This morning, more than 60 janitors, security guards, window cleaners, and other working folks marched in front of Wells Fargo's San Francisco offices to protest the $150 billion in bonuses, benefits, and compensation the six largest banks in the US are giving executives this year. The SEIU-organized protest comes just days after Wells Fargo and Citibank announced they'd be repaying the last of their TARP funds, and in doing so, avoid government scrutiny on executive pay and risk assessment. Though the TARP funds (plus interest) are on their way to government coffers, it's not enough for working people of California, who continue to be outraged at record bank bonuses. Down at Wells Fargo HQ, the anger was hand-written on signs reading "Bank of America: You're Overdrawn," "Arrest those Bank Robbers," and "Theft is Theft! Throw Banksters in Jail!"

"This is your money," said Marvin Webb, a minster at Richmond's Bethlehem Missionary Baptist Church, to the crowd. "This is money we invested, this is money we deposited, this is money that they're using to pay for bonuses." The money doesn't just go to pay bonuses, it pays mortgage middlemen to foreclose on properties still undergoing loan modification. Gina Gates, who spoke at the event, said she took her money out of Bank of America after they foreclosed on her home, despite the fact she was willing to pay off the balance left on her mortgage. "If they can't take care of our money, why are we giving it to them?" she asked.

 

Bernanke Then and Now

Courtesy of Sen. David Vitter (R–La.), Brad DeLong gets the chance to ask Ben Bernanke why he's not willing increase the Fed's inflation target from 2% to 3%:

The Federal Reserve has not followed the suggestion of some that it pursue a monetary policy strategy aimed at pushing up longer-run inflation expectations. In theory, such an approach could reduce real interest rates and so stimulate spending and output. However, that theoretical argument ignores the risk that such a policy could cause the public to lose confidence in the central bank’s willingness to resist further upward shifts in inflation, and so undermine the effectiveness of monetary policy going forward. The anchoring of inflation expectations is a hard-won success that has been achieved over the course of three decades, and this stability cannot be taken for granted.

I think this demonstrates pretty well why it's entirely possible to say both (a) Bernanke's background made him extremely well suited to play a crisis management role in 2007-08 and he did a good job at it, but (b) he's not the right guy to lead the Fed going forward.  What we're likely to need over the next few years isn't a crisis manager, but someone who unwinds the Fed's position gradually and takes its role in boosting employment more seriously.  But Bernanke is a mainstream conservative, and mainstream conservatives have always been more concerned with inflation than with unemployment.  This was entirely predictable, and it's why, even though he did a creditable job in his first term, he shouldn't have gotten a second.

For two weeks we've been listening to the story of the leaked emails from the University of East Anglia—a media tempest in an English teapot. And all the time the biggest scandal has been directly under our noses.

This afternoon at Copenhagen a document mysteriously leaked from the UN Secretariat. It was first reported from the Guardian, and by the time it was posted online it oddly had my name scrawled all across the top—I don't know why, because I didn't leak it.

My suspicion, though, is because it confirms something I've been writing for weeks. The cuts in emissions that countries are proposing here are nowhere near good enough to meet even their remarkably weak target of limiting temperature rise to two degrees Celsius. In fact, says the UN in this leaked report, the  cuts on offer now produce a rise of at least three degrees, and a CO2 concentration of at least 550 ppm, not the 350 scientists say we need, or even the weak 450 that the US supposedly supports.

In other words, this entire conference is an elaborate sham, where the organizers have known all along that they're heading for a very different world than the one they're supposedly creating. It's intellectual dishonesty of a very high order, and with very high consequences. And it's probably come too late to derail the stage management—tomorrow Barack Obama will piously intone that he's committed to a two degree temperature target. But he isn't—and now he can't even say it with a straight face.

Friedman's War

Matt Yglesias reads Tom Friedman so you don't have to:

I think I lack the words to adequately express how morally outrageous Tom Friedman’s call for a Muslim civil war is. But we can at least focus a bit on how factually inaccurate it is.

I was all ready to be outraged, but it turns out Friedman probably isn't asking for the military kind of civil war at all:

We don’t need more NATO allies to kill more Taliban and Al Qaeda. We need more Arab and Muslim allies to kill their extremist ideas....Only Arabs and Muslims can fight the war of ideas within Islam....What is really scary is that this violent, jihadist minority seems to enjoy the most “legitimacy” in the Muslim world today. Few political and religious leaders dare to speak out against them in public....How many fatwas — religious edicts — have been issued by the leading bodies of Islam against Osama bin Laden and Al Qaeda? Very few....Etc.

I say Friedman "probably" isn't asking for a military conflict because, unfortunately, he also includes a paragraph about the "ferocity" of the American civil war and says, "Islam needs the same civil war."  But it's still couched as a war against bad ideas, and I imagine that's what he's really focused on.  Still, Friedman could stand to clear this up for us.  Just what kind of war does he want in the Muslim world?

In the final 48 hours of the Copenhagen climate conference, one of the biggest differences remains a very small number: half a degree.

While most of the attention here is focused on the remaining divide between the United States and China when it comes to measuring and verifying emissions reductions, a much larger split remains between the 102 countries that have called for a limit on temperature rise of 1.5 degrees Celsius and the much more powerful nations that have called for a 2 degree target.

The nations pushing for a 1.5 degree target include members of the Alliance of Small Island States, the G77, the bloc of Least Developed Countries, the Africa Group, and several nations from Latin America and Asia. But there is significant pressure being exerted on these nations to consent to the 2 degree target that has been embraced the United States, European Union, China, and other nations here seen as the most powerful players in a final deal. But leaders from the 1.5 camp say they are holding firm on their target, and won't sign onto a deal that calls for anything else.

"I will not sign anything less than 1.5," said Apisai Ielemia, Prime Minister of the tiny island nation of Tuvalu, which may become one of the first casualties of global warming. The low-lying Pacific island nation made headlines last week for shutting down talks with calls for a legally binding treaty. Now they're staking out their desire for a deal at this summit that will not condemn them to rising tides, they say. "This meeting is about our future existence," said Ielemia. "We don't want to disappear from this earth ... We want to exist as a nation, because we have a fundamental right to live beside you."

"For developed countries to choose to not use that figure, is morally, politically irresponsible," said Lumumba Stanislaus Di-Aping, the Sudanese chairman of the G77.

The debate over what figure to put in the final agreement here maybe meaningless, however, if the corresponding emissions reductions goals would not put the world on a path to stay below that limit. A leaked draft analysis from the UNFCCC of the commitments put on the table from developed countries states that what they have pledged so far would lead to a 3 degree temperature rise. If targets aren't raised, "global emissions will remain on an unsustainable pathway," the document states.

Meanwhile, frustrations remain high among developing nations over what they see as pressure from rich nations to consent to a higher target. "We are not yielding to these pressures, because our future is not negotiable," said Ielemia.

Fiore Cartoon: Bonusmas

Satirist Mark Fiore takes on the classic Night Before Christmas with a spin for Goldman Sachs, JP Morgan, and other finance greed mongers. Sample line: "The bonuses were hung by the chimneys with care, in the hopes the angry mob wouldn't notice them there..."

Watch below:

Bond Mania

I have an idea.  Instead of complaining about all this "war bond" nonsense, why don't we jump on the bandwagon?  It could be great!  We could sell "healthcare bonds" to pay for premium subsidies.  We could sell "unemployment bonds" to pay for unemployment insurance.  We could sell "carbon bonds" to pay for cap-and-trade.  The possibilities are endless.  And since financing things via bonds apparently makes them free, the entire liberal dream could be paid for totally painlessly.  Who's with me?

Is the Glass-Steagall Act, the Depression-era law that blocked commercial banks from participating in riskier investment banking, set for a revival? That's what a new piece of legislation, introduced yesterday by Senators Maria Cantwell (D-Wash.) and John McCain (R-Ariz.), would do, forcing major changes to financial titans like JPMorgan Chase, Citigroup, and Bank of America. 

But first, here's McCain on the new legislation on CNBC:

Reestablishing the firewall between commercial and investment banking poses a dilemma for banks such as JPMorgan Chase, which snapped up Bear Stearns' trading operations earlier this year, and massive Citigroup, which includes more staid consumer banking branches as well as riskier trading operations. The already controversial, shotgun-wedded Bank of America and Merrill Lynch relationship wouldn't survive if Glass-Steagall was revived, either. And you can throw Goldman Sachs and Wells Fargo into that mix, too. The McCain-Cantwell legislation would give such institutions a year to break up their different banking arms.

The Depression-era law, you'll remember, was abolished in 1999 by the Gramm-Leach-Bliley Act, one of the most significant pieces of deregulatory legislation in the past few decades, paving the way for the emergence of financial behemoths like Wells Fargo, JPMorgan Chase, and Citigroup (though Citi received somewhat of an exemption to grow even before 1999). It's a long shot at this point, but bringing Glass-Steagall back would be a watershed moment for financial regulation and major step toward scaling back the excesses and ridiculous risk-taking of the past decade or so. At the very least it would protect consumers' savings from use in banks' riskier operations.

And talk about a role reversal for John McCain! McCain voted for Gramm-Leach-Bliley back in 1999—a vote to tear down a law he now wants to restore. And as David Corn wrote last year, one of McCain's closest economic advisers during part of the presidential campaign was the godfather of deregulation himself, former Sen. Phil "Nation of Whiners" Gramm

Rep. Maurice Hinchey (D-N.Y.) is going to introduce similar legislation in the House, the Wall Street Journal reported Wednesday. Hinchey tried to get his bill into the House's big financial-reform package earlier this month, but Democratic leadership blocked him.

Since the Senate probably won't take up financial regulation until early 2010, it's unclear how soon the McCain-Cantwell legislation will get its day in the sun. It could be tucked into the Senate's financial regulation plans, or introduced as an amendment later in the sausage-making process. Either way, it's a promising idea and an encouraging start to the Senate's financial overhaul.

Divide and Conquer?

Kate Sheppard reports from Copenhagen that the solidarity of the G77 bloc of developing nations is starting to crumble:

Late on Tuesday, the governments of Ethiopia and France announced that Ethiopia, "representing Africa," had agreed to adopt an "ambitious agreement" that would call for limiting the average global temperature rise to 2 degrees Celsius. Previously, the African bloc, along with the G77 coalition of poor countries and the Alliance of Small Island States, had firmly insisted that a 1.5 degree limit was imperative to prevent dire consequences in their regions.

....The major powers welcomed Ethiopia's defection from the 1.5-degree target. British Prime Minister Gordon Brown has endorsed the side deal with France, and on Tuesday, White House officials confirmed to reporters that Obama had placed a call to Zenawi earlier in the day. The US president, they said, had "expressed his appreciation for the leadership role the Prime Minister was playing in work with African countries on climate change."....But developing nations — which appear to have been caught somewhat off guard by the announcement — aren’t applauding. They fear that major powers are trying to pick off key players from the developing bloc via secret pacts. The fact that the agreement was made and announced in Paris — not at the official United Nations negotiations in Copenhagen — has fueled such suspicions.

Hmmm.  "Trying to pick off key players" mostly seems like standard issue negotiating to me, not some nefarious plan to sow discord.  But read the whole thing and decide for yourself.  It's dealmaking time in Copenhagen with only two days of the conference left.

George Monbiot, the Guardian columnist and global warming author who combines pugilistic defenses of climate science with Monty Pythonesque levity, is struck by a paradox at the heart of the attempt to achieve action here in Copenhagen. For, as he put it to a full room last night at a panel hosted by the Danish science magazine FORSKERForum, "In the past year, there has been a massive upsurge in climate change denial in the United States, even as the science gets stronger."

Opinion polls certainly support Monbiot’s contention. According to results released in October by the Pew Research Center, considerably fewer Americans now believe the Earth is warming (the decline has been from 71 percent to 57 percent over the space of a year and a half). And as for agreement with scientists about the cause of global warming—human activities, human emissions—that too has sloped downwards, to just 36 percent today.

How is this possible?