Strange Bedfellows

In the LA Times today, Dean Baker has co-authored an op-ed with Kevin "Dow 36,000" Hassett. So a guy who was right about (almost) everything is paired up with a guy who's been wrong about (almost) everything. This has serious implications for the space-time continuum.

Democrats locking horns on financial reform are in a pickle. As Politico reports today, some Dems with a hand in crafting the Senate's Wall Street overhaul have begun to doubt whether a Memorial Day deadline is at all realistic for delivering a bill to President Obama. And they're probably right: That would mean a majority in the Senate agreed to a politically palatable bill, passed it, then both the House and Senate reconciled their two pieces of legislation and sent the combined bill to the president. In a little under two months. When it took the Senate banking committee, led by Sen. Chris Dodd (D-CT), far longer just to get out of committee.

The fear among Democrats, the Politico story highlights, is that a May 31 deadline, which the administration put in place, will imbue financial reform talks with the same partisan flame-throwing that so marred the health care debate. Ditching the deadline, worried Dems say, could allow for improved negotiations and a better shot at a bipartisan financial reform bill. It might also blunt the public blowback seen with the health care bill's passage. A number of outsiders—lobbyists, former government officials—quoted in the Politico story say the deadline was more a rhetorical flourish than anything, an effort by Obama and Co. to keep Congress' talks moving at a rapid clip.

Not only that, but there's the fear that any major legislation considered after Memorial Day will be overtaken by campaigning for the looming fall elections. That's certainly true for vulnerable Dems—those who voted for health care, for instance—who'll be spending much of the second half of 2010 clawing to keep their seat and, inevitably, less concerned about systemic risk and capital restrictions and consumer protection agencies. It's sad, but a reality—especially in what's shaping up to be a tough midterm election for Democrats, among them those fighting for financial reform.

Of course, no one who's closely followed financial reform believes the Memorial Day deadline means anything. After all, Dodd said early last year that he expected a financial bill to be completed by year's end. Well, it's April 2010, and the full Senate hasn't even begun talks. What remains to be seen, and what really matters, is whether the Democratic leadership will be able to juggle writing new financial reforms and helping party members campaign to keep their seats. It's a balancing act that could land them what they want on both accounts.

For months now, Sens. John Kerry (D-Mass.), Lindsey Graham (R-SC), and Joe Lieberman (I-Conn.) have promised to deliver a climate bill in the "coming weeks." They've delayed the release repeatedly in order to continue the delicate negotiations needed to marshal 60 votes in the Senate. The three lawmakers now say they plan to introduce their bill the week of Earth Day, April 22. But have they already run out of time?

The biggest challenge to passing a climate bill in the Senate is the bloc of legislators agitating to move forward with an energy bill that has already been approved by the Energy and Natural Resources Committee. That bill had bipartisan support, but don't mistake it for climate legislation. Its targets for clean energy are comparatively weak and it includes handouts, rather than restrictions, for fossil-fuel industries. Most importantly, it places no firm limit on carbon pollution. The bill's author, Jeff Bingaman (D-NM), has maintained that he'd like to see his bill combined with a cap. But it appears he's growing tired of the endless wait for the Kerry-Graham-Lieberman legislation and skeptical that it can attract sufficient support to pass.

Senate Majority Leader Harry Reid has called for a comprehensive bill. But last week, his office started sending clear signals to the climate troika: time is running out. The Washington Post reports that Reid is starting to put some pressure on the trio. "We have to be making final decisions soon," Reid spokesman Jim Manley told the Post. If there's no comprehensive bill soon, leadership seems likely to advance the energy-only bill.

Then there are the logistical constraints. There are 15 working weeks left before elections (Congress is in recess at the end of May, the first week of July and from August through Labor Day.) A climate and energy bill also requires five to six weeks of review by the Environmental Protection Agency. Most Senate observers admit that if a comprehensive bill isn't ready for consideration by Memorial Day (May 31), it probably won't be taken up. Legislation could be debated in June, but by July we'll be entering election season, where Congress' willingness to take risks plummets to new lows.

The energy-only approach may be more expedient. But it, too, could face major hurdles. Environmental groups have made it clear they won't back a bill that doesn't address the problem of global warming, and a number of senators have pushed for a vote on a comprehensive bill this year. Even Lindsey Graham has expressed doubts about the energy-only route. "I'm not going to ask the environmental community to accept a compromise that doesn't in a serious way deal with our carbon pollution problems," he said earlier this year.

With April now well underway and still no sign of the Kerry-Graham-Lieberman bill, time is running out fast.

Should the Fed have done more to fight the housing bubble of the past decade? Dean Baker says yes, Brad DeLong says probably not, and Matt Yglesias comments:

I have no opinion on how much monetary policy influenced the bubble or could have counteracted it. I know economists don’t like to talk about this sort of thing, but if you ask me the biggest influence policymakers had on the bubble wasn’t so much what they did as to an extent what they said.....Throughout this period, Alan Greenspan and Ben Bernanke were extremely famous, very well-known public officials charged with economic policy. If Greenspan had said something like “seems to me that price:rent ratios are totally out-of-whack and bubbly, so even though I’m not convinced there’s anything the Fed can do to pop a bubble in the housing market, I’m going to put my house on the market and start renting while the going is good” I think that would have made a big difference in the common understanding of what was going on.

I think what's missing from this discussion is what else the Fed could have done. Yes, they could have raised interest rates earlier and faster, but as Brad points out, that's a blunt instrument that would have hurt the wider economy — and in any case, when they did finally raise short-term interest rates it had precious little effect on longer-term rates. Likewise, Greenspan and Bernanke could have jawboned more, but that might or might not have had any real effect.

But what about everything in between? After all, the Fed regulates banks and it regulates mortgage loans. Would commercial banks have been able to shovel so much leverage off their balance sheets if the Fed had glommed onto what they were doing and prohibited it? What if the Fed had decided to regulate overdraft fees as loans, putting a big dent in the credit/debit card frenzy of the aughts? What if the Fed had taken a tough stance against deceptive mortgage practices, as consumer groups continually begged them to do based on FBI reports that such practices were rampant? What if they had performed more vigorous oversight of bank affiliates — Wells Fargo Financial, CitiFinancial, Countrywide Home Loans, etc. — that played such a big role in the subprime bubble? And keep in mind too that the Fed also has considerable influence over other regulators. Would the SEC have lowered capital limits on investment banks if the Fed had vigorously opposed it?

I haven't read Dean's book yet, and it might go into all this stuff. But just for the sake of the immediate conversation, I want to point out that raising interest rates was far from the only possible response by the Fed to the credit bubble. They probably couldn't have stopped it completely, but if they had seen it coming they had plenty of tools in their toolkit to keep it from spiraling out of control the way it did.

Imagine if President Barack Obama hit the podium one day and griped, "My critics are tougher on me because I'm a black man." Ka-booomb! We'd have the mother of all-about-race political-media circuses. TV pundits would explode. Limbaugh and Beck would fly into higher orbits of outraged craziness. Editorial pages would be crammed with reax. The nation would go nuts.

GOP leader Michael Steele said essentially the same thing on Monday about himself, but it's unlikely that he'll detonate such a nuclear daisy chain—because so many people already expect him to make dumb remarks.

On Good Morning America, Steele had this exchange with host George Stephanopoulos: 

STEPHANOPOULOS: As an African American, do you have a slimmer margin for error than another chairman would?

STEELE: The honest answer is: Yes.


STEELE: It just is. Barack Obama has a slimmer margin. We all -- a lot of folks do. I mean, it's a different role for me to play and others to play. And that's just the reality of it. But you take that as part of the nature of it....My view of politics is much more grassroots-oriented. It's not old-boy-network-oriented. And so I tend to come at it a little bit stronger, a little bit more streetwise, if you will. That's rubbed some feathers the wrong way.

Though Steele has bumbled much as GOP chieftain, he says his precarious position there is partly due to the color of his skin. Whatever happened to the Republican obsession with race-blind performance? And it may well be that if a white guy had pulled the same boneheaded moves as Steele, he'd be out by now. In any event, Steele is using race as a shield against the growing criticism targeting him. Fortunately, he doesn't have the standing—or seriousness—to trigger a nationwide over-reaction.

Last week, Huffington Post's Sam Stein looked into the results of a new Gallup Winston Group poll of members of the "Tea Party." As it turns out, Tea Partiers are mostly white, mostly older, and very conservative. They get their news from Fox, of course. Digby says this should be obvious "to anyone with eyes." Marc Ambinder, reporting on a Gallup poll that was released on Monday, takes the analysis a step further*:

Pay attention to terminology: it's true that just half of those Tea Parties surveyed called themselves Republicans. Yes, the lion's share of the other half say they're independent. But they're not: they're Republican-oriented conservative voters who are dismayed by the direction of the GOP and who don't want to identify with the party's brand. That's not surprising, given how tarnished that brand is. Only 8% identify as Democratic; 7% identify as liberal; 70% percent identify as conservative; two-thirds are pro-life; nearly 90% were opposed to the health care bill.

Ambinder adds that Gallup should have asked for respondents' views on Obama ("is he a socialist?"), immigration, and race, and sought responses on policy questions (i.e., "do they support a 'fair tax'"). Those are great suggestions, but I wanted to add a few more data points to this discussion.

The first is a story from Monday's New York Times reporting that Tea Partiers have made Sen. Harry Reid (D-Nev.), the Senate majority leader, their "No. 1 Target" for November. That shows that while Tea Partiers often claim that they are not Republicans, they happen to share the same electoral goals as the institutional GOP.

The second point is that while the Tea Partiers' anger and frustration are certainly real, the movement has been helped along by Fox News' active promotion and gobs of GOP money. The Tea Party Express, which is highlighted in the Times story about Reid, is run by the Our Country Deserves Better PAC. As the Washington Independent's Dave Weigel has reported, OCDB's leadership is chock-full of professional GOP operatives, including Republican political consultant Sal Russo. (The Times doesn't see fit to mention the GOP connection until about two-thirds of the way into the story.) Howard Kaloogian, a former California assemblyman who ran the 2003 recall campaign against former California Governor Gray Davis in 2003, is also affiliated with OCDB. As Arnold Schwarzenegger fans know, Kaloogian's quixotic recall campaign eventually succeeded—with the help of boatloads of money from GOP Rep. Darrell Issa.

Two other big GOP-affiliated groups have helped the Tea Parties gain national prominence. The first is FreedomWorks, which is run by former (Republican) Senate majority leader Dick Armey. FreedomWorks promotes Tea Party events, sets up websites for activists, provides talking points and media training, and holds conference calls for Tea Party leaders. FreedomWorks' partner-in-Tea-Party-organizing is Americans for Prosperity, a conservative group run by Tim Phillips, the former lobbying partner of onetime Christian Coalition director (and Jack Abramoff scandal star) Ralph Reed. (CampusProgress and Ambinder have good round-ups of some of the work the groups have done.)

None of this is to say that the Tea Parties aren't "real." But when the Times writes about them targeting the top Senate Democrat, it should make clear up top just how deep the connections between the Tea Party and the Grand Old Party run.


On Friday, Salt Lake City and its mayor, Ralph Becker, joined the growing list of cities nationwide to ramp up protections and rights for gay, lesbian, bisexual, and transgender citizens, as the city's ban on discrimination in the workplace and in housing for the GLBT community took effect. Voicing support for Salt Lake City's new laws, in addition to gay-rights groups, was an unlikely organization: the Mormon Church. Indeed, the Mormon Church had pledged to support Salt Lake City's anti-discrimination laws as early as last fall, when a church spokesman said, "The church supports these ordinances because they are fair and reasonable and do not do violence to the institution of marriage."

The Church's support of gay rights is anything but typical. As MoJo's Stephanie Mencimer describes in her latest piece, "Game Changer," the Mormon Church has consistently, secretly battled gay marriage for several decades. And though Salt Lake City's laws have nothing to do with marriage, the Mormon Church as a gay rights ally is nonetheless startling.

Leading the effort to push back against the Mormon Church's gay marriage opposition, Mencimer writes, is a man named Fred Karger, a wily, creative, unrelenting thorn in the Mormon Church's side. A former TV actor and top GOP operative (remember Willie Horton? That was Fred), Karger is now taking his bag of political tricks into the gay marriage battle nationwide—and, in many ways, winning. The story of his transformation and battle against the Mormon Church is one you don't want to miss.

President Barack Obama's 15 recess appointments drew fire from the right last week, in particular the choice of labor lawyer Craig Becker to serve on the National Labor Relations Board. But one controversial pick flew under the radar: Obama's pesticide-pushing nominee to serve as the country's chief agricultural negotiator.

Obama's appointment of Islam "Isi" Siddiqui, a senior executive at the industry's main trade association, CropLife America, to serve as the head agricultural negotiator for the office of the US Trade Representative provoked fierce opposition from environmental, organic, and local agricultural groups. His opponents say that his close relationship with the pesticide industry should disqualify him from a role in which he will be responsible for negotiating international agreements governing the use of pesticides and genetically modified foods. More than 110 organizations, lead by the Pesticide Action Network and the National Family Farm Coalition, wrote to senators protesting his appointment.

Obama's frustration at Republican blocks on his nominees is understandable. But in this case, there was substantial opposition from more than just Republicans that merited better scrutiny before moving Siddiqui forward.

Last month I took note of the curious new genre of Tea Party-themed protest music. No musician, save for perhaps Ted Nugent, has capitalized on the conservative movement's career-building potential as successfully as Lloyd Marcus—a self-identified "black unhyphenated-American" who has headlined dozens of Tea Party rallies across the country since last spring. His stage presence, like any successful artist's, is distinctive: He sports a braided rat tail and performs in a black vest and cowboy hat. Marcus is currently touring the country with a handful of other Tea Party troubadours and conservative speakers as part of the Tea Party Express tour sponsored by Americans for Prosperity. I caught up with the singer at the tour's first stop—in Harry Reid's hometown of Searchlight, Nevada.

TM: Who would say are your biggest influences?

LM: Sammy Davis Junior, Kenny Rogers, Lionel Richie, Nat King Cole. [Laughs.] That's a bizarre combination. But, like a lot of people have called me a combination of all three. Oh! And I like Michael Jackson.

TM: Really? What's your favorite Michael Jackson song?

Have you heard Nellie McKay's tribute to Doris Day, Normal As Blueberry Pie? I had the pleasure of seeing her perform songs from this and other albums at the Great American Music Hall in San Francisco last week. Here are 10 little observations:

1. When McKay first steps out onto the stage, her strange charisma reaches me at the back of the room, at the table where I sit drinking. I sense that something special is about to take place, something unforgettable. I start to grin like an idiot, before anything has even happened. She is surely going to unravel us with her sweet and satirical musical persona. 

2. Beautiful, somewhat unhinged, raveling and unraveling, McKay appears both iconic and eccentric in youth. Her digressive flair dazzles as she moves from a sweet Doris Day number to "Sari," her piano-driven rap song, about three-quarters of the way into which she forgets a line of lyrics, laughs gamely, and simply screams, "Die motherfucker!" It calls to mind McKay's quoting Greta Garbo describing Day's curious allure: "Anyone who has a continuous smile on her face conceals a toughness that's almost frightening."

3. The girl's got pizzazz! A gift for linguistic play, a dynamic intellect, serious musical ability and style. No matter the direction this young woman veers, we're held in enchantment by that loverly voice. It guides us along.

4. Watch.       

5. McKay has written earnestly about Doris Day for the New York Review of Books, showing critical insight into her career and demonstrating what, as an iconic figure in popular culture, Day stood for: "What she possessed, beyond her beauty, physical grace and natural acting ability, was a resplendent voice that conveyed enormous warmth and feeling." In concert, the sincere commitment of McKay's homage disarms the intellect—especially as the word "resplendent" describes McKay's voice as well: supple and warm, gleaming brilliantly as it sanctifies (an ambling, almost humble "Sentimental Journey") and subverts (her own "Mother of Pearl").