Mojo - March 2009

Corn on "Hardball": Still Debunking the Saddam-9/11 Connection

| Thu Mar. 12, 2009 8:57 PM PDT

On Wednesday night, Chris Matthews interviewed--make that, skewered--Ari Fleischer on Hardball, grilling him on George W. Bush's legacy: a lousy war in Iraq sold to the public with false information and a lousy economy. At the end of the long segment, Fleischer said

But after September 11, having been hit once, how could we take a chance that Saddam might not strike again?

Strike again? Was Fleischer pushing the canard that Saddam Hussein had been involved in the 9/11 attacks? Matthews was busy closing out the segment and didn't focus on this remark. But after watching the interview later, he decided this comment deserved attention.

Enter former Reagan Pentagon official Frank Gaffney and me. We were invited on Thursday's show to discuss Fleischer's comment and the claim--to which some neocons still cling--that Saddam was in cahoots with the 9/11 mass-murderers. The 9/11 commission said there was no link between Saddam and 9/11, but, yes, Gaffney still contends that Saddam was behind al Qaeda's attack. His evidence? Gaffney cited circumstantial reports, a book by discredited neocon Douglas Feith, and, essentially, his own hunch. Here's what happened:

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Congress Investigating Whether Merrill Lynch Lied on Bonuses

| Thu Mar. 12, 2009 12:10 PM PDT

Earlier today, I noted that New York Attorney General Andrew Cuomo, who is investigating the bonuses that were given in late 2008 to executives at the massively money-losing Merrill Lynch, seems to have caught the financial services company in a lie. Now Merrill Lynch (which was bought by Bank of America last year with taxpayer help) is in even more trouble. The allegedly misleading letter Merrill Lynch sent in November of last year was sent to Congress, and Congress definitely doesn't like being deceived. Ed Towns (D-NY), the new chair of the House oversight committee, announced today that he is investigating whether Merrill Lynch execs lied to Congress. "[Cuomo's] filings raise the disturbing possibility that Merrill Lynch executives may have obstructed this Committee’s investigation into executive compensation practices and the awarding of bonuses at the company," Towns writes. "We will not hesitate to exercise every means at our disposal to protect the integrity of the Congressional investigation process and to bring real transparency to the use of TARP funds."

SarahPAC Missed the Memo

| Thu Mar. 12, 2009 11:23 AM PDT

Sarah Palin's PAC, SarahPAC, is raising money using the (completely freaking crazy) Human Events mailing list. Opening paragraph:

As Washington, D.C. partisans continue to fight and bicker over "politics as usual," Governor Sarah Palin is working every day to reform government in Alaska and fight for the conservative values we all cherish.

Whoops -- so much for reform!

Why Can't We Get Some Interim Treasury Staff?

| Thu Mar. 12, 2009 10:56 AM PDT

I agree with this point from Times columnist Tom Friedman:

I read that we’re actually holding up dozens of key appointments at the Treasury Department because we are worried whether someone paid Social Security taxes on a nanny hired 20 years ago at $5 an hour. That’s insane. It’s as if our financial house is burning down but we won’t let the Fire Department open the hydrant until it assures us that there isn’t too much chlorine in the water.

But I also get this counterpoint from the Economist's Democracy in America blog:

You can hear the Republican spin if someone in the White House argued this. "Oh, sure. That's convenient. Waive the rules now, after eight years of piling on George Bush."

But do we really have only two options: unduly delay the staffing of the Treasury, or appointing people with ethical transgressions in their past lives? Why can't we appoint interim staff to the Treasury that undergo only a light vetting? They could serve while the full vetting process is going on. I understand there would be hiccups when the interim staff has to transfer their knowledge/files/etc. to the full-time staff, but is that worse that have no staff at all during this critical juncture?

Lessig's Donor Strike Withholds $1 Million from Congress

| Thu Mar. 12, 2009 9:23 AM PDT

In January, Lawrence Lessig and his reform-minded organization, Change Congress, launched a donor strike aimed at members of Congress who do not support a bill designed to greatly reduce the influence of lobbyist and special-interest money in politics.

Thursday, Lessig and fellow Change Congress founder Joe Trippi announced donors have withheld $1 million total, including $365,000 held back from Senators Diane Feinstein (D-Calif.) and Chuck Schumer (D-N.Y.).

Lessig has long railed against the money-powered corruption machine in Congress, and Change Congress's strike was engineered in part to draw attention to Illinois Senator Dick Durbin's Fair Elections Now Act.

Now, you could debate the merits of a donor strike (won't it cause members of Congress to rely more on big-time dollars from special interest groups?), but Durbin's bill, which Arlen Specter (R-Penn.) cosponsored, could transform how politicians finance their campaigns—and how they vote once they arrive in Washington. Basically, it creates an incentive for politicians to raise a large number of small-dollar donations. Once they hit a magic number of those donations, they are eligible for a much larger cash infusion, paid from a public fund. If they accept that chunk of money, they will not be allowed to take big-dollar donations from lobbyists or special interest groups. Instead, every small-dollar donation received after that would be matched by money from the central fund.

Cuomo Catches Merrill Lynch Lying in Bonusgate Probe

| Thu Mar. 12, 2009 8:18 AM PDT

What has Andrew Cuomo done to deserve this disrespect from Bank of America and Merrill Lynch?

As we've previously noted, Cuomo, New York's attorney general, is on the warpath against Bank of America, which swallowed up Merrill Lynch late last year with the help of billions of taxpayer dollars. Cuomo is peeved that Merrill Lynch doled out $3.6 billion in early bonuses even though it knew it was about to lose $15.31 billion in the fourth quarter of 2008. And now Cuomo seems to have caught Merrill's lawyers in a lie. The Wall Street Journal reports:

In a Nov. 24 letter, a lawyer for Merrill Lynch & Co. assured the head of a House committee that "incentive compensation decisions for 2008 have not yet been made," ... But the firm's compensation committee actually voted two weeks earlier to pay bonuses to Merrill employees in December, according to testimony from a Merrill director.

That sure looks like someone's lying. And that's not all. Depositions Cuomo filed with the New York Supreme Court yesterday indicate that, as Cuomo suspected, Merrill didn't even think about reducing its bonus pool when it became apparent that it was going to suffer a steep loss. If Cuomo can continue to paint Merrill and Bank of America as irresponsible, lying scumbags, he'll probably eventually get what he's really after: the names of the employees that the two financial giants made into millionaires last year. The PR cost to B of A from his continued investigation will eventually become greater than the PR cost of releasing the names. But so far, B of A is still holding out on him.

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A Brief Interview with Ray LaHood

| Wed Mar. 11, 2009 12:55 PM PDT

Walking to Wednesday's (mostly uneventful) White House press briefing, I spotted Transportation Secretary Ray LaHood heading from the East Wing toward the Old Executive Office Building. He was by himself. I asked if he had a moment to talk, and he graciously said yes.

I started with substance: light rail. There's money in the stimulus bill for light rail projects, and Prsident Barack Obama has referred to this when pitching the stimulus package. But the White House has not placed much emphasis on this initiative. In general, Obama has (so far) not fully designed or promoted his economic recovery initiative as a bold move to revitalize (and even re-imagine) America's infrastructure. So I asked LaHood how his department would be spending the light-rail money in the stimulus legislation: would it disseminate it widely or use it to move ahead with a few high-profile projects that could draw plenty of public attention? "We will spread it around," he said, noting the stimulus contains about $1 billion for light rail. His department, he said, has a list of about a dozen projects that it will soon send to the White House. Presumably, the White House will weigh in on which project gets what money.

"There's always a fixation on building roads at the Transportation Department," I said, asking "Does the current crisis give you a chance to change that somewhat?"

"Now is the time to change direction," said LaHood, who was a Republican member of the House of Representatives before joining Obama's Cabinet. But, then, he didn't say how fast or--more important--how much.

Next, I turned to politics. "Are you disappointed by your fellow Republicans on the Hill who have been trying to block the president's programs?" He paused for a moment. It looked as if he would say something. He opened his mouth. Then he shut it. A look of reconsideration crossed his face. "I shouldn't comment," he said. "I'm part of the Obama team now. I'm out of the political game."

"But aren't you just a little bit disappointed?" I asked, as coaxingly as possible. "Just a little?" Another pause. "I shouldn't say," he replied. He said goodbye and walked off. And I thought: should I have asked him about Rush Limbaugh?

Let's Hear It For Big Government!

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

We've all got our issues about which we're just plain unreasonable. One of mine is the right wing's vilification of "big government." You might as well try to engage me in a forum on whether the Earth is flat; I will simply get up and walk away from such a pointless conversation. Nothing will convince me that America, or any country, is a group of hearty frontiersmen with no one to blame but themselves if they don't build their own roads, provide their own medical care...oh wait. We're supposed to trust capitalism to do that which we individually can't and religion to take care of the losers. My bad.

As I listen to the latest pathetic jeremiads against the boogeyman of 'socialism,' my eyes just roll and roll. I simply do not trust people who believe we need as little government as possible. Who believe we need just a coupla folks to hand over public resources to corporations gratis, with no pesky bureaucrats whining about not being able to breathe. Who believe that capitalism is always and everywhere rational, so why would corporations contaminate the very resources it needs to exist? And that therefore, there is no global warming. Puh-leeze.

We certainly need better government (a former president comes to mind), but I'm not sure we need less of it. We need government if only to protect us from capitalism; if anyone still believes the profit motive has its limits, I'd like to know what color the sky is in your world. Here's me being unreasonable again: People who want only fifty cents worth of government are people who just don't want to pay taxes. Which makes me sneer because without all this government—roads, cops, telecommunications systems, public schools—we'd all only be able to make fifty cents. Duh. I pay about half my income in taxes (and I don't make even half as much as you think I do). I don't like it, but I'm a patriot, which means thinking now and then about what's best for all of us, not just me. I don't like my money going to people like KBR and Halliburton and AIG; their allegiance is to money and other rich people, and that kind of government we don't need.

Bill Maher summed it up on HuffPo:

"The first responders who put out your fires, that's your government. The ranger who shoos pedophiles out of the park restroom...Recent years have made me much more wary of government...stepping aside and letting unregulated private enterprise run things it is plainly too greedy to trust with."

Take a page from Bill and say it out loud: I'm for big government and I'm proud! Why he lowered himself to 'debate' this ur-knuckle dragger, I don't know, but still...the video of it made me want to stand up and cheer.

Top Marginal Tax Rates Through Time

| Wed Mar. 11, 2009 10:42 AM PDT
Next time you hear someone complaining about how the rich shoulder a massive tax burden, point them to the first graph at this FiveThirtyEight post. The top marginal tax rate in this country is at one of the lowest points in the past 100 years.

Treasury Staffs Up, Brings More Progressives On Board

| Wed Mar. 11, 2009 10:00 AM PDT

President Obama has taken a lot of heat for having an understaffed Treasury Department, so earlier this week he named three new assistant secretaries. I have a web article up on one of the three, Alan Krueger, who will be the assistant secretary for economic policy. Krueger has never worked for a bank, doesn't have any connection to TARP or its later iterations, and has never pushed finance sector deregulation. Oh, and he shifted the conventional thinking on the minimum wage dramatically leftward in the 90s. From my article:

"To my mind, he would be one of the best people we could hope to get in this position," says Dean Baker, head of the left-leaning Center for Economic Policy Research. Adds CEPR's chief economist, John Schmitt: "He has done a lot of research that progressives would be very happy about. He is certainly one of the absolute top labor economists in the country." One-time Clinton economic aide and Berkeley economist Brad DeLong calls Krueger a "good choice."

Krueger is best known for his work on the minimum wage. In 1997, he co-wrote a book with economist David Card called Myth and Measurement: The New Economics of the Minimum Wage. They argued that the moderate increases in the minimum wage typically seen in the US don't raise unemployment numbers—a thesis that went against much of the conventional wisdom at the time—and that such pay boosts have a substantial impact on the take-home pay of low-wage workers. The book, says progressive economist James K. Galbraith, established the minimum wage's value "very firmly and to the horror of the mainstream." At first, Krueger's ideas on the minimum wage were highly controversial. "He took a lot of heat for that, and stood up," says Schmitt. Krueger's extensive background on issues related to job creation and wage distribution, Schmitt adds, will serve him well as the Obama team attempts to implement the stimulus bill, which aims to create over 3 million new jobs.