Wednesday ReadsPosted: November 17, 2010 Filed under: morning reads | Tags: Dubya Library, GM IPO, Murkowski v Demint, Obama triangulation, Plum Line, QE2, Richard Wolffe 59 Comments
So we finally have the triangulation word and President Obama used in the same sentence by liberal groups. Ya think ? This is the Headline from The Hill: ‘Angry left to Obama: Stop caving on agenda’.
Adam Green, co-founder of the Progressive Change Campaign Committee (PCCC) and an outspoken critic of the White House, said liberal anger has less to do with fears of a Clintonian move to the middle by Obama and more with a misreading of the election results by the administration.
The White House “fundamentally” doesn’t get that “the only way to get Republicans to deal in good faith is to fight them, crush them and teach a lesson that if Republicans are on the wrong side of an issue there will be consequences … so it makes sense to negotiate,” Green said.
“Right now, every time Republicans are on the opposite side of an issue from the public, it’s the Democrats who cave and talk about ‘compromise.’ It’s ridiculous.”
While the White House declined to comment for this story, Obama’s remarks since the election indicate that pursuing compromise with Republicans, including on the tax issue, will be one of his top priorities moving forward.
So, they couldn’t make a point without a little dash of CDS thrown in for good measure. Could they?
Here’s an interesting commentary on the economy by UCLA economist Roger Farmer at the FT. The economist forum there is a notorious hang out for all bow tie and spectacles set. He’s got an interesting suggestion here. Rather than buy Treasury bonds for QE2, the Fed should consider buying stocks.
US consumers and business investors reduced spending in 2008 because the value of houses, factories and machines plummeted. The housing bubble burst and the stock market fell at the same time. Currently, investors hold more than a trillion dollars in excess reserves at the Fed because they are afraid of a repeat performance.
QE is widely perceived to be the same thing as increasing the money supply. But it is not. Mr Bernanke has argued that the first round of QE was effective because it increased stock market wealth. That is an argument I have made in previous opinion pieces in the FT and two recent books. When people feel richer, they spend more. That creates jobs.
But the current problem is not that the stock market is undervalued. The Dow is now back at the level it attained immediately before the 2008 crisis. The problem is that investors are fleeing from risk and are demanding safe assets. The Fed is uniquely positioned to provide a safe haven for investors by buying risky securities from the public and replacing them with interest bearing deposits at the Fed.
What kind of risky assets should the Fed buy? Mr Bernanke plans to purchase treasury bonds. The Bernanke plan could prove costly when inflation reappears because the price of treasury bonds will fall when interest rates rise. And when the Fed loses money, its political independence will be compromised. That is why a better plan would be to buy stocks. This policy would provide a more effective exit strategy, since, when inflation reappears, dividends and stock prices will rise and rather than lose money, the Fed will stand to make substantial gains.
Notice that he says that QE2 is not the same as printing money. It’s not because the FED’s trying to prime the credit/investment channel, not the real sector directly. It can’t do that. Another interesting thing in the works is the GM IPO. It seems strange to call GM stock an initial public offering, but post bankruptcy it is what it is. The New GM is not the Old GM legally, but has it changed all of its old GM ways? The U.S. Treasury Department and the United Auto Workers’ retiree health-care trust want to sell more of their stock so this IPO looks to be huge. It would be interesting to see the FED mop up some of these, wouldn’t it?
The IPO, scheduled for tomorrow, will help Chief Executive Officer Dan Akerson return some of the $49.5 billion GM received in a taxpayer bailout last year. The Treasury, which is taking a loss on its portion of the sale, will break even only if the shares climb at least 50 percent, Bloomberg data shows.
“Treasury is confident demand is there for these shares to get soaked up,” said Michael Yoshikami, who oversees $1 billion at YCMNet Advisors in Walnut Creek, California. “It makes a lot of sense for them to do this because we’re already talking about shares going out at a price that is far above what everybody thought would be in demand.”
The IPO would be the second-largest in U.S. history, after Visa Inc.’s $19.7 billion sale in March 2008, and comes 16 months after GM emerged from bankruptcy. The biggest U.S. automaker also increased a preferred stock offering to $4 billion today, $1 billion more than it had planned.
Let’s see what the market does with these things today and see if our dollars were wisely invested in Detroit.
Here’s some interesting Republican infighting between Lisa Murkowski and Jim Demint via Politico. She’s got some fighting words for him.
“I think some of the Republicans in the Congress feel pretty strongly that he and his actions potentially cost us the majority by encouraging candidates that ended up not being electable,” Murkowski told POLITICO outside her Senate office. “And I think Delaware is a pretty good example of that, and I think there’re some folks that feel that DeMint’s actions didn’t necessarily help the Republican majority.”
Murkowski suggested the South Carolina conservative and favorite of the tea party seemed more interested in bolstering his own political standing rather than that of the Republican Party.
“So the real question is, what’s his desire?” she said. “Does he want to help the Republican majority, or is he on his own agenda, his own initiative?”
Asked what she believed the answer was, Murkowksi said: “I think he’s out for his own initiative.”
Fight on little wingnuts, fight on!! It can only help the things we care about. Now if only Obama would just take advantage of the infighting and not cave in to their demands before they have shown they are able to deliver anything but sloppy nasty verbiage.
The Plum line at WAPO is going over Richard Wolffe’s book Revival and reporting on all the juicy bits including this on Rahmbo. Rahm didn’t want any thing to do with bi-partanship and he warned that Health Care Reform would be Waterloo. This is an excerpt from the book quoted by Greg Sargent.
From page 102:
Unlike his boss, Emanuel wasn’t interested in looking reasonable with Republicans; he wanted to look victorious. He didn’t care much for uniting red and blue America; he wanted blue America to beat its red rival…
Obama was prepared to sacrifice time and political capital to make his policy bipartisan and more ambitious; Emanuel believed Obama did not have that luxury. “Time is your commodity. That answers everything,” Emanuel said. “But a lot of us thought we didn’t have the amount of time that was being dedicated. If you abandon the bipartisan talks you get blamed. He still wanted to try to achieve it that way. But that’s one of a series of things you can look back on and be a genius about.
“My job as chief of staff is to give him 180-degree advice. He hired me, as he asked, to learn from the past, or to use my knowledge from my time in Congress and in the Clinton administration. Watching ’94, watching ’97 when we did kids’ health care, and then studying Medicare, what were the lessons? The lesson about time as a commodity is not mine, it’s Lyndon Johnson’s. You got X amount of time; you gotta use it.”
There’s more in an another thread on an exchange between Grassley and Obama on removing the public option from the bill. I guess I may have to buy this book. I know Bostonboomer’s been looking for it to add to her Kindle.
Wolffe reports that Obama got into a testy exchange with Senator Chuck Grassley, in which the President flatly asked Grassley if he could support health reform if the public option were dropped and he got everything he wanted. Grassley, in effect, said: Nope. And he told a top Obama adviser the same.
The key is that this exchange occurred early on in the process, and the quest for bipartisan support for health reform continued anyway. The tale begins on page 70, when top Obama adviser Nancy DeParle met with Grassley to ask for his support amid the health care wars in the summer of 2009:
Just before [Grassley] returned to Iowa, he met with DeParle for another strategy session.
“If we do everything and resolve all the policy issues the way you want, with no public plan, do you think you’ll be able to support the bill?”
Grassley looked away. “I don’t know.”
Grassley went to the Oval Office for a similar conversation with the president and his fellow Republican and Democratic negotiators. He asked Obama to say publicly that he would sign a bill without a public option of a government-run plan. Grassley believed this would be a reasonable, minimal demonstration of Obama’s desire for a bipartisan deal. But the president declined to confront his own party base so explicitly. Obama asked Grassley the same question DeParle had posed: With every concession he wanted, could he support the bill?
“Why not?” asked an exasperated Obama.
“Because I’d have to have a number of Republicans,” said Grassley. “I’m not going to be the third of three Republicans. I’ve defined a bipartisan bill as broad-based support.”
Cheney and Dubya think the tide is turning in their favor. This is from CBS and it’s about the ground breaking for the Dubya Library in Dallas. I still wonder what’s going in there and now I’m going to wonder if it wasn’t all lifted from other places. I can’t believe we’ll all have memories that are that short no matter how much they want Jeb as their next president.
Cheney said that Mr. Bush, whose approval rating upon leaving office was just 22 percent, always understood that “judgments are a little more measured” with the passage of time. He added that Americans “can tell a decent, goodhearted stand up guy when they see him.”
Cheney lauded Mr. Bush as a president who refused “to put on airs,” stating that he was thrilled to find that the most powerful person he knew was “among the least pretentious.” He said Mr. Bush was someone who could “walk with kings, yet keep the common touch,” added that “there were no affectations about him at all – he treats everyone as an equal.”
He spoke admiringly of Mr. Bush’s actions in the wake of the Sept. 11th attacks, telling the former president that “because you were determined to throw back the enemy, we did not suffer another 9/11 or something even worse.”
Okay, now I feel like we should donate copies of “The Pet Goat” when the thing opens just as a reminder.
So, I’m a Nielson family this week and I haven’t turned on the TV once. Some big contributor to pop culture I’ve turned out to be. Actually, I think there’s some pretty good reasons that I avoid the thing. I’m linking you to one PSA that I’d rather not see. It’s a train wreck. I’m not going to put the Youtube up here because I have bodhisattva vows that include being compassionate to sentient being. It’s Bristol Palin and The Situation discussing abstinence and safe sex. Neither can act. Neither are attractive in my book. Warning. You will need eyeball bleach and ear wash if you go over there. There’s gratuitous use of the word situation and icky nick names. Please put all sharp items in a safe place before venturing over there. Do not have any liquid in your mouth.