Mojo - March 2009

Obama Proposes Making Earmarks Subject to Competitive Bidding

| Wed Mar. 11, 2009 9:23 AM PDT

In a statement today, Obama acknowledges that the budget just passed by Congress is loaded with earmarks -- the Administration has argued that O's campaign promises about earmarks don't apply to it because it was written before he took office -- and introduces new ways to reform them. Anything he suggests will have to be approved by earmark-hungry Congress, so don't hold your breath. But here are the President's ideas. The boldest and most promising one is to make earmarks subject to competitive bidding, which, because it strikes at the very heart of the idea of the earmark, will probably be the first to get rejected by Congress.

...earmarks must have a legitimate and worthy public purpose.  Earmarks that members do seek must be aired on those members’ websites in advance, so the public and the press can examine them and judge their merit for themselves.  And each earmark must be open to scrutiny at public hearings, where members will have to justify their expense to the taxpayer.

Next, any earmark for a for-profit private company should be subject to the same competitive bidding requirements as other federal contracts. The awarding of earmarks to private companies is the single most corrupting element of this practice, as witnessed by some of the indictments and convictions we have seen. Private companies differ from the public entities that Americans rely on every day – schools, police stations, fire departments – and if they are seeking taxpayer dollars, then they should be evaluated with a higher level of scrutiny.

Obama added: "if my administration evaluates an earmark and determines that it has no legitimate public purpose, we will seek to eliminate it, and we will work with Congress to do so." We'll see. Congress doesn't share Obama's zeal for reform, a fact we see time and again. So consider me pessimistic, but willing to be proven wrong.

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Obama=Bush?

| Tue Mar. 10, 2009 8:13 PM PDT

I cannot wrap my head around this op-ed by Jackson Diehl in Sunday's Washington Post. The theme? President Obama is starting to look a lot like President Bush:

The Bush administration pushed through the USA Patriot Act in October 2001 by suggesting that opponents didn't want to stop another al-Qaeda attack. In his first news conference, Obama suggested that congressional opponents of the stimulus package "believe that we should do nothing" about the economic emergency...

So Obama hasn't strayed far from Karl Rove's playbook for routing the opposition. But surely, you say, he's planning nothing as divisive or as risky as the Iraq war? Well, that's where the health-care plan comes in: a $634 billion (to begin) "historic commitment," as Obama calls it, that (like the removal of Saddam Hussein) has lurked in the background of the national agenda for years. We know from the Clinton administration that any attempt to create a national health-care system will touch off an enormous domestic battle, inside and outside Congress. If anything, Obama has raised the stakes by proposing no funding source other than higher taxes on wealthy Americans, allowing Republicans to raise the cries of "socialism" and "class warfare."

Just as Bush promoted tax cuts as a remedy for surplus and then later as essential in a time of deficits, so Obama has come up with strained arguments as to why health-care reform, which he supported before the economic collapse, turns out to be essential to recovery. Yet as he convened his "health care summit" at the White House on Thursday, the stock market was hitting another 12-year-low; General Motors was again teetering on the brink of insolvency and the country was still waiting to hear the details of the Treasury's proposal to bail out banks. George W. Bush might well be asking: Is the president taking his eye off the ball?

Cities Are Selling Stimulus Funds to Each Other

| Tue Mar. 10, 2009 4:48 PM PDT

In Los Angeles County, cities are buying federal stimulus funds from each other at deep discounts, turning what was supposed to be a targeted infusion of cash into a huge auction.

It all started when the county's Metropolitan Transportation Agency decided to hand out $44 million from the federal stimulus package in the form of $500,000 transportation grants to each of the county's 88 cities. But some cities didn't have any shovel-ready transportation projects. So with MTA's blessing, they're selling the grants to the highest bidder:

 

La Habra Heights, a city of 6,000, has sold its $500,000 in federal funds to the city of Westlake Village for $310,000 cash. Irwindale, population 1,500, also sold its $500,000 to Westlake Village, for $325,000 cash.

 

The city of Rolling Hills, population 1,900, sold its $500,000 share to the city of Rancho Palos Verdes for $305,000 cash. The city of Avalon has reached an agreement to swap its $500,000 with L.A. County.

This is Southern California that we're talking about--the land of eternal gridlock. MTA could have redirected the money to a nearly infinite list of other transportation projects. But chief planning officer Carol Inge told the Pasadena Star-News that the agency didn't want to do that because "our board wanted to give every city at least a chance to benefit from the stimulus package."

I'm sure many cities have higher priorities than transportation. And I would have liked to have seen more direct aid to ailing local governments in the stimulus bill. Still, MTA's approach strikes me as a bit too creative. What's next, stimuls money credit default swaps?

UPDATE: After this post appeared, MTA reversed course and invalidated these sales. It now says that the stimulus funds can only be swapped for other county money targeted for transit projects. But this probably won't end the controversy. MTA is still handing out a half million bucks to all 88 cities in the county, including the tiny Irwindale, population 1,446. That's $345 per Irwindalian, just for transportation. With that they could hire a worker to dig through the yellow pages and dial up free limos for everyone. H/T to TotalCapitol in the comments.

Out of Afghanistan--Or In Deep?

| Tue Mar. 10, 2009 4:47 PM PDT
In a recent interview with The New York Times, President Barack Obama said the United States was not winning the war in Afghanistan–but did not use the word "losing"–and he raised the possibility of talking to Taliban and Islamist factions in order to separate them from al Qaeda. The point: to isolate Osama bin Laden's murderous gang, both geographically and politically. Obama's remarks have generated much discussion about his policy on Afghanistan, though he does not yet have one. His national security team is in the middle of a review that is due to be completed by the end of the month. Obama has said he will send 17,000 additional US troops to Afghanistan in the spring and summer. But he has not yet said what the overall mission is there. While foreign policy experts and others await the results of the review, there's still plenty to discuss and ponder, and I did so Tuesday night on Hardball:

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Thoughts on Jim Cramer vs. Jon Stewart

| Tue Mar. 10, 2009 11:45 AM PDT

There is a serious feud ongoing between Jon Stewart and Jim Cramer.

Stewart, as you probably know, used the Daily Show and other venues to slam the financial TV networks in general and CNBC specifically. The Mad Money host, who has become famous by instructing viewers to buy and sell individual stocks in a carnival barker style, came under especially harsh criticism.

Cramer then did a media tour to defend himself; you can see a video summarizing that here and read a column Cramer wrote on the subject here. Stewart responded; you can see that here. Cramer's primary argument in all this is that Stewart is taking video snippets out of context to make him look bad -- something a comedian or a blogger could do to any pundit. Cramer points out that Stewart never mentions the fact that he urged people to withdraw their money from the stock market October 2008, when the Dow was still around 10,000. He did do that, it's true.

Cramer does deserve credit for (1) ending his market boosterism and Wall Street CEO ego-stroking before the rest of TV's financial news community did the same, and (2) apologizing for some horrifically bad stock picks (he endorsed Wachovia stock after then-CEO Bob Steel came on Mad Money and pimped the bank). But ultimately that's all tangential: What Cramer really needs to do is stop making ordinary people believe they can game the stock market on a day to day basis. A massive majority of the buying and selling done on Wall Street is done by banks and massive institutions with all the resources in the world at their disposal. Joe Sixpack and his 1,000 shares of Coca-Cola are just grease for the gears. If Joe invests his money long-term in low-risk index funds and mutual funds, he might ride out the market's fluctuations. If he tries to move that Coca-Cola at just the right time, and buy Johnson & Johnson at just the right time, he's going to get eaten alive.

Jim Cramer can defend himself all he wants. But his modus operandi is still problematic: he sends amateurs hurtling into a professional's game.

Obama's New Media Guru Slams RNC's Steele, GOP Internet Strategy

| Tue Mar. 10, 2009 10:43 AM PDT

Michael Steele, the new chairman of the Republican National Committee, has promised to take his party "beyond cutting edge." But Joe Rospars, the man behind the Obama campaign's incredibly successful new media outreach, said that the RNC's current internet strategy is "all smoke and mirrors marketing."

On Tuesday, Rospars took part in a question-and-answer session about the impact of technology on politics hosted by the left-leaning think tank NDN. Rospars dinged the Republicans' much-criticized request for a proposal (PDF) to redesign its website, laughing that his company, Blue State Digital, certainly won't be competing for the business. (Lefty BSD probably wouldn't respond to the RFP anyway, of course, but Rospars brought it up out of the blue—he was obviously referring to the widespread mockery it had already received.) He criticized the GOP's email list, boasting that the Obama campaign's 13-million-strong list was developed in an "organic" way. "We didn't purchase lists and just add people to our email list," he said. "The point of having a big email list isn't just to say you have a big email list. The RNC says they have a however big email list, but the point is to actually have relationships with people so they open the message, they listen to what you're saying, and they're willing to do something," he said.

Rospars suggested that it's a mistake to see the use of social networking technologies and new media as ends in themselves—in other words, using tools like twitter and facebook are ways of mobilizing a following, but they don't ensure you'll get one. Without adopting "the ethos of building an organization from the bottom-up," the GOP will have trouble catching up, Rospars said.

Meanwhile, Rospars is doing his best to make sure the GOP doesn't catch up. He says that of the 100 best ideas he and his team came up with during the campaign, they only used about 15. He's won't be talking about those in public. He doesn't want to "give anybody any ideas."

Too bad for Michael Steele.

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Parents' Worst Nightmare: The Season For Leaving Kids To Die In Cars Is Upon Us

| Tue Mar. 10, 2009 8:53 AM PDT

If you want to have your heart break, I mean really break into a million jagged pieces, read WaPo's hideous piece on parents who forget their kids in cars where they die horribly while Mom types 200 feet away.

Think it could never happen to you? Before I had kids, I would have been quite sure my answer would be not just no, but HELL no! But pizza chefs have done it. Rocket scientists have done it. People who spent years and hundreds of thousands of dollars on foreign adoptions have done it. Two kids later, I have to admit—yeah, it cudda happened to me. Thank god they're too big and too noisy now for that particular mistake. But God knows which other mistakes could easily befall even the best of us. So why are bloodthirsty DAs going after parents?

We're not talking here about parents who intentionally leave kids in cars so they can get their hair done and shop unencumbered. They are criminals and deserve punishment. We're talking about people who, almost entirely, had some change in the routines of their over-stressed lives and simply, honestly, forget their child was in the car. The piece is extremely well done and well researched, so check it out and resolve to look into every back seat you pass this summer. But prosecuting these folks for murder? It's not like there's any deterrent factor at play here. Good thing juries are composed of humans and not ambitious lawyers trying to make names for themselves.

Here's all it took for one jury to do the right thing. The attorney didn't put the mom on the stand because she refused to grovel and whimper in public. He played the 911 tape instead.

The tape is unendurable. Mostly, you hear a woman's voice, tense but precise, explaining to a police dispatcher what she is seeing. Initially, there's nothing in the background. Then Balfour howls at the top of her lungs, "OH, MY GOD, NOOOO!"

Then, for a few seconds, nothing.

Then a deafening shriek: "NO, NO, PLEASE, NO!!!"

Three more seconds, then:

"PLEASE, GOD, NO, PLEASE!!!"

What is happening is that Balfour [the mom] is administering CPR. At that moment, she recalls, she felt like two people occupying one body: Lyn, the crisply efficient certified combat lifesaver, and Lyn, the incompetent mother who would never again know happiness. Breathe, compress, breathe, compress. Each time that she came up for air, she lost it. Then, back to the patient.

After hearing this tape, the jury deliberated for all of 90 minutes, including time for lunch. The not-guilty verdict was unanimous.

These parents have suffered enough.

35 Counties Account for 50% of Foreclosures

| Tue Mar. 10, 2009 8:36 AM PDT
USA Today points out that, last year, just 32 counties accounted for one half of all foreclosures in the United States. Those counties are outlined in red below. Even among them, there are some areas that are worse than others: "Eight counties in Arizona, California, Florida and Nevada were the source of about a quarter of the nation's foreclosures last year."


And yet, California is, on average, the happiest state in the nation. Weird how things work. (H/T The Electoral Map)

Andrew Cuomo is Still Mad at Bank of America for Taking Your Money

| Mon Mar. 9, 2009 12:44 PM PDT

The tireless Andrew Cuomo, current attorney general (and perhaps future governor) of New York, is still very upset with Bank of America. Last month, Cuomo sent a sternly-worded letter to the troubled banking giant, asking why Merrill Lynch, which it bought last year with the help of $20 billion in taxpayer money, doled out $3.6 billion in bonuses before revealing that it lost $15.31 billion in the fourth quarter of 2008. (Bank of America later received a further $25 billion in TARP funds.) Since his last letter didn't get the results he wanted, Cuomo and Rep. Barney Frank (D-Mass.) have written a new one (PDF) demanding the names of the 700 employees that Merrill made into millionaires just weeks before announcing some of the worst corporate results in history. They write:

Detroit, Home of a New American Dream

| Mon Mar. 9, 2009 12:37 PM PDT

A while back, I placed my tongue squarely in cheek and suggested that people buy second homes in Detroit, where the average price of a house is now just $7,500.

Well, it's actually happening. In fact, opportunistic couples are buying up entire blocks and turning them into little urban oases. From the New York Times, via Ryan Avent:

A local couple, Mitch Cope and Gina Reichert, started the ball rolling. An artist and an architect, they recently became the proud owners of a one-bedroom house in East Detroit for just $1,900. Buying it wasn’t the craziest idea. The neighborhood is almost, sort of, half-decent. Yes, the occasional crack addict still commutes in from the suburbs but a large, stable Bangladeshi community has also been moving in.

So what did $1,900 buy? The run-down bungalow had already been stripped of its appliances and wiring by the city’s voracious scrappers. But for Mitch that only added to its appeal, because he now had the opportunity to renovate it with solar heating, solar electricity and low-cost, high-efficiency appliances.

Buying that first house had a snowball effect. Almost immediately, Mitch and Gina bought two adjacent lots for even less and, with the help of friends and local youngsters, dug in a garden. Then they bought the house next door for $500, reselling it to a pair of local artists for a $50 profit. When they heard about the $100 place down the street, they called their friends Jon and Sarah.

"Detroit right now is just this vast, enormous canvas where anything imaginable can be accomplished," says the Times author, Toby Barlow. "In a way, a strange, new American dream can be found here, amid the crumbling, semi-majestic ruins of a half-century’s industrial decline." I find this fascinating. Politicians talk all the time about the ingenuity and resilience of the American people. We all know that rhetoric can feel empty at times. But as this country begins its climb out of this recession, real life examples of that fighting spirit will abound. And the places that were hit the hardest will and already are seeing them first.