Mojo - September 2008

Mission Creep Dispatch: John Nagl

| Tue Sep. 23, 2008 2:13 PM EDT

nagl.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 John Nagl, a retired military officer and author of Learning to Eat Soup With a Knife: Counterinsurgency Lessons From Malaya and Vietnam. Nagl is a senior fellow at the Center for a New American Security.

How the US Can Win in Afghanistan; Lessons from Iraq

Afghanistan is not just the base from which Al Qaeda attacked the United States on 9/11; it is also the key to stability in Pakistan, which is the only Islamic country known to possess nuclear weapons. The security of those weapons and the stability of Pakistan would be vital American national interests even if Osama bin Laden and his associates were not hiding in the lawless Afghan-Pakistan border region and plotting their next attack.

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Lilly Ledbetter: Obama's Newest Ad Star

| Tue Sep. 23, 2008 1:44 PM EDT

At some point, the Goodyear Tire company is going to wish it had simply paid Lilly Ledbetter like a man. Instead, the company managed to turn the Alabama grandmother into the Democrats' poster child for the evils of a GOP-dominated Supreme Court and a powerful critic of John McCain. Last year, the court ruled against Ledbetter in a case she filed against Goodyear for paying her 40 percent less than men in similar jobs. The decision rolled back years of precedent and made it much harder for women to challenge pay discrimination in court. Members of Congress introduced legislation named after Ledbetter to remedy the problem, then failed to pass it. A star was born.

Ledbetter gave a rousing speech at the Democratic convention, and this week, she makes her debut in a series of Obama campaign ads blasting John McCain for opposing pay discrimination laws. Ledbetter is Obama's answer to Carly Fiorina and Meg Whitman: a white, working-class woman who played by the rules and got screwed by GOP policies and judges on every level. In the Obama ad, she quotes John McCain dismissing the gender pay-gap by saying that women just need "more training and education." After noting that she had the same education and training as the men who made more than her at Goodyear, Ledbetter quips: "On the economy, it's John McCain who needs an education."

Ledbetter's story polls so well that the advocacy group People for the American way is also using her case in ads targeting seven Republican senators up for reelection, including New Hampshire's John Sununu and Minnesota's Norm Coleman, who voted to confirm Bush nominees John Roberts and Samuel Alito. PFAW is only one of a number of liberal groups hoping to make the future of the Supreme Court a major campaign issue. (The next president is likely to appoint anywhere from one to three new justices.) Today in a conference call, PFAW president Kathryn Kolbert noted that the Obama ads may be the first time that a Supreme Court case has been turned into a significant presidential campaign issue (aside from Roe, of course).

A Democratic Pushback on the $700 Billion Bailout?

| Tue Sep. 23, 2008 1:20 PM EDT

A Democratic pushback to the $700 billion Wall Street bailout plan proposed by the Bush administration is underway. At a Senate banking committee hearing on Monday morning, Senator Jon Tester, a Democrat and self-described "dirt farmer" from Montana, asked Treasury Secretary Hank Paulson and Federal Reserve chief Ben Bernanke why members of Congress only had one week to determine whether to spend $700 billion or watch the financial system "go down the pipes?" In other words, why the rush? Bernanke said the bailout was necessary to prevent a shutdown in credit that would lead to more unemployment, more foreclosures, and an economic contraction. "Lenders have to be able to lend," Paulson remarked.

But there are a lot of details in the plan to review and consider. And while the hearing was going on, over on the House side, a group of progressive- and populist-minded Democrats were trying to start a quasi-rebellion. On Monday afternoon, Representative Brad Sherman of California, who serves on the financial services committee, convened a meeting with eight other Democrats, and the group on Tuesday morning released a letter to House Speaker Nancy Pelosi questioning whether the Paulson plan has to be approved by week's end and demanding at least eleven major changes in the proposal.

Here's that letter:

In Dealing with the $700 Billion Bailout, Dems Ought To Point Fingers

| Tue Sep. 23, 2008 12:24 PM EDT

I am often reluctant to give advice to members of Congress. But in this case, it was hard to resist. Here's a posting initially put up elsewhere....

In reaction to the financial crisis, here's what the Democrats who control Congress ought to do:

1. Work vigorously on the bailout proposal submitted by Treasury Secretary Hank Paulson but add the populist provisions that Robert Reich and others are suggesting.

2. Point fingers.

Assigning blame ought to be a key component of the Democratic response to the current meltdown. And that ought not be hard to do. House Speaker Nancy Pelosi and Senator Harry Reid could set up a joint select committee to investigate the causes of the financial crisis. This committee then could start holding hearings immediately and haul before it the heads of the companies that have screwed up and imperiled the economy. This will not be a short list. Call in top officials from Lehman Brothers, Merrill Lynch, AIG, Bear Stearns, Countrywide Financial, Fannie Mae, Freddie Mac. Demand explanations from them. Explore how much money they pocketed personally while overseeing their institutions.

That's just a start. The committee should bring in experts who can explain (clearly!) how these players and others abused credit default swaps, subprime loans, mortgage-backed securities, and other hanky-panky financial products.

Wow. Here's a Very Bad Way to Handle the Financial Crisis

| Tue Sep. 23, 2008 12:09 PM EDT

A CEO in India has been beaten to death by a mob of fired workers. Yikes.

Treasury Bailout and Dodd Bailout Now Open for Your Comments

| Tue Sep. 23, 2008 12:52 AM EDT

Courtesy of publicmarkup.org, a project of the Sunlight Foundation. Who else?

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Capping Executive Pay on Wall Street: McCain Takes the Lead?

| Tue Sep. 23, 2008 12:35 AM EDT

The idea of capping executive pay on Wall Street is really catching on. You would think the strongest measure on that front would be found in the version of the bailout proposed by Democrat Chris Dodd. Actually, it's coming from... John McCain?

Dodd is proposing to penalize executives who take "inappropriate or excessive" risks. The executive compensation and severance packages could be reduced if that is "in the public interest," the proposal says. It would also force executives to give back profits they earned that were based on company accounting measures that are later found to be inaccurate.
Republican presidential candidate John McCain, who has supported giving shareholders a bigger say in executive compensation in the past, said today that taxpayers shouldn't foot the bill for "golden parachutes" for officers of companies that have crumbled in upheaval on Wall Street.
"The senior executives of any firm that is bailed out by Treasury should not be making more than the highest paid government official," McCain said at a campaign event in Scranton, Pennsylvania.
The president is the highest paid federal official, with a salary of $400,000 a year.

McCain is really, really committed to this new populist, foe-of-Wall Street posture. And, for what it's worth, take a second to reflect on how quickly and how fundamentally the economic meltdown has changed the political landscape in this country — the two parties are competing to see who can twist the screws tighter on Wall Street fat cats. Did you think even six months ago that such a scenario was possible in this country?

Gallows Humor of the Bailout Variety

| Mon Sep. 22, 2008 10:17 PM EDT

You always want to be on the lookout for these blank check scams:

Dear American:
I need to ask you to support an urgent secret business relationship with a transfer of funds of great magnitude.
I am Ministry of the Treasury of the Republic of America. My country has had crisis that has caused the need for large transfer of funds of 800 billion dollars US. If you would assist me in this transfer, it would be most profitable to you.
I am working with Mr. Phil Gram, lobbyist for UBS, who will be my replacement as Ministry of the Treasury in January. As a Senator, you may know him as the leader of the American banking deregulation movement in the 1990s. This transactin is 100% safe.
This is a matter of great urgency. We need a blank check. We need the funds as quickly as possible. We cannot directly transfer these funds in the names of our close friends because we are constantly under surveillance. My family lawyer advised me that I should look for a reliable and trustworthy person who will act as a next of kin so the funds can be transferred.
Please reply with all of your bank account, IRA and college fund account numbers and those of your children and grandchildren to wallstreetbailout@treasury.gov so that we may transfer your commission for this transaction. After I receive that information, I will respond with detailed information about safeguards that will be used to protect the funds.
Yours Faithfully Minister of Treasury Paulson

Dodd Takes the Lead, Proposes Progressive Bailout

| Mon Sep. 22, 2008 5:39 PM EDT

Politico (totally "in the tank," by the way) has a copy of Chris Dodd's alternative to Treasury Secretary Paulson's bailout plan for Wall Street. While Dodd provides the Treasury Department with the authority it needs to buy up all of Wall Streets "distressed assets" (that's the point of the $700 million), it comes with a bunch of provisions that Paulson neglected. Basically, Dodd is trying to seize this opportunity to achieve progressive goals that would not be manageable in a more market-, deregulation-, and Wall Street-friendly environment.

Authority for bankruptcy judges to restructure mortgages for homeowners facing foreclosure. This was considered a poison pill in a housing bill that passed Congress earlier this summer, but it has gained much more currency now that Washington wants to bail out Wall Street.
A provision that would require the Treasury to take a 65 percent portion of 20 percent any profits [sic] it makes from the newly purchased assets and put it into the federal government's HOPE program, an affordable housing program.
An oversight board that not only includes the chairman of the Federal Reserve and the SEC, but congressionally appointed, non-governmental officials.
Limits on executive compensation. This is a major stumbling point for Paulson in his negotiations with Congress, but cracking down on Wall Street executive salaries will be a major selling point for lawmakers. Dodd and Frank have put in place what's known as a "claw back" provision aimed at revoking compensation that executives received based on fraudulent claims.
An independent inspector general to investigate the Treasury asset program, appointed by the president.

Democrats control the Senate. If they want to, they can play hardball. They can tell the Republicans, "We insist that all or most of these provisions pass. If you block them, your buddies on Wall Street burn. And we tar you as playing obstructionist games during a time of national crisis." The Republicans can respond by holding up the bill and then arguing in the press that any inaction in a Democratic-controlled Congress is the fault of the Democrats. But with the public likely in favor of the common sense measures included in the Dodd bill, that would place the GOP in a very tight spot.

We Said We Wanted Rick's Record Examined? Scratch That

| Mon Sep. 22, 2008 5:19 PM EDT

John McCain, yesterday on CNBC:

My campaign manager [Rick Davis] has stopped [lobbying for Fannie Mae], has had nothing to do with it since, and I'll be glad to have his record examined by anybody who wants to look at it.

The New York Times, today:

Senator John McCain's campaign manager was paid more than $30,000 a month for five years as president of an advocacy group set up by the mortgage giants Fannie Mae and Freddie Mac to defend them against stricter regulations, current and former officials say.

The McCain campaign, today, in response to the Times:

"Whatever the New York Times once was, it is today not by any standard a journalistic organization.... [it is] an organization completely, totally 150-percent in the tank for the Democratic candidate."

H/T Think Progress.