Mojo - February 2009

Dear US Mint: Pump Your Brakes

| Tue Feb. 17, 2009 12:00 PM EST

The US Mint is completely out of control. Most recent illustration: the release of four (4!) new pennies commemorating the 200th anniversary of Abraham Lincoln's birth. The first, shown at the right, is already in production. Here are details:

The first coin, nicknamed the "Kentucky Penny," features an image of one-room log cabin where Lincoln was born on Feb. 12, 1809, near Hodgenville, Ky....
The second design, the "Indiana Penny," features an image of a young Lincoln taking a break from his work as an Indiana rail splitter. It will find its way into pockets and change purses starting May 14.

The "Illinois Penny," marking Lincoln's work as a state legislator, will start dropping into tip jars Aug. 13.

And the fourth penny, with an image of the unfinished U.S. Capitol dome, makes its debut Nov. 12. The unfinished dome symbolizes the nation torn apart by the Civil War and Lincoln's resolve to bring it back together.

And just in case that wasn't enough, the Mint is also producing 500,000 commemorative Lincoln silver dollars. This is officially Minters Gone Wild. Tourists visiting America already have to deal with the fact that our quarters have over fifty different images on the back, many of which are obscure references to local tourist attractions. (Some don't even exist any more!) There are two different versions of Jefferson on our nickles, there are dollar and half-dollar coins you've never heard of, and starting in 2010 the US Mint is going to start featuring national parks on our quarters. Did you know that there are $10 coins featuring famous first wives?

Enough! The pictures on the back of our coins ought to mean something. I know this is a bizarre place to make a stand for tradition, but we're now printing coins with middling Presidents Harrison, Tyler, Polk, and Taylor on them. At this point, the national Mint is like a frantic crack addict, looking desperately for a new fix that it knows it will enjoy less than the last. Consider this an intervention, Mint. Go check yourself into rehab before we find you sprawled out in a gutter surrounded by dimes with pictures of Grover Cleveland's private commode on the back.

Update: This post was originally titled "Dear US Mint: Pump Your Breaks," because I am an idiot.

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Should We Be Critical of the Geithner About-Face?

| Tue Feb. 17, 2009 11:28 AM EST
A lot of early morning chatter on the internets is focusing on this WaPo story, which suggests that Treasury Secretary Tim Geithner's rollout of the Wall Street bailout version 2.0 was "hobbled" by a last minute change of plans. "According to several sources involved in the deliberations, Geithner had come to the conclusion that the strategies he and his team had spent weeks working on were too expensive, too complex and too risky for taxpayers," the article says. "They needed an alternative and found it in a previously considered initiative to pair private investments and public loans to try to buy the risky assets and take them off the books of banks."

This news isn't being received kindly. TPM's top headline: "How Geithner's Bailout Rollout Flopped." Mike Tomasky echoes the Post and says that Geithner's effort was "hobbled." Conservative blog Red State is calling the situation a "picture of dysfunction."

And yet, why? I agree that Geithner should have ignored his arbitrary deadline in order to put more meat on the bones of his plan. I agree that it is ridiculous that the administration gave Geithner no staff to work with. But shouldn't we applaud the fact that Geithner did not stubbornly stick to a plan that he could see was not working, despite the fact that he had spent weeks working on it? Wasn't it characteristic of the Bush Administration to never admit mistakes and to obstinately stick with policies that were obvious failures? Doesn't that explain years 2003-2006 of the Iraq War and Donald Rumsfeld's tenure as Secretary of Defense?

Geithner saw that he had a flawed plan. Instead of saying, "It's too late to change course" or "We put too much work in to switch things now," he scrapped what he had and went with something better. I say we give him credit for that.

Conservatives Gear Up for the Entitlement Wars

| Sat Feb. 14, 2009 9:44 PM EST

There were signs, even before Obama took office, that fiscal conservatives would try to use the recession to achieve their long-cherished goal of rolling back the entitlement programs responsible for rescuing millions of elders from desperate poverty. A month ago, I wrote about the coming “entitlement wars," in which public fears and misapprehensions would be exploited to manufacture intergenerational conflict, and Social Security and Medicare would be raided to pay for the economic stimulus.

In the current issue of The Nation, William Greider has written the essential article on the subject, laying out the history, the players, and the tactics employed in this long-brewing battle.

Governing elites in Washington and Wall Street have devised a fiendishly clever “grand bargain” they want President Obama to embrace in the name of “fiscal responsibility.” The government, they argue, having spent billions on bailing out the banks, can recover its costs by looting the Social Security system. They are also targeting Medicare and Medicaid. The pitch sounds preposterous to millions of ordinary working people anxious about their economic security and worried about their retirement years. But an impressive armada is lined up to push the idea–Washington’s leading think tanks, the prestige media, tax-exempt foundations, skillful propagandists posing as economic experts and a self-righteous billionaire spending his fortune to save the nation from the elderly.

A Brand New Blackwater! Erik Prince Renames Mercenary Firm

| Fri Feb. 13, 2009 4:42 PM EST

What's in a name? A lot, particularly if you're a company accused of misdeeds. The best way out, as has been shown time and again, is simply to discard your name, adopt a new identity, and start again. It's a veritable capitalist tradition. Just ask the budget airline ValueJet, which, after one of its planes nosedived into the Florida Everglades in May 1996, killing everyone aboard, quietly became AirTran. Even cereal executives know the score: the breakfast favorite "Sugar Pops" became "Corn Pops" as health conscious mothers awoke to the idea that feeding sugar to their kids each morning was not a great idea.

What about repeated, questionable shootings of Iraqis? That, too, demands a blank slate... or so Blackwater has decided. Buried in the news Friday was Erik Prince's decision to rebrand his network of military contracting firms from Blackwater to "Xe," pronouned like the letter "z." Seems pretty lame at first blush, but perhaps it's a stroke of genius. Could it be that reporters' fascination with the Blackwater flows, at least in part, from the perfect symmetry of shady dealings and an ominous, Bond-villainish name?

Two Important Stimulus Links

| Fri Feb. 13, 2009 4:02 PM EST

A full breakdown of where stimulus money is going is here. An example, taken at random:

Federal Aviation Administration infrastructure                 $200,000,000
Grants-in-aid for airports                                                  $1,100,000,000
Highway infrastructure investment                                   $26,725,000,000
Highway infrastructure investment in Puerto Rico           $105,000,000
Highway infrastructure funds distributed by states          $60,000,000
Highway funds for the Indian Reservation Roads program $550,000,000

And the end result of the wrangle over executive pay limitations is here. The upshot: the strongest versions of the pay limitations, proposed by Sens. Wyden, Snowe, and McCaskill, were not adopted; a gentler version, proposed by Sen. Dodd, was.

Update: Oh, forgot. Here's my piece from yesterday on the green community's reaction to the stimulus bill. In short: they love it.

Update Update: It's a cavalcade of links. Whistleblower protections stay in the bill!

Banks Banned From Replacing Workers With Foreigners

| Fri Feb. 13, 2009 1:27 PM EST

When the stimulus package hits President Obama's desk, it will include a provision banning bailed-out banks from replacing laid-off American workers with skilled foreigners.

Senators Bernie Sanders (I-Vermont) and Charles Grassley (R-Iowa) proposed the ban, which would last two years. Their proposal came a few weeks after the Associated Press reported banks that had received $150 billion in bailout money requested work visas for nearly 22,000 foreign workers during the last six years, a move Sanders called "absurd."

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GAO: Pentagon Must Reexamine Its Reliance on Private Contractors

| Fri Feb. 13, 2009 12:35 PM EST
The Department of Defense has come too rely too much on private contractors to fulfill core missions without adequate consideration of which functions are "inherently governmental," Gene Dodaro, GAO's acting comptroller, has told Congress. Testifying Wednesday before the House Appropriations Defense Subcommittee, headed by Pennsylvania Democrat John Murtha, Dodaro reiterated a request from GAO--first made in 2006--that lawmakers compel the Pentagon to consider how it hires and deploys contractors. The amount of defense spending devoted to paying private companies to perform an wide array of tasks (support services, intelligence, translation, security, etc.) has doubled since 2003.

While we are all to eager to blame contractors for fraud and corruption, Dodaro emphasized that a large part of the problem stems from a shortage of Pentagon contract specialists and incompetence among those already on the job.

"Diaper Dave" Vitter Says Obama Adopts Judicial Standards of a "Dictatorship"

| Thu Feb. 12, 2009 6:11 PM EST
Republican Louisiana Sen. David Vitter made a trip to DC's Chinatown on Thursday to nibble on kung pao chicken and rally the conservative troops. Addressing the DC lawyers chapter of the conservative legal group, the Federalist Society, Vitter got right down to red meat. After quoting comments from President Obama suggesting that he'd like his judicial nominees to be able to empathize with the downtrodden, Vitter declared that demanding empathy in a judge was something you'd expect in a "dictatorship." How empathy equates with repressive rule, Vitter didn't really explain, except to say that it had little to do with ensuring checks and balances on an imperial government. (Vitter also claimed--and it was hard to tell if he was joking or not--that he routinely walks from the Senate to the House of Representatives to use the apparently more populist House water fountains, instead of imbibing the stuff the Senate is drinking these days.)

But Vitter didn't really come to Tony Cheng's to discuss judges or the Constitution. His talk, entitled "Defending Conservative Principles in the Senate," was mostly a complaint about the economic stimulus bill that his Senate colleagues were poised to pass without his vote or the votes of most Republicans. According to Vitter, his party was having a come-to-Jesus moment over the stimulus package, which had provided the minority party an opportunity to rediscover its mantra of smaller government and lower taxes.

New Torture Memos Outline Black Sites, Ghost Prisoners

| Thu Feb. 12, 2009 3:03 PM EST

Three human rights groups released more than a thousand pages of Department of Defense and CIA documents Thursday that outline how closely the two agencies worked in rendering terrorism suspects to black sites, keeping detainees' identities secret, and tempering bad publicity for inmate treatment at Guántanamo Bay.

Most of the documents—obtained after Amnesty International, the Center for Constitutional Rights, and the Center for Human Rights and Global Justice sued under the Freedom of Information Act—simply contain news articles, but the Center for Constitutional Rights scoured the files and found three significant disclosures from the DoD.

New York Attorney General Cuomo Slams Merrill Lynch

| Thu Feb. 12, 2009 2:39 PM EST

Andrew Cuomo, New York's Attorney General, is most displeased. Cuomo is investigating why Merrill Lynch handed out $3.6 billion in bonuses before releasing its horrendous results for the fourth quarter of 2008, in which it lost $15.31 billion. After doling out the bonuses, Merrill Lynch was subsequently bought by Bank of America (with $20 billion of taxpayer help), and Bank of America was later the beneficiary of a $25 billion government bailout. The bonuses were also very unequally distributed—while 39,000 employees received some bonus money, 700 employees were made millionaires by the bonus pool, and the top 149 bonus recipients alone received $858 million. The New York AG's office wants to know why Merrill Lynch saw fit to reward so few of its employees so extravagantly for such massive failure. But Cuomo's not stopping at a state-level investigation—he's also calling in the feds. In a letter to Rep. Barney Frank (D-Mass.), the chair of the House Financial Services Committee, Cuomo dishes the dirt on his ongoing investigation of Merrill:

On October 29, 2008, we asked Merrill Lynch to detail, among other things, their plans for executive bonuses for 2008, including the size of the bonus pool and the criteria they planned to use in determining what, if any, bonuses were appropriate for their top executives... Merrill did not provide my Office with any details as to the bonus pool, claiming that such details had not been determined.
Rather, in a surprising fit of corporate irresponsibility, it appears that, instead of disclosing their bonus plans in a transparent way as requested by my Office, Merrill Lynch secretly moved up the planned date to allocate bonuses and then richly rewarded their failed executives. Merrill Lynch had never before awarded bonuses at such an early date and this timetable allowed Merrill to dole out huge bonuses ahead of their awful fourth quarter earnings announcement and before the planned takeover of Merrill by Bank of America. [emphasis added]

The sheer Rod-Blagojevich-esque audacity of Merrill's move is impressive. Merrill knew it was being watched by Cuomo, who had asked them to behave reasonably and transparently with their bonuses. One would think that knowledge would inspire some sort of caution. But no—instead, Merrill just went ahead and did what it wanted to anyway, likely figuring that politicians wouldn't have the stomach to take back bonuses that had already been handed out. (Better to beg forgiveness than to ask permission.) That may be the case, but one of Cuomo's accusations seems to make government punishment a bit more likely. "One disturbing question that must be answered," Cuomo writes, "is whether Merrill Lynch and Bank of America timed the bonuses in such a way as to force taxpayers to pay for them through the deal funding." Sure, politicians are reluctant make people give up already-awarded bonuses. But if the bonuses essentially came from taxpayer money, public outrage might force Congress (or Cuomo) to make Merrill's employees give the money back.