Mojo - September 2008

House to Voters: Please Stop Emailing Us

| Tue Sep. 30, 2008 6:45 PM EDT

So much for taxpayer feedback on the House's failure to pass the $700 billion bailout plan. If you email your Rep. right now, here's the automated raspberry you'll likely get in return:

Subject: House of Representatives is limiting constituent email due to volume
Please be advised that the House of Representatives is currently imposing limits on inbound communications from constituents because volumes are so high that Congressional websites and web forms are becoming non-responsive. A limit on the number of emails that can be sent via the "Write Your Rep" web form system (the software that a majority of Representatives use to power their web forms) is being imposed during peak email traffic hours. Clients may want to adapt their campaign timing or switch contact methods (to phone) to avoid delivery disruptions due to these limits. The throttling is dynamic, so unfortunately there is no simple guidance we can offer that will ensure delivery. The throttling is likely to remain in place until the end of the current legislative session.

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"The Rulers of the Exchange of Mankind's Goods Have Failed..."

| Tue Sep. 30, 2008 5:56 PM EDT

Early 1933, when Franklin Delano Roosevelt gave his first inaugural address, was one of the most terrifying times in United States history. More than 10,000 banks had failed, credit had dried up, businesses had gone bankrupt, and the jobless rate was 25 percent, with another 25 percent underemployed and underpaid.

After telling Americans that "the only thing we have to fear is fear itself," FDR went on to describe the causes of the devastating financial crisis, in terms that sound all too familiar today:

"Only a foolish optimist can deny the dark realities of the moment.
"Yet our distress comes from no failure of substance. We are stricken by no plague of locusts.... Plenty is at our doorstep, but a generous use of it languishes in the very sight of the supply. Primarily this is because the rulers of the exchange of mankind's goods have failed, through their own stubbornness and their own incompetence, have admitted their failure, and abdicated. Practices of the unscrupulous money changers stand indicted in the court of public opinion, rejected by the hearts and minds of men.
"True they have tried, but their efforts have been cast in the pattern of an outworn tradition. Faced by failure of credit they have proposed only the lending of more money. Stripped of the lure of profit by which to induce our people to follow their false leadership, they have resorted to exhortations, pleading tearfully for restored confidence. They know only the rules of a generation of self-seekers. They have no vision, and when there is no vision the people perish.
The money-changers have fled from their high seats in the temple of our civilization. We may now restore that temple to the ancient truths. The measure of the restoration lies in the extent to which we apply social values more noble than mere monetary profit...."

Mission Creep Dispatch: Peter Beck

| Tue Sep. 30, 2008 1:46 PM EDT

beck.jpgAs part of our special investigation "Mission Creep: US Military Presence Worldwide," we asked a host of military thinkers to contribute their two cents on topics relating to global Pentagon strategy. (You can access the archive here.)

The following dispatch comes from Korea expert Peter Beck, who teaches at American University in Washington, DC, and Yonsei University in Seoul.

Does South Korea Still Need GI Joe?

Strolling down the wide, grass-lined street, after passing the Burger King on the left and the convenience store on the right, you would be forgiven for thinking you are in Iowa, but the Yongsan Garrison is in the geographic heart of one of the most densely populated cities in the world: Seoul. Picture putting walls up around Central Park and handing it over to the German army.

Why a Democrats-Only Bailout Bill Won't Fly

| Tue Sep. 30, 2008 1:18 PM EDT

Now that I've noted the progressive goals for the next bailout bill, let me add that it's unlikely a Democrats-only bill, loaded with those very same progressive goals, is likely to pass. And it's because of conservative Dems. Ezra Klein makes the case:

The defecting Democrats look to be Blue Dogs -- which is to say, somewhat conservative, generally vulnerable, Democrats -- and members of the Black and Hispanic caucuses. A more liberal bill might get the latter two. It will lose 90 Republican votes. It won't get the Blue Dogs. And you'll lose a few dozen more Democrats who needed the bipartisan cover. My hunch is leadership is relying on market chaos to turn a few votes and trying to figure out the mixture of cosmetic changes and superficial giveaways that will push them over the finish line.

Which is to say, despite the intelligent commentary that suggests a radically different approach to the bailout bill might be wise, there's a relatively small chance we will get a radically different bill. We're more likely to get a bill that the House leadership has tinkered with enough — throwing in a progressive goal here, adding an earmark/sweetner there — to get 15 more votes.

Kevin Drum Wants You for the Bailout, But Consider This First

| Tue Sep. 30, 2008 1:01 PM EDT

Kevin urges readers to call members of Congress and tell them to vote for the $700 billion bailout bill. In an earlier posting, he explained why he favors the plan. But before readers pick up the phone, they might want to read what Mother Jones contributor Nomi Prims says about the bailout. Or what Mother Jones contributor James Galbraith has to say. Or what economist Dean Baker has to say.

Baker notes,

Almost every economist I know rejects the Paulson approach and argues instead for directly injecting capital into the banks. The taxpayers give them the money and then we own some, or all, of the bank. (That's what Warren Buffet did with Goldman Sachs.)
This isn't about begging for a sliver of equity as a concession for a $700 billion bailout, this is about constructing a bank rescue the way that business people would do it. We have an interest in a well-operating financial system. There is zero public interest in giving away taxpayer dollars to the Wall Street banks and their executives.
If Secretary Paulson constructed a package that was centered around buying direct equity stakes in the banks, he could quickly garner large majority support in both houses. Better yet, Congress could just construct its own package centered on buying equity stakes and send it to President Bush. If he balks, we can just threaten him with stories about the Great Depression.

Even Somali Pirates Have Flacks

| Tue Sep. 30, 2008 12:54 PM EDT

The New York Times has managed to interview a "spokesman" for the band of Somali pirates who sparked an international incident last week by hijacking a Ukrainian cargo ship laden with Soviet-made tanks, artillery shells, rocket-propelled grenades, and assorted ammo. Speaking by satellite phone from the bridge of the Faina, which has been surrounded by US naval vessels off the coast of Somalia, the spokesman, Sugule Ali, told the Times that his compatriots were not interested in selling off their haul to ne'erdowells, as many in the international community have feared. "We don't want these weapons to go to anyone in Somalia," he said. "Somalia has suffered from many years of destruction because of all these weapons. We don't want that suffering and chaos to continue. We are not going to offload the weapons. We just want the money." Twenty million dollars to be specific, though Ali suggested the hijackers are willing to negotiate.

The pirates apparently view themselves as some type of vigilante Coast Guard (they call themselves the "Central Region Coast Guard") that patrols for boats "who illegally fish in our seas and dump waste in our seas and carry weapons in our seas," and Sugule said they plan to any prospective ransom proceeds to "protect ourselves from hunger." He added later, "We're not afraid of arrest or death or any of these things. For us, hunger is our enemy."

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A Democratic Voice Speaks Against the Bailout

| Tue Sep. 30, 2008 12:22 PM EDT

Yesterday, I noted that despite very plausible arguments to the contrary, I still believe that genuine ideological opposition was the reason the bailout garnered so many no votes on the far right and far left of Congress. TNR grabbed an example of that ideological opposition on the left, and I want to reproduce it here. It's from Lynn Woolsey, a liberal congresswoman from California:

"Where is the comprehensive economic stimulus package that will assist 95 percent of the taxpayers — a package that includes unemployment benefits, food stamps, infrastructure investment, and of course, foreclosure relief? Stability should come from the bottom up. We need an economic package that will allow those in foreclosure to pay their mortgages and stay in their homes, bringing value back to the mortgage-backed securities that are clogging the financial system. Why isn't Wall Street paying for the mess they created? By reinstating a one quarter of 1 percent surcharge on stock trades, we could raise nearly $150 billion a year from those who have actually caused this mess and profited from it. Finally, question three: With only three months left of this current Administration, why are we willing to even make available $700 billion to them? President Bush and Secretary Paulson have been wrong from the start on just about everything. If you think they will be responsible with this money, think again."

I should note that Woolsey's arguments here are distinct from the arguments of economists who object to the bill on structural grounds. (David cites several.) Those economists believe that there are other mechanisms by which the financial crisis can be addressed that would work better and more fairly. Woolsey's objection, fundamentally, is that not enough progressive goals are being crammed into the bill, at a time when those progressive goals are sorely needed and unlikely to encounter fierce opposition.

And her goals are hard to argue with. Unemployment benefits? Infrastructure investments? Foreclosure relief? These are things America needs. I'm not sure I would seriously delay the bailout in order to achieve them, and they could be addressed by the next president, who may well be a Democrat operating with large Democratic majorities in both houses of Congress. But if rank-and-file Republicans are going to hold the bill hostage to gain traction for their priorities, why shouldn't rank-and-file Democrats?

Third Long-Form Obama Ad Released: Boring, and That's the Point

| Tue Sep. 30, 2008 11:59 AM EDT

Obama is continuing his run of long-form TV ads in which he speaks directly to the camera about the financial crisis — his third effort clocks in at two minutes long. Here are ads one and two.

Take a look at the link above. I tuned out at 0:42. When did you tune out? (Believe me, you'll tune out.) I'm starting to believe that tuning out is the point. The other day I was watching TV with a friend when one of the earlier long-form Obama ads came on. We were about halfway through when my friend yelled at the television in frustration, "Okay, I get it! You know what you're talking about!"

And that was with the volume turned down.

Obama is presenting himself as the boring choice in this financial crisis. To the extent that boring correlates with responsible, adult, and steady, Obama wins. And with Obama's poll numbers looking the way they are, that appears to be a correlation worth betting on.

David Brooks and the Magic of Redefinitions

| Tue Sep. 30, 2008 11:16 AM EDT

Kevin has his thoughts on the new David Brooks column. I want to highlight a passage he didn't address. Here's Brooks:

What we need in this situation is authority. Not heavy-handed government regulation, but the steady and powerful hand of some public institutions that can guard against the corrupting influences of sloppy money and then prevent destructive contagions when the credit dries up.

Huh, that's funny. "The steady and powerful hand of some public institutions that can guard against the corrupting influences of sloppy money and then prevent destructive contagions when the credit dries up" — what does that sound like to you? Sounds an awful lot like "regulation" to me.

(H/T Merrill Goozner)

The Money Behind the Bailout Vote

| Mon Sep. 29, 2008 8:47 PM EDT

According to Maplight.org, House members who voted for the bailout received 54 percent more money from banks and securities firms than members who voted against it. The nonpartisan campaign finance watchdog group has also broken down the average donation from those sectors, based on lawmakers' bailout stances and party affiliations:

All House Members//// Average Amount Received
Voting Yes................................$231,877
Voting No..................................$150,982
Democrats
Voting Yes................................$212,700
Voting No..................................$107,993
Republicans
Voting Yes................................$273,181
Voting No..................................$181,688

Republicans who opposed the bill are thought to have done so because they're rabid free market ideologues. So why hasn't the Street showered these guys with money in the past? Were they actually pro-regulation? (I doubt it). Are they simply marginal members of their party? Or is pure free market evangelism scary even to Wall Street? My bet's on the last one, but I'd be happy to be proven wrong. (Also, money might not explain everything)

The other interesting detail in these numbers is the small difference in donations to anti-bailout Republicans compared to pro-bailout Democrats (only about $30,000). It's not that Wall Street doesn't like free marketers; it's just a bit wary of anything in the extreme. Or to put it another way, it practices risk aversion at the ballot box. Just not enough of it; obviously, that GOP stock ain't so hot now.