Nation editor-at-large and host of MSNBC’s All In with Chris Hayes.
If there's one thing that everyone seems to agree on, it's that the current financial crisis is complicated. There's two problems with this. First, it's not, fundamentally, true. The causes for the crisis are fairly simple when you strip away the artifice and lingo. (Most notably an $8 trillion housing bubble that the financial over-class insisted wasn't a bubble.) But more importantly, the perceived complexity of the issues are being cynically manipulated by those responsible to stem the tide of popular anger and insulate themselves from the wholesale reforms that are necessary.
In a piece on the bailout, Matt Taibbi referred to this posture of condescension as the "eye-roll." As soon as you ask a question -- why did you think housing prices would go up forever -- you are treated to the eye-roll which is the posture of those in power to the supposed ignorance and idiocy of those attempting to figure out just how they broke the world.
The point is that complexity has an enervating affect on the polity: people can only marshal anger and action about the crisis if they feel that at some basic level they understand it. Before we have politics, or a broad call for reform, we must have some broadly shared understanding of what went wrong and who's responsible. That's why a new Pecora Commission is so vital.
The original commission was created during the Great Depression as a fact-finding enterprise, to figure out how things could have gone so wrong. The hearings attracted tremendous attention and their uncovering of the self-dealing and corruption on Wall St. laid the ground work for future regulatory reforms.
The Obama administration has attempted to skip first step of this process. They've brought together the relevant stakeholders to craft a plan for financial reform, but have bypassed the necessary step of educating the public on their stake in the reform fight's outcome.
Unless and until the public feels knowledgeable enough to get angry, to fight for specific policies and solutions, the crafting of a new financial order will be left to the existing players. And they are sure to tip the scales in their favor and endanger the entire economy all over again.
If we've learned one thing in this decade, it's how dangerous it is to allow elites to make decisions based solely on conversations they have with themselves. A new Pecora Commission holds out the promise of giving the public a voice.
Ezra has a smart post up on the mechanisms of influence that the health insurance industry is using to affect the legislative process. "It's Not the Money. It's the Relationships," he says and includes a chart showing the various former Senate finance staffers who've gone to work for the insurance borg.
This is a really crucial point. We have a tendency to understand the economy of influence in DC has almost entirely a product of campaign finance, and the exchange of money. But in my two years here, I've been amazed at how much more powerful establishment social networks are. For another (depressing example) of this phenomenon, check out this item from Sam Pizzigatti's newsletter Too Much:
The Managed Funds Association, the industry trade group, has just hired a well-connected D.C. lobbying firm. How well-connected? Th e firm's newest star lobbyist, Carmencita Whonder, used to serve as the top financial policy adviser for Senator Chuck Schumer, the powerful New York Democrat. Hedge fund managers are hoping Whonder can save the loophole that lets them claim fee income as a capital gain. Ending this bit of tax sophistry, as the White House proposes, would over double the tax due on hedge fund windfalls. In 2008, the top 25 hedge fund managers averaged $464 million each.
Charlie Cray and I wrote about the scandal of the carried interest loop hole last year. If you want to know why it persists, this is more or less why.
This week -- a lot of appropriations work, more markups on health care legislation, the Senate gets started on its climate bill, and welcome Senator Al Franken….
The Senate is scheduled to take up the $3.1 billion Legislative Branch spending bill and the $42.9 billion Homeland Security bill. The House will vote on the $22.9 billion Agriculture bill, $48.8 billion State-Foreign Operations bill, and the $77.9 billion Military Construction-Veterans Affairs bill. The FY10 intelligence authorization act is also expected on the House floor -- there hasn't been an intelligence authorization bill enacted since FY05.
Senate Finance and Health, Education, Labor & Pensions (HELP) Committees will continue work on their respective health care bills this week. It remains to be seen whether the Senate Finance bill will include a public plan option. Sen. Schumer has been the strongest advocate for one on the Finance Committee, but on Face The Nation he was talking possible compromise through regional cooperatives, a weak alternative to HELP's proposed HHS-run plan (which could also still be amended). The House will continue its work on a health care bill as well and plans on bringing legislation to the floor before summer recess begins on August 8. The Congressional Black Caucus, Hispanic Caucus, Asian Pacific American Caucus, and Progressive Caucus, which together make up nearly 120 Members of the House and Senate -- will continue their advocacy for a strong public option.
The Senate Environment and Public Works Committee will get started on its climate bill which will probably be merged with the energy bill already approved by the Senate Energy and Natural Resources Committee. Hearings will kickoff tomorrow when the Committee will hear from Energy Secretary Steven Chu, Agriculture Secretary Tom Vilsack, and EPA chief Lisa Jackson. The Republicans are bringing in Governor Haley Barbour, who replaced Mark Sanford as chair of the Republican Governors Association (note: Sanford is gone, but Sarah Palin's mug is still on the RGA homepage. Any bets as to how long it will remain there?)
Work on transportation bills should start heating up this week. The Obama Administration announced last week that the Highway Trust Fund will run out of money in late August or early September. There is a bill to provide $20 billion for highway and transit infrastructure projects, which CongressDaily reports would last through March, 2011. Congressman James Oberstar is still pushing a $450 billion funding bill and $50 billion for high-speed rail. The Administration is also calling for a federal infrastructure bank -- with $2 billion funded this year and an additional $5 billion next year -- which would make grants and loans available "for projects that cross state lines or combine different modes of transportation."
Notable hearings this week: the House Energy and Commerce Committee examines the proposed Consumer Financial Protection Agency on Wednesday…. On Thursday, House Financial Services looks at the proposed role of the Fed in regulatory reform…. Also on Thursday, the House Judiciary Committee holds a hearing on "Home Foreclosures: Will Voluntary Mortgage Modification Help Families Save Their Homes?" (Chairman John Conyers has been a leading advocate for allowing bankruptcy judges to modify the principals on mortgages.)…. On Friday, a combined hearing -- the House Agriculture and Financial Services Committees examines over-the-counter derivatives regulation…. On the lighter side, if you're a college football fan and pissed off at the inane BCS rankings, check out the Senate Judiciary's hearing on BCS Antitrust Compliance tomorrow…. Finally, this one has the makings of a B horror flick: Burmese pythons, the snakehead fish, and White Nose Syndrome -- Sen. Ben Cardin chairs a hearing Wednesday on "Threats to Native Wildlife Species", Senators Carl Levin and Bill Nelson are among the witnesses (not the threats).
President Obama is out of town this week -- beginning with a summit in Moscow -- where he will meet with Russian President Dimitrii Medvedev and Prime Minister Vladimir Putin. He will also participate in G-8 meetings and visit the Pope in Italy, and deliver a speech in Ghana.
The corrupting influence of monied interests is so established by now, such a dog-bites-man story that it can be hard to find novel and compelling ways to retell it. But luckily for us chroniclers of same the sheer depth, breath and audacity of the corruption continues to grow at such a pace that tracking its outer edges makes for good (but depressing) copy.
Today's latest installment, which has the internet a twitter is the revelation that the Washington Post has set itself up a kind of influence broker for corporate lobbyists, arranging off-the-record dinners with key White House policy makers which lobbyists can attend for the low low price of $25,000. Mike Allen of Politico has the (very good) scoop:
For $25,000 to $250,000, The Washington Post is offering lobbyists and association executives off-the-record, nonconfrontational access to "those powerful few" -- Obama administration officials, members of Congress, and the paper's own reporters and editors.
The astonishing offer is detailed in a flier circulated Wednesday to a health care lobbyist, who provided it to a reporter because the lobbyist said he feels it's a conflict for the paper to charge for access to, as the flier says, its "health care reporting and editorial staff."
The offer -- which essentially turns a news organization into a facilitator for private lobbyist-official encounters -- is a new sign of the lengths to which news organizations will go to find revenue at a time when most newspapers are struggling for survival.
And it's a turn of the times that a lobbyist is scolding The Washington Post for its ethical practices.
So far most of the criticism has focused (rightly) on the Washington Post, but what I want to know is: who at the White House was planning to attend and were they aware that this was a high-priced lobbying session? If so, shouldn't there be repercussions for allowing access to them to be sold?
In this week's Capitolism column I spotlight a new coalition of various progressive groups called Americans for Financial Reform. The idea is to be for the upcoming fight over financial regulation, what HCAN has been to the healthcare reform battle: a well funded coalition pushing on the side of progressive policies. (There's a whole tangential debate to be had about HCAN's lack of support for single payer, but that's another story)
Jane Hamsher at FireDogLake excerpts the piece and writes this:
Great. Glad to hear it. Another group that will redouble every mistake made by every such liberal group since the 1970s. They'll put together a bunch of experts, issue some "white papers," nobody will care but they'll raise a lot of money.
They'll make no attempt to figure out why this doesn't work, or why the model has been such a colossal failure in the past. Because for them, it's not a failure -- big donors love big names. Congress doesn't give a flying fuck, you say? Well, you have a point. But failing to have even a remote hope of success is not necessary to keep the funding stream flowing.
I can understand the skepticism: it's entirely unclear whether AFR will be able to do any good. They're only a few weeks old. I will say that the plan at least (and who knows whether it will be executed) is to do some nationwide grassroots organizing around the issues. There are groups like NTIC/NPA that are very active in the coalition who actually do grassroots organizing and have been doing it for a long time. They're not just some inside-the-beltway donor siphon. Also: the status quo as it stands is there is basically nothing pushing against the banks on the Hill. So from the perspective of triage it seems like something, anything, is an improvement on the status quo.
But there's a broader critique being laid out here and it's of what one very sharp DC progressive organizer calls "campaign-in-a-box organizing vehicles," which has a lineage going back to the (successful)'05 Social Security fight and extends through the very expensive (and unsuccessful) Americans Against Escalation in Iraq to HCAN and others. Each of these, critics contend, have had diminishing returns, and they've all sucked up quite a bit of resources that would have better been spent elsewhere.
The question I have, and it's not a rhetorical one, is whether this is an issue of personnel (more or less the same cast of Beltway progressive characters) or model. If it's a question of the model, one which includes a coalition approach, ad buys, Congressional lobbying, press releases, events, maybe some field, what is the alternative? I don't meant that to suggest there isn't one, but I'm too unimaginative an organizer to conceive of what it looks like.
At Upper Senate Park on the grounds of the US Capitol yesterday, on ahot, humid DC summer day, 10,000 people from across the country ralliedfor healthcare reform with a real public option.
They flew in from as far as Washington state, Montana, New Mexico andNebraska; bussed in from Ohio, Pennsylvania, West Virginia, New York andNew Jersey; and made the trip from Florida, North Carolina, Tennessee,Missouri and Illinois.
It was a vibrant crowd, showing the colors of unions that turned out inforce: CWA red, UFCW yellow, AFSCME green, SEIU purple, LiUNA orange,IBEW lime, and SIU blue.
They were there not only to rally but to lobby. They understood theurgency with nearly 50 million people uninsured and millions moreunderinsured and an illness away from bankruptcy. They understood theopposition as the industry lobbyists fight tooth and nail to protecttheir profits. And they understood the need for citizens to make thecase for real reform each and every day until we win.
Maddie, a resident caregiver for children with developmentaldisabilities in Vineland, NJ, made the bus trip down with AFSCME Local2215.
"We have a lot of people -- even in the bus that we brought down today-- they have children that are sick. One lady has a daughter who has arare disease -- she doesn't have any healthcare," she said. "It's moreimportant than getting a raise, or making extra money. We fight healthissues every day of our life... The private companies aren't necessarilygonna give us that healthcare, the public option makes sure it's forall. I just hope my brothers and sisters make a statement today and dowhat we came here to do -- convince Congress."
Ronald, a splicer for Verizon, came from Wilmington, Delaware with CWAlocal 13100.
"There's a lot of work that needs to be done. Everybody needs to rallytogether and get this," he said. "We're in America -- strongest nationin the world. We shouldn't be going through this -- with all thesepeople not being able to take care of their family members .... We votethese guys in to do a job -- not to leave their state, come down here toDC, and then all of a sudden they flip the script, they have their ownagendas."
Congressman Charles Rangel told the crowd that their efforts werehistoric, drawing a parallel to the March on Washington.
"Civil rights without the right to health -- you can't use it much," hesaid. "Remember this day the same way we remember the day that wemarched down here with Dr. Martin Luther King. No one knew howimportant that march was....One day you'll tell your kids and yourgrandkids that have healthcare, 'Enjoy that, but don't take it forgranted because [I] came to Washington on a hot, June day'...."
Senator Charles Schumer -- who has taken a leading role in speaking outfor a public plan option (in contrast to weak substitutes likeDemocratic Senator Kent Conrad's regional coops) -- also fired up thecrowd. He called for a public option that isn't "diluted" and told thepeople to "hold [Congress'] feet to the fire" in this "long, hardfight."
Actress Edie Falco -- a breast cancer survivor -- talked about her pastas an unemployed actress who needed to make the same tough choices somany people are forced to make today.
"It's bad enough the emotional impact of not having a job, but to getsick on top of that, and worry every day that [you're] not gettingbetter, figuring out what you're gonna have to do without so you canafford a doctor's visit," she said. "I'm far more familiar with thatthan I am with my situation these last number of years. I'm here onbehalf of all the people who are still in that situation, working hard,doing their jobs, and not being able to take care of themselves or theirfamilies."
The rally lasted for about an hour and a half, then folks headed tolobby their legislators or attend town meetings. Pennsylvania -- whichhad 2,000 people who came down in 36 buses or carpools -- packed themain floor of the Capitol City Brewing Company and its balconies withhundreds of rank and file union members. (There were definitely morethan 700 people -- the official capacity of the establishment.) Therewas word that Senator Arlen Specter was on his way, and with his plansfor reelection hinging on Democrats who were unsure about his positionon the public plan option and the Employee Free Choice Act, there wasquite a buzz.
He kept getting delayed, however, and most were predicting he wouldn'tshow. In the meantime, Congresswoman Allison Schwartz stopped in topledge her continued support for this cause. So did Sen. Specter'srumored challenger in a Democratic primary, Congressman Joe Sestak.
Rep. Sestak told the crowd that while his opposition to the Iraq War isoften reported as the reason he ran for Congress in 2006, his primarymotivation was the debt he feels to the nation for the healthcare he andhis family received while he was in the military.
Four years ago his daughter was diagnosed with a malignant brain tumorand given just months to give. But she received the best possibletreatment and she is now eight years old. Her roommate her first dayin the hospital -- a two year old boy with acute leukemia -- didn'thave insurance and treatment was much more difficult to obtain. Thatwas when Sestak began to focus on healthcare for all Americans. He saidhe's in this fight as "payback to the citizens of this nation" whoprovided the care his family needed.
The crowd began to disperse as people gave up on Sen. Specter. Butabout three hours after the meeting began, he showed -- having beendelayed, it turns out, by the White House meeting on immigration.
For some minutes before the Senator spoke, the crowd chanted repeatedly,"Healthcare is a right. Stand with us and fight." So when SenatorSpecter finally stepped to the mic he said, "I compliment you on yourtenacity.... And I think Sen. Schumer has the right idea about having apublic component which has a level playing field with the privatesector."
While it's good news that Sen. Specter called for the public option thatSenator Schumer hours earlier said can't be "diluted", we know this isfar from a done deal.
It would be good to see President Obama tap into the grassroots energythat brought so many to Washington yesterday. Congress now begins arecess that runs through Fourth of July weekend, and Pres. Obama shouldbarnstorm around the country for the robust public option he wants. With his approval rating remaining high, and 72 percent of the countrywanting a public plan, he can tap real momentum which could decide thisdebate.
Too many craven Democrats are still talking compromise in an effort towin 60 votes. We don't need a few out-of-touch Republicans. What weneed is real health care reform that includes the public option, and itcan be done with just 51 votes thanks to the arcane "reconciliation"rule in the Senate.
But to win this, it might take the President coming out and fightinglike hell -- just like the good people who came to Washington to maketheir voices heard yesterday.
The Waxman-Markey American Clean Energy and Security Act (ACES) seemed to have hit a snag this week. One of the reasons was the opposition of House Agriculture Chairman Collin Peterson and agribusiness to the EPA -- instead of the USDA -- monitoring agricultural pollution. No agreement has been reached on that issue, but it looks like the bill will make it to the floor on Friday anyway -- even though, as CongressDaily reports, the 218 votes needed to pass it aren't a lock and negotiations continue.
Supporters and opponents of the bill are therefore kicking into high gear -- which means facts be damned in the case of the latter. The EPA and CBO have estimated the average household cost of the bill as somewhere between 22 cents and 48 cents per day ($80 to $175 per year) -- without taking into account the benefits of reduced global warming, energy efficiency promotion, or job creation. But that hasn't stopped Republicans from claiming the cap and trade program will "cost every American family $3000". They are also, of course, predicting massive job losses and a weak economy -- the same tired line they have used for decades in opposing clean air and clean water laws -- even though history has proven them wrong time and again and this bill would do the same.
Clean energy advocates like NRDC, Sierra Club, 1Sky, and Green For All are mobilizing activists to support and strengthen the legislation -- and fight any efforts to weaken it. Some of the issues include possible changes to clean energy incentives, emission reduction goals, the renewable energy standard, enforcement, green job investment in lower income communities, and auctioning pollution credits versus giving them away to polluters.
Clearly in the coming days the big bucks will go to corporate lobbyists and groups like Newt Gingrich's American Solutions for Winning the Future, which released an ad yesterday predicting, "We'll lose more jobs, pay more for gas and electricity -- pushing our economy to its breaking point." Fearmongering Republicans will continue to try to scare the hell out of the public. So now's a good time to get involved in this fight, help level the playing field, and talk sense with your Representative about the need to strengthen and pass this bill.
Here's what's happening this week:
Congress will begin its July 4 recess at the close of business on Friday -- don't we all wish we could do the same? -- but before it does, it will attempt to make some headway on health care legislation.
The Senate Health, Education, Labor and Pensions Committee continues to markup its version of the bill, while according to the New York Times the Senate Finance Committee will be engaged in "intense back-room negotiations". In the House, three committees -- Ways and Means, Energy and Commerce, and Education and Labor -- will take up the 852-page draft of their joint health care bill.
Look for many in the GOP -- and too many timid Dems -- to try to kill the public plan option by citing a CBO report that estimated the HELP plan would cover "only 16 million people".
As the Center on Budget and Policy Priorities notes, "The CBO analysis covers only a part of the HELP plan… and does not include major elements... that would further substantially reduce the number of uninsured." Democrats in need of a little spine should check out the latest New York Times/CBS News poll that finds 72 percent of Americans support a public plan option that would compete with private insurers. On Thursday, Health Care for America Now (HCAN) will hold a large rally and lobbying day at the Capitol.
The House will vote on the mammoth $680.4 billion FY10 defense authorization bill. According to CongressDaily, Rep. James McGovern will once again offer his good amendment demanding an Afghanistan exit strategy -- something President Obama himself has said is needed but is still inexplicably missing from his Af-Pak strategy. The House and Senate will also take up the FY10 Homeland Security bill (approximately $45 billion). The House will also take up the $32.3 billion Interior-Environment spending bill.
The Senate is expected to sign a tourism promotion bill. That's not too exciting in itself, but the battle around the amendments is of interest. So far, the GOP has blocked an amendment from Senator Bernie Sanders that would take on oil speculation.
Senator Frank Lautenberg continues to push commonsense gun regulation even as many of his Democratic colleagues turn weak-kneed on the issue. Today, he will introduce legislation that would allow the Attorney General to block gun sales to people on terror watch lists. That's right -- as things stand now, people on the list can't board a plane but they can load up on guns and ammo, no problem.
Congress also begins its work on a financial regulatory reform bill. This morning, the Senate Banking Committee looks at regulating over-the-counter derivatives -- a weakness in the Obama proposal. House Financial Services, on the other hand, takes a look Wednesday at one of the stronger aspects of Obama's proposal -- enhancing consumer protection. Obama proposes creating a Consumer Finance Protection Agency.
The White House is scheduled to have one of its bipartisan, let's see what we agree on, meetings this Thursday -- this one on immigration reform. It's been postponed twice already.
Notable hearings -- all taking place on a busy Thursday: Attorney General Eric Holder appears before Senate Judiciary regarding proposed changes to "The Matthew Shepard Hate Crimes Prevention Act of 2009"…. House Financial Services looks at preserving federal and state affordable housing…. Fed Reserve Chairman Ben Bernanke testifies on Bank of America's acquisition of Merrill Lynch and the subsequent government bailout…. and the Joint Economic Committee looks at predatory lending and reverse redlining.
I sat down with Jake Blumgart of Campus Progress to talk about covering Washington DC. Here's a excerpt of our discussion of legislative battles over the future of the financial industry, which seems particularly germane in light of today's White House announcement of its new regulatory initiative:
It does seem to be harder to rally people around something like temporarily nationalizing the banks. Massive pro-gay rights demonstrations, for example, are couched in terms of human rights, which everyone gets. But banking…
That is why they win these battles. There is no mass constituency for re-regulating the banks. It doesn't get people in the [thumps finger on chest]. There are certain political arguments that make your cheeks warm. Those are the things that win elections. It is hard to marshal intensity around systemic risk regulations or temporarily nationalizing the banks. So without a mass constituency it is left to insiders in D.C. That battle isn't even between David and Goliath. It is between Goliath and David's poodle's infant puppy.
From Greg Kaufmann:
One problem with the Obama Administration's "Af-Pak" strategy -- aside from the lack of an exit strategy, air strikes, and a cost that threatens its domestic agenda -- is the fact that the allotment of resources consistently contradicts General Petraeus' own stated counterinsurgency (COIN) strategy. Petraeus says 80 percent of expenditures should go towards non-military purposes like economic development, and only 20 percent to the military. Yet the $106 billion supplemental approved yesterday by the House handed over nearly 90 percent of the funds to the military.
Representative Mike Honda -- Chair of the Asian Pacific American Caucus and a Progressive Caucus member -- homed in on that fact in his good statement explaining his vote against the supplemental yesterday (full statement here):
"… I cannot support the continuation of the Bush Administration's failed modus operandi in Afghanistan, Pakistan, and Iraq, and the mis-proportioned 90-10 doctrine of assistance allocation – that is, 90% for military investments and only 10% for political, economic, and social development. The Supplemental represented our first opportunity to correct the failed approaches of the past, but we unfortunately did not use this chance."
"Going forward, I hope that I can work closely with the President to ensure a policy more aligned with the 80-20 model often quoted by General David Petraeus, which would invest 80% of resources into political capacity and institutions with only 20% for military. In this regard, I have presented specific recommendations to my colleagues in Congress, with the intention of informing and improving US policy in Afghanistan and Pakistan. I was pleased to hear in my April meeting with the President that his FY2010 budget request will move in this direction."
Hopefully, Rep. Honda and others -- especially the 80-member Progressive Caucus -- will hold President Obama to that pledge moving forward. Too many let him off the hook yesterday.