2009 - %3, June

The Appearance of Corruption

| Thu Jun. 4, 2009 2:56 PM EDT

Still don't believe that money buys results in Washington? Take a look at this chart from the Sunlight Foundation. This is what Larry Lessig and Change Congress are talking about when they talk about "the appearance of corruption":

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France Says All AF 447 Remains May Never Be Found; Brazil Disagrees

| Thu Jun. 4, 2009 2:42 PM EDT

Since Monday, the Brazilian navy and air force have been focused on finding what's left of Air France Flight 447. But in trying to get government officials to comment on the crash, I've been met with only one answer: According to international regulations, it is France’s responsibility to determine the cause of the accident, not Brazil's. Was it caused by the storm? An equipment problem? Answering that is France’s job, Brazilian officials repeat over and over again.

Frustratingly, France doesn’t have any leads either. Air France has ruled out the possibility of the plane having left Rio with some kind of technical problem. Other than that, there seems to be no information. The black boxes could be as far as three miles down into the water, in an area full of rock formations and subject to unpredictable weather. The head of France’s accident investigation agency Paul-Louis Arslanian says they may never be found.

But the optimistic Brazilian president Luiz Inacio Lula da Silva disagrees. “A country that can find petroleum at a depth of six thousand meters (3.7 miles) can find an airplane at two thousand meters (1.2 miles),” he said from Guatemala City.

Let's hope he's right.

Guest contributor Gabriela Lessa is a journalist and blogger spending the summer in her native Brazil. Watch for her regular dispatches over the next few months on MotherJones.com.

 

More Smoke and Mirrors from the GOP

| Thu Jun. 4, 2009 2:40 PM EDT

Today House Republican leaders proposed a bold new plan to save $375 billion over the next five years.  So what did they come up with?

Well, according to this document, $317 billion comes from every budget coward's favorite gimmick: an across-the-board spending cap that (a) they know perfectly well will never happen and (b) allows them to avoid mentioning any actual specific cuts.  Another $45 billion comes from devoting returned TARP funds to deficit reduction — something that's going to happen over the next five years anyway.  That leaves $13 billion in actual targeted cuts.  For the arithmetic challenged among you, that's $2.6 billion per year out of a budget of about $3.5 trillion.

That's a reduction of 0.07%.

Every little bit helps, I guess, but for a bunch of fiscal watchdogs they seem curiously unable to find very much in the way of actual wasteful programs that they're willing to stand up and take some lumps for opposing.  Instead it's just the usual smoke and mirrors.  How tedious.

UPDATE: Actually, looking at this more carefully, something doesn't add up.  The GOP brain trust claims to save $317 billion from the cap, $45 billion from TARP, and about $25 billion in targeted cuts.  But that comes to $387 billion, not $375 billion.  So I guess they can't add either.

Still, if the targeted numbers are correct, they're proposing cuts of 0.14%, not 0.07%. I'll leave it up to you to decide if you're impressed by their budget slashing bona fides.

Clemson: Accusations of Gaming Rankings Are "Outrageous"

| Thu Jun. 4, 2009 2:16 PM EDT

Yesterday, we reported on Clemson University's basically admitting that it manipulates U.S. News and World Report's college rankings. Now, the university has done an about face and denied any pandering, calling the accusations "outrageous" and "untrue." From a statement issued by Clemson today:

 

Geithner Plan is Dead

| Thu Jun. 4, 2009 1:32 PM EDT

The New York Times reports that Tim Geithner's plan to buy up toxic assets from the banking system is dead.  Basically, even at the subsidized prices the program would have offered them, banks weren't willing to sell because it would have forced them to recognize big losses, and recognizing big losses would have been bad.  Ezra Klein comments:

There are two ways of understanding what happened here. The first is that banks couldn't sell their assets at current prices because doing so would have rendered them effectively insolvent. In this scenario, PPIP fails to fulfill its intended function: Saving the banks. The toxic assets survive and the banking system remains hollow and unhealthy.

The second is that banks no longer need to rush their troubled assets off their books because they're increasingly able to raise private capital, operate in a restored financial market, and wait out the last vestiges of the storm. They can, in this world, let the value of the assets rise naturally, and sell them off later. In this scenario, PPIP is no longer necessary.

I'll take door #1.  It's at least arguable that the banks were justified in not wanting to sell toxic securities at the fire sale prices on offer from vulture funds and others.  But Geithner's plan would have offered them considerably more than that — and they're still unwilling to sell.  That means they're completely dedicated to the proposition that all their mortgage-backed junk is worth exactly what they say it's worth.

Maybe this will work out in the end.  But history suggests that we'd all be better off if banks were forced to honestly account for their losses, take their lumps, and then move on.  Instead, Geithner's stress tests have persuaded everyone that things are fine and losses on these securities aren't as bad as everyone thinks.  Maybe so.  But if Geithner and the banks are wrong, doing it this way is likely to drag the pain out over years, producing a long period of sluggish semi-recovery and slow, fragile growth.

That's basically my fear at this point.  I sure hope Geithner knows what he's doing.

Chevron or Chevwrong?

| Thu Jun. 4, 2009 1:21 PM EDT

If you believe Chevron's ubiquitous ad campaign, it's an icon of corporate responsibility. According to environmental and human rights groups…not so much.

Organizations including CorpWatch, Global Exchange, and EarthRights International released "The True Cost of Chevron: An Alternative Annual Report" last week. And not surprisingly, it tells a different story than the oil giant. To wit:

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Lowry on Obama

| Thu Jun. 4, 2009 1:00 PM EDT

Most of the conservative reaction to Obama's speech seems to be the usual robotic stuff — moral equivalence! shameful! naive! — but props to Rich Lowry for his reasonably measured response:

I have to go back and read it carefully, so I reserve the right to extend and revise my remarks. But on the whole I thought it was pretty good and I basically agree with Max Boot's take here. Yes, there were many things about which to cavil, there were missed opportunities, and he betrayed the disturbing weakness of his policy in certain key areas, Iran foremost among them. But the speech was an act of diplomacy and as such, it inevitably was going to skate over some inconvenient truths and tilt its presentation in a way to try to make it more persuasive to its target audience. Fundamentally, Obama's goal was to tell the Muslim world, "We respect and value you, your religion and your civilization, and only ask that you don't hate us and murder us in return." Bush tried to deliver the same message over and over again. The difference with Obama is that people might actually be willing to listen.

I guess the question is whether he sticks to his guns here, or whether the wingosphere reeducation squads eventually force him to "extend and revise" his remarks and admit that the speech was, in fact, a betrayal of everything good and decent.  Stay tuned!

Another Good, Obvious Idea That Will Die A Slow, Painful Death In Congress

| Thu Jun. 4, 2009 12:51 PM EDT

It's not just good policy ideas about Medicare and health care costs that fail to become law because entrenched interests oppose them. Good tax reform ideas also die because powerful businesses and interest groups are threatened by them—a fact that helps make our tax code the loophole-ridden mess it is today.

The Great Thing About Media Matters

| Thu Jun. 4, 2009 12:01 PM EDT

media mattersNot everyone likes Media Matters for America, the left-wing media watchdog that seeks out "conservative misinformation" in the media. I do. Like the excellent ThinkProgress, there's a wonderful, understated humor to a lot of Media Matters' content. Both sites have a writing style that focuses on "just the facts." That style can strip some of the color from colorful events. But some things are surreal, brilliant, and hilarious without any comment added. Take this, for example:

Ben Nelson Still Freaking Out Over Change Congress Ads

| Thu Jun. 4, 2009 11:40 AM EDT

change congress logoI'm beginning to think I was wrong to criticize Change Congress' latest ad on Wednesday. The anti-corruption non profit has been slamming Nebraska Sen. Ben Nelson, a Democrat, for his opposition to giving Americans the ability to choose between private insurance plans and a government-run option. Insurance companies hate the idea of a so-called "public option," and they've given Nelson over $2 million in campaign cash. Change Congress has been pointing out that Nelson's position on a public plan and his acceptance of that campaign money, taken together, create the appearance of corruption. (The fact that this even needs to be pointed out is pretty sad.)