Saturday Reads

Bob Dylan reading Disc Magazine with Mick Jagger on the cover, 1966

Bob Dylan reading Disc Magazine with Mick Jagger on the cover, 1966

Good Morning. It’s such a very sad day that I hardly know what to post. I’m still in shock about yesterday’s terrible shooting in Connecticut. How many more of these nightmarish events have to happen before our “leaders” in Washington finally decide to do something about controlling guns? How about completely banning all ammunition?

I’m just going to post a few reactions to the horror. I’m sure we’ll be learning much more about Adam Lanza and his possible motivations in the coming days. We’ll also learn if there are any courageous politicians left in the White House and Congress who will stand up the the National Rampage Association (NRA).

Raw Story: Gun control advocates gather near White House.

Gun control advocates gathered near the White House, many holding white candles, in a demonstration calling for a renewed discussion of gun control policy after a shooting at Sandy Hook Elementary School in Newtown, Conn., left almost three dozen children and adults dead, reported the Associated Press. Multiple signs read “#TodayISTheDay,” a response to Press Secretary Jay Carney’s assertion that “today is not the day” to discuss gun control in the United States. However, the demonstrators made no specific appeals, reported Talking Points Memo.

“We can change the worst conditions of our country. Together we can change the pain into joy. Together we can change the sorrow into gladness,” said one demonstrator.

The speaker then called on everyone to hold their candles high so that everyone can see that “today is the day.”

Adam Gopnik at the New Yorker: Newtown and the madness of guns.

After the mass gun murders at Virginia Tech, I wrote about the unfathomable image of cell phones ringing in the pockets of the dead kids, and of the parents trying desperately to reach them. And I said (as did many others), This will go on, if no one stops it, in this manner and to this degree in this country alone—alone among all the industrialized, wealthy, and so-called civilized countries in the world. There would be another, for certain.

Then there were—many more, in fact—and when the latest and worst one happened, in Aurora, I (and many others) said, this time in a tone of despair, that nothing had changed. And I (and many others) predicted that it would happen again, soon. And that once again, the same twisted voices would say, Oh, this had nothing to do with gun laws or the misuse of the Second Amendment or anything except some singular madman, of whom America for some reason seems to have a particularly dense sample.

And now it has happened again, bang, like clockwork, one might say: Twenty dead children—babies, really—in a kindergarten in a prosperous town in Connecticut. And a mother screaming. And twenty families told that their grade-schooler had died. After the Aurora killings, I did a few debates with advocates for the child-killing lobby—sorry, the gun lobby—and, without exception and with a mad vehemence, they told the same old lies: it doesn’t happen here more often than elsewhere (yes, it does); more people are protected by guns than killed by them (no, they aren’t—that’s a flat-out fabrication); guns don’t kill people, people do; and all the other perverted lies that people who can only be called knowing accessories to murder continue to repeat, people who are in their own way every bit as twisted and crazy as the killers whom they defend. (That they are often the same people who pretend outrage at the loss of a single embryo only makes the craziness still crazier.)

So let’s state the plain facts one more time, so that they can’t be mistaken: Gun massacres have happened many times in many countries, and in every other country, gun laws have been tightened to reflect the tragedy and the tragic knowledge of its citizens afterward. In every other country, gun massacres have subsequently become rare. In America alone, gun massacres, most often of children, happen with hideous regularity, and they happen with hideous regularity because guns are hideously and regularly available.

Politicker: Message to President Obama from Mayors Against Gun Violence, “Offering condolences is not enough.” Statements of Co-Chairs Michael Bloomberg of NYC, and Thomas Menino of Boston:

Statement of Mayor’s Against Illegal Guns Co-Chair New York City Mayor Michael R. Bloomberg:

“With all the carnage from gun violence in our country, it’s still almost impossible to believe that a mass shooting in a kindergarten class could happen. It has come to that. Not even kindergarteners learning their A,B,Cs are safe. We heard after Columbine that it was too soon to talk about gun laws. We heard it after Virginia Tech. After Tucson and Aurora and Oak Creek. And now we are hearing it again. For every day we wait, 34 more people are murdered with guns. Today, many of them were five-year olds. President Obama rightly sent his heartfelt condolences to the families in Newtown. But the country needs him to send a bill to Congress to fix this problem. Calling for ‘meaningful action’ is not enough. We need immediate action. We have heard all the rhetoric before. What we have not seen is leadership – not from the White House and not from Congress. That must end today. This is a national tragedy and it demands a national response. My deepest sympathies are with the families of all those affected, and my determination to stop this madness is stronger than ever.”

Statement of Mayors Against Illegal Guns Co-Chair Boston Mayor Thomas M. Menino:

“As a parent and grandparent, I am overcome with both grief and outrage by the tragedy in Newtown, Connecticut. This unspeakable act of violence will forever imprint this day in our hearts and minds. My heart goes out to the families impacted by this senseless tragedy and the many others we have recently witnessed across the United States. As a Mayor who has witnessed too many lives forever altered by gun violence, it is my responsibility to fight for action. Today’s tragedy reminds us that now is the time for action. Innocent children will now never attend a prom, never play in a big game, never step foot on a college campus. Now is the time for a national policy on guns that takes the loopholes out of the laws, the automatic weapons out of our neighborhoods and the tragedies like today out of our future.”

I’m glad I live in a state that at least tries to control guns. In Massachusetts you have to apply for a license from your local police before you can apply to purchase a firearm. All firearms must have trigger locks and must be stored unloaded in locked containers. If you are caught with an unlicensed gun, you go directly to jail for a mandatory two-year sentence. See the links above for more.

Now a few more reads on other subjects.

School cafeteria worker fired for feeding needy student.

For two years, Dianne Brame worked as a cafeteria manager at Hudson Elementary in Webster Groves, keeping kids’ bellies full for their all-important task of learning.

The lunch lady loved her job: “I knew kids by their names, I knew their likes and dislikes, so it was just fun.”

But recently, she came across a fourth grader who consistently came without money. She says he used to be on the free lunch program, but language barriers got in the way of reapplying: “I sent them paperwork so that they could get back in contact with me, but it didn’t happen,” she says.

For days, Brame snuck the boy lunches. She explains, “I let his account get over $45 which I’m only supposed to let it get over $10, and I started letting him come through my lunch line without putting his number in, and they look at that as stealing. I thought it was just taking care of a kid.”

There’s an update to the story: “Dianne Brame has been rehired by Hudson Elementary following the huge response from this story.”

Center for American Progress: The ‘Debt Limit’: Time to End 95 Years of False Labeling

Congress and the White House have struggled over what has wrongly been called the “debt limit” since 1917, when a cap on the Treasury Department’s borrowing authority was inserted into legislation permitting “Liberty Bonds” to be sold to support U.S. military operations in Europe during World War I. A country that wants to maintain a reputation of paying its bills must recognize that debts are incurred when goods and services are purchased, not on the basis of whether or not the country wants to borrow the money needed to pay for those purchases.

The vote on what we have wrongly referred to for these many years as the “debt limit” is not a vote on how much we will spend or how much revenue we will raise to cover that spending: Those decisions are generally made by Congress months, and in many instances, even years before the extra borrowing authority is needed.

Each spring Congress deals with a budget resolution—setting targets for spending, revenues, and indebtedness. That legislation caps the amount of money that can be appropriated and prescribes what changes are needed in permanent spending legislation such as entitlements and whether we should raise or lower taxes to pay for those spending decisions. That resolution contains specific language stating what those decisions will mean in terms of the annual budget deficit and the change that will take place in the public debt.

Congress then considers the specific appropriation bills, entitlement changes, and tax legislation to implement the plan and determine the size of the debt. The vote on the so-called debt ceiling occurs long after those decisions are made. It is not a vote on how much we will spend or whether we will raise the money to pay for it but rather a vote on whether we will pay our bills. Voting against raising the debt limit is sort of like being the guy who turns down opportunities to work overtime so that he can spend more time at the movies, only to decide when his credit card bill arrives that he needs to correct his profligate ways by refusing to pay it.

Much more at the link.

Here’s a must read from Andrew Sullivan: The Unreason of Antonin Scalia. I’m not going to excerpt from it–you need to read the whole thing.

A few more reads, link dump-style.

The Independent: Jacintha Saldanha: Suicide note criticising senior hospital staff found among possessions of nurse at centre of Duchess of Cambridge phone call hoax

The Guardian: Hospital defends treatment of Jacintha Saldanha

Media Matters: Limbaugh Delivers Sexist Remark About Making A “Real Woman” Out Of Hillary Clinton

Last but not least, from Rolling Stone: How Mick Jagger Learned to Dance – By His Brother, Chris Jagger

I’m heading back to the Boston area today, so I’ll be on the road the next couple of days. I’ll check in when I can. I hope everyone has a peaceful, restful weekend.


Independence Day Reads

Happy Independence Day!

We have a republic and a lot of people have sacrificed a lot over the last several centuries to keep it.  Too bad most of our politicians aren’t in that number.  They can’t see past their next elections.

It seems that two senators– McCain and Corynyn–say they’re open to tax increases as a way to solve the budget stand off.   Guess there are a few of them left that would prefer not to tank our economy. Let’s hope this starts some real negotiations instead of the usual Republican hostage taking and Democratic cave-in that’s been politics as usual the last dozen years or so.

One of the senators, John Cornyn of Texas, said he would consider eliminating some tax breaks and corporate subsidies in the context of changes in the tax code, provided there was not an overall increase in taxes.

“I think it’s clear that the Republicans are opposed to any tax hikes, particularly during a fragile economic recovery,” Mr. Cornyn said on “Fox News Sunday.” “Now, do we believe tax reform is necessary? I would say absolutely.”

But he insisted that any changes in taxes be “revenue neutral,” meaning that the government would not take in any more money from individuals or businesses than it does now.

The other senator, John McCain of Arizona, said he would be willing to consider some “revenue raisers” as part of a broad deal, but he refused to name specific measures.

Mr. Cornyn, a member of the Senate leadership, also said that Republicans would be open to a short-term deal on the debt ceiling to provide more time for a comprehensive agreement.

Let’s also hope that more reasonable and less ideological heads prevail on the right and that the left stands up for what’s right for a change.  Former President Clinton had a words of policy advice over the weekend.  His advice to President Obama is “not to blink”.

Former President Bill Clinton Saturday night urged President Obama not to “blink” at Republican demands to exclude revenue increases from any agreement to extend the government’s debt ceiling.

If Republicans maintain their opposition to revenue increases, Clinton said, Obama should pursue a short-term deal to extend the debt ceiling based on spending cuts both sides have already accepted in the negotiations between the administration and Congressional leaders from both parties.

“I hope they will make a mini-deal,” Clinton said in an interview conducted with him at the Aspen Ideas Festival here.

The White House and Congressional negotiators from both parties are attempting to assemble a deficit reduction package that could win support in Congress for legislation to extend the nation’s debt ceiling, which the Treasury says the government will reach on August 2. The talks have foundered amid demands from Congressional Republicans to exclude any revenue increases from that prospective deficit reduction package.

Asked what the administration could do if GOP leaders hold to that posture, Clinton replied: “First the White House could blink. I hope that won’t happen. I don’t think they should blink.”

If Republicans will not accept revenues in a package to lift the debt ceiling by August 2, Clinton said, Obama should pursue a short-term agreement based on the spending reductions both sides have already accepted.

“There are some spending cuts they agree on …and he can take those and [get] an extension of the debt ceiling for six or eight months,” Clinton said.

Clinton also called on a package of reforms to US tax policy that includes a corporate tax cut if special interest tax loops are closed.  This is something Obama has also supported.

“It made sense when I did it. It doesn’t make sense anymore – we’ve got an uncompetitive rate. We tax at 35 percent of income, although we only take about 23 percent. So, we SHOULD cut the rate to 25 percent, or whatever’s competitive, and eliminate a lot of the deductions so that we still get a FAIR amount, and there’s not so much variance in what the corporations pay. But how can they do that by Aug. 2?”

Clinton also said Grover Norquist, who as president of Americans for Tax Reform is the GOP’s unofficial enforcer of no-new-taxes pledges, has a “chilling” hold on the nation’s lawmaking.

The former president said it has seemed like Republicans need any revenue concessions need to be “approved in advance by Grover Norquist.”

“You’re laughing,” he told the crowd of 800. “But he was quoted in the paper the other day saying he gave Republican senators PERMISSION … on getting rid of the ethanol subsidies. I thought, ‘My GOD, what has this country come to when one person has to give you permission to do what’s best for the country.’ It was chilling.

There’s an extremely interesting piece at The Atlantic Wire on “What Really Happened at Fukushima”. It includes interviews with workers that have been inside the crippled nuclear plant.

Throughout the months of lies and misinformation, one story has stuck: “The earthquake knocked out the plant’s electric power, halting cooling to its reactors,” as the government spokesman Yukio Edano said at a March 15 press conference in Tokyo. The story, which has been repeated again and again, boils down to this: “after the earthquake, the tsunami – a unique, unforeseeable [the Japanese word is soteigai] event – then washed out the plant’s back-up generators, shutting down all cooling and starting the chain of events that would cause the world’s first triple meltdown to occur.”

But what if recirculation pipes and cooling pipes, burst, snapped, leaked, and broke completely after the earthquake — long before the tidal wave reached the facilities, long before the electricity went out? This would surprise few people familiar with the 40-year-old Unit 1, the grandfather of the nuclear reactors still operating in Japan.

The authors have spoken to several workers at the plant who recite the same story: Serious damage to piping and at least one of the reactors before the tsunami hit. All have requested anonymity because they are still working at the plant or are connected with TEPCO. One worker, a 27-year-old maintenance engineer who was at the Fukushima complex on March 11, recalls hissing and leaking pipes.  “I personally saw pipes that came apart and I assume that there were many more that had been broken throughout the plant. There’s no doubt that the earthquake did a lot of damage inside the plant,” he said. “There were definitely leaking pipes, but we don’t know which pipes – that has to be investigated. I also saw that part of the wall of the turbine building for Unit 1 had come away. That crack might have affected the reactor.”

The reactor walls of the reactor are quite fragile, he notes. “If the walls are too rigid, they can crack under the slightest pressure from inside so they have to be breakable because if the pressure is kept inside and there is a buildup of pressure, it can damage the equipment inside the walls so it needs to be allowed to escape. It’s designed to give during a crisis, if not it could be worse – that might be shocking to others, but to us it’s common sense.”

Here’s some frightening news on the disaster in Japan. Radioactive Cesium has been found in Tokyo’s water supply.

Radioactive cesium-137 was found in Tokyo’s tap water for the first time since April as Japan grapples with the worst nuclear disaster in 25 years.

Cesium-137 concentration registered at 0.14 becquerels per kilogram in the city’s Shinjuku ward on July 2, compared with 0.21 becquerels on April 22, according to the Tokyo Metropolitan Institute of Public Health. No cesium-134 or iodine-131 was detected, the agency said on its website.

The Nuclear Safety Commission of Japan sets a safety limit of 200 becquerels per kilogram for cesium-134 and cesium-137. The limit for iodine-131 consumption is 300 becquerels per kilogram.

Japan is battling radiation leaks into the air, soil and water after an earthquake and tsunami on March 11 knocked out cooling systems at Tokyo Electric Power Co.’s Fukushima Dai- Ichi nuclear station, resulting in the meltdown of three of the six reactors at the plant.

The UK Guardian lists an interesting set of Greek public assets for sale.  Many have no buyers.  Bobby Jindal is putting up a lot of Louisiana assets for sale too.  I wonder if this is going to be the new way to raise money.  The Kochs already rent a big chunk of Yellowstone.   Let’s hope we don’t have to put our national treasures on the chopping block.

Up for sale are 39 airports, 850 ports, railways, motorways, sewage works, a couple of energy companies, banks, defence groups, thousands of acres of land for development, casinos and Greece’s national lottery. George Christodoulakis, Greece’s special secretary for asset restructuring and privatisations, said the sell-off would raise €50bn (£44bn) to help pay back the country’s €110bn bailout debt.

The private equity bosses gathered in the hotel’s ballroom for the parade of Greece’s national treasures showed little interest in buying anything.

Nikos Stathopoulous, managing partner of BC Partners, which has invested more than €3.5bn in Greece, said investors are put off by bureaucracy, strong unions, corruption and a lack of transparency. “Even in the good times Greece is not a country that attracts investment. Foreign investors don’t want to invest in a country where there is no flexibility in hiring and firing people,” he said. “You don’t want to invest in a country in which you wake up and a new law has been passed which totally undermines and destroys the value of the investment you’ve just made.”

Stathopoulous said investors were finding it very hard to assess the risk of investing into Greece, which means assets “will be priced at lower than they are worth, lower than the Greek government, and even the European Union, expects”.

Here’s a compelling argument for getting the shadow banking sector into a more regulated, transparent, and standardized order.  It’s written by Henry Tabe who is a Founding Partner of Sequoia Investment Management Company Ltd.  It particularly addresses the use of the Structured Investment Vehicle (SIV).  Complex, nonstandard, and unregulated markets make pricing assets difficult and introduce unnecessary risk and volatility.

Risk management requires identification, measurement, aggregation, and effective management of risks. It should help businesses allocate sufficient capital for survival and growth. The SIV’s extinction highlights risk management failures by the vehicles, their sponsors, rating agencies, policymakers, and regulators.

Financial regulators permitted bank, insurance company, pension, and hedge-fund sponsors to establish SIV “mini-banks” without ensuring that they maintain sufficient capital or back-stop liquidity in the event of a run. Policymakers also seemed unaware of the knock-on effects of the SIV’s demise on the securitisation and global credit markets. The Financial Security Authority’s call for regulators to incorporate sectoral analytical capabilities in their micro-prudential policies should help close the knowledge gap and ensure that timely solutions can be implemented to avert collapses that engender significantly more stress on the financial system (FSA 2009).

Lessons learned include the tightening of regulation governing the sponsorship of off-balance-sheet structures and the sizing of their capital and liquidity needs. These require that regulators adopt a more proactive, dampening role in the wild swings from exuberance to despair that are so characteristic of the financial markets. Discussions around contingent capital and similar products suggest regulators have embraced that dampening role and moved away from the prevailing pre-crisis philosophy of minimal regulation.

Lessons learned also include closer supervision of shadow banks, more skin-in-the-game for their sponsors, in-house retention of risk-analytics capabilities by investors, and less reliance on credit-rating agencies. The agencies themselves are more tightly supervised in order to reduce ratings shopping by issuers and inherent conflicts of interest in the business model (CESR 2009). Tighter regulation will also help to ensure that the agencies improve the monitoring of analyst performance, qualifications, and experience (Dodd-Frank 2010).

These measures should help restore confidence in rating agencies and the global financial system, an outcome more urgently required given on-going turmoil in the sovereign debt market.

So, there’s some wonky goodness to keep you entertained if you’re inside today.  Be sure to let us know what you’re reading and blogging!  Hope your Fourth of July is a happy one!


We’re in Trouble Now: President Pushover “Takes Lead in Budget Talks”

Politico reports today that President Obama

signaled on Friday that he is ready to take over the debt-limit negotiations, summoning Senate leaders to the White House next week as the continuing impasse pushes the country closer to a potential default.

Obama will meet separately with Senate Majority Leader Harry Reid (D-Nev.) and Minority Leader Mitch McConnell (R-Ky.) on Monday. The meetings follow the collapse Thursday of talks between Vice President Joe Biden and congressional leaders.

This isn’t good news for us liberals. Once Obama gets involved, I think we can assume he will give away the store to the Republicans. He’ll probably give them much more than they’re asking for. We’re going to need some stiffened Democratic spines in the Senate if we want to rescue Medicare and Medicaid. Are there and Democratic Senators left who have spines to stiffen?

“The president is willing to make tough choices, but he cannot ask the middle class and seniors to bear all the burden for deficit reduction and to sacrifice while millionaires and billionaires and special interests get off the hook,” White House press secretary Jay Carney said Friday. That’s not “a fair and balanced approach.”

Oh fine. Just what we needed–a Fox News reference.

Meanwhile, House Speaker John Boehner (R-Ohio) said the “realities of the situation” are that the House won’t pass any deal that involves raising new revenues, and the package must include budget reforms and spending cuts that exceed the amount of the debt limit increase, which is expected to top $2 trillion.

Boehner’s demands are insane, but that probably won’t stop Obama from allowing Republicans to put the final nails in the coffin of the U.S. economy.