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Obama Calls for a New Crackdown on Wall Street

| Thu Jul. 3, 2014 11:18 AM EDT

On Wednesday evening, President Barack Obama called for a new Wall Street crackdown, noting that more than five years after the financial crisis, banks still focus too much on gaining profits through often risky trading, instead of investing in Main Street America.

"More and more of the revenue generated on Wall Street is based on…trading bets, as opposed to investing in companies that actually make something and hire people," the president said in an interview with Marketplace host Kai Ryssdal. He called for "additional steps" to rein in the industry.

Obama's comments Wednesday represent one of the most pointed critiques he has made of the banking industry since he took office at the height of the financial crisis, and suggest that he may use his final two years in office to pursue further Wall Street reforms.

The president singled out big bonuses as a central problem plaguing the financial system. Banks can still "generate a huge amount of bonuses by making some big [trading] bets," he said. "If you make a really bad bet, a lot of times you've already banked all your bonuses. You might end up leaving the shop, but in the meantime everybody else is left holding the bag."

He did not offer specific policy cures, instead alluding to the need to "restructure" how banks work "internally."

The massive Dodd-Frank financial reform law that Congress passed in 2010 was supposed to keep banks from taking excess risks and prevent another economic collapse. Obama pointed out that much of that law has already gone into effect. Banks now have to keep more funds on hand to guard against an economic downturn or a bad trading bet, he said. The law created a new agency designed to prevent consumers from being duped by mortgage lenders, credit card companies, and student lenders. Last year, Wall Street regulators implemented a much-touted Dodd-Frank measure aimed at limiting the high-risk trading by commercial banks that helped lead to the 2008 economic crash.

But much is left to be done. Wall Street regulators have completed only about half of the banking rules mandated by Dodd-Frank. Scores of these regulations have been watered down by financial industry lobbyists. Congress has made many legislative attempts to weaken Dodd-Frank. Despite efforts to ensure that banks are no longer too-big-to-fail—or so large that their collapse would endanger the entire economic system—the largest banks are bigger than they were during the financial crisis.

Progressives fault the president for part of the lax response to the financial crisis. Under Obama's Justice Department, for example, no high-level bankers went to jail or faced criminal charges for actions that led to the financial crisis. And liberal critics slam Obama's economic team for focusing too heavily on bailing out banks after the crisis, and allowing the foreclosure crisis to fester.

It is unclear how Obama will push through additional Wall Street reforms. He has limited oversight of rule-making, and banking legislation is not likely to get through the current sharply divided Congress.

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Liberal Comedy, Conservative Outrage. But Why?

| Thu Jul. 3, 2014 11:17 AM EDT

Conservative publisher Adam Bellow thinks conservatives need to produce more popular art: beach fiction, TV shows, comedy routines, etc. Paul Waldman thinks he's got an uphill battle:

As I've noted before, The Daily Show and The Colbert Report work as well as they do because they're not shows written and performed by professional liberals who happen to be comedians, attempting to use humor to score political points; rather, they're shows written and performed by professional comedians who happen to be liberals, using politics to produce comedy. It's a really important distinction.

The same distinction applies to other mediums. If you set out to write an explicitly conservative novel, it's likely to suck. If you set out to write a novel, and it has a conservative worldview because you happen to be a conservative, it will probably do a lot better. Unfortunately for conservatives, if you take this approach you're likely to end up writing little more than an establishment-friendly novel, not an overtly pointed takedown of liberalism.

That said, conservatives could produce perfectly good books and TV shows if they took Waldman's advice. But comedy is a special problem. Conservative comedy just doesn't seem to work very well, and I'd guess there are two big reasons why:

The material: Liberals are, generally speaking, opposed to the establishment. Poking fun at the establishment is easy to do, so liberals have lots of ready-made material. Conversely, poking fun at the little guys just seems mean. It's not impossible to get good comedy out of, say, the more ridiculous aspects of the Occupy Wall Street folks at Zuccotti Park, but it's a lot harder and the material is a lot thinner.

The audience: I've never quite understood this, but liberals just seem to like political comedy more than conservatives. Conservatives simply don't consider this stuff a laughing matter. Especially recently, they're convinced, deep in their marrow, that liberals are literally out to destroy America, and how do you find the yuks in that? By contrast, mocking conservatives is a popular liberal pastime. Is this because liberals accept conservatives as an inevitable part of the scenery, to be fought but not really hated? That doesn't seem quite right. Still, it's true that the establishment, by definition, is always with us, and always working in its usual way to preserve itself. You might think it's a malign force, but you don't think of it as something new that's suddenly emerged to wreck the country.

I dunno. I'm just guessing here. Age probably has something to do with this too. In any case, conservatives are great at outrage, while liberals who try to emulate them almost always fail. Liberals are great at comedy, and conservatives who try to emulate that fail as well. In the middle ground of books and movies, I imagine both sides could do well, but since most artists are liberals, there's just more to choose from along the liberal spectrum.

Chart of the Day: Net New Jobs in June

| Thu Jul. 3, 2014 10:15 AM EDT

The American economy added 288,000 new jobs in March, but about 90,000 of those jobs were needed just to keep up with population growth, so net job growth clocked in at 198,000. The headline unemployment rate dropped to 6.1 percent.

As with last month, there are no serious gotchas in this month's report. The labor participation rate was stable once again, and the unemployment rate fell for the right reason: because more people were getting jobs, not because people were dropping out of the labor force. We've now have five consecutive months of good—but not great—jobs reports, and June's report is an encouraging sign that the Q1 dip in GDP really was an anomaly, not a sign of things to come.

We're Still at War: Photo of the Day for July 3, 2014

Thu Jul. 3, 2014 9:26 AM EDT

Soldiers of the 423rd Military Police Company march in a departure ceremony before training and placement at Guantanamo Bay, Cuba. (US Army Reserve Photo by Sgt. 1st Class Mark Bell)

There's a Pitched Battle Being Fought Over the Phrase "Added Sugars"

| Wed Jul. 2, 2014 7:09 PM EDT

What do the following organizations have in common?

  • American Bakers Association
  • American Beverage Association
  • American Frozen Foods Institute
  • Corn Refiners Association
  • National Confectioners Association
  • American Frozen Food Institute
  • Sugar Association
  • International Dairy Foods Association

Answer: they are all furiously opposed to an FDA proposal that would add a line to the standard nutrition facts label for "Added Sugars." Big surprise, eh? Roberto Ferdman explains here why it's probably a good idea anyway.

The Civil Rights Act Was Signed Into Law 50 Years Ago Today

| Wed Jul. 2, 2014 7:04 PM EDT

Here is President Obama's statement on the 50th anniversary of the Civil Rights Act of 1964:


In 1964, President Johnson put pen to paper and signed the Civil Rights Act into law.  Fifty years later, few pieces of legislation have defined our national identity as distinctly, or as powerfully.  By outlawing discrimination based on race, color, religion, sex, or national origin, the Civil Rights Act effectively ended segregation in schools, workplaces, and public facilities.  It opened the door for the Voting Rights Act, and the Fair Housing Act.  And it transformed the concepts of justice, equality, and democracy for generations to come.
 
The Civil Rights Act brought us closer to making real the declaration at the heart of our founding – that we are all created equal.  But that journey continues.  A half a century later, we’re still working to tear down barriers and put opportunity within reach for every American, no matter who they are, what they look like, or where they come from.  So as we celebrate this anniversary and the undeniable progress we’ve made over the past 50 years, we also remember those who have fought tirelessly to perfect our union, and recommit ourselves to making America more just, more equal and more free.

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The EU's "Right to be Forgotten" Starts to Take Concrete Shape

| Wed Jul. 2, 2014 3:06 PM EDT

A few days ago, Google announced that it was beavering away on the 41,000 requests it had gotten from people demanding that it remove links to unflattering articles about themselves. So just what kind of people are making these requests? Brad DeLong directs me to the BBC's Robert Peston, who gives us a clue:

This morning the BBC received the following notification from Google:

Notice of removal from Google Search: we regret to inform you that we are no longer able to show the following pages from your website in response to certain searches on European versions of Google:

http://www.bbc.co.uk/blogs/legacy/thereporters/robertpeston/2007/10/merrills_mess.html

What it means is that a blog I wrote in 2007 will no longer be findable when searching on Google in Europe....Now in my blog, only one individual is named. He is Stan O'Neal, the former boss of the investment bank Merrill Lynch.

My column describes how O'Neal was forced out of Merrill after the investment bank suffered colossal losses on reckless investments it had made.

Is the data in it "inadequate, irrelevant or no longer relevant"?

Hmmm.

I wonder if there's a way to make this backfire? How hard would it be to create an automated process that figures out which articles Google is being forced to stuff down the memory hole? Probably not too hard, I imagine. And how hard would it then be to repost those articles in enough different places that they all zoomed back toward the top of Google's search algorithm? Again, probably not too hard for a group of people motivated to do some mischief.

Maybe someone is already working on this. It wouldn't surprise me. And I wonder if Google's surprisingly quick response to the EU decision isn't designed to spur exactly this kind of backlash. That wouldn't really surprise me either.

Does America Finally Have World Cup Fever?

| Wed Jul. 2, 2014 2:22 PM EDT

I've been reading a lot of articles about how this year's World Cup is a lot more popular in America than any previous World Cup. I've also read several backlash pieces debunking the idea that we're all about to go soccer mad. I'm not sure which to believe.

But there really does seem to be something different this year. I've personally watched all or most of the World Cup games so far, and I'm pretty sure that in past years I've hardly watched any. Why? Beats me. I'm not really any more interested in soccer than I've ever been.

Or am I? As kind of a joke, I started rooting for Manchester United back in 2008 because they were sponsored by AIG. After the US government basically took over AIG, I figured that meant Man U was America's team. But joke though it may have been, over the last few years I have indeed found myself checking the Premier League standings periodically and even watching the odd match when it appears on American TV. Perhaps that's primed me to look forward to the World Cup.

Or maybe it's just time zones. This is the first World Cup since 1994 that Americans could watch live at a reasonable hour. And we all know that being able to watch live is critical to sports viewership.1 So maybe that's all it is.

How about you? Have you been watching more World Cup than usual this year? Why? Is it because you care more about soccer than you used to? Or something else?

1Except for the Olympics, for some reason.

"Snowpiercer": The Best Post-Apocalyptic Film About Class Warfare You'll See All Summer

| Wed Jul. 2, 2014 12:29 PM EDT

Snowpiercer, directed by Bong Joon-ho and starring Chris Evans, is an ambitious, critically acclaimed new thriller. "While Transformers mucks up cineplexes with its ugly bombast, here, as an alternative, is something truly special, a unique and bracing science-fiction film that stirs both heart and mind," raves Vanity Fair.

Like so many action films that came before it (both the smart and the monumentally silly), Snowpiercer has political relevance pumping through its veins. In the future, a corporate attempt to reverse the devastating effects of global warming goes horrifically wrong: The experiment ends up murdering most of the planet. Survivors live aboard the Snowpiercer, a train—equipped with a perpetual-motion engine—where the rich and pampered live at the front and the poor and unwashed at the rear. Bloody class warfare ensues.

You get the message.

Here's Bong discussing the corporate critique and climate-change angle of his film, in an interview with CraveOnline:

In Snowpiercer, it's more about how big business tries to both use and control nature. And how it backfires on them. Nature takes its revenge and sends them back to the ice age. This is an aspect that is different from the graphic novel [source material] (by Jacques Lob, Benjamin Legrand and Jean-Marc Rochette). I wanted to make a story change because I felt that climate change is more current of an issue and will continue to be, because it's not in the interest of big business to change, but to control.

Basically, it's an action movie in which corporate power takes extreme measures to attack the climate, instead of overhauling the way they do business for the sake of the world. They screw over human civilization, and the rest of the film goes the class-division route. "The poor are in the back and the rich are in the front," Bong told CraveOnline. "So this created an opportunity to talk about the political ideas involved and really examine human nature and why those systems exist. What would we actually discover if they were taken on? We don't know because it's so large and affects billions of people. Having a few survivors is a sci-fi element [that] makes it easier to explore these ideas."

On that note, here's a trailer for Snowpiercer:

Obama Wasn't a Silver Bullet, and Neither Is Hillary Clinton

| Wed Jul. 2, 2014 12:13 PM EDT

Noam Scheiber has a piece in the current issue of the New Republic about Hillary Clinton's imminent takeover of the Democratic Party, and today Ezra Klein interviewed him about it. Klein was especially interested in the argument that Obama's 2008 supporters were so disillusioned by Obama's failure to change Washington that they're now eager to support an old-school politico like Hillary. Here's Scheiber:

Back in 2008, Hillary Clinton made this kind of snide, but in retrospect apt, critique of Obama where she said that Obama thinks he'll get to Washington and the heavens will part and the Republicans will cooperate, but that just won't happen. So I asked some of these Obama supporters if she was right. And a lot of these people remembered those comments and being annoyed by them. But they all said she was actually a bit right. We were a bit naive then, they said. People used the word naive a lot in these conversations.

I'm not sure I've ever fully fessed up to this, so this is as good a time as any. For years, I really didn't believe the conservative snark about how Obama supporters all thought he would descend on Washington like a god-king and miraculously turn us into a post-racial, post-partisan, post-political country. Kumbaya! The reason I didn't believe it was that it never struck me as even remotely plausible. Did Obama give soaring speeches? Sure, he's a politician. Did he promise to change the way Washington works? Sure, he's a politician. Did he promise to pass historic legislation in dozens of different areas? Sure, he's a politician.

It just never occurred to me that anyone took this stuff seriously. It's a presidential campaign! Of course he's promising a chicken in every pot. That's what presidential candidates do. I believed then, and still believe now, that Obama is basically a mainstream Democrat who's cautious, pragmatic, technocratic, and incremental. In fact, that seemed so obvious to me that I never really credited the idea that anyone could seriously see him any differently.

Well, I guess that was naive on my part. By now, the evidence is clear that millions of Obama voters really believed all that boilerplate rhetoric. Naturally, then, they're bitterly disappointed at the real-world Obama. Well, I'm disappointed in some ways too—mostly in the areas of foreign policy and national security—but I continue to think he's a pretty good president because my expectations were tempered to begin with.

Nor do I think Hillary would have done any better. Probably worse, I'd say. After all, once he was in office, it's not as if Obama acted like he believed his campaign-trail rhetoric. He hired a bunch of pretty ordinary staffers and got to work passing pretty ordinary legislation. Is the theory here that Hillary would have figured out some magical points of leverage that Obama didn't? That she would have done better because Republicans like her more than Obama? Please.

I have pretty mixed feelings about a Hillary Clinton candidacy. On the one hand, I've long admired her obviously sincere dedication to public service in the face of abuse that would destroy a weaker person. On the other hand, another Clinton? This is no fault of hers, but I'm not sure I'm any more excited about that than I am about the prospect of another Bush. Maybe it's time to move on.

Either way, though, I sure hope all those folks who are disappointed by Obama don't think that Hillary is some sort of silver bullet either. If she runs and wins, she'll be dealing with exactly the same kind of Republican obstructionism as Obama—and she'll have just as much trouble getting anything done.

If disappointed Dems really want to change things, they have only one option: figure out a way to take back Congress in 2016. That's it. Until and unless that happens, George Washington himself wouldn't be any more effective than Obama has been.