Sunday, October 31, 2010

Understanding the financial mess

Several months ago I read another informative, amusing, and at times exciting book by Michael Lewis: The Big Short. This is all about the economic crisis brought about by the securitization of subprime mortgages. It describes how a handful of people saw through the fraud and instability of the new financial "derivatives" and were able to make a lot of money by betting against most of Wall Street -- mostly by using Credit Default Swaps. (These are akin to insurance policies on securities, and were disastrously issued by companies like AIG.)

Mr. Lewis is the author of other enjoyable and instructive books on finance, including MoneyBall and Liar's Poker. I highly recommend them.

Also, today's NY Times has a column by Yves Smith pointing out that it is the self-inflicted wounds of Wall Street and investment banking -- in particular, the rapacious mortgage and mortgage securitization profiteers -- that is largely responsible for the current skyhigh unemployment rate. Big money apologists have been trying, as usual, to "blame it on the victims" by declaring that the unemployed are simply unqualified to hold down jobs in the "new economy." This invention of "structural unemployment" is as phony as a $3 bill as Mr. Smith points out.

Saturday, October 30, 2010

Diane Ravitch on Charter Schools

This is one of the best articles on education and schools I've read in a long time: Diane Ravitch writing in "The New York Review of Books": The Myth of Charter Schools. Read it and share it!

Thursday, October 28, 2010

Obama on the Daily Show

I watched Obama on the Daily Show, and thought that his appearance pretty much highlighted what is good about him, but also what is very disappointing and harmful to his administration.

First of all, he is well-spoken and reasonable. That, combined with the disillusionment (to put it mildly) of the electorate with the Bush administration, enabled him, and an unusual number of Democrats, to get elected in 2008. Also, this large Democratic majority enabled the passage of some really good legislation including the Children's Health Insurance Plan, many parts of the healthcare reform bill, and the consumer protection bill for investors.

But the outlook soon became much grimmer, and Obama is at least partly to blame.

Jon Stewart accused him of being "timid." I'm not sure whether this is the correct word; I think I would say "not sufficiently aggressive" to the point of seeming naive. Nowhere in his interview with Stewart would he come out and say that the Republicans have savaged him and his adminstration at every turn -- even as they said they would do. Early on they made it clear that they would do all they could to make his presidency fail. And they have done exactly that. This includes voting pretty much unanimously, in both houses, against not just his programs, but against many of his appointments requiring confimation. They have held up ambassadorships and judgeships, and have threatened to filibuster every piece of his legislation. Yet, Obama couldn't seem to say anything negative about them. He kept saying that the Democrats did this and did that, and that the "system" in Washington, which includes the filibuster, is not conducive to progress. But: he couldn't bring himself to attack the Republicans by name and call them out (as he did John Boehner a few weeks ago).

This is not the way FDR would have played it. In a speech he made in Portland Oregon in 1932, he said:

"To the people of this country I have but one answer on this subject. Judge me by the enemies I have made. Judge me by the selfish purposes of these utility leaders who have talked of radicalism while they were selling watered stock to the people and using our schools to deceive the coming generation".

Obama could have said this quite aptly to Jon Stewart and the nation. The financial crisis he inherited was not some natural phenomenon, but was the result of greed and deliberately lax federal regulation of investment banking. The same people who created the crisis mostly came away rich, and are using their wealth to bankroll Republicans and Tea Screamers. Not a word of this from Obama. Some of the biggest advocates for investment banking, in fact, found their way into the Obama adminstration.

Here Stewart got in his one zinger. He began with a quote from Obama himself:

"[You said:] we can't expect different results with the same people. And I remember when you hired Larry Summers, I remember thinking, well that seems like the exact same person."

Obama replied that [we were able to ] "stabilize the system, stabilize the stock market, stabilize the economy," and "in fairness Larry Summers did a heckuva job."

With the audience already laughing as they recalled Bush's praise of his FEMA buddy "Brownie" (Michael Brown), Stewart advised: "You don't want to use that phrase, dude" !!!

(What a straight line from the President!)

BTW, speaking to Obama's timidity: A recent survey of the armed forces indicates that soldiers and their families are OK with serving side-by-side with gays. Yet the Obama administration was quick to appeal a federal court decision declaring DADT unconstitutional. Why? They claim they were worried that allowing openly gay soldiers would upset the very people that the poll indicates are OK with it. Even the troops are ahead of the government on this issue. Harry Truman didn't have a problem with anyone's sensibilities when he unilaterally integrated the armed forces by executive order in 1948. But, then, Truman, like FDR, was a real fighter.

Monday, October 25, 2010

ROTC banned?

Many of us believe that ROTC was "banned" or driven out of elite northeast colleges -- mostly Ivy Leaguers -- because of principled opposition to the military. This is not the case, as a recent NY Times Op-Ed points out. In fact, schools may not boot out either ROTC or military recruiters without facing legal consequences, including lawsuits. None of the Ivies presumed to have thrown out the military have, in fact, been sued by the military. ROTC was mainly discontinued because the Defense Department expected it to get academic credit without meeting the standards that other departments and courses of study have to meet. In fact, universities have offered to allow ROTC as an extra-curricular activity when it doesn't meet strict academic standards; the Defense Department has rejected this, and itself removed the program from schools.

There is a lot to be said for requiring academic recipients of federal dollars to allow a military presence on campus. We have to have an army which is competent, intelligent, and subject to civilian control. To the extent that ROTC and military recruiting are non-coercive, they are, it seems to me, not necessarily undesireable. To the extent that they are coecive, it is because the economic opportunity afforded many students is insufficient, and they turn to the armed forces as employers out of necessity. Finally, to the extent that the military is not competent, not intelligent, and not subject to adequate civilian control, the causes are certainly not college hostility, but lie with the military itself or with the improper relationship between Congress and the military.

Friday, October 22, 2010

More documents from WikiLeaks

The Times described and quoted from more documents released by WikiLeaks about the fighting in Iraq. Here is link.

As usual it is the civilian population which pays the greatest price in a war. This has been the case throughout recorded history as the ubiquity of the hymn text "Dona nobis pacem" bears witness. The great lesson is that war is almost always bad, and those who advocate it usually lie. In America those who oppose war are suspect and the burden of proof somehow rests on them -- exactly the opposite of what should be the case. It is very likely that had actual votes been taken -- either here or abroad -- the large majority of people polled would have opposed intervention in the most recent wars.l Because of this, Americans (and others) are not allowed to vote on wars. Our Constitution requires a declaration of war by the Senate, but that hasn't happened since WWII (after Pearl Harbor).

I think it is safe to say that, except for WWII, there has not been anything close to a morally justifiable war that the U.S. has fought -- since the Civil War. I am not a pacifist, but my standard reaction to calls for deployment of U.S. troops is "NO: you are lying." This reaction has been the correct one during my lifetime...

(During the Vietnam War the military published "body counts" which recorded the number of "Viet Cong" killed. In the recent wars in Iraq and Iran they're called "insurgents." How do they know that the bodies that are retrieved fit these descriptions? Do they find ID cards that say "Communist" or "Insurgent"? Who checks on the accuracy of these designations? In other words, how do we know that they weren't and aren't lying? In fact, all evidence suggests that these counts were and are mostly lies -- or, to be charitable, pretty inaccurate.)

Thursday, October 21, 2010

Why workers dump Democrats: Part II

The second reason that Democrats are unpopular is that they have no real message or ideology, and hence no unified propaganda. With the Republicans it is easy: they represent the interests of the rich, but they uniformly put on a "populist" face, saying that they are against big government and for the ordinary guy: "Joe Sixpack". That this is a lie is patently obvious to anyone who takes a moment to analyze what they have voted for and against, and who their big contributors are; yet, many people don't spend even ten minutes putting two and two together.

The Democrats, on the other hand, don't even have a uniform ideology or story, whether fact or phony. They trot out programs maybe, but no real principles. For example, Harry Reid in his Nevada campaign, seems incapable of defending the elimination of Bush tax cuts for the wealthy, or healthcare reform, in terms of any general principles such as fairness or defense of the middle or working classes. He can't seem to talk about who is to blame for our recession, other than Bush -- as if Bush did what he did for himself and his family alone. While the Republicans and Tea Screamers decry the "socialist" Democrats, the Democrats can't seem to bring themselves to call the Republicans what they are: the Party for The Rich.

The Republicans had their Contract for America (Gingrich) and their new something-or-other. The Democrats have ... nothing. They don't talk about the New Deal anymore, or the Fair Deal, or any kind of Deal.

The Democrats aren't really a party. Although they were outmaneuvered by the Republicans at the time of Nixon and gave up the South (good riddance to the Dixiecrats!), they still have too big a tent, one which includes Ben Nelson, Joe Lieberman (who supported George Bush), Blanche Lincoln, Mary Landrieu and the Blue Dog caucus in the House. These people are far less likely to take a progressive stance than, say, the two Maine senators are to hew to obstructionist Republican positions. When push comes to shove, Olympia Snowe and Susan Collins vote with their party.

Maybe it was the decades of red-baiting, or the loss of the racist Dixiecrats, or the pervasiveness of corporate money, or simply a failure to think about basic issues and discipline. Whatever, the Democrats don't really stand for anything. They simply can't defend their disorganized stances on taxes (when ane why are they good?), healthcare (remember the jettisoning of the popular "Public Option" ?) or the military (did the party every object to a war? Why can't it end DADT?) in terms of any general principles.

Every movement, in order to become a "mass movement", must have some easily described overall belief or ideology; it must also be able to sell that ideology with a decent propaganda machine. For all its supposed connections with Hollywood and with artists, the Dems simply can't mount a good PR campaign. The Republicans have had the best films and ads and one liners. Remember Dukakis and the tank? Remember John Kerry the windsurfer? (Perhaps the most effective and brilliant political video ever.) Remember Sarah Palin saying "How's that Hopey Changey stuff workin' out for ya?"?

Many were excited when Obama was elected president. It has now become clear that although his excellent organization was an important factor, an even more important reason for his success was the total unpopularity of George Bush after 8 years as President. Yet: we still have Don't Ask Don't Tell; we still have Gitmo, we still have Wall Street traders getting rich(er), and we have the Republicans escaping to once again become a ruling party. The Democrats could never point out exactly what and why the PTR (formerly the GOP) did wrong, because the Dems either didn't know or couldn't bring themselves to say it.

A lot of folks are scared (with good reason). A lot of folks didn't and don't pay attention. A lot of folks have very short memories. And: a lot of folks are kind of dumb and don't read and don't think. But that's what we have to work with. The Democrats don't seem to get this and can't seem to work with this. Maybe it's impossible for reasonable, sympathetic and well-meaning people to retain power in this country (or any country). Solutions to complex problems are pretty hard to explain in simple terms, after all. That's why the conservative movement is so successful: it's answer to these problems is Guns, Gays and God -- and Tax Cuts of course. Can't the Dems come up with something?

Saturday, October 16, 2010

Wiki leak wasn't all that bad after all

The Pentagon, according to the AP, has concluded that "No US intelligence sources or practices were compromised by the posting of secret Afghan war logs by the WikiLeaks website."

The Obama adminstration, including Defense Secretary Robert Gates, was all worked up over the leaks when they first appeared. Standard Operating Procedure for this adminstration is that the point of view of the usual powers-that-be is given, least initially, more credence than the views of non-establishment people: exactly the opposite of what Obama promised would happen when he campaigned. This behavior is also evident with the DADT policy against gays in the military. The administration has been distressingly quick to appeal a court decision declaring the policy unconstitutional -- even though Obama campaigned against Don't Ask! No Republican administration would have ever compromised its stated principles in this way. That's another reason why the Democrats are so despised. (See the next installment on why we dump on Democrats, coming soon).

Wednesday, October 6, 2010

Why workers dump Democrats: Part I

Recent polls claim -- and I have no reason to doubt them -- that the Democratic Party is being hammered by white working-class Americans. This has happened before, most notably in the early 80's with the "Reagan Democrats" and in the late 80's with the same folks going for Bush Sr. Interestingly enough, the same voters returned to the Democrats and "Bubba" Bill Clinton (Rhodes Scholar; Yale Law 1973).

Why have these voters periodically dumped the Democrats in favor of the Party for The Rich? Much has been written on this subject, for example Frank's "What's the Matter With Kansas."
I'd like to summarize some of the reason that the Republicans have been so successful in getting American workers to vote for them, in spite of the fact that the Republicans represent the elite wealthy classes.

This installment (more next week) gives what I think is the most important reason: The Democrats have been so sorely red-baited that they are incapable of talking about the most important issues of Economics and Class. Everyone knows that the Republicans are the party of the wealthy. This has been true almost since their creation, when they split from the Whigs in mid 19th century. They favored railroads, banks and northern commercial interests and this became even more pronounced during the 20th century. The Democrats, with the longer history dating back to Jefferson and colonial times, generally represented rural/agricultural interests (definitely anti-banker). After the Civil War they became the natural party of the South since the Republicans were still associated with the hated -- by many whites -- Abraham Lincoln. Below the Mason-Dixon line the Democratic Party represented raw racism and segregation.

At the end of the 19th century came the fierce labor struggles, with Grover Cleveland calling out the National Guard in 1894 to break the Pullman strike, and then the presidential election of 1912 with E. V. Debs getting over 900,000 votes on the Socialist ticket. (He did it again in 1920 while a prisoner in a federal jail for his outspoken agitation against America's participation WW I.) The success of the Communists in Russia made the elite classes in America and Europe very nervous indeed; so did the growth of their homegrown labor movements. The result was the beginning of their desparate attempt to fight the unions and the socialist party: the beginning of the perpetual "Red Scare" acknowledged a threat to them far more serious than "Reefer Madness", contraception, or even Women's Suffrage. Thus was born red-baiting, the main tool that the Republicans, the party of the wealthy, wielded in its attempt to retain power in American political life.

While the captains of industry hated unions and fought them by all means available, including force, the U.S. government itself was not neutral, but sided with the the anti-union forces time and again. -- I've already cited Grover Cleveland's actions above. I don't have time to go into details; there are hundreds of books on labor history available: a new one is called "There is Power in a Union." I haven't read it yet but there is a favorable review here: In These Times.

On the other hand, the various socialist and anarchist parties in the U.S. as well as the Communist Party U.S.A. were whole-heartedly in support of the union movement. This enabled the anti-labor forces to tie the unions to the socialists and communists. In fact, they did the same for anyone who made pro-union statements; this is what red-baiting was and still is about: a way to fight proponents of social justice by smearing them with charges of pro-communism.

With the failure of Republicans Coolidge and Hoover to stem the Great Depression, the labor movement and even socialism became more significant factors in the U.S. Whatever his other motivations were, F.D.R., unlike the Republicans and even most Democrats, realized that government opposition -- legal and military -- to workers' rights might be seriously counter-productive. With the New Deal, Social Security, and the National Labor Relations Act (1935) Roosevelt instituted some of the basic worker-friendly institutions to American life, and may even have saved the capitalist system here. Unfortunately, he also gave the wealthy elite and its Party the opening to apply red-baiting to the Democrats (and any party or group that supported New Deal-like social programs).

One of the great faults of the Democratic party (and parts of organized labor) is that it never had the guts to come to terms with red-baiting. In fact, it periodically tried to purge itself of members who were "too left." That was one of the raps against Hubert Humphrey and George Meaney (of the AFL). Instead of pointing out proudly, over and over, what America gained from the militancy of the labor unions (child labor laws, 8 hour day, workplace safety, end of sweatshops etc.), and attacking labor's foes, it shamefully tried to point out over and over that it hated commies and socialists as much as the Republicans did. This defensive strategy never worked, and over the years working people forgot what the labor movement had accomplished, but carried the association of Democrats with defensiveness weakness -- especially after Roosevelt and Truman were gone. On the other hand, Republicans never disavow their friends, no matter how greedy, racist or homophobic. The result is that everyone knows, especially working people, that the Dems are wimps -- even if they can't exactly remember why.

(Here's a typical example of Democratic wimpiness. In the first presidential debate of 1988, Bush Sr. complained that Michael Dukakis -- his very forgettable opponent -- was a "card-carrying member" of the ACLU. The moderator probably recalling the old Joe McCarthy line "card-carrying member of the Communist Party", questioned Bush on what was wrong with that. Bush simply listed positions of the ACLU with which he disagreed, throwing in a lot of references to porno and X-rated movies etc. Dukakis was given time to comment. He spent all his time saying how what a loyal American he was etc. etc., and never once mentioned the ACLU and why he supported it. You can read it here.)

Tuesday, October 5, 2010

Acceptible Republicans?

There is no such thing as an "acceptible" Republican. Yes it's true that the positions of a few members of PTR (formerly the GOP) on a few issues are comparable to those of a few Democrats; e.g. I think of the two Republican senators from Maine. However, when push comes to shove they tend to vote with their party. For example, both Maine senators opposed the healthcare reform bill and the bill to make corporations and other large sponsors of ads identify themselves (in the wake of the Supreme Court's decision in the Citizens United case).

Furthermore, any Republican rep or senator could be the one that puts the PTR over the top and gives it control of one or both houses of Congress.

The PTR has been a force uniformly supporting big business over small business and workers, an unstinting opponent of regulation, a consistent opponent of science and friend of the religious right, a consistent climate-change deny-er. Also, it has claimed to be against big government and for the rights of individuals, but in every case, when push comes to shove, it has voted exactly the opposite. Every Supreme court justice nominated in recent decades by the Republicans has favored big companies over individuals and oppressive laws over the rights of individuals (though not the "rights" of corporations). It has consistently thrown money at the military, even for programs the military doesn't need and doesn't want.

Over the last few decades the history of the party on minorities has been terrible. It has consistently opposed gay marriage and cozied up to fundamentalist religious sects that believe homosexuals are sinners and will be damned; it has endorsed the worst of the Tea Screamers and their extreme no-nothing positions on immigration and government. These anti-people attitudes as well as the racist and homophobic rants of people like Rush Limbaugh (effectively the offical spokesman for the PTR and right-wing) have created a climate of hate that enabled recent physical and cyber attacks on gays and the verbal and even physical abuse of perceived liberals (including a few members of Congress).

While the Democrats are not, in general, great bargains, their hearts are in the right place; this cannot be said of the Party for The Rich. There is no excuse for voting for any of them.

BTW: Russ Feingold of Wisconsin needs all the support we can give him; we just sent him some money. He is the real thing (though I don't agree with him 100%).

Monday, October 4, 2010

Friedman and Krugman: 2 third-party visions

Last week (9/28) Tom Friedman's column discussed the desireability of a true third party in the U.S. He said that the will was there, and that all that was needed was a leader who could capture the imagination of all the disgruntled "citizens from centrist Republicans to independents right through to centrist Democrats". Poor Tom: as usual his heart is sort of in the right place, but his brain is not fully activated. It was that way when he supported Bush's war in Iraq: all that was needed was for U.S. troops to install democracy in one state -- Iraq -- and the rest of the middle-east would soon come around. He knows: he heard it on the (Arab) "street" (as he put it). (Does Friedman actually speak Arabic?)

Today, (10/3) Paul Krugman brings us down to earth. He points out that with an easy flick of its wrist, the billionaire's club called the "conservative movement," spearheaded by the Koch family and presented by the Fox ministry of propaganda, easily took over the Tea Screamer movement. The so-called "centrists", who have discovered their anger but not books and newspapers, and never seem to master the history of events even as recent as a few years ago, easily became opponents of Social Security and healthcare reform and proponents of tax breaks for multi-millionaires and de-regulation. So much for third party viability.

Consumers and "comparative effectiveness"

Merrill Goozner's GoozNews, a healthcare letter I've recommended before, reports that the GAO has appointed the 17 representatives to the advisory board that oversees Comparative Effectiveness Research on drugs. The 3 so-called "patient and consumer representatives" are not exactly that. One has strong ties to the insurance industry and the other two have been advocates for "fast tracking" of medicines. It seems almost impossible for the Washington establishment to actually include real consumer advocates on any bodies that have real power. It would have been nice to see at least one rep from, say, the Center for Science in the Public Interest (CSPI) or some other group that actually represents consumers' and not industrial or insurance interests.

Friday, October 1, 2010

Harrassment, suicide and the right wing

The recent suicide of Tyler Clementi, and the previous one of Phoebe Prince were both associated with "cyberbullying". However, using computers and the Internet are just means for the harrassment of defenseless individuals by groups that consider themselves in the majority or in the "mainstream."

I blame a lot of this harrassment on the "social conservatives" and their party of choice, the Republicans. The P.T.R. and the conservatives have time and time again taken anti-gay and anti-privacy positions, legislatively, judicially, and verbally. They have fought against and derided equal employment laws -- equal pay for equal work -- and against anti-discrimination statutes. They have mocked the women's movement and gays consistently, and have supported fundamentalist positions denying personhood to gay people and limiting women to subservient social and economic positions. (I'm not even going to talk about slimeballs like Rush and Newt and the talk radio jerks, who personally bully people every day from their positions of power.)

Even while they have denied this, right-wingers have refused to repudiate bullying attacks on individuals and certain minorities since the groups advocating these positions have been major partners in their electoral and financial coalition. When a single major party effectively denies equal protection to a group of Americans, they must be held responsible for those who follow their hint and attack these people, whether physically, verbally, or economically. Of the political parties, the Republicans and only the Republicans must take a large portion of the blame for the cruel and un-American acts daily perpetrated on our fellow citizens who happen to be powerless and/or belong to minority groups.

Just listen to their sneering references to "do-gooders" and "bleeding hearts" and "PC police." That's where they're coming from, and their disdain provides the cue for the vile actions we read about with increasing frequency.