11/29/2011 archive

Punting the Pundits

“Punting the Pundits” is an Open Thread. It is a selection of editorials and opinions from around the news medium and the internet blogs. The intent is to provide a forum for your reactions and opinions, not just to the opinions presented, but to what ever you find important.

Thanks to ek hornbeck, click on the link and you can access all the past “Punting the Pundits”.

Robert Reich: Restore the Basic Bargain

For most of the last century, the basic bargain at the heart of the American economy was that employers paid their workers enough to buy what American employers were selling.

That basic bargain created a virtuous cycle of higher living standards, more jobs, and better wages.

Back in 1914, Henry Ford announced he was paying workers on his Model T assembly line $5 a day — three times what the typical factory employee earned at the time. The Wall Street Journal termed his action “an economic crime.”

But Ford knew it was a cunning business move. The higher wage turned Ford’s auto workers into customers who could afford to buy Model T’s. In two years Ford’s profits more than doubled.

That was then. Now, Ford Motor Company is paying its new hires half what it paid new employees a few years ago.

The basic bargain is over — not only at Ford but all over the American economy.

Dean Baker: Time to Retake Politics From the One Percent in Both Political Parties

The country is still celebrating the inability of the supercommittee to cut Social Security and Medicare, but it is important to move on from this victory to retake control of the political debate from the One Percent. As it stands, the One Percent are insisting that the country genuflect over the non-problem of the budget deficit, at a time when tens of millions of workers are unemployed or underemployed, millions of people are facing the loss of their homes and tens of millions of baby boomers are approaching retirement with little other than their Social Security to support them.

The deficit is the agenda of the One Percent. There is no reason that the rest of us should be concerned about budget deficits when the rest of the country is struggling with the economic disaster created by the greed and incompetence of the One Percent.

This is not a statement of morality; it is a statement based on economic reality. Budget deficits can be a problem when an economy is near full employment and the deficit can be pulling resources away from private investment, thereby slowing growth. However, it is not a problem with large numbers of unemployed workers and vast amounts of excess capacity.

Robert Kuttner: Europe on the Brink

Europe is now on the very edge of an economic abyss. And Germany is finding that it cannot survive as a smug island of fiscally conservative prosperity while the rest of Europe goes down the tubes. It is anybody’s guess whether Europe’s leaders will shift course in time. If they fail, it won’t be pretty. The fact that Germany’s fate is now more closely linked to that of its neighbors actually offers a ray of hope.

Until last week, Germany had been the safe haven. As speculators pulled money out of other countries, in a bondholders’ equivalent of a run on the bank, German government debt was oversubscribed, causing interest rates on German bunds (government bonds) to fall below 2 percent. The spread between German rates and the rates that “weaker” countries had to pay to sell their bonds was treated as a precise barometer of market confidence in a given nation’s debt.

Peter Van Buren: Thought Crime in Washington

Here’s the First Amendment, in full:  “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.”

Those beautiful words, almost haiku-like, are the sparse poetry of the American democratic experiment.  The Founders purposely wrote the First Amendment to read broadly, and not like a snippet of tax code, in order to emphasize that it should encompass everything from shouted religious rantings to eloquent political criticism.  Go ahead, reread it aloud at this moment when the government seems to be carving out an exception to it large enough to drive a tank through.

Michelle Chen: Health Workers Deliver First Aid to Protest Movements

Warning: Defending your rights may be hazardous to your health. Potential side effects can include rubber bullets, tear gas, and batons wielded with impunity.

The recent uprisings around the world illustrate the physical risks involved in intense street protests. At the same time, movements are also discovering the connection between health and activism in another way, through medical workers joining the front lines to deploy their skills and their conviction.

Amid the brutal clashes with security forces at Tahrir Square, barebones field hospitals have held the line, thanks to a grassroots network of Tahrir doctors. One volunteer, Ahmed Adel, who has been aiding wounded protesters since January, told Ahram Online, “Treating the injured protesters here again makes me feel the revolution is about to be completed.”

John Nichols: Barney Frank Took on Banks, Bigots and Bloated Pentagon Budgets

Barney Frank came to Congress as a liberal and will leave as such-not a perfect progressive on every issue but a steady liberal who served a term as president of the Americans for Democratic Action and whose latest rating from the defenders of New Deal/Fair Deal/Great Society programs was a pure 100 percent.

That does not mean that there were not instances where Frank, a former Massachusetts legislator who arrived (to fill former the Rev. Robert Drinan’s seat) in 1980 and who will leave the House at the close of his current term, was always on the right (make that the left) side of the fight. But even where he was forced to accept compromises, he did so as a man of government who argued with passion and certainty that legislators should stand up to bankers, bigots and bloated Pentagon budgets.

Danny Schechter: Occupy Wall Street is All Over The Media: But for How Long?

First, they ignore you. Then, they ridicule you. Then, they realize you are a story and fall in love. So they build you up at first but then, all at once, tear you down

You may not have changed, but they have, addicted as they are to keep coming up with shifting story lines, more to fight their own boredom and fear of tune out, than the validity or importance of the topic.

In the same way, that political sound bites went from nearly thirty seconds to five, or that MTV style editing soon invaded the newsrooms with quick cutting and razzle-dazzle effects, to “cover news” while making it difficult to concentrate on, much less comprehend the fast paced presentation techniques.

When asked by researchers, audiences could barely tell you what they had just seen, much less what it means.

Freshwater Economics == Insider Trading

Hank Paulson’s inside jobs

Felix Salmon, Reuters

Nov 29, 2011 09:55 EST

(I)n secret meetings, Paulson was hanging out with his old Goldman Sachs buddies, giving them invaluable information about what he was thinking in his new job.

Paulson had met with the entire board of Goldman Sachs in a Moscow hotel suite for an hour at the end of June 2008. He told them his views of the US and global economies, he previewed a market-moving speech he was about to give, and he even talked about the possibility that Lehman Brothers might blow up. Maybe it’s not so surprising that Goldman Sachs turned out to be so well positioned when Lehman did indeed do just that a few months later.

Today we learn that the Goldman meeting in Moscow was not some kind of aberration. A few weeks later, on July 28 2008, Paulson met with a who’s who of the hedge-fund world in the headquarters of Eton Park Capital Management – a fund founded by former Goldman superstar Eric Mindich.

(W)e have no idea how many of these meetings there were, or how long they went on for – the only way that we ever find out about them is when reporters like Sorkin or Bloomberg’s Richard Teitelbaum manage to find a source who was in the meeting and is willing to talk about what happened.

Given that it’s taken two years since the release of Sorkin’s book for the Eton Park meeting to be made public, it’s fair to assume that there were other meetings, too – possibly many others. Paulson was giving inside tips to Wall Street in general, and to Goldman types in particular: exactly the kind of behavior that “Government Sachs” conspiracy theorists have been speculating about for years. Turns out, they were right.

Paulson, says Teitelbaum, “is now a distinguished senior fellow at the University of Chicago, where he’s starting the Paulson Institute, a think tank focused on U.S.-Chinese relations”. I’d take issue with the “distinguished” bit. Unless it means “distinguished by an astonishing black hole where his ethics ought to be”.

So when is the indictment Mr. Holder?


mr money bagsIt’s a fundamental fact of economics that corporations and wealthy individuals do not aspire to free market competition which reduces their margins of profit and forces them to work hard to reduce the “uncertainty” that some upstart will out innovate them.  Instead they prefer the predictability of commercial monopolies enforced by the coercive power of a state monopoly of violence.  This is in fact one of the main themes of Adam Smith’s The Wealth of Nations.

As Lord Cutler Beckett put it- “It’s just good business.”

Thus it comes as no surprise to me, and I’m sure to Glenn Greenwald either, that in the age of the Internet, when ownership of a Press is practically free (ok, $15 a month but consider how much you spend on coffee, cable, or cell phone), establishment “journalists” celebrate a culture of secrecy accessible only though their personal contacts and Rolodexes.

It’s not as if they’re particularly bright, or prescient, or even good writers.  What else do they have to sell?

In economics this is called ‘raising barriers to competition’, on the Internet we call it ‘gatekeeping’.

So Cohen, as a journalist, must be furious about this systematic lack of accountability, transparency and democracy. After all, journalists – as they tirelessly tell everyone – are steadfastly devoted to those values; transparency for political officials is their North Star. Surely, nobody who would devote themselves to this profession would celebrate a President who drenches his entire foreign policy in secrecy – beyond any mechanism for democratic accountability – and who fights numerous covert wars without even any clear legal basis for doing so?

(I)t’s simply a given that war with all of these Muslim countries, including Iran, is necessary and inevitable – despite the fact that none is attacking the U.S. or threatening to do so. Warring against all these countries is America’s imperial responsibility and exceptionalist right. The only question, then, is whether the wars will be fought (a) democratically, legally and out in the open, or (b) in secret, with no legal basis or democratic accountability. Cohen, the journalist, chooses (b).

As usual, American journalists are the leading proponents not of transparency but of secrecy, not of accountability but of covert decision-making in the dark, not of the rule of law but the rule of political leaders. As Cohen’s Washington Post namesake put it: “it is often best to keep the lights off.” That, with some exceptions, is the motto not only of The Washington Post but of American establishment journalism generally. That’s what NYU Journalism Professor Jay Rosen meant when he said that the reason we got WikiLeaks is because “the watchdog press died.” With some exceptions – some of this we have learned about from whistleblowers leaking to reporters, who then publish it – the American media does not merely fail to fulfill its ostensible function of bringing transparency to government; far beyond that, it takes the lead in justifying and protecting extreme government secrecy. Watching a New York Times columnist stand up and cheer for multiple covert, legally dubious wars and an underground foreign policy highlights that as well as anything one can recall.

It is indeed so very baffling. This is one of those bizarre mysteries of life: I find that the more you ponder it – as I’ve been so diligently doing ever since it was raised so powerfully by Jon Chait – the more inscrutable it actually becomes. Why in the world would any liberals possibly not find President Obama as dreamy as those long-time leading lights of liberalism, Jon Chait and Andrew Sullivan, do? There is no rational reason whatsoever for this disenchantment, this refusal to reverently stand and cheer for this great President. Why some liberals insist on complaining is such a deep and impenetrable puzzle that it makes one’s head hurt trying to understand it.

Obama Opposed The Federal Reserve Audit

One of the architects of the audit of the Federal Reserve was former Rep. Alan Grayson (D-FL) who is running for his old house seat. He appeared with Keith Olbermann to discuss the Bloomberg report on the secret no strings, 0% interest $7.7 trillion had out to the banks that they also reaped another $13 billion in profits. As Rep. Grayson points out it is far worse than even the Bloomberg report.

So what does the Obama administration have to say about this? Apparently not a lot. The president is too busy raising campaign money from those who benefited most from this bailout. Obama’s minions on Twitter and in so-called “progressive” blogs have rushed in to defend him against any appearance that he sides with the banks. They ignore the history of the president’s part in the dilution of the Dodd/Frank regulations which has yet to take affect. So here is a brief refresher to keep this based in reality.

Way back at the beginning of Barack Obama’s administration and in the aftermath of the 2008 Wall St/Banking meltdown, financial reform had strong bipartisan support. The original Dodd-Frank Bill contained a provision for regular audits to the end the secrecy of the Federal Reserve. It was introduced in the House by Rep. Alan Grayson (D-FL) and Rep, Ron Paul (R-TX) with strong support from on the Senate side from Sen. Bernie Sanders (I-VT) and Sen. Jim DeMint (R-SC). However, the amendment was opposed by not only Wall St. and the Federal Reserve, it was also opposed by the Obama administration so strenuously that Obama threatened to veto the entire Dodd/Frank bill if the audit was included. That amendment failed and a second one was crafted for the one time audit which was just as adamantly opposed by Obama and company.

Deal Killer? White House Takes Aim At Fed Audit Provision

by Brian Beutler | May 4, 2010,

Possibly today, but if not today then soon, the Senate will decide whether or not to follow the House’s lead and adopt a provision requiring government auditors to open up the books at the Federal Reserve. The measure enjoys a great deal of popularity on both the left and the right, but is so fiercely opposed by powerful interests that it could nonetheless become a stumbling block in the way of financial regulatory legislation.

Right now Sen. Bernie Sanders (I-VT) is trying to round up 60 or more votes to overcome a likely filibuster and include an “audit the Fed” provision in the Senate’s bill. There are just a few small obstacles: the White House, major financial institutions, and the Fed itself. Their resistance is fierce–but the measure is so popular that killing it will be difficult for them and that, in their eyes, threatens to put a grenade at the center of efforts to to tighten the rules on Wall Street. [..]

That’s why, according to the Wall Street Journal they’ll “fight to stop it at all costs.” The White House is hoping to cut off “audit the Fed” in the Senate, so that they’ll have a stronger hand when House and Senate negotiators meet to iron out the differences between their regulatory reform bills. If the Senate bill does not include Sanders’ amendment, then the House will be in a weak position vis-a-vis the Senate and White House and the provision could be easily stripped.

If Sanders prevails, then the White House will be all but out of options and President Obama will likely be left with the choice of vetoing the legislation, or signing it and raising the ire of very powerful people. Stay tuned.

Sanders’ amendment for a one time only audit prevailed and was conducted this past year that has revealed a massive handout to banks. We now know why the Federal Reserve and the banks didn’t want this audit. The question now is what is going to be done to prevent the Federal Reserve from dong this again. It’s fairly obvious what the president’s policy is, he sides with Wall St and the banks, the 1%.

Friend of the Environment

Report highlights Obama’s broken environmental promises

Posted by Suzanne Goldenberg, US environment correspondent, The Guardian

Monday 28 November 2011 17.37 EST

The steady stream of oil and coal industry lobbyists to Oira did not end when Bush left office – arguably it turned into a flood. Environmental regulations made up only 10% of Oira business in Bush’s time, but 36% of the office’s business was meeting with outside lobbyists.

Under Obama, Oira has dedicated more than half of its meetings, 51%, to discussing pending environmental regulations with industry lobbyists, the report says.

And for industry the meetings paid off – about as much under Obama as under Bush. Following those meetings with outsiders, Oira changed 84% of EPA rules during the Bush era. Depending on how you calculate it, the change rate was even higher under Obama. Oira changed 81% of environmental rules after meetings with lobbyists. But the change rate rises to 85% once all Oira decisions on environmental regulations are factored in.

Is there any chance that Obama is unaware of what Oira is up to? Rena Steinzor, the law professor at the University of Maryland who wrote the report, doesn’t think so. She notes that Sunstein is a longtime friend of Obama, who has for years advocated against government regulations.

Obama will have to own those decisions – and the failure to live up to his election promises of 2008 to run a government that made decisions based on science and expertise, not political calculus.

“To us this is a sharp departure from what we were promised when this president was elected,” Steinzor said. “From sound practice what we really want is for the experts to be making decisions at government agencies – the toxicologists, the pediatricians, the geologists. That’s what modern government is supposed to be about, not having the decisions made by an office that is not accountable for what it does.”

But it’s not just Cass Sunstein, It’s Aust(eri)an Goolsbee as well.

Goolsbee Says U.S. Opponents of TransCanada’s Keystone Pipeline Are Naive

By Sean B. Pasternak, Bloomberg News

Nov 28, 2011 2:12 PM ET

“It’s a bit naïve to think the tar sands would not be developed if they don’t build that pipeline,” said Goolsbee (former chairman of the White House Council of Economic Advisers), speaking today in Toronto at the Economic Club of Canada. “Eventually, it’s going to be built. It may go to the Pacific, it may go through Nebraska, but it’s going to be built somewhere.”

Oh, who’s being naive Kate?

The stranded oil sands: A worst-case scenario

Claudia Cattaneo, Financial Post

Oct 31, 2011 9:39 AM ET

“Everybody in the industry is thinking about this,” said Bob Dunbar, president of Strategy West Inc., an oil sands consultancy based in Calgary. “Keystone XL is not the only solution, but it is a very elegant solution and it really would have an impact on the industry if it doesn’t proceed in a timely way.”

Industry growth plans would also be in doubt. Aggressive expansions may be revisited if there is no way to sell the oil. According to a new study by international petroleum consultancy Purvin & Gertz Inc., existing pipelines to U.S. markets could run out of space by 2013 to 2016, depending on how quickly oil sands production grows. In fact, after looking at all pipeline options, the consultancy concluded that additional capacity would be needed to accommodate oil sands growth by 2017 to 2019, even if Keystone XL is in operation.

Keystone XL: Game over?

raypierre, RealClimate

2 November 2011

(O)il-in-place is not the same as economically recoverable oil. That’s a moving target, as oil prices, production prices and technology evolve. At present, it is generally figured that only 10% of the oil-in-place is economically recoverable.

Currently, most of the energy used in production comes from natural gas (hence the push for a pipeline to pump Alaskan gas to Canada).

A knock-on effect of oil sands development is that it drives up demand for natural gas, displacing its use in electricity generation and making it more likely coal will be burned for such purposes.

The evil twin of the Keystone XL oil pipeline

By Michael Byers, Salon

Saturday, Oct 15, 2011 11:59 AM

The U.S. State Department has accepted assertions that the production of heavy oil will increase regardless of whether Keystone XL is built, because the Northern Gateway pipeline would bring oil for shipment to China.

Canadians know better. Although the Canadian government supports Northern Gateway, and the government-appointed National Energy Board can be expected to approve, the same cannot be said of the First Nations (i.e. indigenous peoples) living along its path.

The Northern Gateway pipeline faces decades of litigation over indigenous rights before construction could begin. As former Canadian environment minister Jim Prentice told an Enbridge shareholder meeting in May 2011: “The reality on the ground is that the constitutional and legal position of the First Nations is very strong.”

In the 1970s, opposition from First Nations postponed a proposed natural gas pipeline in the Northwest Territories, initially for 10 years. Four decades later, the line still has not been built. In November 2010, Murray Edwards, the vice-chairman of Canadian Natural Resources Ltd., said securing the necessary consensus on the Northern Gateway project would be “just as challenging.” He described the proposal as “very, very difficult.”

Fully 80 percent of British Columbians oppose Northern Gateway, and that public opinion has translated into political opposition. All four opposition parties in the Canadian Parliament – who together won 60 percent of the vote in the last federal election – are opposed to Northern Gateway and support an oil tanker ban.

Another proposal, to expand the capacity of a 50-year-old conventional oil pipeline from Alberta to Vancouver and use it for tar sands oil, is likewise dead.

The current pipeline, named “Trans Mountain” and owned by Kinder Morgan, ends at a terminal in Vancouver’s upper harbor. The oil must be offloaded onto tankers there, then shipped through the “Second Narrows,” a shallow strait that is subject to strong tidal currents, and confined by the piers of a railway bridge. The Canadian Coast Guard has assigned the highest possible navigational hazard rating to the bridge.

(h/t Think Progress)

On This Day In History November 29

This is your morning Open Thread. Pour your favorite beverage and review the past and comment on the future.

Find the past “On This Day in History” here.

November 29 is the 333rd day of the year (334th in leap years) in the Gregorian calendar. There are 32 days remaining until the end of the year.

On this day in 1963, one week after President John F. Kennedy was fatally shot while riding in a motorcade in Dallas, Texas, President Lyndon Johnson establishes a special commission, headed by Supreme Court Chief Justice Earl Warren, to investigate the assassination.

After 10 months of gathering evidence and questioning witnesses in public hearings, the Warren Commission report was released, concluding that there was no conspiracy, either domestic or international, in the assassination and that Lee Harvey Oswald, the alleged assassin, acted alone. The presidential commission also found that Jack Ruby, the nightclub owner who murdered Oswald on live national television, had no prior contact with Oswald.

According to the report, the bullets that killed President Kennedy and injured Texas Governor John Connally were fired by Oswald in three shots from a rifle pointed out of a sixth-floor window in the Texas School Book Depository. Oswald’s life, including his visit to the Soviet Union, was described in detail, but the report made no attempt to analyze his motives.