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Tuesday, March 24, 2009

Information in the open changes the way business was done in DC.

President Obama told the National Conference of State Legislatures last week that, “Decisions about how Recovery Act dollars are spent will be based on the merit…” and stressed that maximizing job creation, making health care affordable, rebuilding crumbling infrastructure, and other projects that manifest “enduring benefits” to taxpayers must take priority.

President Barack H. ObamaUnder the recently issued guidance from the Obama administration (which some were hoping wouldn’t appear) lobbyists seeking an administration member’s time to discuss a “Recovery Act” project must submit their requests in writing so that correspondence can be posted online, just as with the topics of meetings between administration officials and lobbyists on stimulus efforts. This is not business as usual for DC lobbyists; this is a refreshing degree of openness at a time when voters are very curious about how their money is parceled out, and echoes his warnings to mayors last month that the President would “will call them out” on wasteful uses of stimulus dollars.

As history shows us, when we let Wall Street and lobbyists handle their own affairs in smoke-filled back rooms and over martinis at the country club, jobs and sustainable wealth fall by the wayside while cash flows to the wealthiest investors. Curiously enough, income disparities shrink while job creation and government revenues increase if, and when, the wealthy are taxed - it causes them to invest rather than hoard their capital.

Economic viability will come only through repudiating the unfounded faith many Republicans have exhibited in trickle-down voodoo and unregulated capitalism, paired with self-serving definitions of sound-bite terms such as educational choice. We need a return to an ethic of service, work, and strong family values such as the first family demonstrates.

We need to restore confidence - both here and abroad - that the United States is a leading force on economic and moral issues, not a duplicitous, arrogant bully guilty of not practicing what we preach. Obama’s walking the walk.

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Help Mexico by Legalizing Marijuana

By Bill Piper and Ethan Nadelmann, AlterNet.

For months, Mexican drug trafficking organizations have battled it out with the Mexican government, the U.S. government, and each other, with violence escalating on both sides of the U.S./Mexico border. Since 2007, the Mexican drug war has claimed the lives of more than 7,500 people, including 200 Americans. Congress has already held several hearings on the issue and there are more to come. Although they will try, it will be hard for members of Congress to continue ignoring the root cause of the problem – drug prohibition.

Many parts of Mexico today are like Chicago during the days of alcohol Prohibition and Al Capone – times fifty. Citizens wonder who is in control: the government or one or another of the criminal organizations. The U.S. Joint Forces Command recently warned that the Mexico government is in danger of becoming a weak and failed state and could descend into chaos. The U.S. State Department has issued an advisory warning Americans of the risks of traveling to Mexico, including being accidentally killed in violent confrontations between drug traffickers and the Mexico military.

As Mexico deals with the violence, crime and corruption of global drug prohibition, the United States is just beginning to confront the consequences of its own prohibitionist excesses. With less than 5% of the world’s population, we have almost 25% of the world’s prisoners. The incarcerated population has grown from 500,000 in 1980 to 2.3 million today, of which roughly a third are locked up for drug law violations or other prohibition-related offenses. We rank first in the world in the per capita incarceration of our fellow citizens – and we incarcerate more people than China, whose overall population is four times greater than ours. Millions of Americans are barred from voting or accessing student loans, public housing or other assistance because of a drug law conviction. Even well-heeled states have been forced to put off expenditures on health, education, housing, and environmental protection in order to pay for prisons.

It’s no wonder then that more and more people are raising questions about the basic prohibitionist paradigm. In the border city of El Paso, Texas, where several Mexican mayors live and commute to work out of fear their families will be killed if they live in Mexico, the city council passed a resolution in January calling on Congress to debate drug legalization as a way of reducing prohibition-related violence. In February, the Latin-American Commission on Drugs and Democracy, a high-level commission co-chaired by former presidents of Brazil, Colombia and Mexico, called for a “paradigm shift” in global drug policy, including decriminalizing marijuana, and “breaking the taboo” on open and robust debate about all drug policy options.

The Attorney General of Arizona, citing evidence that Mexican drug trafficking organizations get 60% to 80% of their revenue from marijuana, has suggested that national policymakers debate legalizing marijuana as a way to cripple both Mexican and U.S. gangs. Although he was careful to say he wasn’t advocating legalization, he nevertheless asked the right question: Should marijuana be taxed and regulated like alcohol?

Critics will say legalization might increase drug use. Perhaps. But then again, studies around the world have found that the relative harshness of drug laws matters surprisingly little. After all, rates of illegal drug use in the United States are the same as, or higher than, Europe, despite our more punitive policies. And thirteen U.S. states have already decriminalized marijuana, but marijuana use rates in those states go up and down at roughly the same rates as in other states.

What matters most, of course, is not how many people use marijuana, alcohol or other drugs, but how best to reduce both the harms of drug misuse and the harms of drug control policies. Seventy five years ago Americans recognized that the harms of alcohol misuse had been exceeded by the harms of alcohol Prohibition; they responded by repealing a national amendment for the one and only time in our nation’s history. Hundreds of thousands of Americans die prematurely each year because of cigarette smoking but we’re still wise enough to understand that tough public health strategies produce better overall results than criminal prohibition.

Marijuana is dramatically less dangerous than either alcohol or cigarettes. It’s far less addictive than the latter, and typically consumed in much smaller amounts. It lacks alcohol’s powerful association with violence, accidents and reckless sexual behavior. It’s impossible to die of a marijuana overdose. And the consequences of marijuana addiction, for the small proportion of marijuana consumers who do become addicted, are dramatically less than the consequences of alcohol addiction.

With Mexico in crisis, U.S. prisons packed beyond capacity, and state and federal deficits soaring, the time has come to at least consider taxing and regulating marijuana. A 2005 study endorsed by hundreds of economists found that legalizing marijuana could save approximately $7.7 billion a year in government expenditures. Taxing it like alcohol or tobacco could generate another $6.2 billion in revenue. That’s enough to hire almost 350,000 new elementary school teachers or put 290,000 new police officers on the street. No one would hate the new policy more than Mexico’s drug traffickers; after all, they’d be out of business.

Forty percent of all Americans say it’s time to legalize marijuana. In some western states, support for legalization is approaching fifty percent. If ever there were a time for politicians to open up this debate, it is now.

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U.S. Seeks Expanded Power to Seize Firms

Goal Is to Limit Risk to Broader Economy

By Binyamin Appelbaum and David Cho
Washington Post Staff Writers
Tuesday, March 24, 2009; A01

The Obama administration is considering asking Congress to give the Treasury secretary unprecedented powers to initiate the seizure of non-bank financial companies, such as large insurers, investment firms and hedge funds, whose collapse would damage the broader economy, according to an administration document.

The government at present has the authority to seize only banks.

Giving the Treasury secretary authority over a broader range of companies would mark a significant shift from the existing model of financial regulation, which relies on independent agencies that are shielded from the political process. The Treasury secretary, a member of the president's Cabinet, would exercise the new powers in consultation with the White House, the Federal Reserve and other regulators, according to the document.

The administration plans to send legislation to Capitol Hill this week. Sources cautioned that the details, including the Treasury's role, are still in flux.

Treasury Secretary Timothy F. Geithner is set to argue for the new powers at a hearing today on Capitol Hill about the furor over bonuses paid to executives at American International Group, which the government has propped up with about $180 billion in federal aid. Administration officials have said that the proposed authority would have allowed them to seize AIG last fall and wind down its operations at less cost to taxpayers.

The administration's proposal contains two pieces. First, it would empower a government agency to take on the new role of systemic risk regulator with broad oversight of any and all financial firms whose failure could disrupt the broader economy. The Federal Reserve is widely considered to be the leading candidate for this assignment. But some critics warn that this could conflict with the Fed's other responsibilities, particularly its control over monetary policy.

The government also would assume the authority to seize such firms if they totter toward failure.

Besides seizing a company outright, the document states, the Treasury Secretary could use a range of tools to prevent its collapse, such as guaranteeing losses, buying assets or taking a partial ownership stake. Such authority also would allow the government to break contracts, such as the agreements to pay $165 million in bonuses to employees of AIG's most troubled unit.

The Treasury secretary could act only after consulting with the president and getting a recommendation from two-thirds of the Federal Reserve Board, according to the plan.

Geithner plans to lay out the administration's broader strategy for overhauling financial regulation at another hearing on Thursday.

The authority to seize non-bank financial firms has emerged as a priority for the administration after the failure of investment house Lehman Brothers, which was not a traditional bank, and the troubled rescue of AIG.

"We're very late in doing this, but we've got to move quickly to try and do this because, again, it's a necessary thing for any government to have a broader range of tools for dealing with these kinds of things, so you can protect the economy from the kind of risks posed by institutions that get to the point where they're systemic," Geithner said last night at a forum held by the Wall Street Journal.

The powers would parallel the government's existing authority over banks, which are exercised by banking regulatory agencies in conjunction with the Federal Deposit Insurance Corp. Geithner has cited that structure as the model for the government's plans.

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NORML Breaking News: Marijuana Legalization Bills Introduced In Massachusetts!

By: Paul Armentano, NORML Deputy Director

California’s highly publicized effort to legalize the commercial cultivation and sale of cannabis is getting some well-deserved company!

A pair of bills — House Bill 2929 and Senate Bill 1801 — seeking to “tax and regulate the cannabis industry” have just been introduced in the Massachusetts legislature.

These proposals seek to legally regulate the commercial production and distribution of marijuana for adults over 21 years of age. Like California’s proposal, they would impose licensing requirements and excise taxes on the retail sale of cannabis. By some estimates, these taxes could raise nearly $100 million in annual state revenue.

Adults who possess or grow marijuana for personal use, or who engage in the non-profit transfer of cannabis, would not be subject to taxation under the law.

You can read more about these bills at the new website: http://www.cantaxreg.com. If you live in Massachusetts, we urge you to write your elected officials in support of H. 2929 and S. 1801 by going here.

“Decades of whispered grumblings about the wisdom and efficacy of prohibition is rapidly giving way to a serious—really serious public discussion about how to replace it,” said former NORML Board Member Richard Evans, who assisted in drafting the landmark legislation. “Those who consider themselves leaders in government and the media have the obligation to either show how prohibition can be made to work, or join in the exploration of alternatives.”

We can’t think of a better place to begin this discussion on the east coast than Massachusetts, where last November 65 percent of voters endorsed a statewide initiative reclassifying marijuana possession as a fine-only offense under state law. Will a majority of Bay State voters also support legalization? We may soon find out!

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Plenty of Rahm at the AIG Table

By The Prowler

Over the past ten days, as the furor over AIG retention plan bonuses has focused on Sen. Chris Dodd and Secretary of the Treasury Timothy Geithner, the White House has undertaken a PR offensive to protect the highest ranking Obama Administration official who was involved in the House and Senate negotiations over the stimulus bill, in which the AIG waiver language was inserted.

"Right now, you get the feeling this is all about protecting [White House Chief of Staff] Rahm Emanuel,” says a former Treasury Department lawyer, who worked in that department's counsel's office on the Troubled Asset Relief Program (TARP) before joining a D.C.-based law firm in February. "At the time, we were led to believe there were basically three or four people from the Administration at the table when the final deals were cut and one of them was Emanuel."

Informal advisers to Geithner are growing increasingly frustrated, they say, that Geithner is being held up as the straw man for the public anger over the bonuses. "Just over the weekend you saw a new guy added to the target list, [White House economics adviser Larry] Summers,” says a longtime Geithner colleague at the New York Fed. "You have Dodd, Geithner, Summers, but there were other, more senior political people involved in this mess, and their names aren't being mentioned. Why isn't anyone asking Rahm Emanuel, 'What meetings were you in?' 'What did you and the President know and when did you know it?' Tim has some culpability, but he's not the guy who signed off on the Dodd language. He wasn't that empowered to do something like that."

Yesterday, Obama supporter and New York Times columnist Frank Rich fingered Summers as a key player in the AIG bonus mess. "Summers is so tone-deaf that he makes Geithner seem like Bobby Kennedy," Rich wrote.

Summers currently serves as head of the National Economic Council in the White House, and has been mentioned as someone who might be forced to return to the Secretary of the Treasury post he once held in the Clinton Administration should Geithner not survive the political storm he finds himself in.

It isn't just Rich, though, who has placed Summers in the center of the controversy. Last week, Sen. Ron Wyden, who was led to believe that language he was inserting into the stimulus bill, which would have heavily taxed such payouts as the retention bonuses, told reporters that it was the "Obama economic team" that stripped his and Sen. Olympia Snowe's provision from the bill. When he was asked about who he dealt with during the February negotiations over his language, he said, "Secretary Geithner, Larry Summers, and I'll leave it at that." He declined to name other names, though he indicated to reporters present that he was aware of others in the negotiations.

Senior Democrat leadership aides in both the House and Senate, however, insist that both Emanuel and Office of Management and Budget Director Peter Orszag were present at the meetings where the decision was made to strip out the bonus taxation language and insert the Dodd waiver.

Further complicating the situation is that at the time of the negotiations, Geithner had in his possession Treasury Department memorandums outlining November negotiations between the department's counsel's office and AIG officials over the very retention bonuses that were preserved in the final bill.

As early as November 5, 2008, AIG lawyers and senior executives and Treasury officials were in negotiations over just which bonuses and retention-plan payouts could and could not take place. "We indicated that UST wants to put in place a limitation on annual bonuses that assure that AIG executives/employees will not be enriched out of TARP funds," wrote a Treasury official to colleagues involved in the negotiations.

In preparing Geithner for the stimulus negotiations, Treasury staff provided him, as well as Obama Administration officials, detailed memorandums outlining the extensive negotiations the agency had had with AIG, among other financial institutions, about bonus payouts, and recommending steps that could be taken legislatively to at least limit taxpayer exposure.

"[Geithner] had the information," says the former Treasury lawyer. "What he did with it we don't know. But our input didn't seem to make much of a difference in the room when it mattered."

Neither did Republican input; no Republicans were present in the negotiations in the Speaker's office. Both Nancy Pelosi and Harry Reid, who served as a conference manager on the bill, barred Republicans from the negotiation table.

And, surprisingly, neither was Chris Dodd, who was not one of the three Senate managers for the conference negotiations.

So the mystery remains: who had final sign-off on the Dodd language insertion on AIG's retention bonuses? One thing seems certain, Rahm Emanuel isn't talking, and neither are Pelosi or Reid, who were also in the room with Emanuel, Orszag, and Summers when the final language was worked out.

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Palin Flip Flops On Stimulus In Face Of Anger


Alaska Gov. Sarah Palin faced bipartisan criticism and an angry protest back home after deciding to reject federal stimulus funds. That might be why her Lieutenant Governor is now saying she didn't decide anything.

Lt. Gov. Sean Parnell showed up to deliver Palin's message - that she's not necessarily "rejecting" the money, but wants a public debate on how it's spent and whether it would cost the state in the long run.


Among the questions: Is the governor's team trying to have it both ways - saying "no" to the money while leaving the door open to spending it?

DNC spokesman Hari Sevugan comments: "We know when Governor Palin says "thanks but no thanks" she doesn't always mean it. We hope that's the case here, and she's changed her mind about denying the people of Alaska of half a billion dollars in recovery finds that could create thousands of jobs and help turn the economy around. But given her history on the subject, we're not hopeful."

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Stimulus? U.S. to buy Chinese condoms, ending Alabama jobs


Call it a condom conundrum.

At a time when the federal government is spending billions of stimulus dollars to stem the tide of U.S. layoffs, should that same government put even more Americans out of work by buying cheaper foreign products?

In this case, Chinese condoms.

That's the dilemma for the folks at the U.S. Agency for International Development, which has distributed an estimated 10 billion U.S.-made AIDS-preventing condoms in poor countries around the world.

But not anymore.

In a move expected to cost 300 American jobs, the government is switching to cheaper off-shore condoms, including some made in China.

The switch comes despite implied assurances over the years that the agency would continue to buy American whenever possible.

"Of course, we considered how many U.S. jobs would be affected by this move,” said a USAID official who spoke on the condition that he would not be named. But he said the reasons for the change included lower prices (2 cents versus more than 5 cents for U.S.-made condoms) and the fact that Congress dropped “buy American language” in a recent appropriations bill.

Besides, he said, the sole U.S. supplier — an Alabama company called Alatech — had previous delivery problems under the program.

It's clear that Alatech's problems over the years, which apparently have been resolved, may have driven U.S. officials to seek much less expensive foreign-made condoms in the first place.

But that's cold comfort to Fannie Thomas, who has been making AIDS-preventing condoms in southeastern Alabama for nearly 40 years in the small town of Eufaula.

“We pay taxes down here, too, and with all this stimulus money going to save jobs, it seems to me like they (the U.S. government) should share this contract so they can save jobs here in America,” Thomas said.

Thomas and others at the Alatech plant said there aren’t many alternatives for them if it closes down, which is a likely result of the contracting switch.

In fact, the government is close to accepting condoms from two offshore companies: Unidus Corp., which makes condoms in South Korea, and Qingdao Double Butterfly Group, which makes them in China.

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Treasury's toxic asset plan could cost $1 trillion

By MARTIN CRUTSINGER, AP Economics Writer

Gibbs outlines new bank rescue plan Play Video AP – Gibbs outlines new bank rescue plan

WASHINGTON – The Obama administration's latest attempt to tackle the banking crisis and get loans flowing to families and businesses will create a new government entity, the Public-Private Investment Program, to help purchase as much as $1 trillion in toxic assets on banks' books.

The new effort, to be unveiled Monday, will be followed the next day with release of the administration's broad framework for overhauling the financial system to ensure that the current crisis — the worst in seven decades — is not repeated.

A key part of that regulatory framework will give the government new resolution authority to take over troubled institutions that would pose a threat to the entire financial system if they failed.

Administration officials believe this new power will save taxpayers money and avoid the type of controversy that erupted last week when insurance giant American International Group paid employees of its troubled financial products unit $165 million in bonuses even though the company had received more than $170 billion in support from the federal government.

Under the new powers being sought by the administration, the treasury secretary could only seize a firm with the agreement of the president and the Federal Reserve.

Once in the equivalent of a conservatorship, the treasury secretary would have the power to limit payments to creditors and to break contracts governing executive compensation, a power that was lacking in the AIG case.

The plan on toxic assets will use the resources of the $700 billion bank bailout fund, the Federal Reserve and the Federal Deposit Insurance Corp.

The initiative will seek to entice private investors, including big hedge funds, to participate by offering billions of dollars in low-interest loans to finance the purchases. The government will share the risks if the assets fall further in price.

When Geithner released the initial outlines of the administration's overhaul of the bank rescue program on Feb. 10, the markets took a nosedive. The Dow Jones industrial average plunged by 380 points as investors expressed disappointment about a lack of details.

Christina Romer, head of the Council of Economic Advisers, said Sunday that it's important for investors to know that the administration is bringing a full array of programs to confront the problem.

"I don't think Wall Street is expecting the silver bullet," she said on CNN's "State of the Union." "This is one more piece. It's a crucial piece to get these toxic assets off, but it is just part of it and there will be more to come."

But private economists said investors may still have doubts about whether the government has adequate resources to properly fund the plan and whether private investors will be attracted to participate, especially after last week's uproar concerning the AIG bonuses, which has added to the anti-Wall Street feelings in the country.

Romer said the new toxic asset program would utilize around $100 billion from the $700 billion bailout fund, leaving the fund close to being tapped out.

Mark Zandi, an economist at Moody's Economy.com, estimated that the government will need an additional $400 billion to adequately deal with the toxic asset problem, seen by many analysts as key to finally resolving the banking crisis.

Zandi said the administration has no choice but to rely heavily on government resources because of the urgency of getting soured real estate loans and troubled asset-backed securities off the books of banks so that they can resume more normal lending to consumers and businesses.

"This is a start and we will see how far it goes, but I believe they will have to go back to Congress for more money," he said.

The Public-Private Investment Program that will be created was viewed as performing the same functions — selling bonds to finance purchases of bad assets — as a similar organization did for the Resolution Trust Corp., which was created to dispose of bad real estate assets in the savings and loan crisis of the 1980s.

According to administration and industry officials, the toxic asset program will have three major parts:

_A public-private partnership to back private investors' purchases of bad assets, with government support coming from the $700 billion bailout fund. The government would match private investors dollar for dollar and share any profits equally.

_Expansion of a recently launched Fed program that provides loans for investors to buy securities backed by consumer debt as a way to increase the availability of auto loans, student loans and credit card debt. Under Geithner's plan for the toxic assets, that $1 trillion program would be expanded to support purchases of toxic assets.

_Use of the FDIC, which insures bank deposits, to support purchases of toxic assets, tapping into this agency's expertise in closing down failed banks and disposing of bad assets.

Some industry officials said hedge funds and other big investors are likely to be more leery of accepting the government's enticements to purchase these assets, fearing tighter government restraints in such areas as executive compensation.

Administration officials, however, insisted Sunday that a distinction needed to be made between companies getting heavy support from the bailout programs and investors who are being asked to help dispose of troubled assets.

Romer said the partnership with the private sector will help ensure that the government doesn't overpay for the toxic assets that it will be purchasing.

"This isn't just another handout to banks," she said on CNN. "We very much have the taxpayers' interest in mind."

The administration's revamped program for toxic assets is the latest in a string of banking initiatives which have also included efforts to deal with mortgage foreclosures, boost lending to small businesses and unfreeze the market for many types of consumer loans.

In addition, the nation's 19 biggest banks are undergoing intensive examinations by regulators that are due to be completed by the end of April to determine whether they have sufficient capital reserves to withstand an even more severe recession. Those that do not will be able to get more support from the government.

The overhaul of financial regulation will be revealed by Geithner in testimony he is scheduled to give Tuesday and Thursday before the House Financial Services Committee.

In addition to the expanded authority to seize big institutions that pose a risk to the entire system, the administration is also expected to offer more general proposals on limiting excesses seen in executive compensation in recent years, where the rewards prodded extreme risk-taking.

The regulatory plan is also expected to include a major change that gives the Federal Reserve more powers to oversee systemic risks to the entire financial system.

The administration is working to unveil its proposed regulatory changes in advance of a meeting of the Group of 20 economic leaders, which Obama will attend on April 2 in London. European nations have complained that lax financial regulations in the United States set the stage for the current financial crisis.

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'Fusion Centers' Expand Criteria to Identify Militia Members

FOXNews.com

If you're an anti-abortion activist, or if you display political paraphernalia supporting a third-party candidate or a certain Republican member of Congress, if you possess subversive literature, you very well might be a member of a domestic paramilitary group.

That's according to "The Modern Militia Movement," a report by the Missouri Information Analysis Center (MIAC), a government collective that identifies the warning signs of potential domestic terrorists for law enforcement communities.

"Due to the current economical and political situation, a lush environment for militia activity has been created," the Feb. 20 report reads. "Unemployment rates are high, as well as costs of living expenses. Additionally, President Elect Barrack [sic] Obama is seen as tight on gun control and many extremists fear that he will enact firearms confiscations."

MIAC is one of 58 so-called "fusion centers" nationwide that were created by the Department of Homeland Security, in part, to collect local intelligence that authorities can use to combat terrorism and related criminal activities. More than $254 million from fiscal years 2004-2007 went to state and local governments to support the fusion centers, according to the DHS Web site.

During a press conference last week in Kansas City, Mo., DHS Secretary Janet Napolitano called fusion centers the "centerpiece of state, local, federal intelligence-sharing" in the future.

"Let us not forget the reason we are here, the reason we have the Department of Homeland Security and the reason we now have fusion centers, which is a relatively new concept, is because we did not have the capacity as a country to connect the dots on isolated bits of intelligence prior to 9/11," Napolitano said, according to a DHS transcript.

"That's why we started this.... Now we know that it's not just the 9/11-type incidents but many, many other types of incidents that we can benefit from having fusion centers that share information and product and analysis upwards and horizontally."

But some say the fusion centers are going too far in whom they identify as potential threats to American security.

People who supported former third-party presidential candidates like Texas Rep. Ron Paul, Chuck Baldwin and former Georgia Rep. Bob Barr are cited in the report, in addition to anti-abortion activists and conspiracy theorists who believe the United States, Mexico and Canada will someday form a North American Union.

"Militia members most commonly associate with 3rd party political groups," the report reads. "It is not uncommon for militia members to display Constitutional Party, Campaign for Liberty or Libertarian material."

Other potential signals of militia involvement, according to the report, are possession of the Gagsden "Don't Tread on Me" flag or the widely available anti-income tax film "America: Freedom to Fascism."

Barr, the 2008 Libertarian Party presidential nominee, told FOXNews.com that he's taking steps to get his name removed from the report, which he said could actually "dilute the effectiveness" of law enforcement agencies.

"It can subject people to unwarranted and inappropriate monitoring by the government," he said. "If I were the governor of Missouri, I'd be concerned that law enforcement agencies are wasting their time and effort on such nonsense."

Barr said his office has received "several dozen" complaints related to the report.

Mary Starrett, communications director for the Constitution Party, said Baldwin, the party's 2008 presidential candidate, was "outraged" that his name was included in the report.

"We were so astounded by it we couldn't believe it was real," Starrett told FOXNews.com. "It's painting such a large number of people with a broad brush in a dangerous light."

Michael German, national security policy counsel for the American Civil Liberties Union, said the report "crosses the line" and shows a disregard for civil liberties.

"It seems to implicate people who are engaging in First Amendment protected activities and suggest that something as innocuous as supporting a political candidate for office would mean that you're harboring some ill-intent," German told FOXNews.com. "It's completely inappropriate."

German, who claims the number of fusion centers nationwide is closer to 70, said the centers present several troubling concerns, including their excessive secrecy, ambiguous lines of authority, the use of data mining and military participation.

"No two are alike," German said. "And these things are expanding rapidly."

But MIAC officials defended their report, saying it's not a basis for officers to take enforcement action.

"These reports sometimes mention groups or individuals who are not the subject of the document, but may be relevant to describing tendencies or trends concerning the subject of the document," MIAC said in a statement.

"For example, a criminal group may use a particular wire service to transfer funds, but the mention of that wire service does not imply that it is part of that group, or a criminal enterprise.

Nor does it imply that all individuals who use that service are engaged in criminal activity."
The statement continues, "We are concerned about the mischaracterizations of a document following its recent unauthorized release and we regret that any citizens were unintentionally offended by the content of the document."

Donny Ferguson, a spokesman for the Libertarian Party, said he was concerned by the report's "poor choice of words," among other things.

"Unfortunately it is so broadly worded it could be interpreted as saying millions of peaceful, law-abiding Americans are involved in dangerous activities. These mistakes happen and we hope Missouri officials will correct the report," Ferguson wrote in an e-mail. "The Libertarian Party promotes the common-sense policies of fiscal responsibility and social tolerance. We are the only party in America who makes opposition to initiating violence a condition of membership."

Bob McCarty, a St. Louis resident who blogged about the MIAC report, said he's afraid he may be targeted, since he's previously sold Ron Paul-related merchandise.

"[The report] described me, so maybe I need to get a gun and build a shack out in the woods," McCarty said facetiously. "It's certainly an attempt to stifle political thought, especially in Missouri. It definitely makes me pause, if nothing else. Maybe Missouri is just a test bed for squelching political thought."

ACLU officials blasted a Texas fusion center last month for distributing a "Prevention Awareness Bulletin" that called on law enforcement officers to report activities of local lobbying groups, Muslim civil rights organizations and anti-war protest groups.

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Friendly fire: NYT hits Obama

By


Thomas Friedman and Paul Krugman.
A chorus of liberal voices from The New York Times criticize the president in Sunday’s paper.
Photo: Composite image by POLITICO

The leading liberal voices of the New York Times editorial pages all criticized—and, in some cases, clobbered—President Obama on Sunday for his handling of the economy and national security.

It's not unusual for Barack Obama to take a little friendly fire from the Times. But it's perhaps unprecedented for him to get hit on the same day by columnists Frank Rich, Thomas Friedman and Maureen Dowd—and in the paper's lead editorial. Their critique punctuated a weekend that started with a widely circulated blog post by Paul Krugman that said the president’s yet to be announced bank rescue plan would almost certainly fail.

The sentiment, coming just two months after the president was sworn in, reflects elite opinion in the Washington-New York corridor that Obama is increasingly overwhelmed, and not fully appreciative of the building tsunami of populist outrage.

Unlike with President Bush, the Obama administration is less apt to dismiss such commentary, at least publicly, as so much carping from an out-of-touch peanut gallery. These are voices that have been sympathetic, and at times gushing toward Obama, during the campaign and in his administration’s early days.

The president and his top aides read the Times closely and react quickly to its reporting and commentary. Tom Daschle, for example, withdrew from consideration as Health and Human Services Secretary amid back tax issues on the same day that the paper ran a tough front-page piece and editorial on what keeping Daschle would mean to the Obama brand.

So it likely caused some consternation this morning at the White House and at Camp David, where the president is staying this weekend, to pick up the Times and find:

—Frank Rich, who made a cottage industry of Bush-bashing, writing that until Obama “addresses the full depth of Americans’ anger with his full arsenal of policy smarts and political gifts, his presidency and, worse, our economy will be paralyzed.”

Recalling the Daschle episode and the public’s response to the image of a wealthy former senator not paying taxes on a limousine, Rich said that judging from their response to the AIG case “the administration learned nothing from that brush with disaster.”

Larry Summers, perhaps the president’s most high-profile economic adviser, came in for the worst of it.

“Summers is so tone-deaf that he makes Geithner seem like Bobby Kennedy," Rich wrote.

—Thomas Friedman, the paper’s highly-read foreign affairs columnist, turning his focus home to find the nation lacking “inspirational leadership.”

Friedman’s indictment was not limited to Obama, but he captured some of the concern about the president’s communications skills by writing that the president “missed a huge teaching opportunity with A.I.G.”

Instead of letting Congress react in its usual knee-jerk fashion to overcompensate for what it believes the public wants—what Friedman called letting them “run riot”—the president should have stepped up.

“He should have gone on national TV and had the fireside chat with the country that is long overdue. That’s a talk where he lays out exactly how deep the crisis we are in is, exactly how much sacrifice we’re all going to have to make to get out of it, and then calls on those A.I.G. brokers — and everyone else who, in our rush to heal our banking system, may have gotten bonuses they did not deserve — and tells them that their president is asking them to return their bonuses ‘for the sake of the country.’”

—The paper’s liberal editorial page and a frequent voice of opposition to Bush’s national security policies complaining about “confused and mixed signals from the [Obama] White House” on some of the same issues.

“Some of what the public has heard from the Obama administration on issues like state secrets and detainees sounds a bit too close for comfort to the Bush team’s benighted ideas,” penned the Times editorialists, carping about Guantanamo specifically, detainee policy more broadly and Obama’s reluctance to investigate Bush-era actions on “terrorism, state secrets, wiretapping, detention and interrogation.”

—Maureen Dowd, in her inimitable fashion, citing the take-charge First Lady digging a White House garden to wonder “if the wrong Obama is in the Oval.”

“It’s a time in America’s history where we need less smooth jazz and more martial brass,” wrote Dowd.

—Krugman, who is perhaps the most frequent Obama critic at the paper but also a Nobel Prize-winning economist whose analysis carries considerable sway in liberal circles, not even waiting for the administration’s bank plan announcement this week before panning it.

“It’s exactly the plan that was widely analyzed — and found wanting — a couple of weeks ago,” Krugman wrote on his blog. “The zombie ideas have won. The Obama administration is now completely wedded to the idea that there’s nothing fundamentally wrong with the financial system — that what we’re facing is the equivalent of a run on an essentially sound bank.”

The Princeton economist turned opinion columnist predicted: “This plan will produce big gains for banks that didn’t actually need any help; it will, however, do little to reassure the public about banks that are seriously undercapitalized. And I fear that when the plan fails, as it almost surely will, the administration will have shot its bolt: it won’t be able to come back to Congress for a plan that might actually work. What an awful mess.”

Christina Romer, the Chair of Obama’s Council of Economic Advisers, called Krugman’s critique “unfair” in an appearance on CNN’s “State of the Union” and said their plan of partnering with the private sector was to ensure taxpayers didn’t shoulder more of the burden and they didn’t offer “just another hand-out to banks.”

Original here

I Was Followed, Harassed, And Ambushed By Bill O’Reilly’s Producer

wattersf.jpg On March 1, ThinkProgress picked up on a story by News Hounds, which noted that Fox News host Bill O’Reilly — who has made controversial comments about rape victims in the past — was slated to speak at a March 19 fundraiser for the Alexa Foundation. The group is committed to supporting rape survivors.

Our post — which never criticized the Alexa Foundation — highlighted the fact that in the past, O’Reilly has implied that women who dress in a certain way or consume too much alcohol should perhaps expect to be raped. Here is what he said on his radio show on Aug. 2, 2006, about Jennifer Moore, an 18-year-old woman who was raped and murdered:

Now Moore, Jennifer Moore, 18, on her way to college. She was 5-foot-2, 105 pounds, wearing a miniskirt and a halter top with a bare midriff. Now, again, there you go. So every predator in the world is gonna pick that up at two in the morning. She’s walking by herself on the West Side Highway, and she gets picked up by a thug. All right. Now she’s out of her mind, drunk.

O’Reilly’s comments about Moore were part of a larger segment about the dangers of drunkenness. His other example was Mel Gibson going on a drunken tirade and yelling anti-Semitic comments. “I think it’s safe to say that if Mel Gibson didn’t get drunk, he wouldn’t be in this terrible situation he finds himself in,” said O’Reilly. “And if a young woman, 18-year-old Jennifer Moore of Harrington Park, NJ, didn’t get drunk, she’d be alive today.”

This weekend, while on vacation, I was ambushed by O’Reilly’s top hit man, producer Jesse Watters, who accosted me on the street and told me that because I highlighted O’Reilly’s comments, I was causing “pain and suffering” to rape victims and their families. He of course offered no proof to back up this claim, instead choosing to shout questions at me.

I expect O’Reilly to air this “interview” at some point this week, possibly as early as tonight. I have no expectation that he will show the entire altercation or give the entire story about what happened, so here is the full account, offering a glimpse inside the O’Reilly harrassment machine:

– The Stalking: Watters and his camera man accosted me at approximately 3:45 p.m. on Saturday, March 21, in Winchester, VA, which is a two-hour drive from Washington, DC. My friend and I were in this small town for a short weekend vacation and had told no one about where we were going. I can only infer that the two men staked out my apartment and then followed me for two hours. Looking back, my friend and I remember seeing their tan SUV following us for much of the trip.

– The Ambush: Shortly after checking into our lodgings, we emerged and immediately saw two men walking toward us calling out my name. Watters said he was from Fox News, but never said his or his companion’s name, nor did he say he was with The O’Reilly Factor.

– The Surprise Attack: Watters immediately began asking me why I was causing “pain and suffering” to the Alexa Foundation. He never gave me the context for his questions. Confused, I repeatedly asked him what he was talking about and whether he could refresh my memory, but he just continued shouting his question.

– The Evasion: I said that it was inappropriate for O’Reilly to imply that just because a woman may be drunk and/or dressed in a certain way, she should expect to be raped. Watters asked me whether I had listened to the interview (which I had) and claimed that O’Reilly had made the comments in the context of a commentary on Mel Gibson/drunkenness. When I tried to ascertain why he was attacking ThinkProgress in particular — even though other sites had also covered the story — he said that we were part of the “smear pipeline,” which also included the “Soros-funded” Media Matters. He ignored my comments when I asked if Fox News also smears people.

– Setting A Guilt Trap: Watters ended the charade by demanding that I look into the camera and apologize to the Alexa Foundation and rape victims. I told them that I don’t speak through Fox News and if someone from the Alexa Foundation would like to personally call me, I’d be happy to speak with that person.

– More Stalking: The camera man then continued to film me as I walked down the block. After a few minutes while I waited at the light to cross the street, Watters called him back and they left.

This weekend, we contacted Watters and Loren Hynes, who works in Media Relations at Fox. We have yet to receive a response from them, or anyone else at the network, on Saturday’s incident.

The main issue remains: O’Reilly should offer an apology/explanation of why, when a woman is raped and murdered, it’s relevant what she was wearing or how much she was drinking. O’Reilly never asked me for a statement nor invited me on his show before sending Watters to harass me. Since I’m a 5 ft, 100 pound woman with an opinion that he doesn’t like, perhaps O’Reilly believes I deserve to be treated this way.

Original here

Obama fires back at Cheney on 60 Minutes

David Edwards and Stephen C. Webster

Dick Cheney and the anti-terror policies of the Bush years have not "made us safer," according to President Barack Obama.

In an interview on Sunday night's 60 Minutes, the president offered a stern response to the former vice president's criticism that Obama has somehow made Americans "less safe."

"... The vice president is eager to defend a legacy that was unsustainable," said Obama, characterizing Cheney's politics as a line of thought which "has done incredible damage to our image and position in the world."

"I fundamentally disagree with Dick Cheney," said Obama. "Not surprisingly. You know, I think that Vice President Cheney has been at the head of a movement whose notion is somehow that we can't reconcile our core values, our constitution, our belief that we don't torture, with our national security interests. I think he's drawing the wrong lesson from history. The facts don't bear him out.

"I think he is ... That attitude, that philosophy has done incredible damage to our image and position in the world. I mean, the fact of the matter is, after all these years, how many convictions actually came out of Guantanamo? How many ... How many terrorists have actually been brought to justice under the philosophy that is being promoted by Vice President Cheney? It hasn't made us safer.

"What it has been is a great advertisement for anti-American sentiment, which means that there is constant effective recruitment of Arab fighters and Muslim fighters against U.S. interests all around the world."

"Some of it being organized by a few people who were released from Guantanamo," said interviewer Steve Kroft.

"Well, there is no doubt that we have not done a particularly effective job in sorting through who are truly dangerous individuals that we've got to make sure are not a threat to us, who are folks that we just swept up," Obama replied. "The whole premise of Guantanamo promoted by Vice President Cheney was that, somehow, the American system of justice was not up to the task of dealing with these terrorists."

"... This is the legacy that's been left behind and, you know, I'm surprised that the vice president is eager to defend a legacy that was unsustainable. Let's assume that we didn't change these practices. How long are we going to go? Are we going to just keep on going until, you know, the entire Muslim world and Arab world despises us? Do we think that's really going to make us safer? I don't know a lot of thoughtful thinkers, liberal or conservative, who think that was the right approach."

This video is from CBS' 60 Minutes, broadcast Mar. 22, 2009.


Original here

The Brutal Truth


Alex Knapp:

Let’s call the “tea party” and “going Galt” nonsense what it is: unprincipled partisan hackery. If these were truly principled protests, they’d have been around all through the Bush and Republican-controlled Congress years, too.

My sense is that it is a delayed reaction in some ways to Bush, and his betrayal of conservatism. For all sorts of reasons, most of the current tea-partiers backed the GOP under Bush and Cheney, although some, to be fair, did complain about some of it. The pent-up frustrations behind conservatism's collapse under Republicans were trumped, however, by the fruits of power, partisan hatred of "the left", defensiveness over the Iraq war and torture, and, above all religious devotion to the Leader. Now that Bush has been removed, the massive damage done, and a pragmatic liberal is trying to sort out the mess in a sane, orderly fashion, they've gone nuts.

Think of someone like Glenn Beck.

He sat back and watched Bush preside over the worst domestic attack in US history, explode the entitlement state, engage in unending projects of nation-building in two of the most dysfunctional countries on earth, rip up the Constitution, and bequeath as his legacy a trillion dollar deficit, unprecedented domestic discretionary spending, a banking collapse and the worst recession in many many years. The right will take some time to absorb this but Bush was Carter II - with two full terms. All that rage at what has actually happened - bottled up by rank partisanship for years - has come bounding out. Hence the bizarre spectacle of a president just two months on the job being treated on the right as if he's already Robert Mugabe. Throw in a little racial and cultural panic, add a world of genuine economic pain ... and you have the Malkin surge.

What's weird from my perspective is that in an ideal world, I have a huge amount of sympathy for the ideas of individual liberty, a much smaller state, a more prudent foreign policy and much sounder money. But only if you abstract yourself from our current actual moment, only if you deal in ideology and abstraction alone can you look at our current problems and blame everything on Obama and hope he fails.

So these posturing opportunists didn't just sit back and play partisan games as Bush made left-liberalism inevitable and, in some respects, necessary as a response to this crisis of negligence, they now get to rant and rage as if they and Bush had nothing to do with this. But they did. They were critically part of the problem, enabling and abetting most of the (unconservative) policies that gave us this crisis. Rather than address that fact, which would require a certain amount of introspection and self-criticism (when did you last hear that from Malkin or Reynolds?), they pump up the outrage.

It will get worse before it gets better.

Original here

The GOP's burgeoning civil war

By JAMES KIRCHICK


Conservative Radio host Rush Limbaugh at the Capitol.
The White House has gotten in on the act with senior figures like spokesperson Robert Gibbs and chief of staff Rahm Emanuel launching attacks on administration critics ranging from Limbaugh to CNBC personalities Rick Santelli and Jim Cramer.
Photo: AP

Watching the various spats among conservatives, it’s difficult to tell whether one is witnessing a series of lively political disagreements or an episode of “Monday Night Raw.”

In one corner, there’s former Bush administration speechwriter David Frum versus talk radio king Rush Limbaugh. In another ring, Limbaugh is taking on former House speaker-turned-conservative guru Newt Gingrich. And in the Royal Rumble, Republican National Committee Chairman Michael Steele is battling, well, pretty much everybody in the GOP.

Liberals have shown no small measure of delight in this fracas, and understandably so. Taking political advantage of conservative fratricide makes perfect sense, as it’s the strategic execution of Henry Kissinger’s observation about the Iran-Iraq War: “It’s a pity both sides can’t lose.” Fueling the intra-party fire weakens the GOP from within. Even the White House has gotten in on the act with senior figures like spokesperson Robert Gibbs and chief of staff Rahm Emanuel launching attacks on administration critics ranging from Limbaugh to CNBC personalities Rick Santelli and Jim Cramer.

But as liberals engage in multiple rounds of schadenfreude over conservative wrangling, what’s noticeable is that the burgeoning civil war we’re witnessing on the right could not play out on the left, at least not rise to the level of gravity that would attract front-page articles in Newsweek or the instigation of partisans on the other side. And that’s because liberals — unlike conservatives — do not have a “movement” over which to fight.

Given the Barack Obama phenomenon, the rise of the liberal blogosphere and overwhelming Democratic congressional majorities, the proposition that liberals lack a movement might sound strange. But while the Republican Party comprises three steadfast pillars (free marketers, defense hawks and the religious right), the Democratic Party remains a coalition of a vast and diverse assemblage of interest groups (minorities, labor unions, academics, trial lawyers, etc.) rather than an ideological enterprise. As such, the Democrats, up until very recently, have long had more intense internal squabbling than the Republicans, whose various factions learned to reconcile.

The conservative movement began to take form in the 1950s as a reaction to the then-regnant statist consensus. It was firmly anti-communist, opposed the New Deal and the further expansion of government programs, and later launched a harsh critique on many of the social changes that took place in the 1960s and 1970s. What further distinguishes the conservative movement from the liberal coalition is that conservatives built an array of institutions to sustain their ideological apparatus. In Washington and across the country, there exists a constellation of think tanks, like the Heritage Foundation and the American Enterprise Institute. In the 1980s, conservatives took to the airwaves and now attract tens of millions of listeners every day on talk radio. Perhaps the most important feature of the movement was its recruitment of young people through organizations like Young America’s Foundation, which identifies and trains conservative students on campuses across the country.
To see the vitality — if not reasonableness — of the movement, one only had to visit last month’s Conservative Political Action Conference, an annual ritual that attracts conservative activists, politicians and celebrities from across the country. There is no liberal equivalent of this confab. Indeed, the relative influence of the conservative movement on the GOP versus any liberal parallel on the Democratic Party can be seen in the vast number of Republican politicians who proudly call themselves “conservative.” By contrast, few Democrats publicly identify themselves as “liberal,” opting for the more vague and voguish “progressive,” if at all.

Liberals are belatedly constructing themselves a movement akin to the one crafted by their ideological adversaries. In 2003, John Podesta founded the Center for American Progress, a partisan think tank explicitly modeled on Heritage. Media Matters aggressively attacks any perceived anti-liberal media bias in the same way that conservative watchdog groups have been monitoring the mainstream press since the 1980s. POLITICO’s Ben Smith has reported on the daily conference call in which the heads of more than 20 major liberal interest groups participate to shape a coherent message for the day, as well as Unity ’09, a coalition of groups ranging from MoveOn.org to the American Civil Liberties Union “aimed at helping President Obama push his agenda through Congress.” Never before have the disparate organizations of the American left been so well-coordinated.

Does the nascent liberal movement portend good or ill? Judging that question depends in part upon whether or not one agrees with the agenda. If scaling back American commitments overseas, increasing the power of unions, and building a more left-leaning Supreme Court, among other goals, of course, are your thing, then the means by which these ends are achieved will presumably matter less than their attainment.

But the answer also lies in whether or not movement politics is itself a healthy feature of the American electoral system. There is something ironic in the tendency of liberals to denounce the staleness and conformity of the conservative movement and relish in its apparent demise while constructing something of their own that is just as ideologically rigid.

Original here

Financial Policy Despair

Fred R. Conrad/The New York Times

Paul Krugman

Over the weekend The Times and other newspapers reported leaked details about the Obama administration’s bank rescue plan, which is to be officially released this week. If the reports are correct, Tim Geithner, the Treasury secretary, has persuaded President Obama to recycle Bush administration policy — specifically, the “cash for trash” plan proposed, then abandoned, six months ago by then-Treasury Secretary Henry Paulson.

This is more than disappointing. In fact, it fills me with a sense of despair.

After all, we’ve just been through the firestorm over the A.I.G. bonuses, during which administration officials claimed that they knew nothing, couldn’t do anything, and anyway it was someone else’s fault. Meanwhile, the administration has failed to quell the public’s doubts about what banks are doing with taxpayer money.

And now Mr. Obama has apparently settled on a financial plan that, in essence, assumes that banks are fundamentally sound and that bankers know what they’re doing.

It’s as if the president were determined to confirm the growing perception that he and his economic team are out of touch, that their economic vision is clouded by excessively close ties to Wall Street. And by the time Mr. Obama realizes that he needs to change course, his political capital may be gone.

Let’s talk for a moment about the economics of the situation.

Right now, our economy is being dragged down by our dysfunctional financial system, which has been crippled by huge losses on mortgage-backed securities and other assets.

As economic historians can tell you, this is an old story, not that different from dozens of similar crises over the centuries. And there’s a time-honored procedure for dealing with the aftermath of widespread financial failure. It goes like this: the government secures confidence in the system by guaranteeing many (though not necessarily all) bank debts. At the same time, it takes temporary control of truly insolvent banks, in order to clean up their books.

That’s what Sweden did in the early 1990s. It’s also what we ourselves did after the savings and loan debacle of the Reagan years. And there’s no reason we can’t do the same thing now.

But the Obama administration, like the Bush administration, apparently wants an easier way out. The common element to the Paulson and Geithner plans is the insistence that the bad assets on banks’ books are really worth much, much more than anyone is currently willing to pay for them. In fact, their true value is so high that if they were properly priced, banks wouldn’t be in trouble.

And so the plan is to use taxpayer funds to drive the prices of bad assets up to “fair” levels. Mr. Paulson proposed having the government buy the assets directly. Mr. Geithner instead proposes a complicated scheme in which the government lends money to private investors, who then use the money to buy the stuff. The idea, says Mr. Obama’s top economic adviser, is to use “the expertise of the market” to set the value of toxic assets.

But the Geithner scheme would offer a one-way bet: if asset values go up, the investors profit, but if they go down, the investors can walk away from their debt. So this isn’t really about letting markets work. It’s just an indirect, disguised way to subsidize purchases of bad assets.

The likely cost to taxpayers aside, there’s something strange going on here. By my count, this is the third time Obama administration officials have floated a scheme that is essentially a rehash of the Paulson plan, each time adding a new set of bells and whistles and claiming that they’re doing something completely different. This is starting to look obsessive.

But the real problem with this plan is that it won’t work. Yes, troubled assets may be somewhat undervalued. But the fact is that financial executives literally bet their banks on the belief that there was no housing bubble, and the related belief that unprecedented levels of household debt were no problem. They lost that bet. And no amount of financial hocus-pocus — for that is what the Geithner plan amounts to — will change that fact.

You might say, why not try the plan and see what happens? One answer is that time is wasting: every month that we fail to come to grips with the economic crisis another 600,000 jobs are lost.

Even more important, however, is the way Mr. Obama is squandering his credibility. If this plan fails — as it almost surely will — it’s unlikely that he’ll be able to persuade Congress to come up with more funds to do what he should have done in the first place.

All is not lost: the public wants Mr. Obama to succeed, which means that he can still rescue his bank rescue plan. But time is running out.

Original here

Billions in blame to spread


By Mark Woods

It's one thing when Ron Paul rails against the hundreds of billions of dollars in the stimulus package.

For 30 years the Republican congressman from Texas not only has been preaching his idea of strict fiscal responsibility, he also has been voting for it. Even if that means going against a Republican president or having colleagues at debates treat him like a crazy uncle.

So it's one thing when he criticizes a Democratic plan to stimulate the economy with government spending.

But it's harder to accept when Ander Crenshaw rails against the stimulus, saying in a Times-Union editorial that it's "it's too expensive, too vague, produced too few jobs and creates too much long-term debt" - five months after the Republican congressman voted for the expensive, vague and debt-increasing bank bailout. Twice. First when it failed, then when it passed.

"The cost of doing nothing is not acceptable," a Crenshaw press release said in October, citing AIG's woes in the third paragraph.

My first impulse after re-reading that press release was to accuse Crenshaw of a Kerry-esque flip-flop. (I actually voted for throwing money off the roof of the Capitol before I voted against it.)

Or to poke fun at those who bemoan debt after they were part of an era with record-setting deficits. Isn't that like Paris Hilton accusing the new girl of being a shameless attention-seeker?

But to be fair, I gave Crenshaw's office a call and let him explain why the votes (for the Bush-led bank bailout, against the Obama-led stimulus) aren't contradictory and partisan. And to be fair, he was hardly alone.

Both Florida senators voted differently. Republican Mel Martinez voted for the bank bailout and against the stimulus. Democrat Bill Nelson voted against the bank bailout but for stimulus. (See a pattern, anyone?)

Crenshaw, who insisted his votes weren't partisan, started by saying I was comparing apples and oranges. (I wanted to say, "Sure, if apples cost $700 billion and oranges $787 billion." But I resisted.)

He says the bank bailout was necessary because, without it, we could have instantly tumbled into another Depression. The stimulus, he says, is an example of runaway liberal spending. And he says while we need to do something, the urgency isn't the same as with the banking crisis.

At the time of the bank "rescue," as supporters called it, there were plenty of critics who said it was rushed through with woefully inadequate oversight.

When I re-read Crenshaw's press release, I saw it painted a different picture. It said he and his Republican colleagues had "successfully fought" to ensure that corporate executives "who started this crisis won't profit ... as a result of government action."

Five months later, with bonuses all the outrage, Crenshaw stands by his vote but adds he is disappointed.

"We saved the banking system but we also wasted a lot of taxpayer money along the way," he said Friday.

And by the second "we" he doesn't mean those who voted for the bank bailout. He means the Democrats who took control of it.

Meanwhile, as is often the case, a Texas congressman has a different perspective.

"It happened because we did something that was outrageous," Paul said Friday on CNN. "These bonuses are outrageous, $165 million is a lot of money. But so is $700 billion of unconstitutional appropriations. That's where the problem came from."

And, he said, there is a lot of blame to go around.

mark.woods@jacksonville.com

Original here

Obama's standing army

Barack Obama’s election campaign runs on and on


IN 1980 Sidney Blumenthal published a book entitled “The Permanent Campaign”. One of the main reasons that Barack Obama beat Mr Blumenthal’s favoured candidate, Hillary Clinton, was because he promised a new kind of post-partisan politics, supposedly above all that continual warfare. Now that the election is over, however, he is proving to be just as keen on the “permanent campaign” as anybody else in politics.

Mr Obama is currently deploying the formidable resources he built up during his campaign—including contact details for 10m donors, supporters and volunteers—to sell his policies. David Plouffe, the man who managed Mr Obama’s presidential campaign, has sent millions of e-mails to encourage them to support the White House’s agenda.

One of them contains as good a definition of the permanent campaign as any: “In the next few weeks we’ll be asking you to do some of the same things we asked of you during the campaign—talking directly to people in your communities about the president’s ideas for long-term prosperity.” Another, which includes a video of the president, asks supporters to put pressure on their congressman to pass Mr Obama’s budget, by calling his or her office and reciting a little pro-Obama speech.

Mr Obama frequently looks like a man in campaign mode. He has delivered a striking number of speeches in swing states which he needs to retain in 2012, for example. Democratic pressure groups are also fuelling the campaign atmosphere. MoveOn.org has sent millions of e-mails talking up Mr Obama’s budget as “ambitious, amazing and unapologetically progressive”.

Apart from singing the virtues of the president’s policies, his allies are also busy demonising the other side. The aim is to present the Republicans as the party of “no” and as the puppet of unpopular figures such as Rush Limbaugh. When Dick Cheney suggested, on March 15th, that Mr Obama’s policies were making the country less safe, Robert Gibbs, the president’s press secretary, immediately shot back: “Well, I guess Rush Limbaugh was busy, so they trotted out the next-most-popular member of the Republican cabal.”

Why is Mr Obama abandoning one of his central election pledges? Partly because he is surrounded by hard-nosed strategists, such as David Axelrod, who excel at campaigning. But also because he is worried about his political momentum. The administration’s difficulties with various nominees have created an unfortunate impression of incompetence. His poll numbers are sliding. And the combination of pork-stuffed legislation and scandal-riven bail-outs threatens to create a populist backlash.

Original here

Has a ‘Katrina Moment’ Arrived?

By FRANK RICH

A CHARMING visit with Jay Leno won’t fix it. A 90 percent tax on bankers’ bonuses won’t fix it. Firing Timothy Geithner won’t fix it. Unless and until Barack Obama addresses the full depth of Americans’ anger with his full arsenal of policy smarts and political gifts, his presidency and, worse, our economy will be paralyzed. It would be foolish to dismiss as hyperbole the stark warning delivered by Paulette Altmaier of Cupertino, Calif., in a letter to the editor published by The Times last week: “President Obama may not realize it yet, but his Katrina moment has arrived.”

Six weeks ago I wrote in this space that the country’s surge of populist rage could devour the president’s best-laid plans, including the essential Act II of the bank rescue, if he didn’t get in front of it. The occasion then was the Tom Daschle firestorm. The White House seemed utterly blindsided by the public’s revulsion at the moneyed insiders’ culture illuminated by Daschle’s post-Senate career. Yet last week’s events suggest that the administration learned nothing from that brush with disaster.

Otherwise it never would have used Lawrence Summers, the chief economic adviser, as a messenger just as the A.I.G. rage was reaching a full boil last weekend. Summers is so tone-deaf that he makes Geithner seem like Bobby Kennedy.

Bob Schieffer of CBS asked Summers the simple question that has haunted the American public since the bailouts began last fall: “Do you know, Dr. Summers, what the banks have done with all of this money that has been funneled to them through these bailouts?” What followed was a monologue of evasion that, translated into English, amounted to: Not really, but you little folk needn’t worry about it.

Yet even as Summers spoke, A.I.G. was belatedly confirming what he would not. It has, in essence, been laundering its $170 billion in taxpayers’ money by paying off its reckless partners in gambling and greed, from Goldman Sachs and Citigroup on Wall Street to Société Générale and Deutsche Bank abroad.

Summers was even more highhanded in addressing the “retention bonuses” handed to the very employees who brokered all those bad bets. After reciting the requisite outrage talking point, he delivered a patronizing lecture to viewers of ABC’s “This Week” on how our “tradition of upholding law” made it impossible to abrogate the bonus agreements. It never occurred to Summers that Americans might know that contracts are renegotiated all the time — most conspicuously of late by the United Automobile Workers, which consented to givebacks as its contribution to the Detroit bailout plan. Nor did he note, for all his supposed reverence for the law, that the A.I.G. unit being rewarded with these bonuses is now under legal investigation by British and American authorities.

Within 24 hours, Summers’s stand was discarded by Obama, who tardily (and impotently) vowed to “pursue every single legal avenue” to block the bonuses. The question is not just why the White House was the last to learn about bonuses that Democratic congressmen had sought hearings about back in December, but why it was so slow to realize that the public’s anger couldn’t be sated by Summers’s legalese or by constant reiteration of the word outrage. By the time Obama acted, even the G.O.P. leader Mitch McConnell was ahead of him in full (if hypocritical) fulmination.

David Axelrod tried to rationalize the lagging response when he told The Washington Post last week that “people are not sitting around their kitchen tables thinking about A.I.G.,” but are instead “thinking about their own jobs.” While that’s technically true, it misses the point. Of course most Americans don’t know how A.I.G. brought the world’s financial system to near-ruin or what credit-default swaps are. They may not even know what A.I.G. stands for. But Americans do make the connection between their fears about their own jobs and their broad understanding of the A.I.G. debacle.

They know that the corporate bosses who may yet lay them off have sometimes been as obscenely overcompensated for failure as Wall Street’s bonus babies. As The Wall Street Journal reported last week, chief executives at businesses as diverse as Texas Instruments and the home builder Hovnanian Enterprises have received millions in bonuses even as their companies’ shares have lost more than half their value.

Since Americans get the big picture of this inequitable system, that grotesque reality dwarfs any fine print. That’s why it doesn’t matter that the disputed bonuses at A.I.G. amount to less than one-tenth of one percent of its bailout. Or that CNBC — with 300,000 viewers on a typical day by Nielsen’s measure — is a relatively minor player in the crash. Or that Edward Liddy had nothing to do with A.I.G.’s collapse, or that John Thain, of the celebrated trash can, arrived after, not before, others wrecked Merrill Lynch.

These prominent players are just the handiest camera-ready triggers for the larger rage. Passions are now so hot that even Bernie Madoff’s crimes began to pale as we turned our attention to A.I.G.’s misdeeds, just as A.I.G. will fade when the next malefactor surfaces.

What made Jon Stewart’s takedown of Jim Cramer resonate was less his specific brief against CNBC’s cheerleading for bad stocks than his larger indictment of the gaping economic inequality that defined the bubble. As Stewart said, there were “two markets” — the long-term market that Americans earnestly thought would sustain their 401(k)’s, and the fast-moving, short-term “real market” in the back room where high-rolling insiders wagered “giant piles of money” and brought down everyone with them.

No one is more commanding on this subject than our president. In his town-hall meeting in Costa Mesa, Calif., on Wednesday, he described the A.I.G. bonuses as merely a symptom of “a culture where people made enormous sums of money taking irresponsible risks that have now put the entire economy at risk.” But rhetoric won’t tamp down the anger out there, and neither will calculated displays of presidential “outrage.” We must have governance to match the message.

To get ahead of the anger, Obama must do what he has repeatedly promised but not always done: make everything about his economic policies transparent and hold every player accountable. His administration must start actually answering the questions that officials like Geithner and Summers routinely duck.

Inquiring Americans have the right to know why it took six months for us to learn (some of) what A.I.G. did with our money. We need to understand why some of that money was used to bail out foreign banks. And why Goldman, which declared that its potential losses with A.I.G. were “immaterial,” nonetheless got the largest-known A.I.G. handout of taxpayers’ cash ($12.9 billion) while also receiving a TARP bailout. We need to be told why retention bonuses went to some 50 bankers who not only were in the toxic A.I.G. unit but who left despite the “retention” jackpots. We must be told why taxpayers have so little control of the bailed-out financial institutions that we now own some or most of. And where are the M.R.I.’s from those “stress tests” the Treasury Department is giving those banks?

That’s just a short list. In general, it’s hard to imagine taxpayers shelling out billions for a second bank bailout unless there’s a full accounting of every dime of the first, and true transparency for the new plan whose rollout is becoming the most attenuated striptease since the heyday of Gypsy Rose Lee.

Another compelling question connects all of the above: why has there been so little transparency and so much evasiveness so far? The answer, I fear, is that too many of the administration’s officials are too marinated in the insiders’ culture to police it, reform it or own up to their own past complicity with it.

The “dirty little secret,” Obama told Leno on Thursday, is that “most of the stuff that got us into trouble was perfectly legal.” An even dirtier secret is that a prime mover in keeping that stuff legal was Summers, who helped torpedo the regulation of derivatives while in the Clinton administration. His mentor Robert Rubin, no less, wrote in his 2003 memoir that Summers underestimated how the risk of derivatives might multiply “under extraordinary circumstances.”

Given that Summers worked for a secretive hedge fund, D. E. Shaw, after he was pushed out of Harvard’s presidency at the bubble’s height, you have to wonder how he can now sell the administration’s plan for buying up toxic assets with the help of hedge funds. It will look like another giveaway to his own insiders’ club. As for Geithner, people might take him more seriously if he gave a credible account of why, while at the New York Fed, he and the Goldman alumnus Hank Paulson let Lehman Brothers fail but saved the Goldman-trading ally A.I.G.

As the nation’s anger rose last week, the president took responsibility for what’s happening on his watch — more than he needed to, given the disaster he inherited. But in the credit mess, action must match words. To fall short would be to deliver us into the catastrophic hands of a Republican opposition whose only known economic program is to reject job-creating stimulus spending and root for Obama and, by extension, the country to fail. With all due deference to Ponzi schemers from Madoff to A.I.G., this would be the biggest outrage of them all.

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