Scary

I’m not an economist, but I read a lot of economists, particularly economists who saw the current shit show coming from a ways off and have been consistently right in their assessments of why various attempts by first the Bush administration and now the Obama administration are likely to fail. When Paul Krugman writes this about the new Geithner bank plan, I get worried:

Why am I so vehement about this? Because I’m afraid that this will be the administration’s only shot — that if the first bank plan is an abject failure, it won’t have the political capital for a second. So it’s just horrifying that Obama — and yes, the buck stops there — has decided to base his financial plan on the fantasy that a bit of financial hocus-pocus will turn the clock back to 2006.

It’s not just Krugman that is having a bad reaction. Duncan Black is bringing his trademarked gallows humor out in full force. John Cole does the same. James Galbraith call Geithner’s plan a “Rube Goldberg device.” As Digby says, “we are dealing with magical thinking again,”  which would at least make the Goldberg Geithner contraption make sense.

There’s often a lot of funny talk about having faith in markets or not scaring markets, as if saying the wrong thing will somehow offend the Dow Jones Industrial Average and cause everyone’s stock portfolios to tumble. I’ve never understood that. But what I do understand today is that the apparent inability for leaders at the highest level of government to grasp the severity of the problems facing us is likely to produce bad results for the future. Using big words like “sub-prime residential mortgage backed securities” and “$1 trillion” can be much scarier than words like “nationalize” or “fundamental reevaluation.”

I just hope that either Geithner turns out to be right or the severity of our financial circumstances compels the Obama administration to master enough political will to do whatever it has to do when this big shot from Geithner misses. I don’t know where we are if they only get this one shot and choose to use it on something that everyone who’s been right so far says is a horrible idea…

Fundamental Reevaluation

While like Atrios, I agree with all of what Paul Krugman is saying, I think the real point is that unless and until the Obama administration, Congressional leadership, and media influentials recognize that the only way out of this economic crisis is by empowering people capable of a fundamental reevaluation of how they look at the US and global economies and what factors contributed to putting us in the mess we are today, we cannot expect change. It is for this reason that Geithner, Summers, and Bernanke are absolutely incapable of solving the problems we face, as they still have faith that the people who caused this crisis with self-enriching voodoo economics are capable of charting course out of it. They are not.

Educating on Employee Free Choice, Part 23

One of the most noticable things in the fight against the Employee Free Choice Act is the willingness of the Big Business community and those on the right who are anti-American workers’ rights to deploy The Big Lie, namely, that Employee Free Choice ends the secret ballot. This is not a talking point, it is a lie. Fortunately today the Wall Street Journal editorial board (of all places) puts that lie to bed:

“The bill doesn’t remove the secret-ballot option from the National Labor Relations Act”

Thanks WSJ! Now hopefully all the wingnuts who have been trumpeting this lie will stop lying to the public and have a debate on the merits of the case. Should employers control when and how a union is formed? Or should working Americans get to decide when and how they will form a union?

More on Dodd’s Opposition to AIG Bonuses

I’m with Glenn Greenwald and CaptCT: Chris Dodd’s CNN interview last night reaffirms, not contradicts, the reality that changes were made to the TARP bonus provisions at the behest of the Treasury Department.

Following the bad reporting on the CNN interview, which included the groundless assertion that Dodd had admitted he was the author of the AIG  bonus loophole, Dodd put out this statement which, I think, definitively clears things up:

STATEMENT OF SENATOR DODD ON EXECUTIVE COMPENSATION AMENDMENT

Washington, DC – Senator Dodd, Chairman of the Senate Committee on Banking, Housing and Urban Affairs, today issued the following statement on his executive compensation amendment:

“I’m the one who has led the fight against excessive executive compensation, often over the objections of many.  I did not want to make any changes to my original Senate-passed amendment but I did so at the request of Administration officials, who gave us no indication that this was in any way related to AIG.  Let me be clear – I was completely unaware of these AIG bonuses until I learned of them last week.

“Reports that I changed my position on this issue are simply untrue.  I answered a question by CNN last night regarding whether or not a specific date was aimed at protecting AIG.  When I saw that my comments had been misconstrued, I felt it was important to set the record straight – that this had nothing to do with AIG.

“Fortunately, we wrote this amendment in a way that allows the Treasury Department to go back and review these bonus contracts and seek to recover the money for taxpayers.  Again, I have led the fight to curb excessive executive compensation, and will continue to do so.”

Mystery Men

If I were a shareholder of AIG, I would be very concerned that the company’s CEO was incapable and unwilling to name the 20-25 people who cost the company $100,000,000,000.00. That’s a lot of money for a company to lose without knowing who is responsible.

Of course Liddy does know who the 20-25 failures are. He’s just refusing to share the information with Congress, despite the fact that the U.S. Government owns 80% of AIG now. Which, I suppose, is to say that I am a shareholder of AIG. With that in mind, I’ll say this: Edward Liddy should be fired for (1) incompetence or (2) refusing to share information with company shareholders.

Lastly, Alan Grayson is a champion of working Americans and one of the greatest models of what a true civil servant looks like today. He’s in his first term in Congress and has taken a huge role in pushing for corporate accountability in these tough economic times. We got to where we are today for a reason and Alan Grayson seems to be one of the very few people in Washington who gets that we can only  identify, stop, and correct the economic forces that have brought us to where we are now through hardnosed questioning and unflinching investigation into economic wrongdoing.

Better Reporting

The New York Times‘ Jackie Calmes and Louis Story do a better job of correctly reporting the falsehood of the “Blame Dodd” meme being pushed by Republicans and some Democrats.

That position was being questioned at the Capitol. Congressional Republicans, eager to implicate Democrats, initially blamed Senator Christopher J. Dodd, the Connecticut Democrat who heads the banking committee, for adding to the economic recovery package an amendment that cracked down on bonuses at companies getting bailout money, but that exempted bonuses protected by contracts, like A.I.G.’s.

Mr. Dodd, in turn, responded Tuesday with a statement saying that the exemption actually had been inserted at the insistence of Treasury during Congress’s final legislative negotiations.

It’s still in he said-she said mode, but at least it’s not a flat out lie being masqueraded as fact.

Ending the “Blame Dodd” Meme

Jane Hamsher and Glenn Greenwald have to phenomenally detailed and thorough posts explaining why the current “Blame Dodd” meme regarding AIG bonuses is 100% bunk (Media Matters led the way with pushback against Fox News & Drudge’s attacks on Dodd). The very short version is that the current provisions, passed in February, that exempted bonus limitations on preexisting contracts were pushed through at the behest of Geithner, Summers, and the Obama administratoin — over the objections of Senator Chris Dodd. Dodd had in fact introduced provisions that would have stopped future bonuses regardless of when they were promised.

The efforts by the media, Treasury officials and even White House Press Secretary Robert Gibbs to lay the AIG bonus scandal at Dodd’s feet is disgraceful and disgusting. Dodd is up for a very tough reelection campaign in 2010. It may be politically expedient for administration officials to blame Dodd for something they did which he vehemently opposed, but it isn’t without consequence. At a time when he is politically vulnerable, his reputation is being unjustly attacked.

I don’t doubt that the administration’s top economic officials failed to grasp the political consequences of exempting existing AIG bonus schedules from TARP regulation. Clearly they now get that the optics are terrible. But trying to pass the buck to the guy that had the foresight to introduce provisions that would extend oversight and limitation to all AIG bonuses – foresight that Geithner and Summers failed to pay heed to – is the wrong path.

The sad thing is that Senator Dodd is such a loyal and collegial politician that he is unlikely to ever publicly express the anger and outrage he must be feeling now, for fear of doing damage to President Obama’s stewardship of the economy and the trust the public has in the administration’s top economic team. If only the administration were able to recognize and repay the loyalty and dedicated service of Senator Dodd in kind.

Gallup: Double Digit Support for Employee Free Choice

Sam Stein of Huffington Post has the latest Gallup Poll, which shows strong bipartisan support for the Employee Free Choice Act in the American public.

Gallup Surveys released a study on Tuesday finding that 53 percent of respondents favored a new law that would “make it easier for labor unions to organize workers.” Only 39 percent of respondents opposed such a law.

When asked how important it was that Congress pass such a law, 26 percent of respondents said “very,” 29 percent said “somewhat,” 23 percent said “not too important,” and 20 percent said “not important at all.”

Added up, the findings provide a solid boost to EFCA backers, with 55 percent expressing some desire to see Congress act on the legislation and 43 percent expressing a level of opposition or ambivalence (three percent said they had no opinion).

Hopefully this sort of strong support will be an impetus for legislators in Congress to drive forward with this popular legislation.