Friday Reads: Hillary Clinton Takes On Wall Street

It’s Friday!!!

Things continue to be a little crazy around the kathouse but every time I read political news I feel as though the crazy contagion started from politicians and the media that obsess on them.  We’re getting close to 148402_600the first Democratic Presidential Debate so candidates and their proxies are dialing it up to 11.

Former Congressman Barney Frank is on the trail for Hillary Clinton.  He penned an op-ed at Politico at Politico in July in which he said progressives supporting Sanders are basically helping the GOP win.  He also questioned a return to Glass Steagall, as supported by Elizabeth Warren.

In the post, titled “Why Progressives Shouldn’t Support Bernie,” the former Massachusetts congressman urged Democratic primary voters to steer clear of his fellow New Englander, warning “wishful thinking won’t win the White House.”

Frank pointed to the gleeful cheerleading of Sanders’ challenge to Hillary Clinton from neoconservatives like Bill Kristol to argue that Sanders only serves to weaken Clinton before her general election match-up. According to Frank, a Sanders candidacy — with his poll number steadily gaining on Clinton’s lead — would only distract from the circus that is the 15-person Republican primary.

You can find this quote and the rest of the article at Politico. 

I believe strongly that the most effective thing liberals and progressives can do to advance our public policy goals — on health care, immigration, financial regulation, reducing income inequality, completing the fight against anti-LGBT discrimination, protecting women’s autonomy in choices about reproduction and other critical matters on which the Democratic and Republican candidates for president will be sharply divided — is to help Clinton win our nomination early in the year. That way, she can focus on what we know will be a tough job: combating the flood of post- Citizens United right-wing money, in an atmosphere in which public skepticism about the effectiveness of public policy is high.

I realize that before explaining why I am convinced that a prolonged prenomination debate about the authenticity of Clinton’s support for progressive policy stances will do us more harm than good, that very point must be addressed. Without any substance, some argue that she has been insufficiently committed to economic and social reform — for example, that she is too close to Wall Street, and consequently soft on financial regulation, and unwilling to support higher taxation on the super-rich. This is wholly without basis. Well before the Sanders candidacy began to draw attention, she spoke out promptly in criticism of the appropriations rider that responded to the big banks’ wish list on derivative trading. She has spoken thoughtfully about further steps against abuses and in favor of taxing hedge funds at a fairer, i.e., higher, rate.

This is reflective of her role in the 1990s, when she was a consistent force for progressive policies in her husband’s administration. And as Paul Krugman documented throughout the 2008 nomination campaign, she was, on the whole, to Barack Obama’s left on domestic issues.

Barney Frank

On Wednesday, Politico published an article by Zachary Warmbrodt that describes how Frank is advising Hillary on her plan for dealing with Wall Street.

Frank told POLITICO on Wednesday that he has been working with campaign staff including Gary Gensler — a key ally in the eyes of Dodd-Frank supporters and often a foe of big banks during his time as chairman of the Commodity Futures Trading Commission, which regulates derivatives markets.

“He was a major formulator in this plan,” Frank said of Gensler, a former Goldman Sachs partner and a Treasury Department official during Bill Clinton’s presidency.

The input of Frank and Gensler could help Clinton’s standing among Democrats aligned with Wall Street critic Elizabeth Warren, the Massachusetts senator, and allay any lingering concerns that Clinton would go easy on a sector that her husband helped deregulate before the 2007-09 crisis that prompted the passage of Dodd-Frank.

Frank had more to say about the notion of bringing back Glass-Steagall.

In Iowa on Tuesday, Clinton gave a brief preview of the direction of the plan, which she said would be released “in the next week.” Clinton was responding to a question about whether she would try to reinstate the Depression-era Glass-Steagall Act that separated commercial and investment banking activities — an idea backed by Warren and Clinton’s Democratic primary competitor Sen. Bernie Sanders.

Clinton said, “Big banks are not the only things we have to worry about.” She said she also wants to target risks among insurance companies, hedge funds and other entities in the so-called shadow banking sector. Clinton added that she was willing to work to change the law to make sure individuals are held accountable for financial wrongdoing.

“What she has proposed is in the spirit of Glass-Steagall but in contemporary terms,” Frank said. “The Glass-Steagall debate is an artificial debate at this point. It’s 85 years old. Most people can see if we had it in effect, it wouldn’t have stopped AIG. It wouldn’t stop subprime mortgages that shouldn’t have been granted.”

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Today at Vox, Matthew Yglesias wrote that: Hillary Clinton’s plan to tame big banks shows her at her wonkish best.
Hillary Clinton has often stood accused of pandering or shaping policy proposals for political purposes, but her proposals for improving regulation of the financial system show her doing exactly the opposite — tackling the issue of mega-bank risk in a thoughtful way that is likely to prove politically thankless.

Her idea — not exactly optimized for a 15-second television spot — is to “charge a graduated risk fee every year on the liabilities of banks with more than $50 billion in assets and other financial institutions that are designed by regulators for enhanced oversight,” with fees scaled to be “higher for firms with greater amounts of debt and riskier, short-term forms of debt.”

It’s a mouthful. Banks will hate it. It doesn’t feature a crowd-pleasing, populist applause line. And it’s a pretty great idea.

Hillary Clinton’s risk fee, explained

The problem Clinton is trying to address here is that when a big bank goes bankrupt, it creates huge problems for the broader economy. Because of that, governments have a tendency to prevent big banks from going bankrupt.

And because of that, big banks have a tendency to engage in a riskier pattern of business than you see from other kinds of companies. All companies spend money to make money, but banks finance a much larger share of their spending with borrowed money (as opposed to retained profits) than you see from non-banks. And many banks rely very heavily on short-term borrowing, and fund ongoing operations by counting on their ability to get new short-term loans tomorrow. Financing investments with debt magnifies profits when your bets pay off, but it also magnifies losses when they don’t. Using short-term debt rather than long-term debt lets you pay lower interest rates, but also exposes you to the possibility of unexpectedly finding yourself unable to get the money you need in an emergency situation. Both tendencies magnify risk.

Clinton is proposing to clamp down on those risks by imposing a tax on bank debt.

That compensates the public for the financial cost of bailouts and the social cost of bank failures, while also creating new incentives for banks to manage their affairs in a less risky manner.

Read the rest at the link for more wonky goodness.

clinton-says-she-does-not-support-new-pacific-trade-pact-pbs

Hillary’s plans for Wall Street demonstrate the progressive values she has always had. If you watched TV last night, you probably saw the talking heads carrying on about Hillary’s so-called flip-flops on the Keystone Pipeline and the TPP. The problems these folks have is that they have assume that Hillary and Bill are basically the same person with the same political views. They also refuse to understand that when Hillary was Secretary of State she was working for Obama and had to carry out his policies. Now she’s on her own, and she’s expressing her own views–not Bill Clinton’s or Obama’s.

There’s a great post by Peter Daou at Hillary Men about this: TPP to KXL to WTF! Heads Explode as Hillary Goes Progressive. I hope you’ll read the whole thing. It is a wonderful reflection on how Daou came to be such a strong Hillary supporter and how he came to understand that she is a true progressive. Here’s the conclusion:

In the years I worked for her and in the time since, nothing I saw or heard dissuaded me from my first impression: Hillary is a progressive at heart. I’m perfectly aware that anything she does and any position she takes will get savaged by her detractors, but as a lifelong progressive, I know I’m supporting the candidate who is the most capable of anyone in America to advance the things I care most deeply about. Not Bernie Sanders, who I admire greatly; not Joe Biden, who I also like and respect. Certainly none of the out-of-touch and dangerously narrow-minded Republicans. For that matter, not Barack Obama or Bill Clinton.

Hillary will make an exceptional president. On women’s rights alone, her impact will be history-changing. As the father of a young girl (born during the 2008 campaign), nothing matters more to me.

I’ll conclude with a pithy observation from Lane Hudson, another blogger friend from the early days:

The same people criticizing Hillary for taking a position opposing Keystone XL pipeline and the Trans Pacific Partnership trade deal are the same people who wanted a Warren or Sanders challenge to pull her to the Left.

It’s going to be fun watching the Villagers’ heads explode as Hillary reveals more and more of her true, liberal self.

 What stories are you following today?

MA Gov. Deval Patrick Appoints Former Chief of Staff to Fill John Kerry’s Senate Seat

William "Mo" Cowan

William “Mo” Cowan

From The Hill:

Massachusetts Gov. Deval Patrick (D) has appointed William “Mo” Cowen, his former chief of staff, to fill former Sen. John Kerry’s (D) seat until a special election is held this summer….

“Mo’s service on the front lines in our efforts to manage through the worst economy in 80 years and build a better, stronger Commonwealth for the next generation has earned him the respect and admiration of people throughout government,” Patrick said in a statement announcing the appointment.
Former Rep. Barney Frank (D-Mass.) had also pursued the seat, but his outspoken interest might have undermined his chances of winning the appointment.

Patrick will make the official announcement at 11AM this morning.

Some background on Cowan from The Boston Globe:

Cowan, 43, was first hired by Patrick as his legal counsel in 2009 and was then promoted to chief of staff in 2010. Last November, Cowan stepped down from the $144,000 a year job.

Cowan is a North Carolina native and Duke University graduate who came to Boston to attend Northeastern University Law School in the early 1990s – and never left the region. One of the city’s leading African-American lawyers, Cowan is a former partner in the politically connected law firm of Mintz Levin.

Cowan will become the first African-American to represent Massachusetts in the Senate since Edward Brooke held the seat as a Republican from 1966 to 1978….

Cowan’s selection was quickly praised by Martin W. Healy, chief legal counsel for the Massachusetts Bar

Patrick and Cowan built up a strong friendship over the years, in part, because both men have risen from difficult childhoods to prominence in Boston and in the state. Patrick also served as a mentor to Cowan when both were practicing lawyers.

Much more at the link.


Solstice 2012 Morning Reads

Winter_Solstice_Mistletoe_300Good morning and happy solstice!

Today is the shortest day of the year!!

In Washington, D.C., the winter solstice sun reaches a maximum angle of only 27.7º above the horizon at solar noon. In the more northern city of London, the sun takes an even shorter path, climbing only 15.1º in the sky. And just south of the Arctic Circle, the Icelandic capital of Reykjavik sees the midday sun climb no higher than 2.1º above the horizon.

Here’s some other ways that humanity has celebrated the day in the past from National Geographic.  

Throughout history, humans have celebrated the winter solstice, often with an appreciative eye toward the return of summer sunlight.

Massive prehistoric monuments such as Ireland’s mysterious Newgrange tomb (video) are aligned to capture the light at the moment of the winter solstice sunrise.

(Related: “Ancient Irish Tomb Big Draw at Winter Solstice.”)

Germanic peoples of Northern Europe honored the winter solstice with Yule festivals—the origin of the still-standing tradition of the long-burning Yule log.

The Roman feast of Saturnalia, honoring the God Saturn, was a weeklong December feast that included the observance of the winter solsticewinter solstice. Romans also celebrated the lengthening of days following the solstice by paying homage to Mithra—an ancient Persian god of light.

Many modern pagans attempt to observe the winter solstice in the traditional manner of the ancients.

“There is a resurgent interest in more traditional religious groups that is often driven by ecological motives,” said Harry Yeide, a professor of religion at George Washington University. “These people do celebrate the solstice itself.”

I like to remind people that Mithra is the real reason for the season.  Despite what Fox News says, the original happy holiday for the Romans on December 25th was the birthday of the virgin born Mithra.  Vatican City was built on his huge temple.  Too bad we might never get to excavate it.

Mithra, legend says, was incarnated into human form (as prophesized by Zarathustra) in 272 bc. He was born of a virgin, who was called the Mother of God. Mithra’s birthday was celebrated December 25 and he was called “the light of the world.”  After teaching for 36 years, he ascended into heaven in 208 bc.

There were many similarities with Christianity:  Mithraists believed in heaven and hell, judgement and resurrection. They had baptism and communion of bread and wine.  They believed in service to God and others.

In the Roman Empire, Mithra became associated with the sun, and was referred to as the Sol Invictus, or unconquerable sun.  The first day of the week — Sunday — was devoted to prayer to him.  Mithraism became the official religion of Rome for some 300 years.  The early Christian church later adopted Sunday as their holy day, and December 25 as the birthday of Jesus.

Mithra became the patron of soldiers.  Soldiers in the Roman legions believed they should fight for the good, the light. They believed in self-discipline and chastity and brotherhood. Note that the custom of shaking hands comes from the Mithraic greeting of Roman soldiers.

It was operated like a secret society, with rites of passage in the form of physical challenges.  Like in the gnostic sects (described below), there were seven grades, each protected by a planet.

Since Mithraism was restricted to men, the wives of the soldiers often belonged to clubs of Great Mother (Cybele) worshippers.  One of the women’s rituals involved baptism in blood by having an animal- preferably a bull – slaughtered over the initiate in a pit below.  This combined with the myth of Mithra killing the first living creature, a bull, and forming the world from the bull’s body, and was adopted by the Mithraists as well.

When Constantine converted to Christianity, he outlawed Mithraism. But a few Zoroastrians still exist today in India, and the Mithraic holidays were celebrated in Iran until the Ayatollah came into power.  And, of course, Mithraism survives more subtly in various European — even Christian — traditions.

So, somebody needs to remind Fox News that Constantine was the one that stole December 25th from the Mithraists.  They should direct their outrage at him.

Speaking of Fox News,  there’s something you should read on the Dread Pirate Murdoch and his attempt to install a US President.  The story gets some column space from Carl Bernstein writing for The Guardian. It’s about said dread pirate’s attempt to waylay the US presidential election by trying to get Petraeus to run. Bernstein’s big question is why weren’t the press all over this?

The Murdoch story – his corruption of essential democratic institutions on both sides of the Atlantic – is one of the most important and far-reaching political/cultural stories of the past 30 years, an ongoing tale without equal. Like Richard Nixon and his tapes, much attention has been focused on the necessity of finding the smoking gun to confirm what other evidence had already established beyond a doubt: that the elemental instruments of democracy, ie the presidency in Nixon’s case, and the privileges of free press in Murdoch’s, were grievously misused and abused for their own ends by those entrusted to use great power for the common good.

In Nixon’s case, the system worked. His actions were investigated by Congress, the judicial system held that even the president of the United States was not above the law, and he was forced to resign or face certain impeachment and conviction. American and British democracy has not been so fortunate with Murdoch, whose power and corruption went unchecked for a third of a century.

The most important thing we journalists do is make judgments about what is news. Perhaps no story has eluded us on a daily basis (for lack of trying) for so many years as the story of Murdoch’s destructive march across our democratic landscape. Only the Guardian vigorously pursued the leads of the hacking story and methodically stuck with it for months and years, never ignoring the underlying context of how Rupert Murdoch conducted his take-no-prisoners business and journalism without regard for the most elemental standards of fairness, accuracy or balance, or even lawful conduct.

When the Guardian’s hacking coverage reached critical mass last year, I quoted a former top Murdoch deputy as follows: “This scandal and all its implications could not have happened anywhere else. Only in Murdoch’s orbit. The hacking at News of the World was done on an industrial scale. More than anyone, Murdoch invented and established this culture in the newsroom, where you do whatever it takes to get the story, take no prisoners, destroy the competition, and the end will justify the means.”

The tape that Bob Woodward obtained, and which the Washington Post ran in the style section, should be the denouement of the Murdoch story on both sides of the Atlantic, making clear that no institution, not even the presidency of the United States, was beyond the object of his subversion. If Murdoch had bankrolled a successful Petraeus presidential campaign and – as his emissary McFarland promised – “the rest of us [at Fox] are going to be your in-house” – Murdoch arguably might have sewn up the institutions of American democracy even more securely than his British tailoring.

An interesting  little survey result of university students  put a smile on my face for a variety of reasons.  It’s actually a few months old and I some how missed it.  That’s to BB for letting me know why my students always looked so sleepy on the way into the lectures for all those years.   I was an economics major so ….

In a survey of several thousand English undergraduates by Studentbeans.com, economics majors are more likely to have more sexual partners than their peers other fields. A budding Ben Bernanke had an average of 4.88 sex partners since college started. Compare this to the struggling Comparative Religion major who has had an average or 2.13 partners, or the mournful Environmental Science major who has slept with only 1.71 people. It is not even a contest.

Maybe it’s just be cause we’re great at data gathering and we keep count.  Or maybe not.

 Congressman Barney Frank in his last days in office and is giving many interviews.  He talks openly about a lot of interesting things.barney

Later, after recounting a controversy over an attempt by a male prostitute to blackmail him, he said, “I always have thought prostitution should be legal” and said that ultimately women were “worse off” without legalized prostitution.

Frank also believes that those who vote against gay and lesbian rights but who are in the closet deserve to be outed, explaining, “Yes, I believe the policy should be that people have a right to privacy but not to hypocrisy.”

Frank discussed recent comments made by Supreme Court Justice Antonin Scalia when asked by a Princeton student about his writing on same-sex marriage and gay and lesbian issues. “If we cannot have moral feelings against homosexuality, can we have it against murder? Can we have it against other things?” Scalia told the student.

“I was glad that he made clear what’s been obvious, that he’s just a flat out bigot,” said Frank, going on to call the explanation “quite stupid.”

This has to be the biggest taxpayer supported boondoggle in the history of boondoogles:  “The Cost of Romney’s Government-Assisted Transition: $8.9 Million”.

One of the less scintillating milestones of the 2012 election was marked by the General Services Administration, when Mitt Romney became the first candidate to take advantage of the Presidential Transition Act of 2010. The Act, spearheaded by former Sen. Ted Kaufman, provides resources for major candidates to start planning for their presidency long before Election Day. Through a Freedom of Information Act request, TIME acquired documents from the GSA that show the scope–and cost–of this unprecedented government-assisted transition.

In 2010, legislators said the main goal of the Act was to bolster national security by ensuring that candidates are prepared to take office, and that they don’t shy away from transition planning for fear that they’ll look presumptuous. To that end, the law stipulates that the federal government will provide certain resources to non-incumbent candidates after their nominating convention. The GSA says final costs are still being tabulated, but the initial estimated cost for Romney’s pre-transition phase is around $8.9 million.

 It seems the Romney campaign also seriously overbilled their press pool for the privilege of covering the Romney/Ryan Dismal Circuit.

Last week, the Romney press corp wrote a formal complaint regarding the charges that they say far exceed any other campaign. Today, after getting no response from on high, some of the press corp alerted American Express that they are contesting the charges.

Citing examples of “exorbitant charges” for food and holding costs, the press corp detail in their letter to the Romney campaign, “Some examples: $745 per person charged for a vice presidential debate viewing party on Oct. 11; $812 charged for a meal and a hold on Oct. 18; $461 for a meal and hold the next day; $345 for food and hold Oct. 30.”

These are no small outlets fighting back against the Romney campaign; signing the letter are the higher ups from the Los Angeles Times, Wall Street Journal, New York Times, USA Today, Agence France-Presse, Washington Post, Yahoo, Buzzfeed, and Financial Times. This isn’t their first rodeo.

They also have questions about food ostensibly provided for them but eaten by the campaign staff. “These costs far exceed typical expenses on the campaign trail. Also, it was clear to all present that the campaign’s paid staff frequently consumed the food and drinks ostensibly produced for the media. Were any of the costs of these events charged to the campaign itself, to cover the care and feeding of its staff?”

Earlier Buzzfeed reported that the campaign went all out at the viewing party, providing massage tables and lavish food and booze. Unfortunately, these perks weren’t discussed with all of the media that are now being charged for them.

That certainly sounds like the way an enterprising CEO screws their projects to me.  Good thing he didn’t get his hands on the national treasury.

So, that’s it for me this morning … Carry on!!

What’s on your reading and blogging list this morning?


Sunday Reads: Once more with confidence…

With all this heat, I could not bear to put up a picture of hot coffee…so here is a nice cool watermelon to enjoy your summer morning Sunday reads.

Good Morning!

Actually that exclamation point seems a bit overstated. I wanted to write a poetic introduction to this morning’s post. I sat on my bed with the laptop angled up on my lower legs…my fingers on the well-worn keyboard, and nothing could make them move and flick the keys, to write out words on the computer page. I just looked at my hands and saw only that my nails needed to be clipped, and the screen needed to be cleaned.

Must be the heat, it zaps any intelligent thought out of my brain, and it drives my mind into stillness. Nothingness. Only the relief pouring out of my A/C unit and the sound of my fan falls on me. Nothing.

I won’t kid you all into thinking that I have any thought-provoking comment on the news links today. These plastic keys are getting hot under the pressure of my fingertips as they sit waiting for me to get on with it.

Dammit, I should have known that naming a post, once more with confidence was just asking for trouble. So all that I wrote for the intro to this morning’s post is poof, gone. My computer froze, it too must be affected by the heat. No kidding, I had to take a picture of the computer screen so I could retype the paragraphs I did write. Ugh…

For the start of today’s post, I give you this…h/t Boston Boomer who sent me the link last night while I was having computer problems.

Weimar America …Before I even read the article I knew exactly what I was going to be reading about…what little brain cells I have left, the ones who have not melted in the heat, could grasp that headline.

What happens when a nation that was once an economic powerhouse turns its back on democracy and on its middle class, as wealthy right-wingers wage austerity campaigns and enable extremist politics?

It may sound like America in 2012. But it was also Germany in 1932.

Since I’ve been re-reading the book Banality of Evil, and just last month finished the book In the Garden of Beast, this article is not at all surprising to me.

Most Americans have never heard of the Weimar Republic, Germany’s democratic interlude between World War I and World War II. Those who have usually see it as a prologue to the horrors of Nazi Germany, an unstable transition between imperialism and fascism. In this view, Hitler’s rise to power is treated as an inevitable outcome of the Great Depression, rather than the result of a decision by right-wing politicians to make him chancellor in early 1933.

Historians reject teleological approaches to studying the past. No outcome is inevitable, even if some are more likely than others. Rather than looking for predictable outcomes, we ought to be looking to the past to understand how systems operate, especially liberal capitalist democracies. In that sense, Weimar Germany holds many useful lessons for contemporary Americans. In particular, there are four major points of similarity between Weimar Germany and Weimar America worth examining.

Please, if you read nothing else, read the rest of this article…

Next up…David Miscavige: A cult figure in the fame game  This link is about the cult of Scientology, it’s big shot leader and Sea Org…and it is freaky stuff! If you do not know what Sea Org is, you may be one of those folks who have not kept up with the Tom Cruise/Katie Holmes split. Some gossip mags are speculating that Sea Org is the reason behind Holmes filing for divorce and seeking full custody of their daughter. Well, I have no comment on that…but a cult is a cult, nuff said.

At first glance, the handsome Georgian mansion in the heart of the Sussex countryside could easily be mistaken for a National Trust property. Indeed, at this time of year, Saint Hill Manor would not look out of place in a BBC costume drama; lawns are manicured and greenhouses stocked with abundant produce.

Only the presence of stern-faced young men sporting pristine black naval uniforms and white flat caps indicate Saint Hill’s true calling. The cadets are members of the Sea Org, the 6,000-strong unit within the Church of Scientology that is run along quasi-military lines and which is treated with a degree of respect that borders on fear by some of its followers.

Many members are little more than children who have signed contracts pledging to perform a billion years of service for the fledgling church which was set up in 1954 by the former pulp fiction writer L Ron Hubbard, and is famed for its celebrity followers.

Banned from having children while part of the group, Sea Org members are considered the Scientology elite, shock troops to be dispatched to the church’s trouble spots. Hubbard declared that they had “unlimited ethics powers”.

Uh…again I can only say, it’s a cult!

Small-framed, sharp-featured and with an unnerving gaze, Miscavige’s official title is “chairman of the Board of Religious Technology Centre“, a stand-alone organisation whose remit is to “preserve, maintain and protect the Scientology religion”. According to the church, the centre “holds the ultimate ecclesiastical authority regarding the standard and pure application of L Ron Hubbard’s religious technologies”.

What this means in practice, according to those who have quit the church, is that Miscavige wields absolute power over Scientology’s followers.

I will omit the Cruise/Holmes discussion and get back to Miscavige:

Scientology claims the abuse it receives is typical of the treatment meted out down the centuries to any new religion. But a plethora of lawsuits alleging that Scientology has harassed its critics, humiliated and beaten its followers and forced family members to break off contact with their loved ones, all denied by the church, have conspired to leave a sinister impression.

There is also unease over the apparent disappearance of Miscavige’s wife, Shelly, another former member of the Sea Org, who was responsible for introducing Holmes to Cruise and who has reportedly not been seen in public since 2007.

In a letter to the Observer, Jeffrey K Riffer, a lawyer who acts for Shelly Miscavige, denied claims his client was missing. “Mrs Miscavige has been working nonstop in the church, as she always has.”

Once it was the case that the church could rely on its internal disciplinary mechanism to ensure negative publicity was kept to a minimum. According to lawsuits, contested by the church, followers were threatened with manual labour if they spoke out about harsh treatment. The ever-present threat of being rejected by the church and having all links with it broken off, was enough to make even sceptical Scientologists stay silent.

But this fear no longer holds sway – even among Miscavige’s own family. “My experience in growing up in Scientology is that it is both mentally and at times physically abusive,” his niece, Jenna Miscavige Hill, told the Hollywood Reporter. “We got a lousy education from unqualified teachers, forced labour… not to mention the mental anguish of trying to figure out all of the conflicting information they force upon you as a young child…

Questions also loom about the fortunes that Miscavige spends on living up his celebrity lifestyle…

Even those who are supportive of the church are tired of Miscavige’s influence. Last New Year’s Eve, Debbie Cook, a high-profile Scientologist, emailed the church’s followers, urging them to reject its demands for money. Under Miscavige, Cook said, Scientology had become too focused on luxury buildings and was holding more than $1bn in reserve instead of spending it on spreading the religion, claims denied by the church. Miscavige, Cook claimed, had dismantled the internal checks that were supposed to prevent the church from being led by a single person.

There are claims that several of Scientology’s former followers have briefed the FBI on Miscavige’s lifestyle. It is alleged that he owns numerous vehicles, flies in corporate jets and has five stewards and two chefs at his disposal – claims denied by the church.

It is ironic that Miscavige, who by masterminding Scientology’s successful claim for tax exemption from the US Internal Revenue Service in 1993 transformed the church’s fortunes, now finds himself its biggest liability.

Well, I still can’t believe this cult is considered a “church” just thinking of all the tax exemptions alone is enough to piss me off. That there is a missing wife, crazed celebrities and indoctrination of children just adds fuel to the fire.

Let’s keep the rage flowing:  TN Tea Party Groups Demand School Textbooks Overlook Slavery

Remember the Tea Party — that reactionary right wing movement that helped lead the Republican Party into the fever swamp of madness?

Well, in places like Tennessee they found especially fertile ground, and that state’s Teabaggers are now demanding that school textbooks leave out America’s history of slavery.

A little more than a year after the conservative-led state board of education in Texas approved massive changes to its school textbooks to put slavery in a more positive light, a group of Tea Party activists in Tennessee has renewed its push to whitewash school textbooks. The group is seeking to remove references to slavery and mentions of the country’s founders being slave owners.

You know, over at the Holocaust museum there was a section that focused on propaganda, and the way the Nazi’s changed the kids history books to push the Aryan ideal and make the kids “good little Nazis.”

From Tennessee to Louisiana, the tea party nutcases are working hard to fuck up the education system. Louisiana Legislator Upset That Education Vouchers Can Go to Muslim Schools

It looks like someone’s pocket Constitution was lost before she voted in the Louisiana legislature. That’s Republican legislator Valarie Hodges, who wholeheartedly supported Bobby Jindal’s school voucher program. Well, she supported it until she discovered that — GASP! — state money could go to Muslim schools.

Now she’s just horrified.

Rep. Valarie Hodges, R-Watson, says she had no idea that Gov. Bobby Jindal’s overhaul of the state’s educational system might mean taxpayer support of Muslim schools.

“I actually support funding for teaching the fundamentals of America’s Founding Fathers’ religion, which is Christianity, in public schools or private schools,” the District 64 Representative said Monday.

“I liked the idea of giving parents the option of sending their children to a public school or a Christian school,” Hodges said.

Hodges mistakenly assumed that “religious” meant “Christian.”

HB976, now signed into law as Act 2, proposed, among other things, a voucher program allowing state educational funds to be used to send students to schools run by religious groups.

Well….what about that assumption?

“Unfortunately it will not be limited to the Founders’ religion,” Hodges said. “We need to insure that it does not open the door to fund radical Islam schools. There are a thousand Muslim schools that have sprung up recently. I do not support using public funds for teaching Islam anywhere here in Louisiana.”

Well, hey, Rep. Hodges. You don’t get to pick and choose the “permissible religions” when you hand over public funds to private concerns, which is why those of us with half a brain think that public school money ought to be used to fund public institutions, especially when there is NO “founders’ religion.”

See, that way it’s easy. My tax money doesn’t go to fund stupid conservative, narrow-minded, intellectually dishonest education controlled by Catholic bishops and Southern Baptist wingnuts, and your tax money doesn’t go to Muslims. Didn’t you believe that whole “freedom of religion” thing in the Constitution?

Jezebel has a funny take on this story here: Republican Horrified to Discover that Christianity is Not the Only Religion

It’s an honest mistake, assuming that the Constitution only protects your own personal megachurch faith. But one Louisiana Republican is learning the hard way that religious school vouchers can be used to fund education at all sorts of religious schools, even Muslim ones. And while she’s totally in favor of taxpayer money being used to pay for kids to go to Christian schools, she’s willing to put a stop to the entire program if Muslim schools are going to be involved.

Valarie Hodges admitted that when she supported Governor Bobby Jindal’s school voucher program, she only did so because she assumed the religious school vouchers could only be used for Christian schools. Religious freedom means that everyone’s free to follow Valarie Hodges’ religion!

Okay, looks like I have a theme going here, and I did not even notice it.  But back to the Jezebel link:

As The Friendly Atheist points out, the brand of Christianity currently espoused by many in the religious right wing would be pretty unrecognizable to the Founding Fathers, who were pretty high on Deism and pretty low on Christian rock concerts/ talking about The Children’s collective virginity/ having a personal relationship with Jesus Christ. But whatever. Facts are immaterial at this point.

Yup, there is no need to have facts…or science, or anything at all resembling intelligence.

Case in point: LePage calls IRS the ‘new Gestapo’  You know, this healthcare reform, ACA,  is what the GOP supported before it got signed into law and renamed after Obama.

Gov. Paul LePage used his weekly radio address to blast President Obama’s health care law and described the Internal Revenue Service as the “new Gestapo.”

The IRS description was a reference to a provision in the Affordable Care Act that requires Americans not insured by their employers or Medicaid to buy health insurance or pay an annual penalty when filing their tax returns. The provision, known more broadly as the individual mandate, was the subject of a multi-state lawsuit, but was recently upheld by the U.S. Supreme Court.

LePage said the court decision has “made America less free.”

“We the people have been told there is no choice,” he said. “You must buy health insurance or pay the new Gestapo — the IRS.”

Maine Democratic Party Chairman Ben Grant, responding to LePage’s remarks, said, “We’ve come to expect a bunch of nonsense from Gov. LePage, but this is a step too far. There appears now to be no limit to the extreme language he will use to misinform, degrade and insult people. Somebody needs to explain to him that he’s the governor of a state, and not a talk radio host. I demand a full apology on behalf of all those who suffered at the hands of the real Gestapo.”

[…]

The debate over the mandate has become a political flash point since the health law was enacted. Republicans maintain that the requirement is an unfair tax. Democrats say the mandate was originally a Republican idea born from the conservative Heritage Foundation, which introduced the measure in 1989 as a counterpoint to calls for a single-payer health care system.

[…]

The governor added that Maine will not move forward the ACA’s insurance exchanges — the marketplaces where individuals can shop for health plans from private companies — until the proposed $800 million tab to pay for them passes Congress.

“With these looming uncertainties circling around this issue, Maine cannot move forward right now with Obamacare,” LePage said.

The governor finished his radio address by outlining his ideological opposition to the health-care law, which he said “raises taxes, cuts Medicare for the elderly, gets between patients and their doctors, costs trillions of taxpayer dollars, and kills jobs.”

“Even more disheartening is that reviving the American dream just became nearly impossible to do,” he said. “We are now a nation which supports dependency rather than independence. Instead of encouraging self-reliance, we are encouraging people to rely on the government.”

Oh boy…

Now, let’s move on to the latest news out of the Justice Department: Holder says civil rights ‘under renewed threat’

In an address to the National Council of La Raza convention in Las Vegas on Saturday, Attorney General Eric Holder told the Hispanic advocacy group that the gains of the Civil Rights era were coming “under renewed threat,” and touted the administration’s efforts in protecting the rights of minority groups and immigrants.

“Many of you know this firsthand – and have felt the impact of division, and even discrimination, in your own lives,” said Holder in his address, according to prepared remarks released by the Justice Department.”

The attorney general pledged that the civil rights advocacy group would “never have a more committed partner than the United States Department of Justice” and touted the administration’s record on those issues.

In particular, Holder highlighted the Supreme Court’s ruling last week striking down much of Arizona’s law targeting illegal immigration.

[…]

Holder said with the decision, the justices were “confirming the federal government’s exclusive authority to regulate with regard to immigration issues.”

But Holder, expressed concerns over the provision left standing. “We’ll work to ensure – as the Court affirmed – that such laws cannot be seen as a license to engage in racial profiling.  And we’ll continue to enforce federal prohibitions against racial and ethnic discrimination, in order – as President Obama has promised – to “uphold our tradition as a nation of laws and a nation of immigrants,” he said.

The attorney general also touted the administration’s decision to halt the deportation of some young illegal immigrants, a move popular within the Hispanic community, calling it “a significant – and long-overdue – improvement to our nation’s immigration policy.”

Holder said the next step was for lawmakers to push through more comprehensive immigration reform and he said the administration would “keep working with Congressional leaders – from both parties – to advance the passage of critical legislation like the DREAM Act.”

Hmmm, in an election year…yes, that would be a dream in itself. However according to Holder:

“Over the past three years, our Civil Rights Division has filed more criminal civil rights cases than during any other period in its history – including record numbers of human trafficking, hate crimes, and police misconduct cases,” said Holder, pledging that such efforts would remain a “top priority” for the department.

The Obama administration is also sending Vice President Biden to the convention. He is scheduled to speak on Tuesday.

Romney, however, will not be attending, and chose instead to send a surrogate, former Commerce Secretary Carlos Gutierrez. Gutierrez was not given a speaking role and instead met with attendees at the conference.

Okay, that about does it for me. Except for one little wish, and that goes to Barney Frank…congratulations on getting hitched this weekend. Rep. Barney Frank Marries Longtime Partner In Newton

Massachusetts Congressman Barney Frank tied the knot with his longtime partner Jim Ready on Saturday.

The 72-year-old congressman tried to keep the details of the private ceremony under wraps, but managed to drop enough clues to tip off the media.

Governor Patrick officiated the wedding.

Former House Speaker Nancy Pelosi, Rep. Al Green, Rep. Jim McGovern, and others were seen arriving at the Newton Marriott Saturday evening.

[…]

Ready, 42, lives in Ogunquit, Maine and runs a small business that does custom awnings, carpentry, painting, welding and other services; he is also a photographer.

And what are you all reading about this morning? Stay cool and don’t even bother walking outside today, give this video of Absolutely Fabulous a look-see…especially starting at the 8:20 mark. “Sweetie…Now prepare yourself for the heat…you’re not used to it.”


SDB Evening News Reads for 112811: Hit the road, Frank…Gingrich is not the 1%?

Good evening everyone!

How was your Cyber Monday today? I always felt that first Monday after Thanksgiving was a joy. It was relief to get back to the old grind and get caught up on all the things that got put off for the long weekend.

It seems Washington is getting caught up too…The big news today was Barney Frank! He is officially calling it quits and will not run for re-election in 2012. Boston Boomer had a post about it this afternoon, if you missed the press conference, here is a video recap from AP:

The big shock this weekend came with a major conservative newspaper endorsed Newt Gingrich for 2012. Check out the reason New Hampshire’s Union Leader is giving for not endorsing Romney for the 2012 GOP nomination. Union Leader Declined To Endorse Romney Because He ‘Represents The One Percent’

In a sign of the growing impact the 99 Percent Movement is having, New Hampshire Union Leader publisher Joe McQuaid explained today on Fox News that his paper endorsed Newt Gingrich rather than Mitt Romney for the GOP Presidential nomination because the latter represents the one percent and is politically damaged because of it. “I think — and this is crazy, but so are we — that Gingrich is going to have a better time in the general election than Mitt Romney,” said McQuaid. “I think it’s going to be Obama’s 99% versus the 1%, and Romney sort of represents the 1%.”

Excuse me Mr. McQuaid…and the man you did back isn’t in the 1%?

Gingrich is also part of the one percent, “earning $2.5 million in personal income last year,” much of it accrued from using his government connections to assist major corporations.

Not to mention he is a crook, but y’all know that already.

In other election news, this time across the world in Egypt: Egypt election voters defy fears of violence with record turnout

Egyptians cast their votes at a polling station in Cairo

Egyptians cast their votes at a polling station in Cairo. Photograph: Bernat Armangue/AP

Egyptians came out to vote in record numbers, defying widespread predictions of violence and chaos and fears that the country was yet to break free from three stagnant decades of dictatorship.

Polls were kept open two hours past their scheduled closing time to allow long queues of people at polling stations throughout Cairo to cast their ballots. The high turnout followed 10 days of resurgent protests in the capital that had threatened to overshadow the election.

Egypt‘s military rulers and the high election commission, which is supervising the voting, reported no major violations or security incidents during the historic vote – the first free parliamentary ballot for more than 80 years.

The Guardian reports that they have witnessed many violations, particularly in regards to campaigning. They report that many candidate flyers were given out inside polling stations, as a way to “help” delegates understand the voting process…

The Muslim Brotherhood is widely expected to emerge from the vote as a powerhouse in post-Mubarak Egypt. The group’s ascent has alarmed liberals and supporters of the military regime, who fear that it will attempt to remake Egyptian society along Islamic lines.

The elections are finally being held following a referendum in March that approved a series of constitutional amendments and endorsed the junta-sponsored transition timetable that should have seen a parliamentary vote take place by September at the latest. As transition deadlines slipped, patience among many Egyptians ebbed and a fear grew that the Scaf was instead trying to hang on to power. The waning trust led to the reoccupation of Tahrir Square and fears that vote would not take place.

Preliminary results are expected later this week. Two further rounds of voting will be held in other areas of Egypt, the last on 3 January, before a 498-member lower house of parliament is elected. Its main task will be to form a committee to draft Egypt’s new constitution, which promises to be a bitterly contested blueprint for the future.

I’m not too sure about what the Muslim Brotherhood will bring to Egypt. I am concerned because Egyptian women already have it bad…the large amount of sexual assault is something ingrained into the culture and it will take a lot of work to promote women’s status in the country for any change to occur. I just don’t see the Muslim Brotherhood being a champion for women’s rights.

China has come out in support of Pakistan in the latest mistaken NATO attack that left many Pakistani soldiers dead.  China supports Pakistan in row over Nato border attack

The intervention by the Chinese foreign ministry comes at a time when relations between the US and Pakistan are at their most strained for many years. It is being seen as a move by Beijing to strengthen its already close ties with Islamabad in the wake of Saturday’s air attack in which 24 Pakistani soldiers died.

The prime minister of Pakistan, Yousaf Raza Gilani, has threatened to “revisit” engagement with Nato following the deaths at the Mohmand border post, the deadliest such incident since the start of the Afghan war in 2001. “Business as usual will not be there,” Gilani told CNN .

Pakistan has suggested it may now boycott the 5 December international conference on Afghanistan‘s future at Bonn, in Germany.

China’s comments were the product of a 40-minute conversation between the Chinese foreign minister, Yang Jiechi, and his opposite number in Pakistan, Hina Rabbani Khar. After the exchange, the Chinese foreign ministry said that “China is deeply shocked by these events, and expresses strong concern for the victims and profound condolences to Pakistan”.

A foreign ministry spokesman added: “China believes that Pakistan’s independence, sovereignty and territorial integrity should be respected and the incident should be thoroughly investigated and be handled properly.”

Oh, it makes me nervous…and is sounding more and more like the cold war all over again.

Countries with nuclear capabilities taking sides in an obvious fashion…This move from China is no surprise, but I wonder what kind of security problems arise from the US (and now possibly the European Union countries) being indebted to China. Maybe I am just over reacting.

A quick update on Sandusky’s charity Second Mile: Donate elsewhere

A charity for at-risk children founded by a former Penn State assistant football coach now charged with molesting boys has asked its donors to give their money to the Pennsylvania Coalition Against Rape instead.

The Second Mile made the recommendation Monday in the latest sign its days may be numbered. But the charity said its December programs will continue as scheduled.

[…]

Last week, the charity said it was considering restructuring, transferring programs to other organizations or ceasing operations.

Lawyers for one of the people described in a grand jury report as a victim of repeated sexual attacks by Sandusky are seeking a court order to prevent the charity from unloading its assets.

I would think that since Sandusky used the charity to find boys to rape and assault, Second Mile would be a party to the criminal and civil law suit, and their assets would be frozen.

Also Monday, a team with the U.S. Department of Education arrived in State College as part of the federal investigation into whether the school violated reporting mandates for campus crime.

The federal investigation centers on whether reporting provisions of the Clery Act were complied with in the Sandusky case.

This is all I have for you this evening, post any links you like in the comments.


Late Night: A Few Good Smackdowns

Barney Frank explains to MSNBC’s Lawrence O’Donnell why he couldn’t vote for the Obama-McConnell-Boehner bill. Barney comes on at about the 5:27 mark. The first five minutes are interesting too, but you can skip over them if you want to. I couldn’t find a video with just the Barney interview.

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Barney really lives up to his surname, doesn’t he? He just lays it all out with no bullsh&t. Iraq and Afghanistan exempted from budget cuts? No guarantee of equal cuts in Defense and Medicare/Medicaid? Medicare cuts will keep seniors from getting medical care and result in hospital jobs being lost. He also makes a good point about the possibility of invoking the 14th amendment. And there’s more. Please watch it.

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Another good guy, Bernie Sanders, angrily explains why he won’t vote for the “grotesque” bill either. Please, Bernie, run for President!

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Via Gawker, here’s a great video of Matt Damon, with his mom standing next to him, explaining to a libertarian “MBA type” from Reason Magazine that some people don’t work just to get money. Some people are actually dedicated to their work despite shitty salaries and long hours. Like teachers. Damon and his mom, who is a teacher, were participating in the Save Our Schools Million Teacher March this past weekend.

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Please discuss, or use this as an open thread.


Wednesday Morning Reads

Good Morning!!!

I thought I’d give you reason to be glad that Bobby Jindal the Terrible isn’t your governor.  He’s tearing around the country trying to start up his presidential wannabe campaign and we’ve just about had it with him.  This is from Baton Rouge’s The Advocate.  He singled out some woman professor as the poster child for unnecessary research in his new book.  He’s been out pimping for the book ala other Republican Governor Presidential Idiot Wannabes that want to be independently wealthy before they take the plunge to New Hampshire.  The poor anthropology professor was doing a longitudinal story on Russian Mail Order Brides and their U.S. husbands.  It turns out the research was funded by a grant and not tax payers too.  That didn’t stop Jindal from tearing into the article in his book or fact-checking his words or reading the article for that matter.

Read the entire Op-Ed piece and be appalled that some one with so many educational opportunities in his life wants to deny so many others that opportunity and force them into oil rig serfdom.  Baton Rouge is not exactly a bastion of liberalism so this piece may be a good sign that he’s wearing out his welcome here.   The article even sneakily mentions the one university that should be shut down and a trio of universities that should be merged because they are all in the middle of nowhere and have fewer students than most high schools. Jindal would never man up and do that. Instead he’s just draining ever useful and viable university by 1/3 of their budget a year. He’s sucking the life out of LSU, the med centers, and the law school.  LSU has consistently rated among the top public universities in the country.  Jindal obviously prefers we all go to community colleges instead.

Stop this man before he can do more damage any where else!!

Gov. Bobby Jindal’s machine of aides, bloggers, talk radio hosts and boutique publishers has turned its focus on college professors and what they do.

They attacked sabbatical study last week as a waste of money that takes teachers out of the classroom. The governor criticized scholarly study as unworthy of taxpayer dollars because such research fails to “create better lives and more job opportunities.”

At the base of this hubbub is Jindal’s apparent desire that higher education’s top officials just shut up and accept deep cuts he has planned for public college and university budgets
It all has the absurdity of season ticket holders dictating that the LSU Tigers no longer hold huddles because the quarterback’s primary job is to throw touchdowns.

If you haven’t ventured into Jindal’s ‘scholarly work’ at the New Oxford Review, please do so!!!   It’s called BEATING A DEMON ; Physical Dimensions of Spiritual Warfare. It’s all about participating in an exorcism.

”The crucifix had a calming effect on Susan, and her sister was soon brave enough to bring a Bible to her face. At first, Susan responded to biblical pas­sages with curses and profanities. Mixed in with her vile attacks were short and desperate pleas for help. In the same breath that she attacked Christ, the Bible’s authenticity, and everyone assembled in prayer, Susan would suddenly urge us to rescue her. It appeared as if we were observing a tremendous battle between the Susan we knew and loved and some strange evil force. But the momentum had shifted and we now sensed that victory was at hand.”

Maybe Jindal the Terrible should consider signing up for the new recruiting effort by the Catholic Church for exorcists and leave those of us that prefer science, rational thought, and education alone.  This is what you get when you vote for people without researching them carefully.

So, just when you think politicians couldn’t get any more elitist and just plain whacked, this brings me to something BostonBoomer, Pilgrim and I have been discussing.  The book is called ‘C Street: The Fundamentalist Threat to American Democracy’ by Jeff Sharlet.  It’s the follow-up to a book called ‘The Family’. Both let you know how many of our country’s most important institutions–like Congress and the military–have been invaded by crazy people.  Bart Stupak, John Ensign, Tom Coburn, and Jim Inhofe are among the resident nutjobs of this frat boyz for jeezus club.  This group of good ol’ boys supports some of the most villainous, heinous murders in the world you could imagine because they believe being rich is a sign that you are chosen by god.  They helped Papa Doc. They helped Suharto.  Here’s a bit from the author about David Coe, one of the C Street Family.

What was the concept? “Men who are picked by God!” Not the many, but the few. Under Coe’s guidance, Family politicians embraced the idea that God prefers the services of a dedicated elite to the devotion of the masses. “I have had a great and thrilling experience reading the condensed version of The Rise and Fall of the Third Reich, ” one of Coe’s lieutenants wrote him after Coe had given him a reading list for “the Work,” as their mission was often called. “Doug, what a lesson in vision and perspective! Nazism started with seven guys around a table in the back of an old German Beer Hall. The world has been shaped so drastically by a few men who really want it such and so. How we need this same kind of stuff as a Hitler or a Lenin.” That is, for Jesus, of course

You don’t get to call it a Godwin when a group does it to itself on its own, do you?

Okay, so those poor little put out TSA staff are now speaking out about all the trauma that they have to endure.  People actually yell at them!!!  Poor babies!!!   This is from the Daily Mail.

‘It is not comfortable to come to work knowing full well that my hands will be feeling another man’s private parts, their butt, their inner thigh,’ one told the BoardingArea blog.

‘Even worse is having to try and feel inside the flab rolls of obese passengers and we seem to get a lot of obese passengers!’

Another said he had a huge problem dealing with a ‘large number of passengers… daily that have a problem understanding what personal hygiene is.’

Well, that’s a thought.  If you’re going to travel, don’t shower for days and that will certainly raise a stink for them!  What, they thought  they were only going to get to feel up super models?  Was that in the recruiting ads some where?  Maybe they should consider quitting or complaining to their boss, John Pistole.

Just a quick heads up. Wikileaks tweeted that Wikileaks said, “Next release is 7x the size of the Iraq War Logs. Intense pressure over it for months,” and asked supporters to continue donating to the cause.  We need to start up an Ellsberg Prize for Truth.

The always outspoken Congressman Barny Frank defended Ben Bernanke and the QE2. Additionally he called Republican detractors to be more in line with China than U.S. interests.

Frank said that in the absence of additional fiscal measures, the Fed’s asset purchases are an appropriate response.

“I wish we had some more fiscal stimulus,” said Frank, a Massachusetts Democrat. “In the absence of that, given unemployment, given the complete absence of inflation, he is doing a very reasonable thing.”

The Fed has been making speeches before congress and exercising monetary policy in concern of both inflation and unemployment since the Humphrey-Hawkins Full Employment Law was passed in 1978.  I wasn’t really aware that there was anything questionable about that goal until Bostonboomer called my attention to this over at the NYT.
It seems that some Republicans want to limit the Fed’s policy scope to inflation fighting only.  This further convinces me that they have no interest in putting Americans back to work.  I’ve pretty much decided that most of the hoopla over QE2 is from financial interests who really don’t want to lend money at reasonable rates any more.  This also brings me in mind of that thought.

The Fed’s being using a modified Taylor rule for some time and has very much taken a stand in keeping with Anna Schwartz and  Milton Friedman’s seminal work on the Great Depression.  That’s the CONSERVATIVE economist Milton Friedman, remember him?  He basically said that the FED botched monetary policy and let deflation ruin the economy. What most conservatives don’t get these days–probably because they never actually both to read anything factual–is that Friedman’s analysis owes a lot to Keynes.

Read this and see if you see any similarities.

FDR was inaugurated on March 4, 1933, and two days later he declared a “bank holiday,” allowing banks legally to refuse withdrawals by depositors; it lasted ten days. With his famous phrase, “The only thing we have to fear is fear itself,” he intended to dissuade depositors from running on their banks, but by then it was far too late. In 1929 there were a total of 25,000 banks in the United States. As the bank holiday ended, only 12,000 banks were operating (though another 3,000 were to reopen eventually). The effect on the money supply was equally dramatic. From 1929 to 1933 it fell by 27 percent—for every $3 in circulation in 1929 (whether in currency or deposits), only $2 was left in 1933. Such a drastic fall in the money supply inevitably led to a massive decrease in aggregate demand. People’s savings were wiped out so their natural response was to save more to compensate, leading to plummeting consumption spending. Naturally, total economic output also fell dramatically: GDP was 29 percent lower in 1933 than in 1929. And the unemployment rate hit its historic high of 25 percent in 1933.

Friedman and Schwartz argued that all this was due to the Fed’s failure to carry out its assigned role as the lender of last resort. Rather than providing liquidity through loans, the Fed just watched as banks dropped like flies, seemingly oblivious to the effect this would have on the money supply. The Fed could have offset the decrease created by bank failures by engaging in bond purchases, but it did not. As Milton and Rose Friedman wrote in Free to Choose:

The [Federal Reserve] System could have provided a far better solution by engaging in large-scale open market purchases of government bonds. That would have provided banks with additional cash to meet the demands of their depositors. That would have ended—or at least sharply reduced—the stream of bank failures and have prevented the public’s attempted conversion of deposits into currency from reducing the quantity of money. Unfortunately, the Fed’s actions were hesitant and small. In the main, it stood idly by and let the crisis take its course—a pattern of behavior that was to be repeated again and again during the next two years.

According to Friedman and Schwartz, this was a complete abdication of the Fed’s core responsibilities—responsibilities it had taken away from the commercial bank clearinghouses that had acted to mitigate panics before 1914—and was the primary cause of the Great Depression.

Okay, what exactly is the QE2 then?  It’s large scale buying of treasury bonds.  Why are they doing it?  Because the Federal Government is not doing it’s job with the fiscal policy end.  We had a stimulus that was way too weak and way too loaded with stuff that doesn’t stimulate very well and now we’ve got these idiots around talking about deficits and inflation.  It’s like their trying to actively sabotage the economy!

Alright, well, I think I’m hitting MABLUE’s limit for being long winded so I’ll stop now. I need to go to the grocery store and see a man about some trade statistics.

What’s on your blogging and reading list today?