Andy Kroll

Andy Kroll

Senior Reporter

Andy Kroll is Mother Jones' Dark Money reporter. He is based in the DC bureau. His work has also appeared at the Wall Street Journal, the Detroit News, the Guardian, the American Prospect, and TomDispatch.com, where he's an associate editor. Email him at akroll (at) motherjones (dot) com. He tweets at @AndrewKroll.

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The Paul Volcker Surge

| Tue Feb. 2, 2010 5:03 PM PST

After a spell in the political wilderness, where his financial reform proposals received scant attention, Paul Volcker looks to be fully back in the mix. The former Federal Reserve chairman from 1979 to 1987, Volcker now has the ear of both Obama and the current Fed chair, Ben Bernanke. According to a Bloomberg story today, Volcker met with Bernanke six times—five of which were one-on-one meetings—between January and November 2009; by contrast, Volcker met with Bernanke only once in the year before that. And it's obvious that Volcker has had plenty of contact with the top financial gurus in the Obama administration: After all, the president's push to ban proprietary trading by throwing up a firewall between commercial banks' deposits and their riskier trading operations is being called the "Volcker Rule." 

For the most part, this surge of Paul Volcker's is a good thing. Since Obama took office last year Volcker has been pushing rigorous, important reforms—reining too-big-to-fail institutions, restoring parts of the Glass-Steagall Act—but had clashed with administration officials like National Economic Council Director Larry Summers and hadn't exerted much influence despite his stature as one of the leading economists in the country. A veteran of Beltway economic policy, Volcker also appears to have little patience for powerful lobbyists like the US Chamber of Commerce or the Securities Industry and Financial Markets Association (SIFMA) who support "reform lite." And while Volcker's backing of the Fed to keep its watchdog role overseeing financial institutions and consumer protection may not be best for the country, given how poorly the Fed did that job before the crisis, his rise within the financial reform debate can only improve the odds for a bill that actually limits excessive risk-taking and tries to prevent future crises.

The Unmanned Future of US War

| Mon Feb. 1, 2010 2:15 PM PST

From land to sea, there's no mistaking that the US is heading toward a future of unmanned wars. That conclusion is one of the main take-aways from the Defense Department's 2010 Quadrennial Defense Review, released today, a detailed report that updates Congress on the Pentagon's strategies and planning. The 2010 QDR further cements the Defense Department's commitment to bolstering its fleet of unmanned combat ships, like the Reaper and Predator drones whose lethal attack missions over Pakistan and Afghanistan are one of the worst-kept secrets in all of government.

According to the QDR, everything about the military's drone armada is ramping up. The DoD plans to increase the number of Predator and Reaper drone orbits (sustained airborne missions for more than 24 hours) from 35 today to 50 in the 2011 fiscal year to 65 in 2015, a significant uptick that comes on top of the Air Force's projections that all its drones will fly 250,000 total hours this year, up from a measly 71 hours for the Reaper drone in 2004. The QDR says the Army will also increase the number of drones in every class of its fleet in the next few years, especially its souped-up Extended Range Multi-Purpose Predator.

Not to be outdone, the Navy is developing its own aerial drone, the N-UCAS built by Northrop Grumman, which could deploy from aircraft carriers around the world and expand the military's aerial reach. And as the QDR reports, the unmanned future isn't confined to the skies, either: Underway right now is a far-ranging underwater drone with strike capabilities that the Navy is developing. The QDR also vaguely hints at improvements in drone intelligence gathering capabilities, like the current "Gorgon Stare" video technology boasting 10 different cameras operating at once and a more advanced camera technology with 30 feeds at once that could come online this fall.

Interestingly, the QDR's outlook on drone warfare isn't limited to the US. DoD officials anticipate—as they logically should—that unmanned drones are quickly becoming the weapon of choice around the world, briefly noting that "non-state actors such as Hezbollah have acquired" drones and pose a threat going forward. The only question now, based on this latest QDR and other news reports, is whether future warzones will actually feature any living, breathing people at all—apart, that is, from the unfortunate bystanders living in countries like Afghanistan and Pakistan whose skies are filled with the Predators and Reapers and other drones of the future.

Watchdog: No Prayer Day for Obama, Congress

| Mon Feb. 1, 2010 9:10 AM PST

Should President Obama and members of Congress attend the annual National Prayer Breakfast, hosted by the shadowy yet extremely well-connected Christian organization The Fellowship? No way, says [PDF] the government watchdog organization Citizens for Responsibility and Ethics in Washington (CREW), who today is urging the president and lawmakers to avoid the group's entreaties and star-studded annual breakfast this Thursday. The Fellowship, also known as The Family, is headed by a spiritual confidante to government figures named Doug Coe who claims to be leading a "spiritual war" for Christ. Its acolytes have included public officials like Sen. John Ensign (R-NV), disgraced South Carolina governor Mark Sanford, and even Secretary of State Hillary Clinton, whose close ties with the Fellowship were reported by Mother Jones in 2007.

Like others who've written about the Fellowship, CREW says the secretive group uses its connections and clout to arrange meetings between US and foreign officials behind closed doors, and has told its members, like Sen. James Inhofe (R-OK), to spread the Fellowship's evangelical mission while on taxpayer-funded trips. The group's National Prayer Breakfast, CREW contends, is merely a chance for the group to draft more members into its ranks and to boost its fundraising coffers. "The president and members of Congress should not legitimatize this cult-like group—the head of which has praised the organizing abilities of Hitler and Bin Laden—by attending the breakfast," said Melanie Sloan, CREW's executive director. It's doubtful, however, whether CREW's advice will be heeded: There are no signs that Obama, who spoke at the breakfast last year and is slated to do the same on Thursday, plans to back out. 

How to Kill the Recovery

| Mon Feb. 1, 2010 6:00 AM PST

There's plenty to sink your teeth into in the latest report to Congress [PDF] from Neil Barofsky, the main bailout watchdog, including yet more questions about the Treasury and Federal Reserve Bank of New York's handling of AIG's rescue. In essence, Barofsky, whose title is special inspector general for TARP (SIGTARP), calls the Treasury hypocrites for failing to extract concessions from AIG's counterparties (like Goldman Sachs and Societe Generale) when they did just that with General Motors and Chrysler's creditors during the automotive bailout. Barofsky's report also criticizes the Treasury for failing to anticipate the backlash over AIG's post-bailout executive compensation, especially to its Financial Products division that was at the epicenter of the financial meltdown.

But arguably the most fascinating finding in the SIGTARP report is the extent to which the federal government now backstops the housing market—in short, the federal government today is the housing market. According to SIGTARP, in the past two years, the private sector has shed $1.5 trillion in mortgage assets, and it's the government who's filled that massive void. "Between net mortgage lending and existing mortgage management," the report says, "the Federal Government now completely dominates the housing mortgage market, with the taxpayer shouldering the risk that had once been borne by the private sector." As the above chart shows, the government's support of the housing market nears a staggering $11.5 trillion.

More worrying than the size of that support, without which frankly there wouldn't be a housing market, is the fact that it could be ending soon. As the Washington Post recently reported, the federal government plans to wind down some of that backing in the next couple of months, and when that time comes, officials say they hope the industry will stand on its own. But as the SIGTARP report shows, that's blind optimism; a major pullback in housing support could very well send the industry into freefall again and derail the glimmers of recovery we're now seeing. It could undercut the Obama administration's stimulus efforts, and possibly drag Obama's support down with it. Even with government support, housing's future is very much unclear—foreclosures set new records last year, too many homeowners still owe more than their houses are worth, more people are voluntarily defaulting and walking away from their homes. Yet the federal government wants to walk away from the industry itself sooner rather than later.

If SIGTARP's findings reveal anything, it's how much the government's backstopping is critical to economic recovery. Without it, we could see shades of 2007 and 2008 all over again.

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