Spc. Gilad Wolbe provides security for fellow Soldiers nearby during a humanitarian mission in Baghdad on Feb. 26. (US Army photo by Spc. Olanrewaju Akinwunmi.)

Need To Read: October 6, 2009

Today's must-reads are tired of never-ending lunacy:

Get more stuff like this: Follow me on twitter! David Corn, Mother Jones' DC bureau chief, also tweets, as does MoJo blogger Kate Sheppard. So do my colleagues Daniel Schulman and Rachel Morris and our editors-in-chief, Clara Jeffery and Monika Bauerlein. Follow them, too! (The magazine's main account is @motherjones.)

Eco-News Roundup: Tuesday, October 6

News from our other blogs and around the web.

The Littlest Protest: AFP's healthcare protest is small but spunky. Costumes and pics.

Parting Shots: Yet another company, Apple, leaves Chamber of Commerce over outdated climate stance. [Yahoo]

Gearing Up: Pre-Copenhagen, Denmark shows reporters like Kate Sheppard what's green.

Spot Check: Enviros use satellites and thermal imaging to spot illegal toxic waste dumps. [New Scientist]

E.coli Conservatism: Can another scary NYT story about E.coli = actual food reform?

 

 

 

Nationalization Revisited

In Ryan Lizza's New Yorker profile of Larry Summers, he suggests that Summers and Tim Geithner turned out to be right about bank nationalization.  It wasn't necessary after all, and things are going just fine without it:

The results of the stress tests showed that the banks were not in as dire shape as commonly believed. Most of the nineteen banks were able raise money privately. “It worked,” the Treasury official said. “People had money to put into banks. The nationalization crowd would have had the government putting all that money in.”

Matt Yglesias isn't impressed:

The key thing here is that the arguments as being relayed to Lizza seem not to know that the proposal to apply the Swedish model to the banking sector was a proposal to nationalize insolvent banks and explicitly guarantee the debts of the solvent ones. This is precisely designed to deal with the “nationalization sets off larger panic” worry. The fact that the stress tests showed that many banks were not in such bad shape is also irrelevant. Nobody ever proposed that we nationalize banks that weren’t in trouble. The proposal was to guarantee the obligations of banks that weren’t in trouble, a low-cost move since these are the banks that aren’t in trouble. The Obama administration wound up implicitly doing that anyway, which is precisely why most of the banks were able to raise money privately. The exact same thing would have played out with the exact same banks if the troubled banks had been nationalized.

I'm on the fence about this.  I was initially a proponent of nationalizing weak banks (Citigroup being the most likely target), even though I always recognized that there were downsides, and I'm not sure I've changed my mind.  After all, the argument was never that the banking system would collapse unless we nationalized, the argument was that (a) nationalization was the best deal for taxpayers and (b) it would get weak banks back into good shape faster than just waiting for them to earn their way back to solvency.  Considering that we pumped $45 billion into Citigroup and provided them with $300 billion in asset guarantees as an alternative to nationalization, I'm still not sure that argument wasn't correct.

It's probably true that nationalization wasn't absolutely necessary, and that we'll muddle through without it.  But the fact that we're muddling through doesn't mean we live in the best of all possible worlds.  It just means we're muddling through.

That said, so far the Geithner/Summers gamble has paid off.  If we don't hit any more big bumps in the road, it will probably continue to.

Apple quit the US Chamber of Commerce today, and sent Chamber president Tom Donohue an exhortation to think different:

We would prefer that the Chamber take a more progressive stance on this critical issue and play a constructive role in addressing the climate crisis. However, because the Chamber's position differs so sharply with Apple's, we have decided to resign our membership effectively immediately.

At this point, it might be time to announce a new subgenre of corporate communications literature: the trade group smackdown. Donohue has gotten so many similar letters from other large companies that it's starting to feel routine. Not that Apple isn't a major feather in the cap of climate campaigners. Now, I'm half expecting to see an ad casting Donohue as PC Guy. 

David Corn and Jonathan Martin joined Chris Matthews on MSNBC's Hardball to discuss the right's gleeful reaction to Obama's Olympic embarrassment.

Visit msnbc.com for Breaking News, World News, and News about the Economy

 

You can follow David Corn's postings and media appearances on Twitter.

Levi Johnston, one of the nation's best known baby daddies, is getting into the nut business. In a new series of commercials for pistachios, Johnston wears a green Alaska t-shirt and strolls up to the camera flanked by a bouncer. "Now Levi Johnston does it with protection," the announcer quips, as Johnston pops a green one in his mouth. Cute line, but was Johnston really the biggest celebrity they could get? Oh wait, there's former Miss Teen South Carolina too.

The commercial's maker is none other than Roll International, the parent company of Fiji Water. Fiji Water, you may recall, was the subject of a recent Mother Jones expose showing that, among other things, the water is bottled under a military dictatorship, and its bottles use twice as much plastic as competitors'. Roll seems to be trying to make pistachios sexy, both by using Johnston and by a video contest asking viewers how they "do it" (and by "do it" they mean crack open pistachio nuts). But like the Fiji Water Twitter strategy, Roll's TV approach is flawed. So they want to be sexy? Fine. But keep the kids out of it, would you? Throughout the contest promo there's porny music in the background. One shot catches a young woman from above, rolling on the floor as she puts a nut in her mouth. "Do you do it on the floor?" the narrator asks. A few seconds later, there's a shot of young kids hanging out while the narrator asks "Do you do it in a tree?" I'm not saying it's pedophilia or anything, it just seems a little odd and inconsistent. Videos are below, judge for yourself.

 

Quote of the Day

From Gail Wilensky, a conservative healthcare economist:

It's very frustrating to see somebody who makes outrageous statements that bear no relationship to reality receive so much attention.

She's talking about serial healthcare fantasist Betsy "Death Panel" McCaughey.  The quote is from Michelle Cottle's profile of McCaughey in the current New Republic.  Worth a read.

Treasury Inspector General Neil Barofsky has released another biting report on his department's mismanagement of the Troubled Asset Relief Program (TARP). This latest assessment will probably make former Treasury Secretary Hank Paulson's retirement a bit less comfortable and Bank of America CEO Ken Lewis' likely court appearances a whole lot more interesting.

Barofsky, whom Mother Jones profiled last week, accuses Paulson of misleading Americans about the precarious state of the financial industry in the immediate aftermath of the bailout. One example he cites is the secretary's assurances on October 14 that the banks were "healthy" and that they'd accepted the TARP funds for "the good of the U.S. economy." The Fed concurs with Barofsky's assessment, but his bosses at the Treasury have attempted to defend Paulson's statements by suggesting that they "must be considered in light of the unprecedented circumstances in which they were made."

Barofsky's report also seems to lend credence to Lewis's claims that the Treasury Department forced Bank of America's troubled merger with Merrill Lynch. As the New York Times notes, Bank of America received only $15 billion of the $25 billion it was eligible for under TARP, with Merrill receiving the other $10 billion. Although the two companies had agreed in principle to the merger when the funds were disbursed in October, their deal had not yet been approved by regulators or shareholders. Bank of America's restricted TARP funding may have been a way to force Lewis into an awkward arrangement with the troubled investment bank and a sign that Treasury already considered the shotgun marriage a done deal.

Although the inspector general's report was primarily intended to address TARP, Barofsky has also raised some troubling questions about both the credibility of Treasury and its role in the ill-fated BofA-Merrill merger. Some of these questions may soon be addressed if Ken Lewis appears in court to address unrelated concerns about bonuses payed to Merrill traders. Stay tuned.

Copen-bloggin': The Danish Story

Ahead of the big climate summit in December, the Danish government has invited a small group of reporters from the US to the country so they can show us all the climate-related activities they've been up to. I'll be reporting from here this week.

Our first day started out with a meeting at the Climate Consortium, a private-public partnership that the Danes created in June 2008 to promote and enhance the political, business, and public relations opportunities related to their climate work. As executive director Finn Mortensen describes it, the goal is to promote "Danish solutions in climate and energy."

The group organizes trips such as the press junket we're currently attending, as well as visits for political and business leaders from all over the world. They've also developed a website that uses Google Maps technology to highlight projects around the country.

Denmark has plenty to show off, and with the biggest climate meeting in history coming here in just 62 days, they've got an incentive to entice other countries to follow suit. The country has maintained a steady level of energy consumption since the 1970s, and continues to see a decline in use.

Meanwhile, the percentage of renewables has ticked steadily upward; they're now the world leader in wind energy and have a burgeoning biomass industry. Twenty percent of energy now comes from electricity generated by wind turbines, and they've set a goal of drawing half their power from wind by 2050. They also intend to end fossil fuel use by that time.