As David pointed out in his Politics Daily column Wednesday about the feud between Fox News and the White House, "Fox is just not worth a game of chicken." I would go one step further and suggest that, for all of its obvious flaws, Fox and its out-sized viewership are still very worth Obama's time.

Following statements by White House Communications Director Anita Dunn describing Fox as "opinion journalism masquerading as news," media watchdogs and left-wing pressure groups have turned up the heat on the network.  Yesterday, Media Matters sent around a press release drawing attention to Fox's use of outdated or dubious polls that suggested its audience is as balanced as its coverage famously claims to be. MoveOn is urging Democratic lawmakers to boycott Fox News.

The attention is not unwarranted. Dunn was merely voicing what every Daily Show viewer has known for years. The fastidious fact-checkers at Media Matters caught Fox News playing up last year's biennial news consumption survey from the Pew Research Center while ignoring its less favorable but more recent media attitudes survey and called out political analyst Dick Morris for quoted some unbelievable numbers on air.

A boycott, however, is the wrong kind of attention. The White House and MoveOn can call Fox News' coverage whatever they want: opinion journalism, partisan hackery or outright lies—all labels which have applied in the past. That's not cause enough for the Democrats to ignore Fox News and the millions of voters who watch it.

There is no denying the conservative bent of both the network's coverage and audience but it is also important for lawmakers and the White House not to forget that there is still sizable minority of self-described Democrats and Independents who tune into Fox News. As Media Matters notes, this section of the viewing audience is smaller than Fox claims—regardless, it is still too large to overlook. In its argument against disengaging with Fox, The Economist noted Ben Pershing's observation about the network's audience: "Maybe they're mostly 'right-leaning' but that doesn't mean they're 100 percent unpersuadable."

Obama and Democratic lawmakers need to be on the network interacting with Fox anchors (perhaps using some well-calibrated "dismissive humor," as David suggests) and the swing voters who are influenced by their unfair and unbalanced reporting. Like it or not, Fox News still matters. 

With most of Washington's attention focused on health care reform, it's easy to forget that Democrats are also working on a cap-and-trade bill to combat climate change. On September 30, Sens. Barbara Boxer (D-Calif.) and John Kerry (D-Mass.) introduced their version of the cap-and-trade bill that passed the House back in June. But the Kerry-Boxer bill has a big piece missing: it says almost nothing about how pollution permits will be allocated. Grist explains why: "Doling out what is effectively a huge new pot of money is a subject of considerable interest to many senators, and it’s expected to help bring some recalcitrant Democrats on board."

The Senate Energy and Natural Resources Committee discussed exactly this topic at a hearing on Wednesday. Kate Sheppard will have more on this later in the week, but here were a couple of the less constructive suggestions:

Can Michael Stipe and Eddie Vedder Shut Down Gitmo?

Does being forced to listen to Bruce Springsteen constitute torture?

In truth, the guards at Guantanamo and other US military prisons overseas could have played detainees just about anything. Turn it up loud enough, set it to repeat enough times, and any song in existence—from metal band Doom's hyper-aggressive "Die MF Die" (lyrics: Die motherfucker die motherfucker die motherfucker... etc.) to Prince's "Raspberry Beret" to Don McClean's "American Pie" would suffice to disorient prisoners, mess with them, deprive them of sleep. As part of our March 2008 special report Torture Hits Home, we published a list including these songs and numerous others—the Barney theme, the Meow Mix cat food jingle—that were used by interrogators and guards to soften up their charges.

In December 2008, then Mojo staffer Jesse Finfrock reported that British human rights organization Reprieve had launched a campaign called zero dB (decibels) to fight such abuses; artists including Massive Attack and guitarist Tom Morello of Rage Against the Machine—another name on our torture playlist—got on board to demand the US military stop using their songs. "It's difficult for me to imagine anything more profoundly insulting, demeaning and enraging than discovering music you've put your heart and soul into creating has been used for purposes of torture," Nine Inch Nails singer Trent Reznor wrote on the band's website days later. (NIN's songs were reportedly among those used to torture military contractor-turned-whistleblower Donald Vance.) "If there are any legal options that can be realistically taken they will be aggressively pursued," Reznor promised.

Today, he, Morello, and other prominent musicians—including megabands R.E.M. and Pearl Jam—took a step in that direction, attaching their names to a national campaign to pressure Congress to shutter Gitmo once and for all. They are also demanding that the government declassify documents related to the use of music in interrogations—a practice the United Nations has condemned. Among the other artists signing on are Bonnie Raitt, Jackson Browne, T-Bone Burnett, David Byrne, Rosanne Cash, the Roots, Rise Against, and popular British crooner Billy Bragg. "Guantanamo may be Dick Cheney’s idea of America, but it’s not mine," Morello said in a statement announcing the effort. "The fact that music I helped create was used in crimes against humanity sickens me."

News From TreeHugger: Thursday, October 22

A weekly roundup from our friends over at TreeHugger. Enjoy!

$172 Billion Will Be Sucked From Global Economy Every Year if We Let Coral Reefs Die Off

Here's another potent warning about the huge economic value that intact ecosystems have: New analysis shows that if the world's coral reefs die because of climate change $172 billion a year will be sucked out of the global economy.

Ukraine's Ticking 'Time Bomb': Old Pesticides

When you think of dangerous stockpiles in the former Soviet Union, you probably think of nuclear and chemical weapons. But a single stash of pesticides in Ukraine poses a major threat to some 7 million people.

Political Myth: Trappers, Hunters & Fishers Are Against Strong Climate Legislation

Think US hunters don't want strong climate legislation? Think again. Political conservatives may favor fewer regulations, but that does not mean they categorically oppose endangered species protection, open space conservation, or climate action.

Carbon Capture is Essential for Developing World, And Still a Pipe Dream

The IEA has said that 2,000 coal plants with carbon capture & storage are needed in developing nations by 2050. The financial problem? It'll cost more than $5 trillion to retrofit existing plants, and the some 62,000 miles of support pipelines will have to be built—at a price tage of $275 billion for India and China alone.

Ottawa's 'Green Bin' Muncipal Composting Program is About to Take Off

They've been distributing green composting bins in the Canadian capitol for more than a month; and now the city's composting program is about to begin in earnest. Check out how Ottawa's program works, and get one going in your city.

Coal Plants Do $62 Billion of Damage to US Environment

A new report from the National Academy of Sciences reveal that US coal-fired power plans do over $62 billion in environmental damage a year due to hidden costs: Decreases to crop and timber yields, damage to buildings and materials, plus the toll coal takes on human health.

Spc. Justin Slagle returns to Forward Operating Base Lane in a UH-60 Black Hawk helicopter after an air assault mission in the Zabul province of Afghanistan, Oct. 15, 2009. (US Army photo by Spc. Tia P. Sokimson.)

Need To Read: October 22, 2009

Today's must-reads:

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.)

They're Back....

And now, in news that should surprise precisely no one:

Some of the biggest Wall Street firms are back in the political-spending game after hunkering down while they were getting government bailout funds.

Goldman Sachs Group Inc., Bank of America Corp., Morgan Stanley and other large financial-services firms stepped up their political donations in September to members of Congress, for many the first time this year they have joined the fray.

....The renewed assault on Washington comes as the Capitol Hill debate begins on a broad overhaul of financial-services regulations that is strongly backed by President Barack Obama and opposed by large swaths of the finance industry. The spending could also heighten tensions with Mr. Obama, who as recently as Tuesday called on Wall Street to stop lobbying against the proposed regulations.

The battle to pass financial regulatory reform is going to be like trench warfare: a grinding, bloody struggle that's won a single subparagraph at a time against a relentless barrage of money, lawyers, and lunches at Tosca.  And that's the optimistic view.  Strap on your flak jackets, folks.

Nate Silver predicts how the argument over banking reform will play out:

From a 30,000-foot view, the debate will be between the Volckerists and the Summersists, with the Volckerists arguing that large financial institutions need to be broken up — probably through something resembling a modern Glass-Steagall Act — and the Summersists arguing instead for more extensive regulations.

I don't understand.  Why do I have to choose?  These aren't mutually exclusive, after all.  Tightly regulated small banks seem like the sector to have come through last year's meltdown in the best shape.

In any case, Yves Smith reminds us of the obvious: when the crisis hit last year, the pure investment banks fared pretty poorly:

Remember, Morgan Stanley and Goldman, both pure investment banks as of last year, also nearly failed, and Merrill, Lehman, and Bear perished....The industry had already become so concentrated (and levered) that it had become more failure prone. So merely separating commercial banking and investment banking is not sufficient; you have to do something about the risk taking of capital market players.

....And the elephant in the room is derivatives. The big players have massive OTC derivatives exposures. You need a really big balance sheet to provide OTC derivatives cost effectively....The books are large, and most exposures are hedged dynamically.

There are lots of regulations I'd like to see implemented, but if I had a choice I think I'd trade every single one of them for a comprehensive set of restrictions on leverage.  Stronger capital adequacy standards might do part of the trick, but what I'd really like to see is some kind of flat, systemwide restriction on the amount of borrowed money (as well as the tenor of the borrowing) that both individuals and institutions are allowed to apply to asset purchases.

The credit bubble of the past eight years could never have taken off if it weren't for the huge chain of increased leverage at every step along the way.  At the individual level, mortgage loans were geared up when down payments went from 20% to 10% to 3% to zero.  The loans were then securitized and sold off so they didn't count against bank capital requirements.  The loan securities were turned into CDOs that got more complex over time and hid ever more stupendous amounts of built-in leverage.  The super-senior tranches were insured via AAA credit default swaps and moved off the balance sheet entirely.  And all that came on top of loosened capital adequacy requirements from the FDIC and the Fed.  (Basel II had the same effect in Europe.)

When you multiply it all out, how much did leverage increase throughout the financial system over the past decade?  I'm not sure anyone has any idea.  But without it, the mortgage market doesn't take off, the derivative market doesn't take off, and in 2008 the banking system suffers only a minor flesh wound when a small regional housing bubble bursts.

I'm happy to be corrected on this point, but I'm pretty sure that, even combined, all the other financial pathologies we've identified recently wouldn't have caused more than a few hiccups if not for the massively increased application of leverage we experienced over the past ten years.  That's the key pathology, and if it's rooted out and controlled everywhere and in every guise, we could probably skip most of the other stuff.

Unfortunately, it's not really clear how to do this.  Deleveraging from our current heights will take years even under the best circumstances, and leverage shows up in so many different forms than I'm not sure how you can write rules broad enough to keep it under control.  And God knows, since leverage is the common key to big paydays almost everywhere, serious rules to curb it would be bitterly opposed by every financial lobbyist in the country.  But we should at least try.  A decade after the collapse of LTCM and a year after the collapse of the planet, we should have learned at least that much.

Too Quick on the Draw

I just got a phone call from "James" at the "National No Call List Department."  I hung up before he got any further, and now I'm sorry I did.  Was this (a) the most brazen telemarketing call of all time, or (b) a fantastically misguided effort by the federal government to survey people about the Do Not Call list?

Almost certainly (a), and now I wish I'd stayed on the line to find out was the scam was.  Unfortunately, my telephone reflexes got the better of me.  Maybe he'll call back.

A Shot Across the Bow

I'm pretty sure that Lefty High Command has instructed us not to refer to the Obama administration's "coordinators" as czars anymore, but anyway, Obama's pay czar has apparently decided to show that he's no potted plant.  Kenneth Feinberg announced today that banks that got a big chunk of bailout aid will have to rein in their top managers:

The seven companies that received the most assistance will have to cut the cash payouts to their 25 best-paid executives by an average of about 90 percent from last year....Total compensation, which includes bonuses, will drop, on average, by about 50 percent.

The companies are Citigroup, Bank of America, the American International Group, General Motors, Chrysler and the financing arms of the two automakers.  At the financial products division of A.I.G., the locus of problems that plagued the large insurer and forced its rescue with more than $180 billion in taxpayer assistance, no top executive will receive more than $200,000 in total compensation, a stunning decline from previous years in which the unit produced many wealthy executives and traders.

There's certainly some justice in this.  But I'd prefer something less punitive and more useful: a limit on the total bonus pool at these banks.  The point isn't just that executives who imploded their companies don't deserve huge paydays — though there's a lot to be said for that — it's that financial companies in trouble should be using their retained earnings to build up their capital base, not to pay their staffs outlandish salaries.  Today's action is nicely symbolic, but insisting on a more wide-ranging cultural change that helps the entire system recover would be even better.