07/26/2012 archive

“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”.

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New York Times Editorial: Who Deserves a Tax Break?

In a rare show of old-fashioned democracy, Senate Republicans allowed Democrats a simple-majority vote on Wednesday to pass a bill extending tax cuts on income up to $250,000 a year. Republicans, knowing the measure would be killed in the House because it raises taxes on the rich, chose not to filibuster it in hopes of “exposing” a few vulnerable Democrats to a tough vote. [..]

The vote, however, exposes the true priorities of the Republicans. No Senate Republican agreed to support the middle-class tax cut by itself because they insisted that the rich get one, too. (Actually, the rich would have gotten a tax cut on their first quarter-million of income, but, apparently, that wasn’t enough.) Forty-four Republicans (and one Democrat) voted for an alternative bill that would give wildly generous estate tax breaks to a few of the richest American heirs at a cost of $119 billion to the deficit.

And those 44 Republicans also voted to raise taxes on 13 million low- and moderate-income working families. Though it seems unbelievable on a day when Republicans tried to be so generous to their wealthiest contributors, they voted for a bill that would end the child tax credit for nine million families that make less than $13,300, costing some of the nation’s most struggling households $854 a year. Another four million families would be affected by the Republican vote to reduce both the earned income tax credit and the middle-class credit for college tuition.

Robert Reich: The Man Who Invented ‘Too Big to Fail’ Banks Finally Recants. Will Obama or Romney Follow?

I’m in Alaska, amid moose and bear, trying to steal some time away from the absurdities of American politics and economics. But even at this remote distance I caught wind of Sanford Weill’s proposal this morning on CNBC that big banks be broken up in order to shield taxpayers from the consequences of their losses. Forget the bear and moose for a moment. This is big game. [..]

Sandy Weill has finally seen the light. It’s a bit late in the day, but, hey, he’s already cashed in. You and I and millions of others in the United States and elsewhere around the world are still paying the price.

What’s the betting that one of the presidential candidates will take up Weill’s proposal?

(Joseph Stiglitz w/ Jon Stewart 7/25/12)

The Price of Inequality

Joseph E. Stiglitz, Project Syndicate

Jun. 5, 2012

America likes to think of itself as a land of opportunity, and others view it in much the same light. But, while we can all think of examples of Americans who rose to the top on their own, what really matters are the statistics: to what extent do an individual’s life chances depend on the income and education of his or her parents?

Nowadays, these numbers show that the American dream is a myth. There is less equality of opportunity in the United States today than there is in Europe – or, indeed, in any advanced industrial country for which there are data.

Part 1

A closer look at those at the top reveals a disproportionate role for rent-seeking: some have obtained their wealth by exercising monopoly power; others are CEOs who have taken advantage of deficiencies in corporate governance to extract for themselves an excessive share of corporate earnings; and still others have used political connections to benefit from government munificence – either excessively high prices for what the government buys (drugs), or excessively low prices for what the government sells (mineral rights).

Likewise, part of the wealth of those in finance comes from exploiting the poor, through predatory lending and abusive credit-card practices. Those at the top, in such cases, are enriched at the direct expense of those at the bottom.

It might not be so bad if there were even a grain of truth to trickle-down economics – the quaint notion that everyone benefits from enriching those at the top. But most Americans today are worse off – with lower real (inflation-adjusted) incomes – than they were in 1997, a decade and a half ago. All of the benefits of growth have gone to the top.

Defenders of America’s inequality argue that the poor and those in the middle shouldn’t complain. While they may be getting a smaller share of the pie than they did in the past, the pie is growing so much, thanks to the contributions of the rich and superrich, that the size of their slice is actually larger. The evidence, again, flatly contradicts this. Indeed, America grew far faster in the decades after World War II, when it was growing together, than it has since 1980, when it began growing apart.

Part 2

America is paying a high price for continuing in the opposite direction. Inequality leads to lower growth and less efficiency. Lack of opportunity means that its most valuable asset – its people – is not being fully used. Many at the bottom, or even in the middle, are not living up to their potential, because the rich, needing few public services and worried that a strong government might redistribute income, use their political influence to cut taxes and curtail government spending. This leads to underinvestment in infrastructure, education, and technology, impeding the engines of growth.

Part 3

America’s inequality is undermining its values and identity. With inequality reaching such extremes, it is not surprising that its effects are manifest in every public decision, from the conduct of monetary policy to budgetary allocations. America has become a country not “with justice for all,” but rather with favoritism for the rich and justice for those who can afford it – so evident in the foreclosure crisis, in which the big banks believed that they were too big not only to fail, but also to be held accountable.

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.

July 26 is the 207th day of the year (208th in leap years) in the Gregorian calendar. There are 158 days remaining until the end of the year.

On this day in 1775, the U.S. postal system is established by the Second Continental Congress, with Benjamin Franklin as its first postmaster general. Franklin (1706-1790) put in place the foundation for many aspects of today’s mail system. During early colonial times in the 1600s, few American colonists needed to send mail to each other; it was more likely that their correspondence was with letter writers in Britain. Mail deliveries from across the Atlantic were sporadic and could take many months to arrive. There were no post offices in the colonies, so mail was typically left at inns and taverns. In 1753, Benjamin Franklin, who had been postmaster of Philadelphia, became one of two joint postmasters general for the colonies. He made numerous improvements to the mail system, including setting up new, more efficient colonial routes and cutting delivery time in half between Philadelphia and New York by having the weekly mail wagon travel both day and night via relay teams. Franklin also debuted the first rate chart, which standardized delivery costs based on distance and weight. In 1774, the British fired Franklin from his postmaster job because of his revolutionary activities. However, the following year, he was appointed postmaster general of the United Colonies by the Continental Congress. Franklin held the job until late in 1776, when he was sent to France as a diplomat. He left a vastly improved mail system, with routes from Florida to Maine and regular service between the colonies and Britain. President George Washington appointed Samuel Osgood, a former Massachusetts congressman, as the first postmaster general of the American nation under the new U.S. constitution in 1789. At the time, there were approximately 75 post offices in the country

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Football… lots of football… fields of football… a tremendous amount of football…

Today is Men’s Football.  All Men’s Football, all the time.  Live from 7 am to 6 pm, repeats after that on Vs. (NBC Sports) from 6 pm to 5 am.

And again from 8 am to 7 pm tomorrow.

Which is also Opening Ceremonies so everyone has the day off except me.  There will be coverage, but don’t expect it much before 7 pm.

Today’s Schedule

We have to take our possessions and flee. I’m very good at that. I was the men’s freestyle fleeing champion two years in a row.

And will someone please explain to me how many As there are in Morocco?

In 1998, then Citigroup Chairman and CEO Sanford “Sandy” Weill orchestrated the merger of Travelers Group and Citibank in what was, at the time, considered the largest merger in history. The merger was technically illegal because still in existence was a law known as Glass-Steagall,  a 66-year-old law that had separated commercial banking from investment banking. That merger and the repeal of the  Glass-Steagall Act in 1999, Mr. Weill now says were a mistake. He made this stunning pronouncement on CNBC’s “Squawk Box.”

“What we should probably do is go and split up investment banking from banking, have banks be deposit takers, have banks make commercial loans and real estate loans, have banks do something that’s not going to risk the taxpayer dollars, that’s not too big to fail,” Weill told CNBC’s “Squawk Box.”

He added: “If they want to hedge what they’re doing with their investments, let them do it in a way that’s going to be mark-to-market so they’re never going to be hit.”

He essentially called for the return of the Glass-Steagall Act, which imposed banking reforms that split banks from other financial institutions such as insurance companies.

“I’m suggesting that they be broken up so that the taxpayer will never be at risk, the depositors won’t be at risk, the leverage of the banks will be something reasonable, and the investment banks can do trading, they’re not subject to a Volker rule (the Volcker rule explained), they can make some mistakes, but they’ll have everything that clears with each other every single night so they can be mark-to-market,” Weill said.

Some of the reactions to Mr. Weill’s about face were not so kind, feeling that this took a lot of “chutzpah” on his part as the prime architect at shattering Glass – Steagall,  “helping create monstrously large institutions that appear impossible to regulate, manage and, in recent years, value”

{..}This is rich coming from the man who hung a portrait with the words “The Shatterer of Glass-Steagall” in his office. Nor did he shoulder any of the blame for creating a mega-bank that stumbled from crisis to crisis before sucking down a $45 billion taxpayer bailout.

Such chutzpah may make his message easy to dismiss. But the point has been resonating for a while across the political spectrum. For critics like Paul Krugman, smaller financial institutions would wield far less political influence. Others lament that the financial reforms of the Dodd-Frank Act don’t do enough to protect the financial system from another calamity. Meanwhile, some conservatives are starting to think that a more radical split might be preferable to the mess of new regulations coming down the pike, such as the Volcker Rule.

As Charles Gasparino, Fox Business News contributor, formerly with CNBC, and author of “The Sellout“, observed:

It’s a shame it took mountains of sleaze, tremendous shareholder losses, a financial crisis and taxpayer bailouts for Weill to see the light because there are many valid reasons to break up the banks. We had a financial crisis (and subsequent taxpayer bailouts) largely because of enormous risk taking at the mega-banks like Citigroup, which led others to blindly copy the firm’s risk taking model until the entire system blew up in the fall of 2008.

Even so, it’s hard to take Weill seriously. First this is a man with an ego the size of the bank he created. People who know him say he needs media attention like an alcoholic needs a stiff drink, and he’s gotten precious little of it since retiring from the banking business six years ago. Yesterday made him feel like the same old Sandy again.

Then there’s his record as a banker, which should banish him from ever dispensing advice on the business he helped destroy.

Over at naked capitalism, Yves Smith sees the real significance of the Weill’s flip a bit differently:

It’s a reminder that talk of reform is cheap and without consequence. Would any of these former Big Names who would love to be hauled out of mothballs (ex John Reed, who never liked the limelight and I believe in genuine) be serious about advocating change if they thought it really might happen? This isn’t a sign of a break in the elites, this is at best pandering to the 99%, or adopting a faux provocative position to get some media play. Look at how the British regulators, who have been at least willing to talk tough about banking and pushed hard for a full split between depositaries and trading firms, are in deer in the headlights mode over the Libor scandal. This isn’t just being caught out at having missed a big one; there is an astonishing inability to leverage what should be seen as a God-given opportunity to put reform back on the front burner.

When I see someone like Weill or Dick Parsons putting a big chunk of their ill-gotten gains to fund lobbying or a think tank promoting tough-minded financial services reform, I’ll give the backers their due for making a sincere and serious effort to undo the considerable damage they have done. But absent that, this career death-bed conversion is a hollow and insulting gesture.

Yes, breaking up these big banks that are too hard to regulate is the right thing to do but I suspect, damn near impossible unless it all comes crashing down taking the banksters with it.

The Senate Intelligence Committee passed an intelligence authorization bill, Intelligence Authorization Act for Fiscal Year 2013. The bill, co-sponsored by the chair of the committee, Sen. Dianne Feinstein (D-CA) and Sen Saxby Chambliss (R-GA), passed the committee by a vote of 14 – 1 would:

[..] authorize intelligence funding to counter terrorist threats, prevent proliferation of weapons of mass destruction, enhance counterintelligence, conduct covert actions and collect and analyze intelligence around the globe. [..]

The legislation includes a title on preventing unauthorized disclosures of classified information to improve the government’s ability to prevent and detect unauthorized disclosures that harm national security and investigate and punish those responsible. [..]

The approved bill includes a series of provisions to prevent leaks, including:

   

• A requirement the executive branch notifies Congress when making certain authorized disclosures of intelligence information to the public;
• A requirement for the Director of National Intelligence to improve the process for conducting administrative leaks investigations, including a requirement to proactively identify leaks and take administrative action when necessary;
• A restriction on the number of intelligence community employees authorized to communicate with the media;
• A provision to improve non-disclosure agreements and the penalties for non-compliance;
• A prohibition on current and former intelligence officials entering into certain contracts with media organizations;
• A report from the attorney general on possible improvements to the criminal process for investigating and prosecuting leaks; and
• A provision to improve the intelligence community’s ability to detect insider threats.

The bill was a response to the recent high level leaks about cyber warfare against Iran, Obama’s “kill list” and a CIA underwear bomb plot sting operation in Yemen that Sen. Feinstein said came from the White House. A good portion of the bill is directed at curbing “leaks” that come from intelligence employees who talk to the media either with or without the permission of the White House. The details of these restrictions are vague and ill defined, as Kevin Gosztola at FDL points out:

Would the “number of intelligence community employees” be limited by establishing guidelines that prohibited lower level employees from talking with news organizations? Would it cut back on the number of individuals, who could speak in an official capacity about intelligence operations?

What exactly does the intelligence committee mean by “contract”? Is getting an intelligence official’s approval to put comments on the record a “contract”? Then there’s the part about this applying to “former intelligence officials” as well as “current” officials. Would this put limits on what people like NSA whistleblower Thomas Drake would be able to say publicly because they might share information that would reveal details on matters “sensitive” to national security? Would the “number of intelligence community employees” be limited by establishing guidelines that prohibited lower level employees from talking with news organizations? Would it cut back on the number of individuals, who could speak in an official capacity about intelligence operations?

What exactly does the intelligence committee mean by “contract”? Is getting an intelligence official’s approval to put comments on the record a “contract”? Then there’s the part about this applying to “former intelligence officials” as well as “current” officials. Would this put limits on what people like NSA whistleblower Thomas Drake would be able to say publicly because they might share information that would reveal details on matters “sensitive” to national security? [..]

Truth be told, Sen. Feinstein’s motives are not all that altruistic since she has a vested interest in the national security state which has enriched her and her military contractor husband. Nor is she interested in the original purpose for the creation of the Intelligence Committee. Created in the wake of the intelligence abuses discovered by the Church Committee in the mid-1970s, committee’s intent was to “provide vigilant legislative oversight over the intelligence activities of the United States to assure that such activities are in conformity with the Constitution and laws of the United States.” But, as Glenn Greenwald noted the Senator from California, who Greenwald says embodies the species of blatant corruption, has no interest in that but in fact does the opposite:

(S]he unyieldingly devotes herself to fortifying the wall of secrecy behind which the intelligence community operates, protecting whatever they do from accountability, and punishing anyone who impedes it.

Along those lines, one of Feinstein’s prime causes over the last several years has been to increase even further the extreme secrecy regime behind which the federal government operates, and to demand harsh punishment for whistleblowers. At the end of 2010, she demanded that the DOJ prosecute Julian Assange and WikiLeaks for violations of the Espionage Act of 1917, and earlier this month issued the same demand to an Australian newspaper, using a rationale that would apply every bit as much to The New York Times (inded a rationale that is now being applied by many in Washington to call for prosecutions of newspapers). Even though the Obama administration has prosecuted twice as many leakers for espionage as all previous administrations combined, Feinstein continues to go on Fox News and call for still more leak prosecutions.

This month, she joined with the most right-wing members of the House to demand investigations into recent leaks to the media (though because it’s White House officials who are the leakers – rather than Army Private-nobodies or obscure mid-level NSA employees – she notably refused to endorse any criminal prosecutions: only harmless Congressional ones). Yesterday, she pointed out the obvious – that at least some of these most controversial recent leaks come “from the ranks” of the Obama White House – and “said her committee would meet Tuesday to craft legislation that would address the leaks of classified information, including additional authorities and rules to stop the leaks”: in other words, enact new laws to strengthen the government’s secrecy power still further and permit still easier punishment for leakers.

In June, commemorating the 40th anniversary of Watergate, Bob Woodward and Carl Bernstein appeared on “Face the Nation” and warned against a McCarthey-esque “witch hunt” that is about to break out in Congress:

“You’ve got to be very careful about creating a witch hunt for sources and a witch hunt in which you go after reporters, because now more than ever we need real reporting on this presidency, on national security, on all these areas, and the press is not the problem here,” Bernstein said on CBS’s “Face the Nation.”

“We’ve got plenty of laws, and if somebody inside is doing things with real national security secrets that he ought not, or she ought not, to be doing in terms of giving them to the press, that’s one thing,” he added. [..]

“It’s very difficult – I know from doing stories like this where you’re dealing with sensitive government secrets — to modulate and be careful and at the same time hold the government accountable for what they’re doing,” Woodward said. “This is an area that needs to be handled with great delicacy, and I’m not sure we have a political system that knows how to do anything with great delicacy.”

Bernstein noted that the press has generally handled sensitive information carefully in the past.

Sen. Feinstein, along with her right wing cohorts, has accomplished creating that legislation which would embody that “McCathy-esque witch hunt” that would jeopardize our civil liberties in the name of national security and Sen. Feinstein’s self interests.  

Those of you that read this regular series know that I am from Hackett, Arkansas, just a mile or so from the Oklahoma border, and just about 10 miles south of the Arkansas River.  It was a rural sort of place that did not particularly appreciate education, and just zoom onto my previous posts to understand a bit about it.

I have written about Ma’s garden before and shall not repeat that.  If you want to read them, you can look here, here, and here.  What I want to talk about tonight is that I have begun harvesting from my own garden recently, and just Monday got the first large tomatoes and purple hull peas.  I had been collecting cucumbers for a while.

I garden in a rather unconventional style.  For starters, I HATE to hoe and will go to great lengths to avoid it.  I do not mind tilling, but my soil was still nice and loose this year and did not even have to do that.  At least with tilling, you do it once and are finished for the year.

I had a bit of trouble getting the garden started this year because it was wet in the spring (not as bad as last year).  I finally did get it in, though, and my philosophy has changed considerably since I first started gardening living alone.