Is is just me or is there just about no important news coming out of Washington DC? We just finished with a horrible crisis in the government, and there’s another one coming up when Congress and the President have to deal with the continuing resolution and the debt ceiling once again. Yet there seems to be very little focus on dealing with this ongoing threat to the country’s ongoing well-being.
This silence on the economic situation makes me nervous. I suspect there’s a lot of planning and discussion behind the scenes on how those in power are going to convince the mass of Americans to give up our social safety net–they’re trying to figure out how to loot Social Security and Medicare.
I don’t think they’re going to be able to do it, because Americans are awake to the possibility now. As Dakinikat wrote yesterday, President Obama still dreams of a “Grand Bargain,” and so do many other powerful people like Pete Peterson, Alan Simpson, and lots of Republican and Democratic politicians. Just look at how Twitter responded when “Fix the Debt” tried to hawk its greedy plans on the social media site recently. Dakiniat wrote about that yesterday too. So I guess I see the current silence on as the calm before the storm which will hit after all the politicians enjoy their long, relaxing Thanksgiving and Christmas vacations.
Meanwhile, the biggest political story at the moment is the apparent mess that the government made of the Obamacare website. I haven’t tried to get on the site myself, so I don’t really understand what the problems are. But the media is very focused on them. From what I can tell, the biggest problem seems to be that the site is too slow. Today’s Washington Post reports that the government was aware of the problems but went ahead with the site launch despite them.
Days before the launch of President Obama’s online health insurance marketplace, government officials and contractors tested a key part of the Web site to see whether it could handle tens of thousands of consumers at the same time. It crashed after a simulation in which just a few hundred people tried to log on simultaneously.
Despite the failed test, federal health officials plowed ahead.
When the Web site went live Oct. 1, it locked up shortly after midnight as about 2,000 users attempted to complete the first step, according to two people familiar with the project.
As new details emerged about early warning signs of serious deficiencies in HealthCare.gov, Obama on Monday gave a consumer-friendly defense of the health-care law, insisting that the problems many Americans have faced in trying to enroll in insurance plans will be fixed quickly.
“There’s no sugarcoating it: The Web site is too slow; people have been getting stuck during the application process,” he said at a White House event.
At the same time, he admonished Republican critics of the federal insurance exchange, saying that “it is time to stop rooting for its failure.”
Obama’s reaction to the problems isn’t getting good reviews, even from supposedly liberal journalists. At the Atlantic, Garrance Franke-Ruta called Obama “Insurance Salesman In Chief.
Of all the things Barack Obama ever expected to be during the course of his life, a television insurance salesman is probably not one of them.
But that’s the role he took on Monday morning in a Rose Garden speech pitching insurance through the Affordable Care Act’s online marketplaces and acknowledging for the first time just how troubled the website to access them is. His remarks failed to address many of the specific concerns raised byreporters and technologists about the gargantuan Healthcare.gov website, and he and provided no new information about what went wrong or how, specifically, it will be fixed.
Instead, his message was more like an infomercial designed for the general public: We know there are problems with the site and we are on it. Meanwhile, we’re offering a great product that will save you money, so keep on trying, even if it’s a little frustrating.
Washington Post healthcare reporter and commenter Ezra Klein pushed back against the administration’s reference to the problem as bugs and technical problems.“These aren’t glitches, the website, to a first approximation, simply isn’t working” Klein said on Monday’s Morning Joe. Early traffic problems that occurred when the site was overwhelmed by visitors on the first few days may have actually masked the public from the larger problems, he said, like garbled or false information being sent to insurers.
“No one beta-tested the site, which is almost criminal,” the Huffington Post’s Sam Stein said.
“They keep using the word unacceptable. It’s not unacceptable, it’s outrageous,” Mike Barnicle said.“This is the president’s singular achievement, and to be so reticent about the problems that have gone is kind of surprising.”
Politico criticized Obama’s “passive” response to the problems with the website:
Once again, Barack Obama risks looking like a bystander to his own presidency.
Here’s what he did to kick off the week: assemble a crowd in the Rose Garden to hear him repeat how “frustrated” he was about the many problems that plagued the launch of the Affordable Care Act’s website, promise that a “tech surge” was already on its way to set those problems right and implore people to bear with him until they see what the program can do.
Here’s what he didn’t do: explain why those problems weren’t addressed before the Oct. 1 launch, why he didn’t seem to be aware of them before they went very public, or who would be suffering the consequences for any of it. He didn’t apologize. He announced, in broad terms, who would be coming in to help. But he didn’t say anything about who would be shown the exits.
His “nobody’s madder than me” Monday echoed the kinds of statements he’s repeatedly made about problems over the last few months — “Americans are right to be angry about it, and I am angry about it” (the IRS scandal), “It’s not as if I don’t have a personal interest” (the NSA scandal), “This is not a world we should accept” (Bashar Assad’s use of chemical weapons). He puts himself forward as a man frustrated with what’s happened on his watch, promising change, insisting that nothing of the sort could ever happen again.
I have to agree. Obama’s passivity is one of the biggest complaints I have about his presidency–particularly in the way he has (or hasn’t) dealt with the economic crisis.
The New York Times reports that it will take “weeks of work” to fix the website problems, despite the fact that most of the problems have been identified.
In interviews, experts said the technological problems of the site went far beyond the roadblocks to creating accounts that continue to prevent legions of users from even registering. Indeed, several said, the login problems, though vexing to consumers, may be the easiest to solve. One specialist said that as many as five million lines of software code may need to be rewritten before the Web site runs properly.
“The account creation and registration problems are masking the problems that will happen later,” said one person involved in the repair effort.
Personally, I’m finding this all pretty depressing, because it was starting to look like the Democrats could retake the House in 2014. The Obamacare mess isn’t going to help that project.
Today, CNN reported the results of new new poll that found that: 75% say most Republicans in Congress don’t deserve re-election.
A CNN/ORC International survey released Monday also found a majority saying that the Republicans’ policies are too extreme. And according to the poll, Democrats have an 8-point advantage over the Republicans in an early indicator in the battle for control of Congress. But with more than a year to go until the 2014 midterm elections, there’s plenty of time for these numbers to change.
The poll was conducted Friday through Sunday, just after the end of the 16-day partial federal government shutdown that was sparked in part by an effort by House conservatives to dismantle the health care law, which is President Barack Obama’s signature domestic achievement.
A majority of those questioned blamed congressional Republicans for the government shutdown and said the President was the bigger winner in the deal to end the crisis.
The survey also found nearly eight in 10 saying the shutdown was bad for the country, and the standoff has led to a loss of confidence and satisfaction in government. And more than seven in 10 think that another shutdown is likely.
I hope Obama gets serious about fixing the Obamacare problems so Republicans can’t get up off the mat.
Another big story in the news is the $13 billion penalty the Justice Department is seeking to get from JP Morgan Chase.
From Bloomberg: JPMorgan Guilty Plea Sought by Holder Shows Harder Stance.
JPMorgan Chase & Co. (JPM) Chief Executive Officer Jamie Dimon went to Washington almost a month ago to see if U.S. Attorney General Eric Holder would settle a criminal probe of mortgage fraud at the bank if it paid more money to resolve related civil investigations.
Holder’s team, which included Deputy Attorney General James Cole and Associate Attorney General Tony West, said ending the investigation by the U.S. attorney in Sacramento would require the bank to plead guilty to something, according to a person familiar with the talks, which were held in a conference room that was Robert F. Kennedy’s office when he had Holder’s job….
Later, the department proposed the bank plead guilty to making false statements related to sales of toxic mortgage bonds. The bank proposed a nonprosecution agreement, which Holder rejected, the person said. The bank agreed to assist the continuing criminal probe. The negotiation typifies the harder line the Obama administration is taking in its second term.
Well, that’s good news IMHO.
Holder’s refusal to let JPMorgan, the biggest U.S. bank, escape criminal liability for its mortgage-bond sales, and the move to extract penalties for wrongdoing that led to the financial crisis, may go a long way toward appeasing critics of the Justice Department who have been urging charges against bankers since the collapse of Lehman Brothers Holdings Inc. in 2008….
The effort began on orders from President Barack Obama, who promised in his 2012 State of the Union address to hold banks accountable for their role in helping trigger the deepest recession since the Great Depression. A mortgage task force of prosecutors and regulators set up to carry out the president’s mandate produced the record $13 billion deal, which requires a formal sign-off by both sides.
Great! Let’s hope Obama follows through. Another good sign is that The Wall Street Editorial page is up in arms about the settlement.
The tentative $13 billion settlement that the Justice Department appears to be extracting from J.P. Morgan Chase JPM +0.21% needs to be understood as a watershed moment in American capitalism. Federal law enforcers are confiscating roughly half of a company’s annual earnings for no other reason than because they can and because they want to appease their left-wing populist allies.
The settlement isn’t final and many details weren’t available on the weekend, but we know enough for Americans to be dismayed. The bulk of the settlement is related to mortgage-backed securities issued before the 2008 financial panic. But those securities weren’t simply a Morgan product. They were largely issued by Bear Stearns and Washington Mutual, both of which the federal government asked J.P. Morgan to take over to help ease the crisis.
So first the feds asked the bank to do the country a favor without giving it a chance for proper due diligence. The Treasury needed quick decisions, and Morgan CEOJamie Dimon made them in good faith. But five years later the feds are punishing the bank for having done them the favor. As Richard Parsons notes nearby, this is not going to make another CEO eager to help the Treasury in the next crisis. But more pointedly, where is the justice in such ex post facto punishment?
The WSJ complains that banks are being turned into “public untilities.” I think that’s exactly what they should be.
We’d like to see Mr. Dimon fight the charges, but the political reality is that he and his bank don’t have much choice. His board is eager to move on, and the government will only turn the screws harder if he resists. In a post Dodd-Frank world, banks are public utilities and no CEO can afford to resist the government’s demands.
The real lesson of the Morgan settlement isn’t that justice has finally been done to the perpetrators of the crisis. That would require arresting Barney Frank and those in Congress who blocked the reform of Fannie and Freddie, plus the Federal Reserve governors who created so much easy credit.
Hahahahahahahaha!! The oligarchs don’t like it much when the shoe is on the other foot, do they?
I’m already running out of space, so here are a few more headlines link dump style:
Rolling Stone: U.S. Drone Strikes Violate Laws of War
What’s the deal with Facebook?
Now it’s your turn. What stories are you following today? Please share your links in the comment thread.
I have some interesting links today–some of them a couple of days old, but even if you’ve seen them, they bear repeating.
First up, there’s just one more day until the first presidential debate. I just can’t wait to hear those “zingers” Mitt Romney’s advisers told the NYT he has been practicing for months.
Mr. Romney’s team has concluded that debates are about creating moments and has equipped him with a series of zingers that he has memorized and has been practicing on aides since August. His strategy includes luring the president into appearing smug or evasive about his responsibility for the economy.
Since August? I hope they haven’t gotten stale. Apparently they’re hoping Obama will have another “likable enough” moment. I doubt that will happen, but we’ll see.
Frankly, as Ezra Klein writes at HuffPo, Romney would be better off to forget the zingers and develop more popular policies.
Behind in the polls and facing mounting panic among his donors, Mitt Romney is readying his secret weapon for the debates: Zingers….Pro tip: If your strategy to turn the presidential election around relies on Romney’s sense of comic timing, you might want to prepare a Plan B, as well.
The idea that this election can be reshaped by a zinger speaks to a deeper problem in the Romney campaign’s fundamental view of the race. As they see it, Obama’s record is an obvious disaster and their job entails little more than pointing that out over and over again. That the polls haven’t seemed responsive to this theory hasn’t dissuaded them. The new explanation for Romney’s difficulties is that the media are in the tank for Obama and that’s why the Romney campaign’s message isn’t breaking through.
But, Klein says, Americans know the economy is bad, but they also think it would have been worse if John McCain had been elected, rather than Barack Obama. Check out the chart.
Anna Marie Cox also addressed the “zingers” story at the Guardian.
The Romney campaign, having already proven able to discover impressive new ways for a nomination to blunder (my jaw still involuntarily drops a little when I hear the phrase “47%”), they have now added yet another type of podiatric wound to their catalogue. According to a report in the New York Times on Saturday, Romney’s staff “has equipped him with a series of zingers that he has memorized and has been practicing on aides since August.”
Already an awkward presence, Romney seems particularly susceptible to the tense stillness and deathless pathos that accompanies a dud punchline. Picturing the forced jocularity around the campaign headquarters has its pleasures, specifically the idea of Mitt trotting out well-worn jokes with the panache of a Catskills stand-up:
“Take my economic policy … please!”
“How lazy is half America? So lazy …”
“Any car-elevator owners in the audience tonight?”
But there’s an awful flipside: my God, what if he actually tries one of them?
Whether you wince or guffaw at the image of Romney attempting and failing to “zing” the president, probably says more about your tolerance for the humiliation of others than your political sensibilities. You’d think covering politics would have inured me to it by now, but in real life, I can’t even watch “American Idol”. I will view the debate on Wednesday through the spaces between my fingers, with a desk nearby to bang my head against.
What I really wish is that Romney would follow Donald Trump’s advice. According to TPM, Trump tweeted that Romney “should ask Obama why autobiography states “born in Kenya, raised in Indonesia.”
Romney will definitely have to watch his tone though, based on the results of a focus group study that TPM reported today. And Republicans will have a hard time saying this one is biased, because it was done by Haley Barbour’s company.
Barbour’s firm Resurgent Republic conducted focus groups of blue collar voters in Ohio and suburban women in Virginia who supported Obama in 2008 but are now undecided. Both are swing demographics that Romney is working to win over in order to flip each state from blue to red.
Their findings? Voters are a lot more willing to believe attacks based around Romney quotes than they are on Obama quotes.
“Whenever we showed direct quotes from President Obama over the last few years, voters consistently say that this is probably taken out of context and they don’t seem to hold that same standard with Governor Romney,” pollster Linda DiVall, who conducted the Virginia focus groups, said in a conference call announcing the findings Monday.
She added that while their reaction struck her as “a little bit unfair,” it was nonetheless “American voters’ right to do that.”
Pollster Ed Goeas said his own Ohio focus groups elicited similar responses, which could make things harder for Romney as he seeks to reverse his comments that 47 percent of Americans consider themselves “victims.”
It sounds like these swing state voters have figured out that Romney is a lying liar who only cares about the needs of the top .01 percent. Voters just aren’t as stupid as the Romney campaign thinks.
Did you see the tough op-ed Harry Reid wrote for the Las Vegas Sun on Sunday? He really ripped Romney a new one.
We learn the most about someone’s character not from what he does when he knows others are watching but from what he does when he thinks they aren’t.
We’ve learned an awful lot of troubling things about Mitt Romney recently. First, his sweeping, closed-door condemnation of President Barack Obama’s supporters revealed the disdain he has for half the population he hopes to serve. Then, the limited tax returns Romney selectively released confirmed that he’s willing to share information about the time he’s been in the public eye and running for president, but not the time he was running the corporation he touts as his sole qualifying credential for the highest office in the land.
When he thought no one was listening, Romney accused 47 percent of Americans of not taking responsibility for their lives, painting them as lounging in government dependency — a conclusion he reached because, for various legitimate reasons, they are exempt from paying federal income taxes.
Romney stands not only on shaky ethical grounds in making that indiscriminate generalization — he’s also on flimsy factual footing. The 47 percent Romney derides as self-pitying “victims” includes seniors who live on a fixed income thanks to the Social Security they paid into and earned over a lifetime of hard work, our troops in combat zones and veterans who have fought for our country. It includes students studying to get the skills that will win them the jobs of the future and decent Americans actively looking for work because their jobs were outsourced by companies such as those Romney specialized in developing. Most of them pay plenty of payroll, property, local and state taxes.
Reid goes on to beat Romney over the head with his secret tax returns one more time. Go read the whole thing if you haven’t already. Reid is turning out to be the Democratic attack dog of the 2012 campaign season.
Just one more Romney link: Romney would put states in charge of federal lands. James Bruggers, a Kentucky reporter who covers environmental issues full-time writes:
Our public lands are a birthright, held in trust for each one of us and managed by a set of laws that were worked out through compromise by Congress and various presidential administrations going back generations.
They provide places for us to hike, ride our mountain bikes, horses, camp, hunt and fish. Many are managed for multiple uses, and they also allow for cattle grazing, timber harvesting, oil and gas development, mining and skiing.
Romney, however, has said he would change all this, putting states in control of lands now under the stewardship of such agencies as the U.S. Forest Service and the Bureau of Land Management, who are charged with making sure all Americans have a say in their management. Often this gets reported simply as an expansion of oil and gas development on public lands, a simplification that fails to acknowledge just how radical of a shift in public policy it would be to turn over federal lands to state control.
From a Romney white paper:
States will be empowered to establish processes to oversee the development and production of all forms of energy on federal lands within their borders, excluding only lands specially designated off-limits;
• State regulatory processes and permitting programs for all forms of energy development will be deemed to satisfy all requirements of federal law;
• Federal agencies will certify state processes as adequate, according to established criteria that are sufficiently broad, to afford the states maximum flexibility to ascertain what is
I still remember how shocked I was when I heard Romney say this in the Nevada primary debate. This is a huge issue as far as I’m concerned. American is still a beautiful country with many unspoiled wilderness areas. It is vital that we protect those public lands–they belong to all Americans, not to individual state governments.
Here’s another environmental story on the attempts to block the Keystone XL pipeline: BREAKING: Blockader Locks to Underground Capsule to Protect a Family Farm. It’s a live blog of the “Tar Sands blockade.” Here’s their Facebook page.
From Firedoglake blogger Kevin Gosztola:
A Tar Sands Blockader, Alejandro de la Torre, locked his body in a concrete capsule buried in the path of TransCanada’s Keystone XL pipeline to stop a small family farm in East Texas from being destroyed by construction. He blocked demolition for at least six hours before police were able to break off a chunk of concrete is arm was in and arrest him.
Police confiscated cameras of Blockaders that were there to film for Torre’s safety. Tar Sands Blockade spokesperson Ramsey Sprague reported they wanted to keep cameras on him as long as possible but police intimidated observers and took the cameras.
Last week, TransCanada supervisors encouraged police to use torture tactics on protesters to stop their nonviolent direct action.
Sprague recounted the brutality, which was “astounding.” Shannon “Rain” Beebe and Benjamin Franklin locked themselves to TransCanada machinery to stop clear-cutting. The police hung them with their arms behind their backs. They put pressure on their shoulder with their arms twisted. They pepper sprayed a tube connecting their arms. They twisted a tube cutting off circulation to their hands. (One protester is seeking medical attention for nerve damage.)
The police used tasers and planned to keep using tasers on Beebe and Franklin until they released. Cameras were supposed to be on the scene to film the action, but police were directed by TransCanada supervisors to run off those with cameras so they could commit brutality without people seeing video evidence on the evening news.
Continuing the environmental theme, pioneering environmental activist Barry Commoner died on Sunday.
Scientist and activist Barry Commoner, who raised early concerns about the effects of radioactive fallout and was one of the pioneers of the environmental movement, has died at age 95.
Commoner died Sunday afternoon at a Manhattan hospital, where he had been since Friday, said his wife, Lisa Feiner. He lived in Brooklyn.
Commoner was an outspoken advocate for environmental issues. He was one of the founders of a well-known survey of baby teeth in St. Louis that started in the late 1950s. The survey assessed the levels of strontium-90 in the teeth and showed how children were absorbing radioactive fallout from nuclear bombs that were being tested.
The survey helped persuade government officials to partially ban some kinds of nuclear testing.
Feiner said Commoner had “a very strong belief that scientists had a social responsibility, that the discoveries would be used for social good and that scientists also had an obligation to educate the public about scientific issues so that the public could make informed political decisions.”
Commoner took on that role of educating the public, writing books on environmental issues. Among his works were “Making Peace with the Planet” and “Science and Survival.” He made the cover of Time magazine in early 1970 and ran for president as a third-party candidate in 1980.
Finally, here’s a little bit of schadenfreude for you. Bloomberg reports that New York is “suing JP Morgan for fraud over mortgages securities.”
JPMorgan Chase & Co. (JPM), the biggest U.S. bank, was sued by New York Attorney General Eric Schneiderman over claims that the Bear Stearns business the bank took over in 2008 defrauded mortgage-bond investors.
Investors were deceived about the defective loans backing securities they bought, leading to “monumental losses,” Schneiderman said in a complaint filed today in New York State Supreme Court.
“Defendants systematically failed to fully evaluate the loans, largely ignored the defects that their limited review did uncover, and kept investors in the dark about both the inadequacy of their review procedures and the defects in the underlying loans,” Schneiderman’s office said.
Schneiderman in January was named co-chairman of a state- federal group formed to investigate misconduct in bundling of mortgage loans into securities leading up to the financial crisis. The group includes officials from the U.S. Justice Department, the Securities and Exchange Commission, the FBI and other federal and state officials.
Poor Jamie Dimon. Why don’t people respect his “success?”
Those are my suggestions for today. What are you reading and blogging about?
Suddenly it’s hot here in New England. Just last week I actually had to turn my furnace on to warm up the house! It’s been a pretty cold June here, but yesterday the temperature reached 96 in Boston. Today is supposed to be a repeat performance. As I’m writing this late on Wednesday night, it’s still 84 degrees! It has been quite a shock to the system, let me tell you.
There is apparently a heat wave stretching from Chicago to the Northeast. And how appropriate, since the Summer Solstice took place yesterday at 7:09PM Eastern time. The Summer Solstice is usually on June 21, but since 2012 is a leap year, it fell on June 20.
So last week, JP Morgan CEO Jamie Dimon appeared before the Senate Banking Committee and got his ass kissed by the committee members–many of whom have received generous campaign donations from Dimon and/or his bank. If you haven’t read Matt Taibbi’s takedown of the committee’s embarrassing performance, please check it out. Here’s a sample:
I wasn’t prepared for just how bad it was. If not for Oregon’s Jeff Merkley, who was the only senator who understood the importance of taking the right tone with Dimon, the hearing would have been a total fiasco. Most of the rest of the senators not only supplicated before the blowdried banker like love-struck schoolgirls or hotel bellhops, they also almost all revealed themselves to be total ignoramuses with no grasp of the material they were supposed to be investigating.
That most of them had absolutely no conception of even the basics of the derivatives market was obvious. But what was even more amazing was that several of them had serious trouble even reading aloud the questions their more learned staffers prepared for them. Many seemed to be reading their own questions for the first time.
It would be one thing if this had been a bunch of hick congressmen from the plains asking a panel of MIT professors about, say, ozone depletion, or the potential dangers of nuclear fallout. But these were members of the Senate Banking Committee, asking Dimon questions as though he were an alien from another world: “Tell us, Mr. CEO, what is this ‘derivative trading’ to which you refer? How long has it been in use on your planet?” The whole tenor of the proceeding was incredibly embarrassing, and showed just how unlikely it is that you’ll ever get anything like real questioning in a Senate hearing when a) the level of general expertise among the members is so shamefully low, and b) the witness is a man who controls millions of dollars of campaign contributions.
This week it was the House Banking Committee’s turn to hear from Dimon, and they apparently did slightly better than their Senate counterparts. I was particularly struck by this quote reported by George Zornick of The Nation:
As the House Financial Services Committee hearing into recent failures at JPMorgan waned, bank CEO Jamie Dimon finally said what had already been obvious to everyone — he didn’t want to be there. “These are complex things that should be done the right way, in my opinion in closed rooms,” Dimon said. “I don’t think you make a lot of progress in an open hearing like this.” In the closed room, Dimon said, everyone would be “talking about what works, what doesn’t work, and collaborating with the business that has to conduct it.”
I was immediately reminded of a remark that Mitt Romney made in January about how inappropriate it was for President Obama to be talking about income inequality in public–that such things should only be discussed in “quiet rooms.” Watch it:
Romney tells Matt Lauer that we peasants “envy” his wealth, and then expresses shock that Obama had talked about income inequality in campaign speeches:
Romney: I think it’s fine to talk about those things in quiet rooms and discussions about tax policy and the like. But the president has made it part of his campaign rally. Everywhere he goes we hear him talking about millionaires and billionaires and executives and Wall Street. It’s a very envy-oriented, attack-oriented approach and I think it will fail.
Here is what I wrote about this at the time:
Never in my life have I heard a more naked expression of the conservative philosophy that the rich are better than the rest of us and that they alone should make important decisions. Romney clearly believes that we proles must be protected from the knowledge of how lowly we really are. Romney actually believes that discussions of government tax policies that make the rich richer and the poor poorer should not be discussed in public–such poor taste! These topics must only be talked about in “quiet rooms,” presumably in grand mansions where only the very rich and powerful can hear.
No doubt Romney is expressing a common opinion among those of his class. The good news is that Romney has so little self-awareness that he can’t seem to avoid expressing his elitist opinions in public. Does he think that the proles don’t watch TV? Or does he think we’re too stupid to understand what he’s saying?
I guess I was right. These richie-rich guys don’t want us to know what they’re really up to. Zornick notes that Dimon
is indeed quite effective in closed rooms. He’s received personal audiences with Treasury Secretary Timothy Geithner to push back against a strong Volcker rule, and his staff has enjoyed several more. The closed rooms at JPMorgan are populated by throngs of former Congressional staffers and even former members. The bank has plied current members with millions in donations, including over $522,000 to the Senate Banking Committee, where Dimon testified last week, and $168,000 to members of the House Financial Services Committee just this year.
This works well for Dimon and his allies. The financial services industry was unable to defeat the Dodd-Frank legislation in public view because overwhelming numbers of Americans supported the bill—it was arguably the only popular piece of regulatory legislation in the Obama era—but Wall Street has operated in closed rooms over the past two years to delay and weaken the rules.
Back in January, Charles Pierce also wrote about Romney’s “quiet rooms” remark. His post is well worth reading again.
Those words, and the entitled attitude with which they are so luxuriously chandeliered, should kill any campaign being conducted in 2012. The country is still staggering, blinking, out of the rubble of an economy that was shattered by an industry full to its gunwales with Willard Romneys. He is campaigning in South Carolina, where unemployment is pushing up at 10 percent. Do those people want to leave their fates up to a bunch of fancy haircuts in “quiet rooms” where they discuss how much more flesh they can pick off the carcass of what is laughingly called the “middle class” of this country?
You mean like the one where these wonderful conversations took place among our lords of the universe, and aren’t they so very cute as they sit there making their funnies and giggle like the Pep Club while the tectonic plates of the national economy crack under their feet?
“Quiet rooms” should be enough. Willard Romney, stripper of companies, looter of pension, career gombeen man for the most unproductive “industry” in the history of man, thinks that a discussion of the nation’s staggering gap in inequality, and of the steady decline of a functioning middle-class, should be conducted in private, and not in the streets, where those hippies and their drum circles might disturb the plush japery of their betters. This is because, for Willard Romney, the world is divided into two kinds of people: Willard Romney and The Help.
I hope you don’t mind the trip down memory lane. But really, Mitt Romney and Jamie Dimon are very much alike: selfish, entitled, accustomed to being catered to, and oblivious to the needs of 99 percent of Americans. Romney sees no need to tell the peasants how much he pays in taxes, who contributes to his campaign, or even what policies he favors. We really really should bring back the guillotine.
In other news, Mitt Romney is giving a speech today in which he may have to get more specific about what he would do about Obama’s popular executive order on immigration.
Wall Street Journal: Romney’s Fine Line on Immigration
Mitt Romney’s address Thursday to Latino politicians will test whether he is willing to stake out immigration policy more in line with a growing bloc of Hispanic voters. But his bigger challenge may be striking a tone acceptable to his Republican Party, which remains deeply divided on the issue.
GOP congressional leaders are hoping Mr. Romney, with the Florida speech, will find a way to bridge divisions and define the party’s response to President Barack Obama’s announcement last week that he would allow many young people who came to the U.S. illegally as children to stay and apply for work permits.
That announcement was cheered by Hispanic leaders and likely boosted the president’s standing with Hispanics. It also reignited longstanding tensions within the GOP between those who consider aid for people who came to the U.S. illegally to be an unacceptable form of amnesty, and those looking for a softer approach—in part to appeal to Hispanic constituents.
Will he continue to equivocate on the issue, or will he finally embrace a specific policy? My money is on more beating around the bush. I’ll bet Romney would prefer to discuss the issue in “quiet rooms.”
This coming weekend, Romney will host a “retreat” in Utah for campaign donors who have raised at least $100,000 for him. It will all be very hush-hush–no press allowed. More of those discussions in “quiet rooms.”
The presumptive Republican nominee and his senior advisers and aides are hosting two days of policy sessions and campaign strategy discussions at the Deer Valley resort for more than 100 top fundraisers and their spouses. Those who raised more than $100,000 are expected to attend.
More than a dozen Republican heavy-hitters are scheduled to join the private retreat as special guests. According to a fundraiser who is attending, they include some GOP stars thought to be in contention to be Romney’s vice presidential running mate: Rep. Paul Ryan (Wis.), Louisiana Gov. Bobby Jindal and Sen. John Thune (S.D.).
George W. Bush strategist Karl Rove, who helps run American Crossroads, the well-funded GOP super PAC, is planning to speak at the retreat, said the fundraiser, who was not authorized to publicly discuss the event and spoke on the condition of anonymity. Rove’s appearance could raise questions because of laws barring any coordination between super PACs and campaigns.
Hey, rules are for the proles, not patricians like Willard Mitt Romney or Jamie Dimon for that matter.
So what else is going on? What’s on your reading and blogging list for today?
Wall Street Royal Jamie Dimon deigned to appear before a Senate Committee yesterday, and the Senators mostly sucked up to him. I’m surprised they didn’t ask if he needed a pillow for his chair. MSNBC: Senate treats JPMorgan CEO Dimon with kid gloves
Dimon was expected to receive a frosty reception in his first congressional appearance since he announced the bank sustained a trading loss some analysts now estimate is at least $3 billion. It was a massive loss for the nation’s biggest financial institution.
Instead, Dimon, who has won praise for bringing JPMorgan (JPM) through the financial crisis relatively unscathed, was treated cordially by most of members of the Senate Banking Committee. They peppered him with questions about regulation and risky practices at the bank, but did not press him to give an update on the losses resulting from the trade. JPMorgan is expected to give an update to shareholders when it reports its second-quarter earnings July 13.
“I think it was a pretty favorable day,” David Konrad, a Keefe, Bruyette & Woods banking analyst, told CNBC. Konrad said he was surprised that the questioning of Dimon by lawmakers was so “professional.”
Excuse me, “professional” for a Senator would have been sending this man to the woodshed. NPR’s Marketplace called the treatment of Dimon “a wake for Dodd-Frank.”
Yahoo has named the winner of the “Most Tepid Endorsement of Mitt Romney” contest: it’s a bumper sticker that reads “At least he’s not a communist.”
Until recently, it appeared that no one could unseat Indiana Gov. Mitch Daniels as the champion of the tepid Romney endorsement. Since Yahoo News started conducting reader polls on the politicians who supported Mitt Romney in the least enthusiastic terms, Daniels has defeated original champ George Pataki and defended the crown against Newt Gingrich, Rick Santorum and George W. Bush. (The former president came the closest to unseating Daniels.)
We thought the book was closed on the tepid endorsement bracket until Yahoo News reporter Chris Moody spotted a bumper sticker at last weekend’s regional CPAC conference in Chicago bearing these words of praise: “At least he’s not a communist.”
You can read the other tepid endorsements at the link.
First Romney made fun of Obama for wanting to help cities and states pay for cops, teachers, and firefighters. Then he went on Fox News and said it was a “strange accusation” for anyone to say he didn’t want to hire teachers and first responders.
After an extended skewering of President Obama for a gaffe about the private sector last week, ending with the charge that it was proof the president was “out of touch” Romney was asked by Fox and Friends’ Brian Kilmeade for his response to Obama saying it was Romney who was clueless (Romney’s comment comes at about the 1:40 mark) :
[BRIAN] KILMEADE: He says that you’re out of touch. He says you want to cut firefighters and teachers, that you don’t understand what’s going on in these communities. What do you say to that, Governor?
ROMNEY: Well, that’s a very strange accusation. Of course, teachers and firemen and policemen are hired at the local level and also by states. The federal government doesn’t pay for teachers, firefighters or policemen. So, obviously that’s completely absurd.
But of course the federal government does subsidize states and they often use the money to pay for these public employees. In fact, the reason so many teachers, firefighters and cops are getting laid off now is because stimulus money has run out.
Yesterday Greg Sargent pointed out that Romney’s plan would indeed cut billions from cops, firefighters and teachers
Yesterday Mitt Romney claimed that it was “ completely absurd” of the Obama campaign to argue that he favors cutbacks in cops, firefighters and teachers. “The federal government doesn’t pay for teachers, firefighters or policemen,” Romney said, adding that they were paid by states and localities.
What’s getting lost in the back and forth here is that Romney’s actual economic plan would, in fact, cut billions of dollars in federal money that goes to cops, firefighters, and teachers — perhaps more than $10 billion a year, in fact.
This is the conclusion of the Center on Budget and Policy Priorities, which analyzed Romney’s plan through the prism of the debate over public workers at my request.
As Michael McAuliff reported yesterday, despite Romney’s claim, the federal government does give billions of dollars to states and localities through programs like Title 1, the COPS program, FEMA and others — which pay for first responders and teachers.
This is amazing. Romney finally broke down and decided to talk to a media source that isn’t Fox News! He will be on Face The Nation on Sunday morning.
A full year into his presidential campaign, presumptive Republican nominee Mitt Romney will venture out of his Fox comfort zone this Sunday to make his first appearance on a rival network’s political talk show.
Romney has been interviewed several times on ”Fox News Sunday” this campaign cycle, but has declined repeated invitations to appear on any of the other Sunday shows, occasionally drawing scorn from veteran anchors accustomed to interviewing presidential candidates.
Let’s hope Shieffer asks a few tough questions. One thing Shieffer will probably ask about is Romney’s choice of Vice President. One of the leading contenders, Marco Rubio, announced yesterday that he supports the illegal Florida voter purge.
“How can you argue against a state identifying people who are not rightfully on the voter rolls?” he said at a Bloomberg event, according to the Tampa Bay Times.
Rubio’s comments put him in line with Florida Gov. Rick Scott (R) who on Tuesday declared the debate on the merits of the purge “over,” because the probe had supposedly turned up more than 50 non-citizen voters who had cast ballots.
The Department of Justice didn’t agree. Later Tuesday, it announced it was launching a federal lawsuit against Florida over complaints that the purge was taking place within 90 days of its August 14 primary election, as well as over its alleged violation of a voting rights law meant to prevent states from suppressing voters.
That might not help Romney win over Latino voters.
John Avlon has a piece at CNN on Jeb Bush and other “moderate” Republicans who are starting to fight back against Grover Norquist:
This is what happens when politics starts looking like a cult: Jeb Bush gets attacked for being a traitor to the conservative cause.
The former Florida governor has been speaking with the freedom of someone not running for office, saying that both his father and Ronald Reagan would have had a hard time in today’s hard-right GOP and questioning the wisdom of Grover Norquist’s absolutist anti-tax pledge.
That set off a fascinating public fight between Bush and Norquist, two faces of competing factions within Republican Party. It is the latest evidence of a growing GOP backlash against the ideological straitjacket Norquist has attempted to impose on governing in the United States.
And Jeb is not alone.
As it turns out, Norquist has reason to be concerned. It’s not just Jeb Bush. A growing number of Republicans are rejecting his pledge. Oklahoma conservative Sen. Tom Coburn called the pledge’s effective veto of deficit reduction plans “ridiculous” when talking with Erin Burnett on “OutFront.”
Sen. Lindsey Graham of South Carolina on Tuesday declared his independence from the pledge, saying, “We’re so far in debt, that if you don’t give up some ideological ground, the country sinks.”
Add to those voices seven other Republican U.S. senators — from Maine’s Susan Collins to Iowa’s Chuck Grassley to Wyoming’s John Barrasso — and 11 Republican House members, ranging from centrist New Yorker Richard Hanna to tea party Floridian Allen West.
In pedophile news, Jerry Sandusky had another bad day in court yesterday with three victims testifying that he manipulated and threatened them into putting up with his sick sexual behavior.
The trio of young men who testified against Jerry Sandusky on the third day of his sexual-abuse trial couldn’t have been more different in personality and temperament. Yet each of their testimonies was sexually graphic and disturbing—and midway through the prosecution’s fast-tracked arguments, a clear pattern has emerged in their allegations.
I’m not going to quote all of the sordid details–there are too many of them anyway. You can read it all at the link. I’ll just give you one excerpt that shows what Sandusky is all about:
Then, the witness told the jury of a time he visited the Sandusky home.
“We were in the basement. We were wrestling,” he said in a monotone frequently heard from abuse victims who have had to tell their stories multiple times. “The defendant pinned me to the floor, pulled down my gym shorts, and started to perform oral sex on me.” Asked by prosecutor Joe McGettigan what his reaction was at the time, the witness said, “I freaked out.”
“Did he ever say anything to you about it?” McGettigan asked.
“He told me if I ever told anyone I’d never see my family again,” the young man replied. “Later he apologized and said he didn’t mean it, that he loved me.”
I hope Sandusky goes to prison for life, and I want to see prosecutions of his enablers at Penn State. It’s an outrage that he was allowed to go on abusing children for years after many at the school knew about his behavior.
And then there’s the Catholic Church: U.S. Catholics still suspect priests sexually abuse children: Report
The National Review Board said that, a decade after the US Conference of Catholic Bishops issued a child protection charter, there has been a “striking improvement” in the way the Church deals with the abuse of minors by clergy.
“Children are safer now because of the creation of safe environments, and action has been taken to permanently remove offenders from ministry,” said the report, released as the Conference began its annual spring meeting in Atlanta.
But it acknowledged: “Despite solid evidence (to the contrary), many of the faithful believe that sexual abuse by clergy is occurring at high levels and is still being covered up by bishops.”
Well, what did they expect? I’m certainly not surprised. In fact I’d be surprised if there aren’t still pedophile priests abusing children.
I’ll end with the strange story of “Forest Boy.”
Berlin police on Wednesday released photos an English-speaking teenage boy who wandered into the city nine months ago saying he had been living for the last five years in the forest with his father.
Police spokesman Thomas Neuendorf said all attempts to identify the boy since he emerged in the German capital on Sept. 5 have been unsuccessful, and they are now hoping the release of his photo may produce some leads.
“We have checked his DNA against all missing person reports, sent the data to Interpol so that they could check it internationally, but unfortunately without any success,” Neuendorf said.
The boy has told authorities his father called him “Ray” and that he was born June 20, 1994, but claims not to know his last name or where he’s from.
He said his mother, Doreen, died in a car accident when he was 12 and after that he and his father, Ryan, took to the forest. He said they wandered using maps and a compass, staying in tents or caves overnight.
He told authorities that after his father died in August, 2011, he buried him in the forest and then walked five days north before ending up in Berlin, and showed up at city hall.
As of last night, the identity of the boy was still a mystery even after release of the photos.
What’s on your reading and blogging list today?
I’m headed up to LSU this morning for baby daughter’s graduation. She’s getting a degree in finance. She wants to work for a high tech company and isn’t headed to Wall Street. Next weekend is Doctor Daughter’s wedding in Colorado. I’m getting all fitted up in a Sari for her big fat Bollywood wedding. I’m not thrilled about having a bare midriff. Needless to say, I’m a wreck.
Barbara Ehrenreich writes a fascinating post at TruthDig on how our various state and local governments are looting the poor.
Local governments are discovering that they can partially make up for declining tax revenues through fines, fees, and other costs imposed on indigent defendants, often for crimes no more dastardly than driving with a suspended license. And if that seems like an inefficient way to make money, given the high cost of locking people up, a growing number of jurisdictions have taken to charging defendants for their court costs and even the price of occupying a jail cell. The poster case for government persecution of the down-and-out would have to be Edwina Nowlin, a homeless Michigan woman who was jailed in 2009for failing to pay $104 a month to cover the room-and-board charges for her 16-year-old son’s incarceration. When she received a back paycheck, she thought it would allow her to pay for her son’s jail stay. Instead, it was confiscated and applied to the cost of her own incarceration.
You might think that policymakers would take a keen interest in the amounts that are stolen, coerced, or extorted from the poor, but there are no official efforts to track such figures. Instead, we have to turn to independent investigators, like Kim Bobo, author of Wage Theft in America, who estimates that wage theft nets employers at least $100 billion a year and possibly twice that. As for the profits extracted by the lending industry, Gary Rivlin, who wrote Broke USA: From Pawnshops to Poverty, Inc.—How the Working Poor Became Big Business, says the poor pay an effective surcharge of about $30 billion a year for the financial products they consume and more than twice that if you include subprime credit cards, subprime auto loans, and subprime mortgages.
These are not, of course, trivial amounts.
Martha Rosenberg writes about ” How Big Pharma and the Psychiatric Establishment Drugged Up Our Kids” over at Alternet. You think bald heads, limp dicks, and wrinkles are the new gravy train? Well, check this out. “Pediatric psychopharmacology is a billion-dollar business that sustains Pharma and Pharma investors on Wall Street.” This isn’t St. Joseph’s baby aspirin we’re talking about. Gotta kid that’s acting a little eccentric? Well, just take her to the doctor! There’s a pill for that!
In his book Psychiatryland, psychiatrist Phillip Sinaikin recounts reading a scientific article in which it was debated whether a three-year-old girl who ran out into traffic had oppositional-defiant disorder or bipolar disorder, the latter marked by “grandiose delusions” that she was special and cars could not harm her.1
How did the once modest medical specialty of child psychiatry become the aggressive “pediatric psychopharmacology” that finds ADHD, pediatric conduct disorder, depression, bipolar disorder, oppositional defiant disorder, mood disorders, obsessive-compulsive disorders, mixed manias, social phobia, anxiety, sleep disorders, borderline disorders, assorted “spectrum” disorders, irritability, aggression, pervasive development disorders, personality disorders, and even schizophrenia under every rock? And how did this branch of psychiatry come to find the answer to the “psychopathologies” in the name of the discipline itself: pediatric psychopharmacology? Just good marketing. Pharma is wooing the pediatric patient because that’s where the money is. Just like country and western songs about finding love where you can when there is no love to be found at home. Pharma has stopped finding “love” in the form of the new blockbuster drugs that catapulted it through the 1990s and 2000s. According to the Wall Street Journal, new drugs made Pharma only $4.3 billion in 2010 compared with $11.8 billion in 2005—a two-thirds drop.2
The finance/econ twitter wonks were all on this WSJ story called “Inside J.P.Morgan’s Blunder”. Their insider says that Jamie in the Sky with Dimon actually approved all those disastrous trades. Oopssssss…..
This behind-the-scenes account of the disaster—based on interviews with numerous J.P. Morgan executives and with officials on Wall Street and in Washington—provides new details about the drama inside the bank as executives sought to understand the scope of the losses and decide what to do about them.
Among other things, Mr. Dimon initially resisted ousting the executive at the center of the mess, confided in his wife that he had “missed something bad,” and expressed regrets with his colleagues one night over vodka about how they had all let the firm down.
“The big lesson I learned: Don’t get complacent despite a successful track record,” Mr. Dimon said in an interview Wednesday. “No one or no unit can get a free pass.”
The debacle has raised broad questions on Wall Street and in Washington about whether any executive can properly oversee such a large financial institution, whether new regulatory rules will do anything to prevent another financial crisis and whether tougher regulation is needed to further rein in risky bank trading, particularly at financial behemoths that are viewed as too big to fail.
The bank has ousted the executive in charge of its Chief Investment Office, a huge trading unit at the heart of the scandal that has contributed more than $4 billion of net income over the past three years—nearly 10% of J.P. Morgan’s overall profit during that period.
The stakes are high. Mr. Dimon personally approved the concept behind the disastrous trades, according to people familiar with the matter. But he didn’t monitor how they were executed, triggering some resentment among other business chiefs who say the activities of their units are routinely and vigorously scrutinized.
I see lean and hungry mean and we’ve just passed the Ides of May. It’s not just our banks. It looks like Greek Banks are experiencing bank runs. They really didn’t fix that global financial melt down thingie, did they? Greek capital is fleeing the country. Gold bullion any one? Picasso paintings? Bullets?
Greeks have withdrawn €3bn (£2.4bn) from the banking system since the country’s inconclusive elections on 6 May, with tellers saying savers were making two or three visits a day to local banks.
Savers fear Greece leaving the eurozone and returning to the drachma. An aide to the outgoing prime minister, Lucas Papademos, said there were “serious fears that the banks were running out of money”.
Greece’s president, Karolos Papoulias, warned on Monday that €700m had been withdrawn but said he had been assured by the governor of the Greek central bank, George Provopoulous, that there was no panic yet.
According to minutes of a meeting on Monday, Papoulias said: “Withdrawals and outflows by 4pm when I called him [Provopoulous] exceeded €600m and reached €700m. He expects total outflows of about €800m, including conversions into German bunds [bonds] and other such things.”
Greeks have been slowly withdrawing cash from the banking system ever since the country first needed a bailout two years ago. Nearly a third of bank deposits were withdrawn between January 2010 and March 2012.
A crucial €18bn cash injection to stabilise Greece’s banks has been held up at the European financial stability fund’s Greek offshoot, the Hellenic financial stability fund (HFSF), for nearly two weeks with officials in Brussels refusing to release the funds because of the political instability in the wake of the elections. That had still not been released by tonight and is now not expected to be released for another four days despite the efforts of the Papademos government to expedite the recapitalisation of Greek banks.
Dimon will be facing a Senate Committe shortly. I watched the Goldman Sachs hearings awhile ago. I’m convinced the entire Senate Banking Committe wouldn’t know a bull flattener from a contango. (Oh, ask him about his naked shorts! I’ll watch any way.
Johnson announced Thursday that the panel’s investigation of the botched trade had “made it clear” that lawmakers needed to “hear directly” from the head of the bank.
The Banking Committee is currently set to hold two hearings on the implementation of the Wall Street reform law, which has been a dominant topic on Capitol Hill ever since JPMorgan announced it had lost at least $2 billion thanks to a complex bet on corporate debt. The New York Times reported Thursday the losses had actually climbed to $3 billion.
On May 22, the committee will hear from regulators at the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) on the financial overhaul. The SEC is reportedly investigating the JPMorgan trade, and the CFTC is responsible for implementing new restrictions on financial derivatives, which played a key role in the bank’s bad bet.
On June 6, the committee will hear from regulators with the Federal Reserve, Federal Deposit Insurance Corporation, Consumer Financial Protection Bureau, the Office of the Comptroller of the Currency and the Treasury Department.
This last link is somewhat unusual for me. The Saint’s bounty scandal continues to be big news down here. Vilma is going to take Goodell to court. This could be popcorn worthy.
Vilma accused the commissioner of making false statements about him in reports about the bounties allegedly paid to players for intentionally hurting opponents during games, according to a filing in federal court today in New Orleans.
“Goodell’s statements forever falsely taint and permanently damage Vilma, in the eyes of NFL clubs, media, fans and sponsors, as a player who brazenly disregards NFL rules and intentionally attempts to injure his opponents,” according to the complaint.
Vilma was banned in March for the 2012 season without pay for his role in the Saints’ bounty program. His penalty was the most severe of the four players who were suspended. The league’s investigation concluded that as captain of the defense, Vilma assisted then-defensive coordinator Gregg Williams in establishing and funding the program that offered money to players who knocked specific opponents out of a game.
That’s my offerings this morning. I may not see you around much for the next few weeks. Be assured I’m not having a lot of fun and leaving you out of it. What’s on your reading and blogging list today?
On Tuesday night I wrote a brief post about the bizarre speech Mitt Romney gave in Des Moines, Iowa earlier that day. I was struck by Romney’s childish effort to get at President Obama by talking about Bill Clinton’s economic policies and claiming that Obama must have ignored those policies because he has some kind of grudge against both Clintons. It was so strange and off key that I thought Romney sounded like a crotchety old busybody gossiping over the backyard fence.
I didn’t really even go into the many baldfaced lies Romney told in the speech–I guess I’ve become so accustomed to his total refusal to confine himself to reality as it is that I almost don’t notice it anymore. Basically, Romney attacked Obama the deficit that was primarily created by Bush, and made his usual claims that he (Romney) will be able to cut taxes by 20 percent, increase defense spending, and at the same time magically balance the budget and dramatically reduce unemployment. Only a moron would buy what he’s selling.
Yesterday, a number of bloggers commented on that speech, so I thought I’d share some of those reactions in this morning’s reads.
Steve Benen at Maddowblog: A peek into an alternate reality.
Mitt Romney delivered a curious speech in Iowa yesterday, presenting his thoughts on the budget deficit, the debt and debt reduction, which is worth reading if you missed it. We often talk about the problem of the left and right working from entirely different sets of facts, and how the discourse breaks down when there’s no shared foundation of reality, and the Republican’s remarks offered a timely peek into an alternate reality where facts have no meaning.
Even the topic itself is a strange choice for Romney. If the former governor is elected, he’ll inherit a $1 trillion deficit and a $15 [trillion] debt, which he’ll respond to by approving massive new tax cuts and increasing Pentagon spending. How will he pay for this? No one has the foggiest idea.
In other words, the guy who intends to add trillions to the debt gave a speech yesterday on the dangers of adding trillions to the debt.
Benen says he doesn’t believe Romney is “stupid,” but he must be “operating from the assumption that voters are stupid.” I’d say that’s true. I think Romney believes that he’s much smarter and more worthy than just about anyone and that poor and middle-class people are beneath contempt.
Jonathan Cohn at The New Republic: Romney’s Make-Believe Story on the Economy. Cohn writes about Romney’s claims that Obama’s failure to reduce the deficit is the cause of the “tepid recovery,” unemployment, and the struggles of seniors to get by on fixed incomes.
Note the way Romney establishes cause and effect here: Obama’s contribution to higher deficits are the reason more people can’t get work and more seniors can’t make ends meet right now. This is an audacious claim and, while I’m no economist, I’m pretty sure it places Romney on the outer edges of the debate among mainstream scholars.
I know of serious conservatives who think the Recovery Act, which has increased deficits temporarily, didn’t ultimately do much to create jobs in the near term. And I know of serious conservatives who think that creating jobs now wasn’t worth the long-term downside of adding to the federal debt, however incrementally. Both viewpoints seem to represent minority views, if a recent University of Chicago survey of leading economists is indicative. But the arguments have at least some logic to them.
But Romney’s suggestion that unemployment today is a consequence of Obama’s contribution to the deficit (real or imagined) requires further leaps of logic. You’d have to argue, for example, that extensions of unemployment benefits have reduced incentives to work (despite research to the contrary) and that such negative effects substantially outweigh the positive effects of traditional stimulus measures. It’s not impossible to make this case. I think Casey Mulligan, also of the University of Chicago, has written things along these lines for the New York Times. But, unless I’m missing something, that argument is even more marginal than suggestions the Recovery Act didn’t help at all.
I suspect that even Cohn’s effort to make sense of Romney’s fantasy economic theory will have Dr. Dakinikat pulling her hair out.
Jonathan Chait at New York Magazine: Romney’s Budget Fairy Tale.
In the real world, the following things are true: The budget deficit was projected to top $1 trillion even before President Obama took office, and that was when forecasters were still radically underestimating the depth of the 2008 crash. Obama did propose temporary deficit-increasing measures, an economic approach endorsed in its general contours, if not its particulars, by Romney’s economists. These measures contributed a relatively small proportion to the deficit, and their effect is short-lived. Obama instead focused on longer-term measures to reduce the deficit, including comprehensive health-care reform projected to reduce deficits by a trillion dollars in its second decade. Obama put forward a budget plan that would stabilize the debt as a percentage of the economy. Obama has hoped to achieve deeper long-term deficit reduction by striking bipartisan deals with Congress, and he has tried to achieve this goal by openly endorsing a bipartisan deficit plan in the Senate and privately agreeing to a more conservative plan with John Boehner, both of which were killed by Republican opposition to any higher revenue.
But Romney doesn’t seem to live in the real world, and Chait suggests that Romney either doesn’t understand how deficits work or doesn’t care if what he says makes any sense at all.
In Romney’s telling, the terms debt and spending are essentially interchangeable. When presented with Obama’s position — that the solution to the debt ought to include both higher taxes and lower spending — he rejects it out of hand. Naturally, Romney has admitted before that his budget plan “can’t be scored.” It’s an expression of conservative moral beliefs about the role of government. While loosely couched in budgetary terms, Romney is expressing an analysis that resides outside of, and completely at odds with, mainstream macroeconomic forecasting and scoring assumptions.
At the Plum Line, Greg Sargent discusses How Mitt Romney gets away with his lying.
If you scan through all the media attention Romney’s speech received, you are hard-pressed to find any news accounts that tell readers the following rather relevant points:
1) Nonpartisan experts believe Romney’s plans would increase the deficit far more than Obama’s would.
2) George W. Bush’s policies arguably are more responsible for increasing the deficit than Obama’s are.
Oh, sure, many of the news accounts contain the Obama campaign’s response to Romney’s speech; the Obama campaign put out a widely-reprinted statement arguing that Romney’s plans would increase the deficit and that he’d return to policies that created it in the first place.
But this shouldn’t be a matter of partisan opinion. On the first point, independent experts think an actual set of facts exists that can be used to determine what the impact of Romney’s policies on the deficit would be. And according to those experts, based on what we know now, Romney’s policies would explode the deficit far more than Obama’s would.
Obviously, the problem is the obsequious corporate media. But the Romney campaign makes it impossible for even the few remaining serious reporters to question his policies by keeping the candidate completely insulated from the press except for occasional appearances on Fox News and lightweight network morning shows like Good Morning America. Yesterday, Politico reprinted tweets from several reporters who were “physically” blocked from talking to Romney on a rope line.
Speaking of Republican ignorance of basic economics, House Republicans are gearing up for another pitched battle on increasing the debt ceiling. Speaker John Boehner met with President Obama at the White House today and they “clash[ed] over” increasing the debt limit, according to The Hill.
The president convened the meeting of the bipartisan congressional leadership to discuss his “to-do list” for Congress, but an aide to the Speaker said the bulk of the meeting was spent on other issues, including a pile-up of expiring tax provisions and the next increase in the federal debt limit.
Boehner asked Obama if he was proposing that Congress increase the debt limit without corresponding spending cuts, according to a readout of the meeting from the Speaker’s office. The president replied, “Yes.” At that point, Boehner told Obama, “As long as I’m around here, I’m not going to allow a debt-ceiling increase without doing something serious about the debt.”
Shortly after the meeting, White House press secretary Jay Carney told reporters that the president warned the leadership that he would not allow a repeat of last August’s debt-ceiling “debacle,” which led to a downgrade in the U.S. credit rating.
In a related story, there’s this piece at Wonkblog about the Pete Peterson summit and how Democrats talked long-windedly about cutting “entitlements,” and Republican refused to talk about tax increases. Read it and weep. I’m not even going to quote from it, because it’s too damn depressing.
So far Jamie Dimon seems to have survived the $2 billion loss recently suffered by J.P. Morgan.
The CEO of JPMorgan Chase survived a shareholder push Tuesday to strip him of the title of chairman of the board, five days after he disclosed a $2 billion trading loss by the bank.
CEO Jamie Dimon also won a shareholder endorsement of his pay package from last year, which totaled $23 million, according to an Associated Press analysis of regulatory filings.
Dimon, unusually subdued, told shareholders at the JPMorgan annual meeting that the company’s mistakes were “self-inflicted.” Speaking with reporters later, he added: “The buck always stops with me.”
Yeah, right. The buck will stop with the taxpayers if Dimon’s bank ultimately crashes and burns. Bill Moyers asked economist Simon Johnson about that.
Moyers: I was just looking at an interview I did with you in February of 2009, soon after the collapse of 2008 and you said, and I’m quoting, “The signs that I see… the body language, the words, the op-eds, the testimony, the way these bankers are treated by certain congressional committees, it makes me feel very worried. I have a feeling in my stomach that is what I had in other countries, much poorer countries, countries that were headed into really difficult economic situations. When there’s a small group of people who got you into a disaster and who are still powerful, you know you need to come in and break that power and you can’t. You’re stuck.” How do you feel about that insight now?
Johnson: I’m still nervous, and I think that the losses that JPMorgan reported — that CEO Jamie Dimon reported — and the way in which they’re presented, the fact that they’re surprised by it and the fact that they didn’t know they were taking these kinds of risks, the fact that they lost so much money in a relatively benign moment compared to what we’ve seen in the past and what we’re likely to see in the future — all of this suggests that we are absolutely on the path towards another financial crisis of the same order of magnitude as the last one.
A number of shareholders have sued Dimon over the losses, according to Bloomberg (via the SF Chroncle). And of course lots of people are gloating over Dimon’s getting temporarily knocked off his pedestal. Jena McGregor writes in the WaPo:
It’s being called Dimonfreude.
There are barely disguised smirks emanating from the canyons of Wall Street and the business press over the fact that Jamie Dimon has had to admit a mistake — and a whale of one, for that matter.
For years, the JPMorgan CEO (and America’s least-hated banker, as he was known) has worn a halo over those pinstripes. Dimon has been called President Obama’s “favorite banker”. Institutional Investor magazine has called him the country’s best CEO for two years running. And his actions during the financial crisis have been painted in patriotic terms: Press reports said he “answered the call” from then-FDIC chairman Sheila Bair to buy Washington Mutual, one of two banks he scooped up during the financial meltdown, and he has cited a patriotic duty to a country in crisis as why he took in $25 billion in government aid.
Yet now, Dimon is in the hot seat as JPMorgan confronts a $2 billion trading loss and the early stages of a criminal probe by the Justice Department.
Finally, some sad news: Estranged Wife of Robert F. Kennedy Jr. Is Found Dead at Home in Westchester
Mary R. Kennedy, the estranged wife of Robert F. Kennedy Jr., was found dead on Wednesday at the family’s home in Bedford, N.Y. She was 52.
Ms. Kennedy’s death was confirmed in a statement from her family, who did not comment on the circumstances. The Bedford Police Department said only that it had investigated a “possible unattended death” in an outbuilding at the home.
Her lawyer, Kerry A. Lawrence, would not say whether foul play was suspected. Kieran O’Leary, a spokesman for Westchester County, said an autopsy was scheduled for Thursday morning.
Born Mary Richardson, Ms. Kennedy joined one of America’s foremost political families in 1994, in a marriage ceremony aboard a boat on the Hudson River, near Stony Point, N.Y. At the time, she was an architectural designer at Parish-Hadley Associates in New York.
Those are my suggested reads for today. What are you reading and blogging about?