Nation editor-at-large and host of MSNBC’s All In with Chris Hayes.
Over the weekend, during a drive to and from New York I listened to Steven Johnson's enjoyable and stimulating new book The Invention of Air. It's about a British scientist/preacher/philosopher named Joseph Priestly who, among other things, discovered oxygen, invented soda and was good friends with Benjamin Franklin, John Adams and Thomas Jefferson.
Any time I revisit the Founders, their writing and their thinking, I'm always struck by the streak of Burkean conservatism that ran through many of them. Their fear of the mob (and, well, democracy) and their desire to keep power broadly distributed, but also out of the hands of the riff raff. In many respects the arc of American political history is more and more democracy, wider circles of enfranchisment, preserving the founder's belief in checks and balances, while jettisoning their distrust of the ability of people to effectively self-govern.
The massive exception to this is the United States senate, which has only grown more undemocratic and more minoritarian over the years. Since population distributions have grown more unequal (California has 68 times the people of Wyoming), the imbalance of representation has also grown. Filibusters have gone from being a relatively rarely invoked tactical gambit, to a de facto super majority requirement for all legislation. And the evolution of the "hold" means that each individual senator can more or less bring the body to a halt.
All this by way of recommending this excellent piece by Norm Ornstein on the subject. He argues persuasively that the senate is "broken." I'm increasingly of the opinion that if we want the kind of change we need in this country, the Senate has to change first.
From Greg Kaufmann:
Now that Obama has announced his Af/Pak strategy there will be a whole host of hearings about it this week.
One that was already in the works was the Congressional Progressive Caucus' second forum in a six-part series. (You can read about the first forum here.) Wednesday the CPC will explore the question "Will the policies and goals of the Obama Administration serve our strategic interests?" Speakers include Colonel Lawrence Wilkerson, former chief of staff to Colin Powell; Joanne Trotter, Director of Programs with the Aga Khan Foundation, USA; and Abdulkader Sinno, professor of political science and middle eastern studies at Indiana University, Bloomington.
General Petraeus and Michele Flournoy, undersecretary of Defense for policy, will testify before the Senate and House Armed Services Committees on Wednesday and Thursday, respectively. A House Foreign Affairs subcommittee will also hold a hearing Thursday morning entitled "…Achieving Peace and Stability in the Graveyard of Empires". Senate Foreign Relations holds a full committee hearing on "Enhanced Partnership with Pakistan". House Oversight meets about "…Engaging Regional Stakeholders"; and the House (Select) Intelligence Committee has a closed door briefing on Afghanistan.
Both the House and Senate will take up their FY10 budget resolutions which they need to complete before the two-week recess scheduled to begin at the end of this week. In the Senate, that means an unlimited number of amendments are allowed, with each one given two minutes for debate. Should be plenty of opportunities to see just how whacked-out the GOP is, and watch Sen. Judd Gregg fulminate as -- according to CongressDaily -- he offers amendments already defeated in committee. (A big issue in the Senate is whether it will use the "reconciliation" rule which would allow the budget to pass with a simple majority rather than 60 votes.) Look for the Progressive Caucus Budget Alternative to be offered and debated on the House floor on Thursday -- I'd imagine there will be some smart cuts to obsolete Cold War weapons systems and the disastrous $13 billion per year Missile Defense program, among other things.
According to CongressDaily, the White House might send its supplemental spending requests for Afghanistan and Iraq this week, with $75.5 billion for military and "billions more for the State Department and other agencies."
The House is also expected to approve its national service legislation and Rep. Barney Frank's legislation to limit bonuses at financial institutions that take TARP money -- even if contracts regarding bonuses were signed prior to taking bailout funds. (Satisfying, but is it legal? Would be interested in comments from people with any insights into that.)
The House Energy and Commerce Subcommittee on Health holds two healthcare reform hearings on public health and reducing costs and improving safety….
House Ways and Means takes a look at how the IRS can crackdown on the estimated $300 billion in revenues lost in offshore accounts and tax havens at a hearing entitled "Banking Secrecy Practices and Wealthy American Taxpayers"….
Obama's guy for recovery money oversight -- Earl Devaney, a former cop and Secret Service agent -- will appear before Senate Homeland Security for an update on those efforts....
House Homeland Security continues the focus on Mexico -- looking at drug-cartel violence on the US-Mexico border… Senate Foreign Relations has a field hearing in El Paso today exploring similar issues.
Other hearings of note: the media will have a blast and Congressmen will compete for sound bites when former AIG CEO Hank Greenberg appears before the House Oversight and Government Reform Committee on Thursday….
A Senate Banking Subcommittee hears "Lessons from the New Deal" from White House Council of Economic Advisors Chair Christina Romer, economist James Galbraith, and others….
One lesson from the New Deal -- support the Arts. House Appropriations holds a hearing on "The Arts" which I'm sure faces plenty of detractors from the Blue Dogs and GOP in these times… Wynton Marsalis will testify as will Linda Ronstadt….
Finally -- yikes -- a Joint Economic Committee hearing on the March Jobs Report on Friday.
A dispatch from Greg Kaufmann:
On Budgets and Europe
Thursday afternoon, I was one of the 18 viewers in the age 3 to 100 demographic watching the Senate Budget Committee's markup of Obama's budget on C-SPAN.
There was actually a great exchange between Senators Judd Gregg and Bernie Sanders that I think 1) shows yet again how out of touch the GOP is; and 2) serves as another vindication of sorts for Sanders.
After being elected to the Senate in 2006, Sanders introduced his National Priorities Act that would have done many of the things the American people are now asking for and Obama is taking on -- by rescinding the Bush tax cuts for the wealthiest 1 percent and using those revenues for health care, education, childcare, veterans services, infrastructure, deficit reduction and other vital needs.
He also urged his constituents, colleagues, and Americans to look abroad rather than blindly accepting arguments that we have "the best health care in the world", or "the best education system," etc.
Which brings me back to the hearing. Gregg introduced an amendment (defeated) that would have required 60 Senate votes for budget resolutions that don't meet the European Union standard of limiting debt to 30 percent of GDP.
"We're in such a bad situation in this nation right now… that [the Europeans] actually look good," Gregg said.
"I'm glad to hear that my neighbor from New Hampshire is suddenly interested in Europe," he said. "And maybe we can take a hard look at the fact that virtually every European country has a national health-care program guaranteeing health care to all of their people, spending substantially less per capita than we do in this country -- maybe we can add that. And maybe we can look at the fact that while we have 18 percent of our kids living in poverty, our European friends in some cases have 3 or 4 percent of their children living in poverty. And maybe while our families have to spend $40,000 a year to send our kids to college, they do it virtually free. So I like the idea of opening up the discussion about the pros and cons of Europe, but it is broader than my friend from New Hampshire is talking about."
Sanders had it right. A flailing Gregg and the GOP continue to get it dead wrong.
Six weeks ago I wrote a column about Gary Gensler, Obama's problematic nominee to be chair of the Commodity Futures Trading Commission
As Robert Scheer points out here, Bernie Sanders has placed a hold on his nomination, stalling it for the time being.
I was in the East Room of the White House last night for the press conference. I was, alas, not one of the 13 journalists given an opportunity to ask the president a question, though I had a real zinger ready (Mr President: don't you think poor people should be doing more to help out Wall Street?).
Anyway, a few scattered thoughts:
1) Not one question about the trillion-dollar toxic asset program. This really stunned me. On the very slim chance I was called on, I had prepared a few questions about the rescue but figured that if I were called on the topic would be pretty exhausted by then, so also prepped a few about the defense budget and incarceration rates. But remarkably, no one asked about it. Why? My sense is that most political reporters (the people who were in the room, and got to ask questions) can't really make heads or tails of it either way. In their defense: it's complicated! I'm struggling to make sense of it, too. But it just seems crazy to me that the day after the White House announces a very complicated, high stakes and possibly expensive plan to remove toxic assets from bank balance sheets, the President is not asked about the details of the plan.
2) Why the president needs authority to take over non-bank financial institutions. I thought the first question, from the AP reporter was pretty good: why should we trust the government to take over big non-financial institutions. I also thought the president's answer was fairly smooth and fluent. But upon close inspection, it didn't make much sense. He praised the FDIC's capability to take over insolvent depository institutions, and their competent management of the process recently. But of course, the five largest banks, the one's many think are insolvent and need to be nationalized are all (thanks to deregulation!) depository institutions. It would seem to me the FDIC can already take the over. As for AIG, he noted, correctly, it's an insurance company and that there was no authority to take it over, which is part of the reason the situation's a mess. But authority or no, we *did* take it over. The Federal Reserve purchased 80% of the equity in the company. So under what authority did they do that? This is not to say I don't think the WH is totally correct to want the authority in advance to be able to take over firms that pose systemic risk. I just thought the explanation last night was a bit muddled.
3) The press' obsession with deficits. Look: deficits are important. You can't always and forever borrow a ton of money at low rates and keep amassing debt. Fine. Stipulated. But I continue to be amazed by how obsessively the press focuses on the deficit and debt. During he campaign, you had debate moderators attempting to browbeat the candidates into embracing totally crazy-ass neo-Hooverism in the face of a massive drop-off in demand. Now you have reporters pressing the White House on deficit projections for the out-years based on very low GDP growth projections. (If growth is as low as the CBO says, we'll have bigger problems than a deficit). Part of the reason for this is that "fiscal conservatism" is a weird Beltway religion (except when defense is the issue). Even though it's meaningless, and, at its core, reactionary (it's a way of saying government is too big), it is just part of the general worldview/frame of political reporters.
Second, there's the problem that we are operating under fairly unique macroeconomic circumstances, what Paul Krugman calls "depression economics." When you're in the midst of this kind of demand collapse, you really /can/ have a free lunch, Milton Friedman's infamous dictum notwithsanding. The press hasn't figured this out yet.
Finally, the complexity of the substance of a $3.6 trillion budget is just staggering. To ask a question about the policy mechanisms and implications on the spending or revenue side of it, you have to have some expertise and facility with policy. Most political reporters don't have a ton of that. (And that's not necessarily a knock. If you're a daily political reporter, you're working pretty hard just following the day's news cycle and producing something for your outlet) What everyone can understand is a simple figure of how much more the government is spending than what it's taking in.
A Democratic politician once said of Arlen Specter that he's "always there when you don't need him." Well, the Employee Free Choice Act, was one place where we did need him. He was the lone Republican co-sponsor and the lone Republican who voted or cloture last time it came up. Today he recanted.
"The problems of a recession make this a particularly bad time to enact Employee's choice legislation," he said. "Employers understandably complain that adding a burden would result in further job losses. If efforts are unsuccessful to give labor sufficient bargaining power through amendments to the [National Labor Relations Act] then I would be willing to reconsider Employees choice legislation when the economy returns to normalcy. I am announcing my decision now because I have consulted with a very large number of interested parties on both sides and I have made up my mind."
The rationale is bullshit, of course. (The NLRA was passed in the depths of the Great Depression, let's recall) What really happened is that he got metaphorically waterboarded by the US Chamber of Commerce. So that's that.
I feel like every day the scales fall further from my eyes in terms of just how much the currently entrenched powers will fight to maintain their advantages. Also: can we please get rid of the filibuster?
Laura Dean attended the local Take Back the Economy protest today and files this dispatch:
Quite a crowd had gathered outside AIG's K street offices despite the dreary weather for today's "Take Back the Economy" rally sponsored by the SEIU, MoveOn and ACORN among others. The action was one of over a hundred scheduled across the country to protest the AIG bonuses and corporate excesses.
There were hoarse chants and lively percussion – everyone shook cans of change chanting, "AIG! You can't hide! We can see your greedy side!"Young organizers in purple union hoodies joined seasoned members who bellowed new chants when energy lagged, inspired passersby, and even Rocky Twyman, founder of Prayer at the Pump.
Anastasia Christman, one of the organizers, expressed outrage over the AIG bonuses while "autoworkers, firemen and policemen are having to break their contracts" and go without – an issue we should perhaps hear more about when AIG complains that their hands are tied due to "binding contracts."
Eventually the group assembled in front of an enormous "reality check," made out to AIG for "billions" signed by "taxpayers." The crowd heard from Joan Nemoth, an SEIU member, who described her 14-year struggle for healthcare, before she joined the union. "But there are others" she said, and that's why we need "to pass the Employee Free Choice Act."
Then came SEIU chairman Andy Stern, who denounced the recent spate of anti-EFCA conference calls hosted by TARP recipients, reserving particularly choice words for Citibank and B of A. "We don't need restitution," he said, "we need prosecution!" And entered the building to dispatch the check. When he emerged the crowd continued down K street to make their sentiments known at several of the other banks around town – their first stop: Citibank.
I think there's a fascinating cultural difference between the way that Democratic politicians view the progressive base (as something to keep distance from, to be triangulated against) and the way Republicans view the conservative base (something to be paid regular tribute)
Lester Feder catches an interesting example of this dynamic in action while talking to Chuck Grassley:
Rush Limbaugh, Fox News, and others recently launched a smear campaign against a provision in the stimulus bill designed to gather research that will help doctors and patients choose the treatments that work the best, and avoid unnecessary spending. This, said Fox, "appear [s]to set the stage for health care rationing for seniors, new limits on medical research, and new rules guiding decisions doctors can make about your health care."
At an event this morning at the Kaiser Family Foundation, I asked Senator Chuck Grassley (R-Iowa)--who, as the ranking minority member of the Senate Finance Committee, arguably has more influence on the fate of health reform than any other member of his party--whether such distortions from the right-wing noise machine will make it harder to get the bipartisan compromise he says he wants. Though the senator endorsed this kind of effectiveness research, he paradoxically also encouraged conservative commentators to keep doing what they're doing:
"I think they ought to hype them right now because people's attention needs to be brought to it, and that's the only way you're going to get their attention. When the dust settles, they won't have a leg to stand on and we will have and we will have a study and a tool that will be useful for doctors to use but not to dictate medicine."
In other words: it's politically beneficial for us to have propogandists who lie and distort the truth because it increases our room to politically maneuver.
As promised here's my comment in this week's issue on the AIG bonus issue. It's behind a sub-wall, but I'm just gonna yank it out and post it here:
The infamous letter from AIG CEO Edward Liddy to Treasury Secretary Tim Geithner--the one in which he informs the good secretary that whatever the administration's preference might be to the contrary, the company will be paying $165 million in bonuses to its financial products division--is destined to be studied years from now as the perfect text for this strange moment in American capitalism. Facially supplicant yet substantively defiant, its rhetorical posture is that of a bank robber who calls the teller "ma'am" before asking her calmly to put the money in the bag. "On the one hand, all of us at AIG recognize the environment in which we operate and the remonstrations of our President for a more restrained system of compensation for executives," Liddy writes. (Nice touch, the use of "remonstrations" to describe the president's attempts to rein in Wall Street with moral suasion.) "On the other hand, we cannot attract and retain the best and brightest talent to lead and staff the AIG businesses--which are now being operated principally on behalf of the American taxpayers--if employees believe that their compensation is subject to continued and arbitrary adjustment by the U.S. Treasury." This is the language of someone who has sized up what an organizer would call "the power relations" and believes they are balanced in his favor.
The question is, Was his calculation correct? At this writing, Liddy is appearing before Congress, sitting in the proverbial hot seat. On Capitol Hill there is unanimous agreement that the proposed bonuses are an intolerable insult to taxpayers. They certainly are. But one learns to mistrust unanimity in Washington. There's something vaguely redolent of the earmark foolishness in the dramatic expressions of anger from elected officials--what might be called the Law of Small Numbers. When it comes to money, trillions of dollars is a statistic, but $165 million is an outrage. Then there's the fact that much of Washington, including, sadly, the Obama administration, was complicit in setting the stage for this drama. Ron Wyden and Olympia Snowe co-sponsored an amendment to the recovery act that would have required TARP recipients to pay back bonuses in excess of $100,000 or face tax penalties. It was mysteriously removed from the final bill just before passage. Geithner and Larry Summers, meanwhile, have both reportedly worked internally to water down statutory limitations on executive compensation for bailed-out firms.
I'd bet against AIG's financial products traders keeping their bonuses: public outrage is running too high. But then what? The power imbalance is the fundamental problem, and it remains. At a Nation-sponsored panel on the financial crisis in New York City on March 6, an audience member asked, "Why aren't people in the streets?" There are a number of answers: the capital-L, to-the-streets Left is withered. The absolute level of privation doesn't begin to approach the mass starvation and immiseration of the Depression. The whole goddamned thing is so complicated, no one's quite sure what to make of it.
Perhaps, though, AIG overplayed its hand. Perhaps it has catalyzed something. A coalition of progressive groups including MoveOn, SEIU and ACORN has announced Take Back the Economy protests at banks and corporate headquarters across the country on March 19. Another group of activists have set up a website, A New Way Forward (anewwayforward.org), to facilitate the organization of grassroots protests in favor of bank nationalization on April 11. Their slogan--Nationalize. Reorganize. Decentralize.--represents the first attempt to distill the intimidating complexity of the financial rescue into a straightforward popular demand. And power, as Frederick Douglass so sagely observed, concedes nothing without a demand.
Like everyone I've been following the AIG brouhaha, though with more than a bit of skepticism at the howls of outrage from the political class. (I have some more extended thoughts in this week's issue, which should be up soon). Now that it seems that voiding the contracts is too difficult legally, congress is proposing to tax the bonuses at 90%Q. I kind of like the politics of this, if only because it will force the GOP to put their money where their mouths are: if they're as outraged as they say, they'll have no problem ignoring Grover Norquist and Rush Limbaugh and voting for the tax.
But Dean Baker also floats what might be a simpler, cleaner solution: just make what's left of the AIG equity-holders pay for it.