Hullabaloo

Wednesday, November 30, 2011

 

Paul vs Newtie

by digby

Ron Paul goes after Gingrich with a rhetorical 2x4:

I guess Paul figures that if Newtie goes down it's his turn to be the anti-Romney. I'm fairly sure he's going to have to mud wrestle Santorum first.

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digby 11/30/2011 06:00:00 PM

 

IPO for the Poor House

by digby

That obnoxious complaint from the multi-millionaire seems all the more odious in light of this story:

Yesterday, a Deutsche Bank branch in Atlanta had requested the eviction of Vita Lee, a 103-year-old Atlanta woman, and her 83-year-old daughter. Both were terrified of being removed from their home of 53 years and had no idea where they’d go next.

The movers and the police didn't have the heart to follow through, thus creating a moral hazard. What's to stop these two little old ladies from scamming another great deal and getting away with it, huh?

This reminded me of that great story by Grim and Delaney from a few months back about what life was like for the elderly before Social Security:

The woman "could not give street and number, but could 'fotch' the agent to her place," according to a case study labeled "Aunt Winnie" in one of the organization's annual reports from near the turn of the century. "Old age, with a heavy load on top and a strong wind blowing, made the walk a trying one. At last the 8x10 cabin was reached. In it was a stove in many pieces held together with wire, a bedstead with rags for mattress and rags for covering. From the leaky roof the floor was wet through and through."

Aunt Winnie, the report said, had no income save the 50 cents she made every two weeks for taking in the wash. In summertime she raised herbs and greens, but in winter she "suffered for food and fuel." Her children had all been sold away to slavery, and a nearby niece was too poor to offer any support. Her neighbors helped, providing money for the stove and cot, and a "colored friendly visitor was found to carry broth and other comforts to her." The neighborly charity wasn't enough to persuade the agent, who was essentially a private sector version of a social worker, that the old woman should be on her own.

[...]

Aunt Winnie, whose story is preserved in the archives of the Historical Society of Washington, had been sent to an American institution that was by then some 300 years old and went by a variety of names: the county farm, the poor farm, the almshouse or, most often, simply the poorhouse. She would probably have been surprised to learn that more than a hundred years later, after the virtual eradication of elderly poverty, a powerful political movement would materialize with the mission of returning to the hands-off social policies that made the poorhouse the nation's only refuge for the jobless, the aged, the infirm and the disabled.

But not to worry, that will never happen because people today will be allowed to invest money in "private accounts", so it's not like they're heartless or anything. If they are savvy investors and lucky enough to live in the right time period, they should be just fine. If not, well as Ron Paul says: "That’s what freedom is all about, taking your own risk." Just like the good old days.

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digby 11/30/2011 04:30:00 PM

 
Amen

by David Atkins

It's no secret that Christianity broadly speaking and the Left haven't been on the greatest terms over the last few decades. Part of that, of course, is that the Left tends to be more inclusive, which in turn means fighting for the rights of of minorities of all sorts, including religious minorities. That tends to earn the ire of dominant groups, Christianity among them.

Liberals also tend more towards atheism than conservatives do, largely out of a greater respect for the scientific method and a more skeptical approach toward authority.

All of that is self-evident. But there's also a mutually reinforcing contempt that has arisen ever since the rise of the Religious Right started to turn (predominantly white) churches into Republican activist grounds. Christianity in the United States took on a more political edge with a distinctly right-wing tilt beginning around the 1970s.

Given that Jesus' message was mostly concerned with social justice rather than sexual morality, it has been difficult for the Left to take the movement seriously as a religious movement, rather than one of socially conservative reactionaries using religion as a cover.

The absence of a serious religious left to counter this trend has been a big part of the problem. If mainstream Christians don't want to become tarred by association with the bigots and charlatans, it's up to them to push back and retake the initiative.

So this is a good sign in context:

A small but growing number of religious communities across the country are removing their money from Wall Street banks to protest what they see as unfair mortgage foreclosures and unwillingness to lend to small businesses.

The New Bottom Line (NBL) coalition of congregations, community organizations, labor unions and individuals is promoting a “Move Our Money” campaign with the goal of shifting $1 billion from big banks to community banks and credit unions.“In a way, the banks have divested from our communities, especially communities of color,” said the Rev. Ryan Bell, a Seventh-day Adventist pastor in Los Angeles. “So we’re basically telling Bank of America that we want them to invest in our communities, and until they do that we’re not going to give our money to them.”

Bell’s church was one of six Los Angeles Christian congregations that announced they would divest a collective $2 million from Bank of America and Wells Fargo as part of the Move Our Money campaign.

The campaign has been slow to get off the ground; but after a recent national convocation of clergy in New Orleans, about 100 more leaders from a broad cross section of Christian, Jewish and Muslim congregations pledged to move an additional $100 million.

Of course, these are mostly minority churches, which have always placed a greater emphasis on the social gospel. Hopefully this movement will go beyond that. But if more white churches don't get on board, it will only reinforce legitimate accusations of hypocrisy, and exacerbate the divide between them and the Left. And while the Left may suffer from that somewhat in the short term, in the long term the churches and the image of American Christianity itself will be far more severely hurt.


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thereisnospoon 11/30/2011 03:22:00 PM

 

1% Whine: redolent of privilege with a faint whiff of condescension and a soupçon of white truffle

by digby

What is it about whining multi-millionaires that is so repulsive? Is it that they think they work so much harder than everyone else that they are entitled to hundreds of times what the average worker makes? Is it their petulant temper tantrums every few minutes because the president once called them "fat cats" in passing? Is it the fact that they are so insular and frankly stupid that they can't see that there are times when they should shut their fat, entitled pie-holes and lay low? I don't know. But this is exactly the sort of thing that is making average Americans believe that these people are threats to democracy, not President Obama's tepid jabs.

Omega Advisors, Inc. I Wall Street Plaza • 88 Pine Street • 31 st Floor | New York, New York 10005

Leon G. Cooperman, C.F.A. Chairman & Chief Executive Officer

OPEN LETTER TO THE PRESIDENT OF THE UNITED STATES OF AMERICA

November 28, 2011

President Barack Obama

The White House

1600 Pennsylvania Avenue, NW

Washington, D.C. 20500

Dear Mr. President,

It is with a great sense of disappointment that I write this. Like many others, I hoped that your election would bring a salutary change of direction to the country, despite what more than a few feared was an overly aggressive social agenda. And I cannot credibly blame you for the economic mess that you inherited, even if the policy response on your watch has been profligate and largely ineffectual. (You did not, after all, invent TARP.) I understand that when surrounded by cries of "the end of the world as we know it is nigh", even the strongest of minds may have a tendency to shoot first and aim later in a wellintended effort to stave off the predicted apocalypse. But what I can justifiably hold you accountable for is your and your minions' role in setting the tenor of the rancorous debate now roiling us that smacks of what so many have characterized as "class warfare".

Whether this reflects your principled belief that the eternal divide between the haves and have-nots is at the root of all the evils that afflict our society or just a cynical, populist appeal to his base by a president struggling in the polls is of little importance. What does matter is that the divisive, polarizing tone of your rhetoric is cleaving a widening gulf, at this point as much visceral as philosophical, between the downtrodden and those best positioned to help them. It is a gulf that is at once counterproductive and freighted with dangerous historical precedents. And it is an approach to governing that owes more to desperate demagoguery than your Administration should feel comfortable with.

Just to be clear, while I have been richly rewarded by a life of hard work (and a great deal of luck), I was not to-the-manor-born. My father was a plumber who practiced his trade in the South Bronx after he and my mother emigrated from Poland. I was the first member of my family to earn a college degree. I benefited from both a good public education system (P.S. 75, Morris High School and Hunter College, all in the Bronx) and my parents' constant prodding. When I joined Goldman Sachs following graduation from Columbia University's business school, I had no money in the bank, a negative net worth, a National Defense Education Act student loan to repay, and a six-month-old child (not to mention his mother, my wife of now 47 years) to support. I had a successful, near-25-year run at Goldman, which I left 20 years ago to start a private investment firm. As a result of my good fortune, I have been able to give away to those less blessed far more than I have spent on myself and my family over a lifetime, and last year I subscribed to Warren Buffet's Giving Pledge to ensure that my money, properly stewarded, continues to do some good after I'm gone.

My story is anything but unique. I know many people who are similarly situated, by both humble family history and hard-won accomplishment, whose greatest joy in life is to use their resources to sustain their communities. Some have achieved a level of wealth where philanthropy is no longer a by-product of their work but its primary impetus. This is as it should be. We feel privileged to be in a position to give back, and we do. My parents would have expected nothing less of me.I am not, by training or disposition, a policy wonk, polemicist or pamphleteer. I confess admiration for those who, with greater clarity of expression and command of the relevant statistical details, make these same points with more eloquence and authoritativeness than I can hope to muster. For recent examples, I would point you to "Hunting the Rich" (Leaders, The Economist, September 24, 2011), "The Divider vs. the Thinker" (Peggy Noonan, The Wall Street Journal, October 29, 2011), "Wall Street Occupiers Misdirect Anger" (Christine Todd Whitman, Bloomberg, October 31, 2011), and "Beyond Occupy" (Bill Keller, The New York Times, October 31, 2011) - all, if you haven't read them, making estimable work of the subject.

But as a taxpaying businessman with a weekly payroll to meet and more than a passing familiarity with the ways of both Wall Street and Washington, I do feel justified in asking you: is the tone of the current debate really constructive?

People of differing political persuasions can (and do) reasonably argue about whether, and how high, tax rates should be hiked for upper-income earners; whether the Bush-era tax cuts should be extended or permitted to expire, and for whom; whether various deductions and exclusions under the federal tax code that benefit principally the wealthy and multinational corporations should be curtailed or eliminated; whether unemployment benefits and the payroll tax cut should be extended; whether the burdens of paying for the nation's bloated entitlement programs are being fairly spread around, and whether those programs themselves should be reconfigured in light of current and projected budgetary constraints; whether financial institutions deemed "too big to fail" should be serially bailed out or broken up first, like an earlier era's trusts, because they pose a systemic risk and their size benefits no one but their owners; whether the solution to what ails us as a nation is an amalgam of more regulation, wealth redistribution, and a greater concentration of power in a central government that has proven no more (I'm being charitable here) adept than the private sector in reining in the excesses that brought us to this pass - the list goes on and on, and the dialectic is admirably American. Even though, as a high-income taxpayer, I might be considered one of its targets, I find this reassessment of so many entrenched economic premises healthy and long overdue.

Anyone who could survey today's challenging fiscal landscape, with an un- and underemployment rate of nearly 20 percent and roughly 40 percent of the country on public assistance, and not acknowledge an imperative for change is either heartless, brainless, or running for office on a very parochial agenda. And if I end up paying more taxes as a result, so be it. The alternatives are all worse.But what I do find objectionable is the highly politicized idiom in which this debate is being conducted.

Now, I am not naive. I understand that in today's America, this is how the business of governing typically gets done - a situation that, given the gravity of our problems, is as deplorable as it is seemingly ineluctable. But as President first and foremost and leader of your party second, you should endeavor to rise above the partisan fray and raise the level of discourse to one that is both more civil and more conciliatory, that seeks collaboration over confrontation. That is what "leading by example" means to most people.

Capitalism is not the source of our problems, as an economy or as a society, and capitalists are not the scourge that they are too often made out to be. As a group, we employ many millions of taxpaying people, pay their salaries, provide them with healthcare coverage, start new companies, found new industries, create new products, fill store shelves at Christmas, and keep the wheels of commerce and progress (and indeed of government, by generating the income whose taxation funds it) moving. To frame the debate as one of rich-and-entitled versus poor-and-dispossessed is to both miss the point and further inflame an already incendiary environment. It is also a naked, political pander to some of the basest human emotions - a strategy, as history teaches, that never ends well for anyone but totalitarians and anarchists.

With due respect, Mr. President, it's time for you to throttle-down the partisan rhetoric and appeal to people's better instincts, not their worst. Rather than assume that the wealthy are a monolithic, selfish and unfeeling lot who must be subjugated by the force of the state, set a tone that encourages people of good will to meet in the middle. When you were a community organizer in Chicago, you learned the art of waging a guerilla campaign against a far superior force. But you've graduated from that milieu and now help to set the agenda for that superior force. You might do well at this point to eschew the polarizing vernacular of political militancy and become the transcendent leader you were elected to be. You are likely to be far more effective, and history is likely to treat you far more kindly for it.

Sincerely,

Leon G. Cooperman

Chairman and Chief Executive Officer

Oh, boo fucking hoo. Maybe he should go somewhere and count all his money. I'm sure it'll make him feel better.

Here's the problem. And it doesn't look like it's all that difficult to solve to me:

Perhaps this fellow could take up his complaint with his Republican friends. After all, they are promoting a theory of government that calls anyone who isn't rich a parasite and wants to cut taxes on the top 1% and make people who earn 20k a year pay more. To start, their front runner, Newt Gingrich, might be persuaded to stop telling people to "go out and get a job and before they do, take a bath." Once they clean up that side of the aisle maybe we'll think about civility. Unilateral disarmament hasn't been working out all that well for the folks.

(And by the way the phrase "you and your minions" probably isn't really the best way to start off a scolding letter demanding civility. Just saying.)

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digby 11/30/2011 02:00:00 PM

 
"They knew they got it"

by digby

I guess the pepper spray was too messy, so they used what amounts to a cattle prod:

“We’d rather not do arrests but we are prepared to if need be,’’ State Patrol spokesman Dan Coon said a few minutes ago [about 6:40 p.m.]. Coon explained that protesters are being given additional chances to leave voluntarily. “It’s still very fluid. Lots of things are going on.’’

Coon also confirmed that tasers were used to zap protesters that tried to push past troopers guarding the north doors of the Legislative Building:

“Basically what happened was a trooper used his taser on three subjects that were … attempting to get back into the building. … (T) hey used it almost for their own safety to keep the crowd back. … They said it was absolutely necessary to keep the troopers at the door from being trampled. … and keep more people from coming into the building.”

Coon described the use of tasers as a “dry stun” in which the subject is jabbed by the electrical probes rather than shot by electrically charged arts. “I’m not sure it sends the same juice as with the two darts, but the individual knows they just got tased. They knew they got it,’’ Coon said.

I'm sure they did. In case you are wondering what a "dry stun" is:

A Las Vegas police document says "The Drive Stun causes significant localized pain in the area touched by the Taser, but does not have a significant effect on the central nervous system. The Drive Stun does not incapacitate a subject but may assist in taking a subject into custody."[27] "Drive Stun" was used in the UCLA Taser incident and the University of Florida Taser incident (which popularized the widespread use of the phrase "Don't tase me, bro!"). It is also known as "dry tasing", "contact tasing", or "drive tasing".

Amnesty International has expressed particular concern about Drive Stun, noting that "… the potential to use TASERs in drive-stun mode — where they are used as 'pain compliance' tools when individuals are already effectively in custody — and the capacity to inflict multiple and prolonged shocks, renders the weapons inherently open to abuse."

They'll know they got it, though.

Update:

Commenter at the video site:

Tasing is effective, throw a few bars of Irish Spring at em along the way and we will have these filthy parasites cleared out in no time.

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digby 11/30/2011 01:00:00 PM

 
Texas leading the way in the crusade against women

by digby

Sarah Posner has published an informative new article about the latest tactics in the war on women. Evidently Texas is now the epicenter of the Right To Life movement and they are going after birth control:

It’s a battle fought on more than one front, these Texas activists say, a window into the machinations of the anti-choice movement nationwide. The legislature is one front, and Texas has a robust constellation of anti-choice groups that, in conjunction with an increasingly powerful Republican caucus, have chalked up a series of impressive victories. These successes have led the national anti-choice group Americans United for Life to rank Texas fourth in the country for its “aggressive legislative action over the past several years.”

Another front is in the streets, where Catholic activists have led the way, praying and proselytizing in front of clinics that provide abortions, aiming to persuade patients that not only is abortion contrary to God’s will, but that it will cause them untold harm, from mental health problems to breast cancer, infertility, and even death. While medical evidence says otherwise, such falsehoods have been codified into law in Texas. Its 2003 “right to know” law, never challenged in court, requires doctors to “inform” women seeking abortions of a supposed link between abortion and a higher risk of breast cancer and future infertility, in addition to: “serious psychological effects... including depression, grief, anxiety, lowered self-esteem, regret, suicidal thoughts and behavior, sexual dysfunction, avoidance of emotional attachment, flashbacks, and substance abuse.”

While abortion hasn’t played a central role in the presidential campaign, that, too, is a product of the shift in strategy: anti-choice activists are focused not on overturning Roe v. Wade (although that remains a crucial goal). Instead, they are now fixated on portraying abortion as harmful to women, tying it to an “industry” (i.e., Planned Parenthood) they have targeted with an unrelenting campaign in an effort to malign not just abortion, but birth control—and to restrict access to both.

Rick Perry is apparently very personally involved in all this, which is very creepy. Thank goodness the base is so put off by him otherwise that he hasn't gotten any traction. (The way that primary is going, though, it could circle back to him. Look at Newtie.)

Here's where it gets interesting:

[T]he Texas legislature slashed family planning funding by two-thirds in 2011. The Republican-led legislature allocated another $8.4 million over two years to the Alternatives to Abortion program, which not only prohibits funding for abortion or abortion counseling, but whose contractors do not offer birth control, or even counseling or referrals for contraceptives. In other words, an uninsured woman entering a crisis pregnancy center for its free services will be dissuaded from having an abortion, given blankets, booties, and Jesus, and won’t be informed about how to prevent another unintended pregnancy in the future.

The Alternatives to Abortion program is modeled on a Pennsylvania program launched at the urging of former Governor Bob Casey, a Catholic anti-choice Democrat whose son, Bob Casey Jr., since being elected to the US Senate in 2006, has pressed for federal legislation funding “alternatives” to abortion.* The Texas program uses federal funds under Temporary Assistance for Needy Families (TANF), which are disbursed in block grants to the states...

Among the criteria the potential providers must meet are “maintain[ing] a pro-life mission and agree[ing] not to promote, refer, or counsel in favor of abortion or abortifacients as an option to a crisis or unplanned pregnancy” and “agree[ing] not to promote the teaching or philosophy of any religion while providing services to the client.” Yet most, if not all, of the centers maintain that Christian faith is central to their mission. Many are affiliated with Care Net, which describes itself as a “Christ-centered ministry whose mission is to promote a culture of life within our society in order to serve people facing unplanned pregnancies and related sexual issues.” Others are affiliated with Heartbeat International, which says it “does not promote birth control” because its “policies and materials are consistent with biblical principles and with orthodox Christian (Catholic, Protestant, and Orthodox) ethical principles and teaching on the dignity of the human person and sanctity of human life.”

May I please have one of those "conscience clauses" requiring that the government not spend my tax dollars on patriarchal throwbacks? I think it's only fair.

Read Posner's whole piece. The so-called lovers of "life" have already extended their battle to birth control --- proving that they are less about their great love of blastocysts than about their great loathing for women having stress and guilt free physical pleasure. (Either that or they really need that frisson of danger that sex could result in pregnancy to enjoy themselves.)

This piece makes it clear that the battle for reproductive freedom needs to be engaged right now, openly and without all this "common ground" nonsense that the Religion Industrial Complex is selling. They have managed to demonize abortion to such an extent it's become an act of shame for most politicians to support it unequivocally as a matter of personal autonomy. And now they have launched their crusade against birth control. You don't win battles like these with compromise.


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digby 11/30/2011 11:30:00 AM

 
Our annual holiday kabuki special

by digby

So we have some typically cynical kabuki going on in DC over the extension of the payroll tax cut.(I personally wish we would just send out government checks instead of enacting payroll tax cut because inevitably people are going to start complaining that SS is draining the treasury and has to be cut. But then, they're already doing that so I guess we've lost that battle.)

Anyway, here's the latest from dday. He says that for all the happy talk from McConnell about passing it, it appears the plan is to demand something odious in return to pay for it and then blame the Democrats for raising taxes when they refuse. (Sound familiar? It should, it worked beautifully last December. Look for them to hold up the Unemployment extension too, just for kicks. It's Christmas. They deserve a little fun.)

The big problem with this whole idea is that there should be no trade-off for this at all. Stimulus is supposed to put more money into the economy. Extending the payroll tax cut is just status quo, which at least won't be contractionary. But insisting that we cut something else in order to keep it going is.

Jared Bernstein has a good example of how a nation has screwed itself with misplaced austerity, the UK:

They’ve downgraded their forecast significantly for years to come, yet they remain committed to the spending cuts that are partially responsible for the downgrade.

The first figure shows the forecast for slower real GDP growth and higher unemployment as a result of the OBR’s update of their March report. Next year, for example, they expect real GDP to grow 1.8% more slowly—0.7% instead of 2.5%–a large decline and a rate that will give rise to growing unemployment, as you can see in the second figure. That one compares the forecasted unemployment rates from the March forecast with the new ones. The new ones are a lot higher and initially growing instead of declining.

That worked out well. And considering what's happening the Eurozone, it's probably going to look a lot worse before it's over.

Now one can certainly argue for taxing some of the upper 1% to pay for the payroll tax cut extension --- they have so much money they can't spend it all so it's sitting in their accounts collecting interest. It could help the economy tremendously to redistribute it to those who will actually spend it. But cutting more spending to offset? Not a good idea.

But then, according to dday, the Republicans may not even allow that. And if they do, they will try to extract the maximum pain from the American people in the long run. The Democrats do have an argument --- and the election is coming up. But they will have to be aggressive in ways they haven't been up to now. We'll see how it plays out over the next couple of weeks.

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digby 11/30/2011 09:51:00 AM

 
Supporting the Troops

by David Atkins

There's a great article in the Financial Times today about illegal foreclosures on military families. Essentially, banks were foreclosing on families of active duty troops. That's against the law, and it carries criminal penalties. As in, jail time for those involved.

In the United States, that cannot be allowed to be happen to the "producers." Jail time is reserved for protesters and little people. Here's Dylan Ratigan:

Foreclosures on active duty troops is usually a big no-no, for a lot of reasons – for instance, when your credit rating is damaged by a foreclosure, it can impact your national security clearance. In addition, there’s enormous stress that the soldier goes through when his or her family is facing a threat of eviction, and it’s the kind of stress that makes him or her less equipped to be ready in a warzone. Congressman Bob Filner has even accused banks of “homicide” against American troops, blaming the banks for suicides resulting from the increased stress brought on by aggressive debt collection techniques.

So why is nothing happening?

Much has been made of President Obama’s argument that the banks did nothing illegally, and various other scholars and officials have argued that prosecuting the banks is far too expensive and difficult. Yet, the SCRA is a simple law with teeth; it carries real jail time, and the parties have already confessed to the crime. Here’s Section 303(d)(1) of that law, which spells out penalties. (PDF)

(1) MISDEMEANOR.—A person who knowingly makes or causes to be made a sale, foreclosure, or seizure of property that is prohibited by subsection (c), or who knowingly attempts to do so, shall be fined as provided in title 18, United States Code, or imprisoned for not more than one year, or both.

Interestingly, the Department of Justice seems to agree with this interpretation. Here’s a press release from the Department of Justice on a settlement of some of these claims, from Bank of America. I’ve bolded the important part.

The Justice Department announced today that, as part of its settlement with BAC Home Loans Servicing LP, a subsidiary of Bank of America Corporation, servicemembers whose homes were unlawfully foreclosed upon will each receive a minimum $116,785 plus compensation for any equity lost to compensate them for the bank’s alleged violation of the Servicemember Civil Relief Act (SCRA).

Note the use of the word “alleged.” Bank of America isn’t admitting anything, and the Eric Holder’s Department of Justice isn’t making them admit anything. Otherwise, the penalties might come into play. Sometimes, law can get very complex. But sometimes, it isn’t. JP Morgan admitted to violating the law. There are up to 5000 more cases, and each one carries up to a year in jail.

Eric Holder and various US Attorneys around the country aren’t prosecuting bank foreclosures on active duty troops, even though they know it is happening. Bank regulators know about the problem. Congress knows about the problem. Certainly, the Pentagon knows about the problem.

But once again, New York AG Eric Schneiderman is stepping up to the plate. Per Dave Dayen:

It looks like even Congress is getting involved, or at least a few of them, because systematic illegal foreclosures on everyday people can be ignored, but systematic foreclosures on members of the military cannot. Jack Reed, a member of the Senate Banking Committee, will request a hearing on the matter. Brad Miller, who has actually been great on this issue and who sees it as a lever to open up a host of inquiries on foreclosure fraud, had a great statement yesterday:

It is hard to see this as anything except a flagrant disregard for a law that has been on the books continuously since the First World War. The Servicemembers Civil Relief Act is very clear: if you’re in harm’s way in our nation’s military, you can devote your whole energy to our nation’s service without worrying what’s happening in a courthouse back home. And if you have a claim against someone in our military, you can wait until they get home and can defend themselves.

The SCRA is not some obscure legal technicality that might just have escaped the attention of mortgage servicers. Those servicers are all affiliates of the biggest banks, but they’re huge and specialized. Servicing mortgages is all they do, and they really don’t have that many laws to keep up with. They have got to have known what the law required, and consciously decided that they could just ignore it, the same way they apparently decided it was okay to file false affidavits in legal proceedings.

The continued failure to pursue criminal charges in the face of flagrant violations of the criminal law is destroying Americans’ faith in their government and democracy. In a democracy, no one is too big to prosecute.

Absolutely. And when Eric Holder won’t, Eric Schneiderman is at least willing to give it a try.

The only thing the U.S. government throws banksters in jail for these days is ripping off Goldman Sachs. Rip off Goldman Sachs, you spend a decade in jail.

But systematically violating the law by screwing over active duty troops? No problem.


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thereisnospoon 11/30/2011 07:23:00 AM

Tuesday, November 29, 2011

 
Poll Number 'O The Day

by digby

43%:

A new Rasmussen Reports national telephone survey finds that 43% of Likely U.S. Voters agree with the former House speaker and think the protesters should take baths and get jobs. But an identical number (43%) disagree, and 14% more are undecided.

Who says this country is polarized?


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digby 11/29/2011 07:30:00 PM

 
The most vile woman in Britain

by digby

Ugh:

Sadly, she's not all that anomalous. I hear that stuff all the time about Mexican laborers. I think what makes her so unusual is that she's saying it right in front of all those people with a baby in her lap.

In Britain they apparently have laws against racist speech and she's been arrested. As an American that's offensive to me. As a human being it 's hard to feel sorry for her. I sure feel sorry for that poor kid though.

Update: if you want to treat yourself to a real roll in the sewer read some of the comments on Youtube.

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digby 11/29/2011 06:00:00 PM

 
Karl Rove is a jerk Part 17

by digby

In this Fox "News" piece Rove rends his garments about how terrible that mean and nasty Barney Frank has been for the congress. It's very upsetting to courtly Republican gentlemen like Karl for politicians to be rude, don't you know --- it just makes them want to sit in a corner and have a good old fashioned cry. (And then in the ongoing pathetic conservative attempt to blame liberals for the global economic meltdown, he lies about Fannie Mae and Freddie Mac some more, )

But as trite as Rove's punditry may be, he's very good at one big thing. This must-read article from Walter Shapiro spells it out:

Perhaps Rove’s biggest initiative at Crossroads was conceptually modest, initially difficult to achieve, and ultimately potent: He convinced most other major independent groups aligned with the Republican Party to work together. “Groups tend to be territorial,” says Law. “They don’t like somebody else telling them what to do. And they’re especially proprietary about their information and their strategies and their donors.” Rove summarized his strategy via e-mail: “Invited them to lunch, suggested we all might be more effective and efficient if we shared our plans, shared costs and resources where possible.” The result is regular Washington meetings and coordination among groups like Crossroads, the Chamber of Commerce, and Americans for Prosperity (funded by the billionaire Koch brothers) to plot how to bedevil the Democrats in 2012.

Shapiro makes the interesting point that presidential Super-Pac advertising is unlikely to be all that influential because there are just so many ways for people to get information. It's down ticket where the danger lies:

... it’s on Capitol Hill where Democrats rightly fear Rove’s wrath. Mark Mellman, Reid’s pollster, admits to being “frightened” by Rove and his allies as Democrats struggle to hold the Senate. “You have a lot of potentially very close Senate races where one side with a fund-raising advantage can change everything,” Mellman says. Ali Lapp, who runs the House Majority PAC, a SuperPAC designed to help Democrats defy the odds and win back the House, puts it this way: “It’s a real fear that the Republicans will have a tidal wave of corporate and conservative money that could wash over everything.”

Rove is the guy who's coordinating all that and that's something he's apparently pretty good at.

Contribute to Blue America if you can. It's no American Crossroads, but it at least tells progressive politicians out there that somebody gives a damn and that's worth something.

Update: Just this. To hell with Karl Rove.

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digby 11/29/2011 04:30:00 PM

 
A step in the right direction. Mostly.

by David Atkins

Harry Reid is launching a volley on behalf on the middle class:

Democrats are offering a bill that would cut taxes for most families next year by about $1,500, paying for the cut by taxing income above $1 million.

The idea is to extend and expand a tax cut passed for this year that has let workers off the hook for 2 percent of their Social Security payroll taxes. The new version offered Monday by Sens. Harry Reid (D-Nev.), Bob Casey (D-Pa.) and Chuck Schumer (D-N.Y.) would boost that figure to 3.1 percent, or half the 6.2 percent payroll tax, for 2012.

The measure would give employers the same break on the first $5 million of their payrolls, as well as waive the tax entirely on the first $12.5 million in payroll for new workers -- in the hopes of creating an incentive to spur hiring. They estimate it would benefit 98 percent of small businesses.

The tax cut would be paid for by slapping a 3.25 percent tax on adjusted gross income above $1 million, which wouldn't kick in until 2013. Reid said the bill would cost $255 billion, but would be paid for by the surtax, which has no sunset date.

The Republicans are refusing to go along with it, of course. While they haven't offered a specific counterproposal to offset the payroll tax cuts, it will likely be highly regressive and designed to wedge the middle class against the poor, in an election where the Democrats will be looking to highlight income inequality between the middle class and the very rich.

So far so good. This is exactly the ground Democrats should be playing on, and puts the lie to the idea in many voters' minds that the two parties are just mirror images of one another. There are serious policy differences here with serious consequences.

That said, there are two troubling issues that come to mind:

1) Though I haven't written about it much, I've long championed payroll tax cuts as good policy. Payroll taxes are highly regressive, and a drag on hiring. I'm painfully conscious of that as a small business owner. Payroll taxes and healthcare costs are the two big hits to a true small business' pocketbook when in comes to investing in the company and expanding the workforce, even when there is sufficient demand. Cutting existing payroll taxes puts more money in regular people's pockets, which in turn theoretically increases demand. So that's all good. Offset the budgetary issues involved in cutting taxes and you're good to go (by the way, since the GOP is seeking alternative offsets, doesn't that suggest even the GOP knows these cuts don't pay for themselves?)

The sticking point with payroll tax cuts is that they fund Social Security. By cutting payroll taxes, the social security fund gets hit, which makes it easier for politicians to pretend that Social Security is "in crisis." From a theoretical good government standpoint, this shouldn't matter: regressive taxes that hurt hiring can be cut, and alternate progressive revenue streams found to cover the loss in funding. Certainly, the lack of a self-sustaining dedicated revenue stream didn't stop us from invading Iraq. America manages to find the money for things it wants to prioritize, and Social Security should be no exception.

From a practical political standpoint, however, the closed system of payroll taxes to Social Security benefits has kept it from major cuts in the past, and from being considered a "welfare program." Dedicated revenue streams for Social Security should be created through progressive taxation, but the likelihood of that actually happening is next to nil.

Which means that a payroll tax cut today might turn into an excuse to cut Social Security tomorrow.

2) The knock on Democrats lately has not been so much that we cater to the interests of wealthy, but to the interests of Wall St. and the financial sector. Of course, those two are in many ways synonymous, but in other ways they are not. Recall that even as Bill Clinton deregulated Wall St., he increased the marginal tax rate on the wealthiest Americans. Many of America's wealthiest citizens like Warren Buffett would be happy to pay more in taxes on a personal level (they would hardly notice the difference, but the impact on the budget would be significant). But they would mostly oppose increases in taxes on the 15% capital gains rate, which is where most of the money is really made.

Democrats took a lot of heat and made a lot of progressives really angry when the Bush tax cuts for the wealthy were extended by the Obama Administration. But it's important to remember that the Republicans were holding many other priorities hostage in exchange for those cuts, including the START treaty and unemployment extensions. Commentators can argue endlessly over whether the trade was a good one to make (I happen to think it wasn't), but it's deeply unfair to say that Democrats, including President Obama, don't want to kill the Bush tax cuts for the rich. They do. Most Democrats, given the wherewithal to do so, will create a more progressive income tax system just as Bill Clinton did.

That's an important point, especially considering that simply allowing the Bush tax cuts on the wealthy to expire will go almost halfway to killing our current budget deficit.

But the problem isn't that. The problem is that the bigger lack of progressive punch in the tax code doesn't apply so much to marginal rates on income (though that's certainly a factor), as it does to rates on speculative behavior. And that's where the sickness in the system lies: we have incentivized speculative behavior at the expense of slower, constructive long-term investment in stable enterprises.

The 15% capital gains rate is preposterously low; a higher rate would affect a few middle class 401K holders, but by far the most affected class would be the super wealthy. Capital gains is where they really make (I refuse to use the word "earn", as it would be a misnomer) their money. Doubling the capital gains rate to 30% would make long-term investors take a hit as well--but not as much as speculative short-term day traders. For a long-term investor, a good investment is still a good investment whether taxed at a 15% or a 30% rate. But for a speculative short-term grifter, many trades wouldn't be worth the risk at a 30% rate. And that's a good thing. If that means many day traders would have to find a different line of work, then good. Consider it a sin tax. Update: as pointed out in the comments, the capital gains rate is only for investments held over a year. Thanks for the correction.

Similarly, a transaction tax of even half a cent on each trade would go completely unnoticed by responsible long-term investors, but would do serious damage to the front-running and blatant cheating that is high frequency trading:

High-frequency techniques are used by Wall Street banks and hedge funds, but it is new independent firms that account for the bulk of this new kind of activity. Most of them were founded in the last 10 to 12 years. Many are still relatively small, employing a dozen to a hundred people, though some have as many as 250.

Trading mostly with their owners’ money, they scoop up hundreds or thousands of shares in one transaction, only to offload them less than a second later before buying more. They can move millions of shares around in minutes, earning a tenth of a penny off each share.

As a group, they earned $12.9 billion in profit in 2009 and 2010, according to the Tabb Group, a specialist on the markets.

These sorts of taxes on Wall Street behavior are not only where the money is, but also where the real impact on public policy is.

Redistributive progressive taxes on the wealthy are a good thing, but they don't really address the problem of how the great disparity in income happened in the first place. All they do is mitigate a public policy problem by treating its symptoms. Don't get me wrong: treating the symptoms is good. But it's in taxing speculative short-term gambling on Wall Street, with the aim of encouraging long-term productive investment in activity that actually creates stable jobs, that legislators can help cure the disease.

Update: It looks like the payroll tax cut doesn't harm the Social Security trust fund after all: the money is mandated to be paid back from the general fund. This is all a big semantic game, of course. It's all money going into the federal system and then coming back out again. But it's important to quell Republican talking points that Democrats are "weakening Social Security."

As I said, if politicians want to continue to fund Social Security at its current levels, they can find a way. The rest is posturing and political gamesmanship.


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thereisnospoon 11/29/2011 03:00:00 PM

 
Newtie and the sweet spot

by digby

To those wondering why Newt is doing so well, read this piece by Ben Adler at The Nation. There is one thing he does better than any other politician in America: articulating conservative contempt for liberals. And I do mean liberals, not liberalism. This is about bad people not bad ideas, and that is an important distinction:

The answer lies in what many in the mainstream media tend to perceive as a weakness, rather than strength, of Gingrich’s: his over the top rhetorical condemnations of Democrats and liberals. Gingrich’s various pronouncements that strike moderates and liberals as odd are actually effective dog whistles. Here are some examples:

-In September, 2010 Gingrich told National Review that Dinesh D’Souza’s widely mocked Forbes article on President Obama provided him with the “most profound insight I have read in the last six years about Barack Obama....What if [Obama] is so outside our comprehension, that only if you understand Kenyan, anti-colonial behavior, can you begin to piece together [his actions]? That is the most accurate, predictive model for his behavior.”

-In an October, 2011 presidential debate Gingrich, responding to why no one on Wall Street executives was arrested after the financial crisis, said, “If you want to put people in jail, you ought to start with Barney Frank, Chris Dodd.”

-Gingrich has repeatedly denigrated the Occupy Wall Street movement with language that oscillates from dismissive to paranoid. On November 20, he instructed them to “Go get a job, right after you take a bath.” Just a few days earlier Gingrich had decried “the destructive, hostile, anti-civilization of the so-called ‘Occupy Wall Street’ crowd.... They want to tear down our country.”

To most people these sorts of comments seem divisive, foolish and un-presidential. To a movement conservative, though, they hit the sweet spot.

This is what the hardcore base craves now more than ever and Newt can give it to them. In fact, it's the only thing he has to offer. His organizational abilities are nil, his only example of leadership as Speaker of the House ended with a failed coup from his own lieutenants and eventual resignation. He has caused endless headaches among the establishment elders and his ego is so inflated that it threatens to explode him at any given moment.

But when it comes to an overarching theory of conservative righteousness and snarling contempt for liberals, he's the only politician in the party who can do it with the kind of panache the folks usually only get from wingnut giants like Limbaugh and Coulter. He just sounds like one of them. He's the original Glenn Beck, but smarter and without all the Mormonism and kooky conspiracy mongering.

The base wants someone to tell them a story, or maybe a fable, about how they are mankind's saviors from the enemy of all that is good and decent. (That would be liberals.)

It's their own version of that ode to American narcissism: "we are the ones we've been waiting for." Nobody delivers that better than Newtie. Perhaps his time really has come.


Update: For more on Newtie's unique appeal, read this fine piece by Elias Isquith:

If the man had truly wanted to be President from the start of this campaign — if, instead of hawking books, he had devoted himself to amassing the campaign infrastructure (and cash) so vital in winning a major electoral contest — he very well may have been able to topple Romney. Because, again, he “gets” it. As a recent Times report makes plain, Newt knows how to talk to these people with an uncommon authenticity and intimacy. He effortlessly weaves winks and nods toward the far-right id into his pronunciations, and taps into enduringly powerful themes that make-up the GOP base’s worldview. read on ...

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digby 11/29/2011 01:30:00 PM

 
Signs of a sick culture

by digby

At least he wasn't tasered:

Michael Davis is diagnosed with Attention Deficit Hyperactivity Disorder or ADHD. His mother says it has led to fights at school. But when the school district said it had a plan to change Michael's behavior, his mother says things went wrong...

[She] says the school, Rio Calaveras Elementary of Stockton, wanted to change that behavior by having Michael meet with a school police officer.

"He could come out and talk to Michael and the kids are normally scared straight," said Gray, describing how she says the school district proposed the meeting.
But the meeting didn't go as planned.

Gray says Michael was agitated when the officer entered the room, and the whole meeting ended with Michael arrested and cuffed, with zip ties on his hands and his feet.

"I was led to believe that Michael saw a police officer and attacked a police officer on sight," said Gray, adding that that's not what happened.

She knows because she ultimately obtained a copy of the police report.

In it, the officer, Lt. Frank Gordo, says he placed his hand on Michael's and, "the boy pushed my hand away in a batting motion, pushed papers off the table, and kicked me in the right knee."

When Michael wouldn't calm down, Gordo cuffed Michael's hands and feet with zip ties and took the boy to the Stockton Kaiser Psychiatric Hospital in the back of a squad car.

He had not called Michael's mother or father at that point.

Michael was cited for battery on a police officer.

The good news:

A juvenile court judge eventually dismissed the battery charges against Michael

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That's nice. He is, after all, only five years old.

But then they're now prosecuting six year olds as sex offenders for playing doctor -- so I guess that's par for the course.

How does it happen that people come to believe that tiny children should be dealt with in the criminal justice system anyway? Why would that idiotic school think a five year old can be "scared straight" by a cop? He's a baby!

We are so twisted that we're infantilizing adolescence and turning tiny children into adults.

Get a load of this odious practice:



They should have put that mom in zip ties and thrown her in the back of a police car.

What is going on here?


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digby 11/29/2011 12:30:00 PM

 
Nudging Enron

by digby

Remember when we were all up in arms about Dick Cheney's energy task force? Grist reports on disturbing data that shows this sort of thing became standard operating procedure in both the Bush and Obama administrations:

When former Harvard Law Professor and eclectic intellectual Cass Sunstein was named administrator of the Office of Information and Regulatory Affairs (OIRA), conservative, industry-oriented Wall Street Journal editorial writers enthused that his appointment was a "promising sign." A slew of subsequent events has proved their optimism well placed, as we have noted repeatedly in CPRBlog.

But nothing beats hard, empirical evidence. In a report released yesterday, CPR announces the results of an exhaustive six-month analysis of the barebones information OIRA has eked onto the web regarding 1,080 meetings held over a 10-year period (October 2001-June 2011) with 5,759 outside lobbyists, 65 percent of whom represented industry and 12 percent of whom represented public interest groups. The results were shocking even to us, long-time and admittedly jaded observers of OIRA's one-way ratchet toward weakening public health and other protections.

Read on for the depressing details.

This seems to be a bureaucratic problem as much as anything, with regulatory policy being centralized in the White House instead of the agencies assigned to that task. Until now Republicans were more likely to do this but it seems to have been continued under Obama rather seamlessly.

Industry has a great deal of sway under this secretive approach, which is understandable under GOP reign since that's their stated goal. It's a little bit surprising under a Democrat, but probably shouldn't be. The naming of Sunstein to this post was the tip off. He's very popular with neo-liberals and European conservatives (basically the same thing) for his "nudge" theory, which is interesting but of doubtful utility in opposition to the profit motive. It's one thing to "nudge" consumers into making better decisions for themselves, it's quite another to "nudge" industries into foregoing growth and profit for the greater good.

This stems from he calls "libertarian paternalism" the name alone fairly describing the absurdity of the idea. Here's how Wikipedia defines it:

Soft paternalism (also referred to as asymmetrical paternalism and libertarian paternalism) is a political philosophy that believes the state can
help you make the choices you would make for yourself—if only you had the strength of will as well as the sharpness of mind. But unlike 'hard' paternalists, who ban some things and mandate others, the softer kind aims only to skew your decisions, without infringing greatly on your freedom of choice.

The term libertarian paternalism is intended to evoke the idea that soft paternalism is an approach to public policy that can be endorsed by some self-described libertarians because it does not abridge individual freedom, though other libertarians are firmly opposed to it.

This seems to me to be an idea from someone who has very little real knowledge of human nature. (Or someone who doesn't like regulation of business and seeks to give cover to neo-liberals who can't get elected if they come right out and say it.)

Sunstein is an iconoclast with a whole lot of ideas about everything, many of which are odious, others provocative and interesting. He's a good friend of the president whom everyone assumed would end up in the administration. But if I had to pick the one area in which his philosophy would likely do the most harm, it would be running a secretive executive branch organization with the power to make- or unmake -- government regulation. So naturally that's where he ended up.


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digby 11/29/2011 11:15:00 AM

 
What's the matter with Mitt?

by digby

I wish I fully understood why so many commentators are unwilling to admit that this is part of Mitt Romney's problem:

More than four in 10 American voters say they are uncomfortable with the idea of a Mormon in the White House, a reflection of the steep challenge facing Mitt Romney in the GOP primary.

According to a survey released Tuesday (Nov. 8) by the Public Religion Research Institute, Romney faces an identity problem among those who already know he's a Mormon, and those who don't but generally have qualms about the faith...

Among white evangelical voters, 47 percent expressed discomfort with a Mormon president, compared to 42 percent of Catholics and 30 percent of white mainline Protestants. Among Americans overall, the figure was 42 percent.

42% of Americans of all stripes have discomfort with a Mormon? That's a lot of people. And yet, as Romney continues to be the presumptive nominee among the chattering classes, he cannot seal the deal. And everybody assumes it's because he's wishy-washy or has some other obscure personality defect that turns people off.

When Perry slid in the polls it was immediately assumed to be because of his semi-humane approach to illegal immigration rather than his uncanny George W. Bush impression. Now Newtie has taken over the Great Conservative Hope role and recently committed apostasy on the same subject. So far he seems to be hanging in there in the polls. I think the commentators got that wrong.

Similarly, I think people have been misreading Romney's weakness as being his flip-flopping or his suspected moderation. In his case, the underlying suspicion that he isn't "one of them" meaning --- Christian. And what's interesting about it is that it's politically incorrect to even mention it.

Has there ever been a more fascinating GOP primary? I don't ever want it to end.

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digby 11/29/2011 09:56:00 AM

 
Tick tock, tick tock

by David Atkins

In case you were sleeping too well lately, here's something to cure you of that malady from Wolfgang Munchau of the Financial Times:

In virtually all the debates about the eurozone I have been engaged in, someone usually makes the point that it is only when things get bad enough, the politicians finally act – eurobond, debt monetisation, quantitative easing, whatever. I am not so sure. The argument ignores the problem of acute collective action.

Last week, the crisis reached a new qualitative stage. With the spectacular flop of the German bond auction and the alarming rise in short-term rates in Spain and Italy, the government bond market across the eurozone has ceased to function.


The banking sector, too, is broken. Important parts of the eurozone economy are cut off from credit. The eurozone is now subject to a run by global investors, and a quiet bank run among its citizens.

This massive erosion of trust has also destroyed the main plank of the rescue strategy. The European Financial Stability Facility derives its firepower from the guarantees of its shareholders. As the crisis has spread to France, Belgium, the Netherlands and Austria, the EFSF itself is affected by the contagious spread of the disease. Unless something very drastic happens, the eurozone could break up very soon.

Technically, one can solve the problem even now, but the options are becoming more limited. The eurozone needs to take three decisions very shortly, with very little potential for the usual fudges.

How much time is left, according to Munchau?

I have yet to be convinced that the European Council is capable of reaching such a substantive agreement given its past record. Of course, it will agree on something and sell it as a comprehensive package. It always does. But the half-life of these fake packages has been getting shorter. After the last summit, the financial markets’ enthusiasm over the ludicrous idea of a leveraged EFSF evaporated after less than 48 hours.

Italy’s disastrous bond auction on Friday tells us time is running out. The eurozone has 10 days at most.

Oy. I don't know if Munchau is right on the timing, but if any sort of deal is going to be done, it needs to be done soon. Otherwise, we're looking at the implosion of the Eurozone, and a total restructuring of the Euro itself. Whether or not that's in the best interest of Europe long-term is arguable, but it would certainly mean major economic pain in the short term.


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thereisnospoon 11/29/2011 07:30:00 AM

Monday, November 28, 2011

 
I guess it doesn't matter if they're certifiably nuts as long as there isn't a drum circle anywhere near them.

by digby

Here's the story of a routine ballot commission hearing that was taken over by Orly Taiz and her followers, some of whom are elected officials, insisting on keeping Barack Obama off the ballot:

After berating the commission and telling them how to do their jobs, Taitz announced, “I have here a number of state representatives who support me.” Indeed she does, including Rep. Harry Accornero (R-Laconia), who references the “overwhelming” evidence against Obama being a natural born citizen:



When the complaint was unanimously dismissed, audience members shouted “traitors” and Rep. Accornero went ballistic and stormed out while calling out to the commission: “Why don’t you rip up the Constitution and throw it out?” “You all should be accused of treason, and we’ll get people to do that,” he jeered. Shortly after, Rep. Susan DeLemus (R-Strafford) repeatedly berated Assistant Attorney General Matt Mavrogeorge:

Right wing watch reports:

Afterwards, Mavrogeorge and Assistant Secretary of State Karen Ladd locked themselves in an office “out of fear for their safety due to the aggressive behavior of the crowd that included several legislators.” Later, Attorney General Michael Delaney said, “No state employee should find himself in this situation, and I am asking the General Court to take whatever steps it deems appropriate concerning the standards of conduct exhibited by these elected officials.”

Well at least they have a demand. It's a demand from another dimension, but they have one. So it's all good.


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digby 11/28/2011 07:30:00 PM

 
A nation turns its lonely eyes to ...

by digby

Oh yes. We want her in this race. We need her in this race.

Update: Why? Charles Pierce examines that burning question:

I've cast my memory back as far as I can, and I cannot recall a major politician of either party who causes so many members of his party to spit (metaphorically, one hopes) at the simple mention of his name. And this is not a recent phenomenon. One of the few insights worthy of anyone's time in that horrible Game Change book was the fact that, by the end of the 2008 presidential cycle, all of the other Republican candidates had come to despise Willard. (John McCain was apoplectic on the subject, even by McCain's standards, which are considerable.) This now has seemed to transfer itself to the Republican electorate in general. Nobody likes this guy. To hell with drinking a beer with him. If they'd got stuck in a bar with Willard, the only way they'd drink hemlock with the man is if he let them go first.

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digby 11/28/2011 06:00:00 PM

 
Self-interest misunderstood

by digby

Kevin Drum wrote earlier today that he'd been radicalized by the fact that the 1% have not only profited, but "rubbed our noses in it", which I think is what's really fueling this populist reaction. Americans don't usually loathe the wealthy but these Masters of the Universe and Randian CEOs have been so arrogant and greedy that even moderate people are outraged.

Behavior like this, for instance:

Last month, the first layoffs began at Zimmer’s plant in Statesville, N.C., which is due to shut early next year. The company made splints and tourniquets there for more than three decades. For the sewing machine operators and the rest of the 124 workers at the plant, it is bad news, but it is a different story for Zimmer’s top executives.

Powered by huge stock buybacks — the company bought $500 million worth of its own shares last year, more than twice what it spent on research and development — Zimmer posted earnings growth of 10 percent a share, even though operating income and revenue grew by less than 5 percent in 2010.

That helped its senior management, including the chief executive, David C. Dvorak, collect millions in cash and stock incentive payments by meeting earnings-per-share goals. For example, 50 percent of Mr. Dvorak’s $1.03 million cash bonus was tied to achieving per-share earnings of $4.28 in 2010. The company earned $4.33, but without the share repurchases the company would have made $4 to $4.10 a share.

Investors have not rewarded the strategy, however: Zimmer’s shares have dropped 32 percent in the last five years, while Pfizer’s are down 30 percent in the same period.

Over the last decade, in fact, companies that spent the most on repurchases had a total shareholder return of 37 percent versus 127 percent for companies that spent the least, according to research by Gregory V. Milano, chief executive of Fortuna Advisors, which consults with companies on how to raise their share price over the long term.

In the cases of Pfizer and Zimmer, analysts say the rush to buy back shares crimped development of new products, a prime reason that both companies are experiencing slow revenue growth.

Despite the looming expiration of the patent for its best-selling drug, Lipitor, Pfizer spent more than $20 billion repurchasing shares from 2005 to 2010.

“In that era, it wasn’t the best use of cash,” said Catherine Arnold, an analyst with Credit Suisse. “They should have been doing more to fix the company.”

Matthew Dodds, an analyst with Citigroup, said, “Zimmer has shown little appetite for acquisitions or diversification, yet they don’t sport a pipeline that can drive investor interest."

Nevertheless, Zimmer is on track to repurchase $1 billion worth of its shares this year, double last year’s pace, and it actually borrowed money last quarter to achieve its goal.

In a statement, Zimmer said its bonus programs were “designed to pay for performance,” and that overall compensation strategy was “designed to align the interests of its employees and stockholders.” Zimmer is committed to research and development and the introduction of new products, the company said, adding that the factory closure in North Carolina, while difficult, “is in the best interest of the company’s stockholders.”

It's this entirely self-serving attitude, in which executives see themselves as the value in the economy whose personal wealth the system is designed to maximize, that is so galling.
These people are not only killing the economy, they are killing their own companies with their greed. But why shouldn't they? In this culture you're considered a chump if you leave money on the table for any reason and in business there is no tomorrow.

I'll just repeat my favorite Joseph Stiglitz quote:

Alexis de Tocqueville once described what he saw as a chief part of the peculiar genius of American society—something he called “self-interest properly understood.” The last two words were the key. Everyone possesses self-interest in a narrow sense: I want what’s good for me right now! Self-interest “properly understood” is different. It means appreciating that paying attention to everyone else’s self-interest—in other words, the common welfare—is in fact a precondition for one’s own ultimate well-being. Tocqueville was not suggesting that there was anything noble or idealistic about this outlook—in fact, he was suggesting the opposite. It was a mark of American pragmatism. Those canny Americans understood a basic fact: looking out for the other guy isn’t just good for the soul—it’s good for business.

The top 1 percent have the best houses, the best educations, the best doctors, and the best lifestyles, but there is one thing that money doesn’t seem to have bought: an understanding that their fate is bound up with how the other 99 percent live. Throughout history, this is something that the top 1 percent eventually do learn. Too late.

Randism only works on the pages of a pot-boiler novel. In reality these Galtian heroes live in a world with a whole lot of other people. If they are too thick to realize that a stable society with a thriving middle class is more necessary to their survival than a quick buck to add to their already depraved level of wealth, then they aren't really masters of the universe after all.


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digby 11/28/2011 04:30:00 PM

 
What could possibly go wrong?

by David Atkins

Nothing scary about this:

Idea of civilians using drone aircraft may soon fly with FAA.

The Federal Aviation Administration plans to propose new rules for the use of small drones in January, a first step toward clearing the way for police departments, farmers and others to employ the technology.

Drone aircraft, best known for their role in hunting and destroying terrorist hide-outs in Afghanistan, may soon be coming to the skies near you.

Police agencies want drones for air support to spot runaway criminals. Utility companies believe they can help monitor oil, gas and water pipelines. Farmers think drones could aid in spraying their crops with pesticides.

"It's going to happen," said Dan Elwell, vice president of civil aviation at the Aerospace Industries Assn. "Now it's about figuring out how to safely assimilate the technology into national airspace."

Some of this makes sense, of course. Using unmanned aircraft to spray crops isn't a bad idea.

But using drones for civilian law enforcement? Creepy, scary and ripe for abuse.


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thereisnospoon 11/28/2011 03:00:00 PM

 

Fundamentalist phonies

by digby

Krugman quotes Grover Norquist making a really stupid but depressingly common economic argument and refutes it handily. He concludes with this:

And it really is very disturbing that arguments like this, arguments that were thoroughly refuted three generations ago, are playing a major role in political debate. I mean, what’s next? Will they start rejecting the theory of evolution? Oh, wait.

It reminded me of a favorite old post of mine that I think is probably worth sharing in this moment because it's oddly just as relevant now as it was then:

Ben Adler asked a bunch of leading conservative intellectuals whether they believed in evolution. As far as I can tell only about half of them have any intellectual integrity whatsoever, and only one is definitively honest in my opinion: Charles Krauthamer, if you can believe that. Richard Brookheiser and William F Buckley get honorable mentions.

Remember, these are highly educated people. The problem is not that they may believe in God or have a religious view of the origins of the universe. That is quite easily explained. It's the weaselly, mushy way they try to divert the question elsewhere or explain what they know is a ridiculous position. It's as if they are all terribly afraid that James Dobson might read TNR and berate them for not having a religiously correct fundamentalist view. William Kristol, as always, is the slickest guy around.

William Kristol, The Weekly Standard

Whether he personally believes in evolution: "I don't discuss personal opinions. ... I'm familiar with what's obviously true about it as well as what's problematic. ... I'm not a scientist. ... It's like me asking you whether you believe in the Big Bang."

How evolution should be taught in public schools: "I managed to have my children go through the Fairfax, Virginia schools without ever looking at one of their science textbooks."

Grover Norquist, Americans for Tax Reform

Whether he personally believes in evolution: "I've never understood how an eye evolves."

What he thinks of intelligent design: "Put me down for the intelligent design people."

How evolution should be taught in public schools: "The real problem here is that you shouldn't have government-run schools. ... Given that we have to spend all our time crushing the capital gains tax I don't have much time for this issue."

David Frum, American Enterprise Institute and National Review

Whether he personally believes in evolution: "I do believe in evolution."

What he thinks of intelligent design: "If intelligent design means that evolution occurs under some divine guidance, I believe that."

How evolution should be taught in public schools: "I don't believe that anything that offends nine-tenths of the American public should be taught in public schools. ... Christianity is the faith of nine-tenths of the American public. ... I don't believe that public schools should embark on teaching anything that offends Christian principle."

Stephen Moore, Free Enterprise Fund

Whether he personally believes in evolution: "I believe in parts of it but I think there are holes in the evolutionary theory."

What he thinks of intelligent design: "I generally agree with said critique."

Whether intelligent design or a similar critique should be taught in public schools: "I think people should be taught ... that there are various theories about how man was created."

Whether schools should leave open the possibility that man was created by God in his present form: "Of course, yes, definitely."


Jonah Goldberg, National Review

Whether he personally believes in evolution: "Sure."

What he thinks of intelligent design: "I think it's interesting. ... I think it's wrong. I think it's God-in-the-gaps theorizing. But I'm not hostile to it the way other people are because I don't, while I think evolution is real, I don't think any specific--there are a lot of unknowns left in evolution theory and criticizing evolution from different areas doesn't really bother me, just as long as you're not going to say the world was created in six days or something."

How evolution should be taught in public schools: "I don't think you should teach religious conclusions as science and I don't think you should teach science as religion. ... I see nothing [wrong] with having teachers pay some attention to the sensitivities of other people in the room. I think if that means you're more careful about some issues than others that's fine. People are careful about race and gender; I don't see why all of a sudden we can't be diplomatic on these issues when it comes to religion."

Charles Krauthammer, The Washington Post

Whether he personally believes in evolution: "Of course."

What he thinks of intelligent design: "At most, interesting."

Whether intelligent design should be taught in public schools: "The idea that [intelligent design] should be taught as a competing theory to evolution is ridiculous. ... The entire structure of modern biology, and every branch of it [is] built around evolution and to teach anything but evolution would be a tremendous disservice to scientific education. If you wanna have one lecture at the end of your year on evolutionary biology, on intelligent design as a way to understand evolution, that's fine. But the idea that there are these two competing scientific schools is ridiculous."

William Buckley, National Review

Whether he personally believes in evolution: "Yes."

What he thinks of intelligent design: "I'd have to write that down. ... I'd have to say something more carefully than I can over the telephone. I'm a Christian."

Whether schools should raise the possibility that the original genetic code was written by an intelligent designer: "Well, surely, yeah, absolutely."

Whether schools should raise the possibility--but not in biology classes--that man was created by God in his present form? : "Yes, sure, absolutely."

Which classes that should be discussed in: "History, etymology."

John Tierney, The New York Times (via email)

Whether he personally believes in evolution: "I believe that the theory of evolution has great explanatory powers."

What he thinks of intelligent design: "I haven't really studied the arguments for intelligent design, so I'm loath to say much about it except that I'm skeptical."

James Taranto, The Wall Street Journal

Whether he personally believes in evolution: "Yes."

What he thinks of intelligent design: "I could not speak fluently on the subject but I know what the basic argument is."

Whether schools should teach intelligent design or similar critiques of evolution in biology classes: "I guess I would say they probably shouldn't be taught in biology classes; they probably should be taught in philosophy classes if there is such a thing. It seems to me, and again I don't speak with any authority on this, that the hypothesis ... that the universe is somehow inherently intelligent is not a scientific hypothesis. Because how do you prove it or disprove it? And really the question is how do you disprove it, because a scientific hypothesis has to be capable of being falsified. So while there may be holes in Darwinian theory, while there's obviously a lot we don't know, and perhaps Darwinian theory could be wrong altogether, I think whether or not the universe is designed is just a question outside the realm of science."

How evolution should be taught in public schools: "It probably should be taught, if it's going to be taught, in a more thoroughgoing way, a more rigorous way that explains what a scientific theory is. ... You know, my general impression is that high school instruction in general is not all that rigorous. ... I think one possible way of solving this problem is by--if you can't teach it in a rigorous way, if the schools aren't up to that, and if it's going to be a political hot potato in the way it is, and we have schools that are politically run, one possible solution might be just take it out of the curriculum altogether. I'm not necessarily advocating that, but I think it's something that policy makers might think about. I'd rather see it taught in a rigorous and serious way, but as a realistic matter that may be expecting too much of our government schools."

Norman Podhoretz, Commentary (via email)

Whether he personally believes in evolution: "It's impossible to answer that question with a simple yes or no."

Richard Brookhiser, National Review

Whether he personally believes in evolution: "Yes."

What he thinks of intelligent design: "It doesn't seem like good science to me."

Whether intelligent design should be taught in public schools: "No."

Pat Buchanan, The American Conservative

Whether he personally believes in evolution: "Do I believe in absolute evolution? No. I don't believe that evolution can explain the creation of matter. ... Do I believe in Darwinian evolution? The answer is no."

What he thinks of intelligent design: "Do I believe in a Darwinian evolutionary process which can be inspired by a creator? Yeah, that's a real possibility. I don't believe evolution can explain the creation of matter. I don't believe it can explain the intelligent design in the universe. I just don't believe it can explain the tremendous complexity of the human being when you get down to DNA and you get down to atomic particles, and molecules, atomic particles, subatomic particles, which we're only beginning to understand right now. I think to say it all happened by accident or by chance or simply evolved, I just don't believe it."

How evolution should be taught in public schools: "Evolution [has] been so powerful a theory in Western history in the nineteenth and twentieth centuries and often a malevolent force--it's been used by non-Christians and anti-Christians to justify polices which have been horrendous. I do believe that every American student should be introduced to the idea and its effects on society. But I don't think it ought to be taught as fact. It ought to be taught as theory. ... How do you answer a kid who says, 'Where did we all come from?' Do you say, 'We all evolved'? I think that's a theory. ... Now the biblical story of creation should be taught to children, not as dogma but every child should know first of all the famous biblical stories because they have had a tremendous influence as well. ... I don't think it should be taught as religion to kids who don't wanna learn it. ... I think in biology that honest teachers gotta say, 'Look the universe exhibits, betrays the idea that there is a first mover, that there is intelligent design.' ... You should leave the teaching of religion to a voluntary classes in my judgment and only those who wish to attend."

Tucker Carlson, MSNBC

Whether he personally believes in evolution: "I think God's responsible for the existence of the universe and everything in it. ... I think God is probably clever enough to think up evolution. ... It's plausible to me that God designed evolution; I don't know why that's outside the realm. It's not in my view."

On the possibility that God created man in his present form: "I don't know if He created man in his present form. ... I don't discount it at all. I don't know the answer. I would put it this way: The one thing I feel confident saying I'm certain of is that God created everything there is."

On the possibility that man evolved from a common ancestor with apes: "I don't know. It wouldn't rock my world if it were true. It doesn't sound proved to me. But, yeah I'm willing to believe it, sure."

How evolution should be taught in public schools: "I don't have a problem with public schools or any schools teaching evolution. I guess I would have a problem if a school or a science teacher asserted that we know how life began, because we don't so far as I know, do we? ... If science teachers are teaching that we know things that in fact we don't know, then I'm against that. That's a lie. But if they are merely describing the state of knowledge in 2005 then I don't have problem with that. If they are saying, 'Most scientists believe this,' and most scientists believe it, then it's an accurate statement. What bothers me is the suggestion that we know things we don't know. That's just another form of religion it seems to me."

Ramesh Ponnuru, National Review

Whether he personally believes in evolution: "Yes."

What he thinks of intelligent design: "To the extent that I am familiar with it, and that's not very much, I guess what I think is this: The intelligent designers are correct insofar as they are reacting against a view of evolution which holds that it can't have been guided by God in any way--can't even have sort of been set in motion by God to achieve particular results and that no step in the process is guided by God. But they seem to give too little attention to the possibility that God could have set up an evolutionary process."

Whether intelligent design should be taught in public schools: "I guess my own inclination would be to teach evolution in the public schools. I don't think that you ought to make a federal case out of it though."


David Brooks, The New York Times (via email)

Whether he personally believes in evolution: "I believe in the theory of evolution."

What he thinks of intelligent design: "I've never really studied the issue or learned much about ID, so I'm afraid I couldn't add anything intelligent to the discussion."

And these are the people who railed against campus political correctness.

What do you suppose it's like to be intellectually held hostage by people who you know for a fact are dead wrong on something? It must be excruciating.

I've revised my thinking on that. They just don't give a damn.

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digby 11/28/2011 01:00:00 PM

 
Reporting from the edge of catastrophe

by digby

There's lot's of economic stuff this morning worth sharing. First, the view that austerity is bad for us is starting to make it beyond the pages of obscure blogs and Krugman's column. Here's one from a historian in Bloomberg News:

...“common sense” tells us that growth requires private investment. After all, everybody knows that an unequal distribution of income is a requirement of comfortable existence for the masses.

As British author John Lanchester explained, when the “jet engine of capitalism was harnessed to the oxcart of social justice” after World War II, the lives of ordinary people got better, and the “most admirable societies that the world has ever seen” were born. Everybody knows that “the prosperity of the few is to the ultimate benefit of the many.” To which I say, baloney.

Growth has happened precisely because net private investment has been declining since 1919 and because consumer expenditures have, meanwhile, been increasing. In theory, the Great Depression was a financial meltdown first caused, and then cured, by central bankers. In fact, the underlying cause of this disaster wasn’t a short-term credit contraction engineered by bankers. The underlying cause of the Great Depression was a fundamental shift of income shares away from wages and consumption to corporate profits, which produced a tidal wave of surplus capital that couldn’t be profitably invested in goods production -- and wasn’t invested in goods production.

In terms of classical, neoclassical, and supply side theory, this shift should have produced more investment and more jobs, but it didn’t. Paying attention to historical evidence allows us to debunk the myth of private investment and explain why the redistribution of income has become the condition of renewed, balanced growth. Doing so lets us see that public-sector incentives to private investment -- say, tax cuts on capital gains or corporate profits -- are not only unnecessary to drive economic growth; they also create tidal waves of surplus capital with no place to go except speculative bubbles that cause crises on the scale of the Great Depression and the recent catastrophe.

This too from Robert Skidelsky:

Politicians are masters at “passing the buck.” Everything good that happens reflects their exceptional talents and efforts; everything bad is caused by someone or something else.

The economy is a classic field for this strategy. Three years after the global economy’s near-collapse, the feeble recovery has already petered out in most developed countries, whose economic inertia will drag down the rest. Pundits decry a “double-dip” recession, but in some countries the first dip never ended: Greek GDP has been dipping for three years.

When we ask politicians to explain these deplorable results, they reply in unison: “It’s not our fault.” Recovery, goes the refrain, has been “derailed” by the eurozone crisis. But this is to turn the matter on its head. The eurozone crisis did not derail recovery; it is the result of a lack of recovery. It is the natural, predictable, and (by many) predicted result of the main European countries’ deliberate policy of repressing aggregate demand.

That policy was destined to produce a financial crisis, because it was bound to leave governments and banks with depleted assets and larger debts. Despite austerity, the forecast of this year’s UK structural deficit has increased from 6.5% to 8% – requiring an extra £22 billion ($34.6 billion) in cuts a year. Prime Minister David Cameron and Chancellor George Osborne blame the eurozone crisis; in fact, their own economic illiteracy is to blame.

Unfortunately for all of us, the explanation bears repeating nowadays. Depressions, recessions, contractions – call them what you will – occur because the private-sector spends less than it did previously. This means that its income falls, because spending by one firm or household is income for another.

In this situation, government deficits rise naturally, as tax revenues decline and spending on unemployment insurance and other benefits rises. These “automatic stabilizers” plug part of the private-sector spending gap.

But if the government starts reducing its own deficit before private-sector spending recovers, the net result will be a further decline in total spending, and hence in total income, causing the government’s deficit to widen, rather than narrow. True, if governments stop spending altogether, deficits will eventually fall to zero. People will starve to death in the interim, but the budget will be balanced.

This view has been pretty much frozen out of the debate up until now and the politicians either didn't understand it or were too chicken to confront it. But the result is horrible and now that the Eurozone is falling apart (at least partially due to this banrupt worldview), it's looking more likely that it's about to become a catastrophy.

Here's Dean Baker today:

The European Central Bank (ECB) has been working hard to convince the world that it is not competent to act as a central bank. One of the main responsibilities of a central bank is to act as the lender of last resort in a crisis. The ECB is insisting that it will not fill this role. It is arguing instead that it would sooner see the eurozone collapse than risk inflation exceeding its 2.0 per cent target.

It would be bad enough if the ECB's incompetence just put Europe's economy at risk. After all, there are tens of millions of people who stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics. But the consequences of a euro meltdown go well beyond the eurozone.

At the very least, the chaos following the collapse of the euro will mean a second dip to the US recession. The loss of the European export market, and the likely surge in the dollar that will result from a worldwide flight to safety, would be enough to turn a weak positive growth number into a negative.

However, it is also likely that the financial panic following the collapse of the euro will lead to the same sort of financial freeze-up that we saw following the collapse of Lehman Brothers. In this case, we won't be seeing unemployment just edge up by a percentage point or two, we will be seeing unemployment possibly rising into a 14-15 per cent range. This would be a really serious disaster.

That's quite a prediction. His solution is sufficiently outside the mainstream that it's doubtful it will be considered although you might be surprised to read what it is. (Particularly in light of this.) Do read on. It's fascinating ... and scary.

We are likely on the verge of a Very Big Deal with what's happening in Euroland. The political system is locked up, mostly because of a case of political malpractice on the part of those who should have learned from their own legacy and nihilism on the part of those who seem to want to bring on the rapture. So we wait and watch and hope for the best.

At least some sane voices are rising above the din. The question is if it's too late.

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digby 11/28/2011 11:00:00 AM