Reality Behind the Debt Crisis

I stopped writing about politics because it was driving me crazy. I decided to bury my head in the sand for a while. That is until I heard about the 39 riders on the the Boehner plan to raise the Debt Ceiling. The Bill was intended to a limited increase in the Debt Ceiling and we would have the whole fight again in a few months. The 39 riders were all about destroying regulation, environmental regulation. De-funding the EPA and gutting the Endangered Species Act are prime Republican targets. If the current class of Republicans and Tea Baggers had their way we would return to the pre-progressive Oligarchy when the wealthiest Americans owned everything, child labor laws did not exist, the environment was pillaged and plundered, factories were death traps, and the food was not fit for human consumption. Why would that be? Because regulation is really there to help the poorest and weakest of our society. The bottom 90% benefit the most from governmental protection. If we want a vision of the Republican Plan we need only to look at China with its lung searing pollution, toxic products and toys, unregulated building codes, and lack of personal liberty.

Yes the Republicans want to unfetter industry, the job creators, but they also want to tell you what you can do with your own body and tell you who you can love.

The Republicans always paint Democrats as tax and spend liberals but a quick search of the debt accumulated in my lifetime reveals the most fiscally prudent Presidents have been Johnson, Nixon and Clinton and the most fiscally reckless have been Ford, Reagan, and both Bushes. I left our Carter because he's somewhere in the middle and I left out Obama because were are only part way through his first term. George W. Bush raised the National Debt from 5.7 Trillion to 10.6 Trillion doubling it in 8 years. Under Bush Senior the Debt nearly doubled from 2.6 to 4.1 Trillion. Under Reagen the National Debt went from 900 Billion to 2.7 Trillion increasing by two thirds. Yes the debt has risen under all of the last 9 presidents but Clinton and Johnson were the best at keeping it under control.

If you want to believe the Republican lies and let the gut all environmental protection then go ahead... I'm looking to move to Canada.

Affable Dunce

Last night I watch Eugene Jarecki's documentary Reagan. The director interviews everyone from Reagan's cabinet members and sons to new reporters and biographers. It's a compelling piece of film making and gives probably the most unflinching view of the 40th president yet. From his beginnings as a nearsighted lifeguard who saved 77 lives and a staunch FDR supporter to his rise as the president of the Screen Actors Guild and spokesman for GE; Jarecki shows the evolution of the man but does not shy away from the hard questions surrounding the Iran Contra scandal.

Jarecki paints a clear picture that Reagan must have known about the arms deals but he seems to lay more blame at the feet of Vice President Bush... At once point the real mystery of Reagan (to my mind) was revealed. While many on the left saw him as an affable dunce, his resolve and calculation was entirely, to quote a phrase from another affable dunce, "misunderestimated." It seems the true genius of Reagan was to disarm his opponents with his likability. Even as he was flouting the Constitution and congress, he addresses the American people with a grandfatherly tone of learning from his mistakes. So even as Reagan destroyed the middle class, labor unions, and increased poverty most people liked him...

Bush Sr. never mastered this technique and always appeared petty and paranoid. Clinton was folksy and likable but George W. truly took the folksy lesson to heart. Despite the fact that he was from east coast money and studied at Yale, he was seen as the guy many Americans wanted to share a beer with; Never mind that he did more to gut our civil liberties than any other president.

Unfortunately, Obama is taking the same cues from Reagan. His tone has taken on a decidedly more folksy air since taking office but I don't think folksy enough to disarm his opponents.

Palin Gets Her Wish

Yesterday, in a story about Obama allowing offshore drilling Phil Flynn (Energy Analyst, PFGBEST Research) was interviewed by Scott Horsley from NPR. Mr. Flynn opened with this statement:

We've come a long way from the days when President Obama was talking about filling our tires with air, you know, could produce more energy savings than drilling in the ocean. I, for one, think it's a courageous move by the Obama administration, because we know many of the supporters are vehemently against this.

Inflating your tires to the right pressure is a good way to improve fuel mileage, by about 3% according to some studies. Why malign suggestions that actually work?
Anyway, how much oil is actually off our coasts? This is up for debate but the small amount that IS there might not be worth the expense.

Later in the story, Horsley said that Top Republicans grudgingly applauded the president's move. Senate Republican leader Mitch McConnell called it a step in the right direction, but a small step. McConnell also questioned whether the administration would really follow through and issue the permits for offshore drilling. But Republican Senator Lindsey Graham, who met with the president earlier this month, says he came away impressed by Mr. Obama's openness to traditionally Republican thinking.

Is it Republican thinking to take the short sided approach? Is it Republican thinking to focus on older technologies that will run dry? And, more importantly why does Obama want to throw them a bone (pun intended)? Does he think he's going to find consensus with the Republicans on a climate bill? Really?

Failure to Lead

I remember the argument like it was yesterday. I was searching through the bins at Ace Hardware trying to find the right screws for the bathroom project. I was picking up boxes and discarding them with one hand and holding my phone with the other. It was late September 2008 and I was trying to convince my mom that Barack Obama was different, that voting for McCain was a mistake and that we needed to change direction. She was dismissive. She said she didn't trust any of them and that nothing would change. That's when she told me about her "wasted" vote. My mom, a life long Republican, voted for Jimmy Carter in 1976.

1976 was the Bicentennial year. The country was trying to forget it's economic troubles and trying to put the Nixon scandal behind us. The only thing I remember about the Presidential election was that a peanut farmer from Georgia was running and that he looked at Playboy. That night at dinner, my brothers and I asked mom and dad who they voted for and my mom was actually swooning over Carter. She kept saying that he's so smart and that he will take this country in a new direction and that he's so smart and he will change Washington and that he's so smart... For those too young to remember the late 70's stagflation (a period of slow economic growth and high unemployment with rising prices) was gripping the country, fuel prices were through the roof and Chrysler was heading for bankruptcy.

The savior from the south lasted one term, the Iran Hostage crisis did him in and Ronald Reagan was elected overwhelmingly in 1980. My mom was anti union and anti tax; my dad was an old school Democrat and pro-union his dad was in the union and they took care of him. Reagan was the cowboy riding in from the west to bust up the unions and clean up America. Even though I was just a teenager I knew Reagan was trouble but the country loved him and eventually we recovered from the malaise of the 70's and launched into the self-centered, coke-snorting, economic boom of the 80's...

Is Obama really that different? Will he become this generation's Carter? How can candidate Obama, a man so clear and articulate, so utterly fail to lead? His push for Health Care reconciliation isn't even an 11th hour push. It's 2:00am, last call and the lights are on. Frank Rich, in his op-ed column for 3/6/2010 so eloquently put it:

At last he pushed for a majority-rule, up-or-down vote in Congress. At last he conceded that bipartisan agreement between two parties with “honest and substantial differences” on fundamental principles wasn’t happening. At last he mobilized his rhetoric against a villain everyone could hiss — insurance companies. In a brief address, he mentioned these malefactors of great greed 13 times.

There was only one problem. This finest hour arrived hastily and tardily. At 1:45 p.m. Eastern time, who was watching? Of those who did watch or caught up later, how many bought the president’s vow to finish the job “in the next few weeks”?

But once again the Republicans are the master of the message and have cornered the conversation into talking points that start with ramming the legislation down the throats of the American voters and end with cries of socialism. What is lost in the battle are the costs. Today's Prime Number in the Times is 197: The amount, in thousands of dollars, that the typical married couple at age 65 should expect to spend on uninsured health care costs over the rest of their lives...

My parents lost their health care this fall. My Dad's pension went belly-up and they searched in earnest for a new prescription drug benefit but ended up with a band aid fix from Walgreens. Thankfully they are healthy but what happens if that changes. Will Medicare step in or will my brothers and I be saddled with the costs? I still find it amazing that Obama, with all his political capital and moral high ground has lost the argument to a few talking points and a few talking heads.

Political Theater

With the political pundits in every media outlet looking for winners and losers and with the Republicans calling the whole event political theater, was anything really accomplished?
I'm guessing not but I could barely contain myself when I heard Eric Cantor R-VA speak up and say "the American people have spoken... and they don't want this bill..." I wanted Obama to bitch slap him and say of course not motherfucker, you lied about every part of it. From Death Panels to the carefully crafted talking points calling it a Government Takeover the Repubs pulled out the full arsenal. The Republican's master wordsmith, Frank Luntz, so skillfully framed the talking points that even the media began to use them. Let's review Republican tactics:

•Jim DeMint R-SC says: "If we're able to stop Obama on this, it will be his Waterloo. It will break him."
•Betsy McCaughey, former Lieutenant Governor of NY coins the term "Death Panels"
•Sarah Palin popularizes the term "Death Panels"
•All Republicans follow lock step with Luntz' term "Government Takeover"
•American learn they can substitute SOCIALIST for N****R
•Tea Party is started by Texas Republican Dick Armey
•Obama's face with Hitler mustache, apparently Tea Baggers don't know the difference between Socialism and Fascism...
•Republican Plan non-existent until recently...

I am surprised Obama kept his cool. Will anything change probably not. Was it political theater, of course. People on the right will follow what their talking heads said and people on the left will do the same. Most folks will vote against their own best interest and nothing will change...

Is Obama Hatred Rasict?

I read the Y-Buzz on Kosmix and this article caught my attention: Michelle Obama thinks doubts about her have eased I read the article and it's refreshing to see that she had a high approval rating and that she was treated cordially at Fox but all that disappeared when I read the comments. Here's a gem

Yes she's Popular but not in America, Only in Africa and in Philly Zoo

Once again it's clear what Obama hatred is about.

This is Interesting

Under Obama job creation has perfectly mirrored job losses under Bush

State of the Union

Great speech and a call to action. It was the Obama I voted for and the Obama I wanted to lead this country. I hope the Democrats in the chamber were listening. Obama was elected by a 6 point margin, a very good margin and mandate, and the Democrats were swept to healthy majorities is both houses. Here's the part of the speech that struck me:

Unfortunately, too many of our citizens have lost faith that our biggest institutions—our corporations, our media, and, yes, our government—still reflect these same values. Each of these institutions are full of honorable men and women doing important work that helps our country prosper. But each time a CEO rewards himself for failure, or a banker puts the rest of us at risk for his own selfish gain, people's doubts grow. Each time lobbyists game the system or politicians tear each other down instead of lifting this country up, we lose faith. The more that TV pundits reduce serious debates to silly arguments, big issues into sound bites, our citizens turn away.

No wonder there's so much cynicism out there. No wonder there's so much disappointment.

I campaigned on the promise of change—change we can believe in, the slogan went. And right now, I know there are many Americans who aren't sure if they still believe we can change—or that I can deliver it.

But remember this—I never suggested that change would be easy, or that I could do it alone. Democracy in a nation of 300 million people can be noisy and messy and complicated. And when you try to do big things and make big changes, it stirs passions and controversy. That's just how it is.

Those of us in public office can respond to this reality by playing it safe and avoid telling hard truths and pointing fingers. We can do what's necessary to keep our poll numbers high, and get through the next election instead of doing what's best for the next generation.

This is a call to action if I've ever heard one. This is a time when democrats in both houses are calling retreat, a time when democrats are sacrificing everything they believe in the sake of reelection. A time when we as constituents need to call into question what our elected leaders believe in and a time to actually call and write our elected leaders. We need to tell them what we want and to get involved in the process or this next decade will be another lost decade.

Goldman Under Investigation

So that are a few things that really stink about the financial meltdown. I don't claim to understand all of the intricacies of the market or for that matter even some of them (I think they are intentionally confusing). Two of the financial tools that I find interesting are short selling and hedging. Right now Goldman is under investigation for backing risky sub-prime loans and simultaneously betting against them. According to McClatchy Newspapers,

"Goldman was the only major Wall Street firm to safely exit the subprime mortgage market. however, that Goldman sold off more than $40 billion in securities backed by over 200,000 risky home loans in 2006 and 2007 without telling investors of its secret bets on a sharp housing downturn, prompting some experts to question whether it had crossed legal lines."

Now for some definitions
Short Selling: selling a financial instrument without actually owning it. The purpose is to drive down the price. It is a way to manipulate the market and is illegal under SEC rules. Some people claim it's a benign practice but used over and over to artificially drive the price of a financial instrument down can be destructive. Again this is the process of selling something YOU DON'T ACTUALLY POSSESS. Kind of fuct.

Hedging: Off setting your exposure in one market but taking an opposite position in another market. This is what Goldman is accused of doing. By helping to create and promote the credit default swaps that became the toxic assets key to the meltdown and the betting that those very securities would lose value they hedged and won big time. Additionally, they received back 100¢ on every dollar they invested in other toxic assets, because of the AIG bailout.

Now they whole demonic financial system is trying to demonize Obama as anti-capitalist, anti-market, and anti-investment. They (anyone who doesn't share my views) sucker punched Obama on healthcare will they do in again on finance?