It’s just a little bit of Policy Fail Repeating

bad-bank-2When you let lobbyists make public policy, failure is an acceptable outcome. That’s because the point of the policy isn’t the public and isn’t necessarily doing what will work. The point of the policy is to enrich and perpetuate the entrenched interests. Every other possible goal becomes expendable including those that have to do with protecting the public purse and welfare.

Imagine my lack of surprise when I saw that the creation of a “bad bank” policy is back in today’s WaPo headlines. Go take a look at “U.S. Considers Remaking Mortgage Giants:’Bad Bank’ Would Wipe the Slate Clean for Fannie Mae, Freddie Mac by Taking Their Toxic Loans” and weep. This administration will reward bad players as long as there is a political reason for them to exist. So, instead of real reform of Fannie and Freddie, they’re proposing a solution that sweeps past mistakes under the rug and allows these failed institutions to operate in the same irresponsible way that brought them their current fate. There is no such thing as the discipline of the market or the bankruptcy court when you’re big enough to hire K Street impresarios to keep your show running and the federal government enables you.

The Obama administration is considering an overhaul of Fannie Mae and Freddie Mac that would strip the mortgage finance giants of hundreds of billions of dollars in troubled loans and create a new structure to support the home-loan market, government officials said.

The bad debts the firms own would be placed in new government-backed financial institutions — so-called bad banks — that would take responsibility for collecting as much of the outstanding balance as possible. What would be left would be two healthy financial companies with a clean slate.

The moves would represent one of the most dramatic reorderings of the badly shattered housing finance system since District-based Fannie Mae was created by Congress to support mortgage lending during the Great Depression. Both Fannie Mae and Freddie Mac, based in McLean, have government charters to buy home loans from banks, which they then repackage and sell to investors. The banks can then use the proceeds to offer more loans to home buyers.

The leviathans became emblematic of the financial crisis when they were effectively nationalized in September amid a market meltdown that revealed much of their holdings to be troubled. The government has since pledged more than $1.5 trillion, including $85 billion in direct aid, to keep the mortgage market working through Fannie Mae and Freddie Mac.

The proposal, which is preliminary and one of several under discussion, is scheduled to be taken up by the White House’s National Economic Council on Thursday.

What about the Japanese lost decade and all the papers and studies written about the bad bank policy did these folks miss? Well, of course, you do know that the head of the “White House’s National Economic Council ” is La-La Summers, right? Mister, I got mine from Wall Street? Let’s look at the other players who buy into this. I’ll just highlight them so you can see that it’s basically the same players that had some kind of supporting role in the original failure. Why does Washington D.C. continue to reward the very same people and players? It has too be some thing pathological.

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News for those not Interested in Death and Sex Watches

or When Will Journalists actually Report Real News?

pig3So for those that don’t want to see the People Magazine section on the front page of every news paper and as the lead in to every TV news item, let’s look at some real news.

Climate Change : The American Clean Energy and Security Act:

Should we be questioning the Climate Change Numbers? Surprise from the WSJ? Not. It’s still an interesting read in light of the Waxman-Markey attempt to push through cap and trade.

The Climate Change Climate Change: The number of skeptics is swelling everywhere.

Among the many reasons President Barack Obama and the Democratic majority are so intent on quickly jamming a cap-and-trade system through Congress is because the global warming tide is again shifting. It turns out Al Gore and the United Nations (with an assist from the media), did a little too vociferous a job smearing anyone who disagreed with them as “deniers.” The backlash has brought the scientific debate roaring back to life in Australia, Europe, Japan and even, if less reported, the U.S.

In April, the Polish Academy of Sciences published a document challenging man-made global warming. In the Czech Republic, where President Vaclav Klaus remains a leading skeptic, today only 11% of the population believes humans play a role. In France, President Nicolas Sarkozy wants to tap Claude Allegre to lead the country’s new ministry of industry and innovation. Twenty years ago Mr. Allegre was among the first to trill about man-made global warming, but the geochemist has since recanted. New Zealand last year elected a new government, which immediately suspended the country’s weeks-old cap-and-trade program.

Greenpeace opposes Waxman-Markey

“Since the Waxman-Markey bill left the Energy and Commerce committee, yet another fleet of industry lobbysists has weakened the bill even more, and further widened the gap between what Waxman-Markey does and what science demands. As a result, Greenpeace opposes this bill in its current form. We are calling upon Congress to vote against this bill unless substantial measures are taken to strengthen it. Despite President Obama’s assurance that he would enact strong, science-based legislation, we are now watching him put his full support behind a bill that chooses politics over science, elevates industry interests over national interest, and shows the significant limitations of what this Congress believes is possible. “As it comes to the floor, the Waxman-Markey bill sets emission reduction targets far lower than science demands, then undermines even those targets with massive offsets. The giveaways and preferences in the bill will actually spur a new generation of nuclear and coal-fired power plants to the detriment of real energy solutions. To support such a bill is to abandon the real leadership that is called for at this pivotal moment in history. We simply no longer have the time for legislation this weak.

I would hate to see this piece of legislation move through the House of Representatives with out media coverage and robust discussion. You’ll remember that I explained cap and trade earlier in case you want a review.

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Obama and the Enhanced Status Quo

monopoly smoke ringsWe were promised changed. What we are getting is perpetuation of the status quo. Let’s try this headline at the Guardian on for size “Goldman Sachs to make record bonus payout”.

Staff at Goldman Sachs staff can look forward to the biggest bonus payouts in the firm’s 140-year history after a spectacular first half of the year, sparking concern that the big investment banks which survived the credit crunch will derail financial regulation reforms.

A lack of competition and a surge in revenues from trading foreign currency, bonds and fixed-income products has sent profits at Goldman Sachs soaring, according to insiders at the firm.

Staff in London were briefed last week on the banking and securities company’s prospects and told they could look forward to bumper bonuses if, as predicted, it completed its most profitable year ever. Figures next month detailing the firm’s second-quarter earnings are expected to show a further jump in profits. Warren Buffett, who bought $5bn of the company’s shares in January, has already made a $1bn gain on his investment.

The bold part says it all. There continues to be a systematic elimination of competition from merger mania in the financial sector which has created two classes of too-big-to-fail institutions. We now have those that function completely with government funding and those that function by funding candidates for government. Goldman Sachs is benefiting immensely from both.

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One Person One Vote Died a Year Ago today

222px-Black_Ribbon.svgIn an important landmark case Reynolds v. Sims, 377 U.S. 533 (1964), the Supreme Court established one of the most significant voting rights rulings impacting our Republic since the enfranchisement of woman and the election of U.S. senators by popular vote. Both of these occurred earlier in the century.  Basically, Reynolds v Sims established the means to ensure  that the United States was a truly representative form of government.  It provided a legal way to enforce the idea that legislatures are those instruments of government elected directly by and directly as representatives of the people. Because of this, all elected officials should be elected in a free and unimpaired fashion. One Person one vote is a bedrock of our political system.

That was until one year ago today, when the Democratic Rules and Bylaws Committee declared the voters of Michigan and Florida to be one half of a person. This decision, done in a closed room behind close doors, was done in the name of party unity and led to the famous “party unity my ass” uttered at The Confluence that led to the PUMA movement. It led to spontaneous outrage across the country.

What began as a Democratic Party initiative to change the caucus and primary schedule to appease some special interest groups, wound up as a means to disenfranchise two states as Florida and Michigan were selectively punished for their decisions to change the dates of their primary caucuses. While other states similarly changed their dates, these two states were singled out for retribution. This was a stinging indictment of our entire political system for those of us that supported Hillary Clinton and were still stinging from the earlier disenfranchisement of Florida under the Bush v. Gore ruling that essentially gave us a President who mostly likely did not win the election. Every one knows how well that worked out.

080530-vote-florida-hmed-1p.h2Here are some reports from the day. This one is from MSNBC’s Chuck Todd called Nothing is fair about Florida and Michigan. Here was his suggestion for the situation at the time.

Why not consider punishing the party leaders and not the voters? Couldn’t the committee take away the states’ superdelegate votes? After all, it wasn’t the voters who demanded the states break party rules, but rather the leaders of the respective state parties.

Of course, this is too logical. The likely ruling on Saturday will probably highlight the party’s inability or reluctance to punish the superdelegates. There is a challenge from a Florida superdelegate claiming the party violated its own charter by stripping the state of both pledged delegates and superdelegates. Most members of the Rules Committee I’ve talked to indicate that he may be right. Keep in mind members of the Rules committee are all superdelegates themselves.

The Golden Rule could apply: Do unto other superdelegates as you would want done unto you.

The second idea the committee should be considering but isn’t reflects everything we’ve learned throughout this long primary season.

As many have noted, census data for each state have been remarkably determinative of results since Super Tuesday. In fact, the support groups for the two candidates have been incredibly stable. Why not apply what we’ve learned about the support groups of both candidates and split the delegates accordingly?

Of course, we found out soon enough that the party leaders did have their agenda and it was to ensure that we had their Candidate. We’re still unraveling the reasons for this travesty. We endured sexism, misogyny, and race-baiting through out the entire election cycle. We will be paying for this most undemocratic of decisions for years to come. We could have had a President that supports Abortion Rights and Universal Health Care. We could have had a President that refused to vote for FISA. We could have had a President that wasn’t controlled by lobbyists, Wall Street Fat Cats, and was a policy wonk extraordinaire. Instead, as Ted Ralls of Common Dreams, puts it, we got this:

We expected broken promises. But the gap between the soaring expectations that accompanied Barack Obama’s inauguration and his wretched performance is the broadest such chasm in recent historical memory …From healthcare to torture to the economy to war, Obama has reneged on pledges real and implied …Obama is useless. Worse than that, he’s dangerous. Which is why, if he has any patriotism left after the thousands of meetings he has sat through with corporate contributors, blood-sucking lobbyists and corrupt politicians, he ought to step down now–before he drags us further into the abyss.

I don’t know about you, but I WILL NEVER FORGET THIS DAY OF INFAMY.puma-head


PUMA forward

puma-paw2You think it’s too late to plan some kind of commemorative/commiserative event for the 5.31 rules committee meeting that led to the birth of PUMA? Maybe make it net/blog based? Any interest?

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