Is the Glass-Steagall Act, the Depression-era law that blocked commercial banks from participating in riskier investment banking, set for a revival? That's what a new piece of legislation, introduced yesterday by Senators Maria Cantwell (D-Wash.) and John McCain (R-Ariz.), would do, forcing major changes to financial titans like JPMorgan Chase, Citigroup, and Bank of America.
Reestablishing the firewall between commercial and investment banking poses a dilemma for banks such as JPMorgan Chase, which snapped up Bear Stearns' trading operations earlier this year, and massive Citigroup, which includes more staid consumer banking branches as well as riskier trading operations. The already controversial, shotgun-wedded Bank of America and Merrill Lynch relationship wouldn't survive if Glass-Steagall was revived, either. And you can throw Goldman Sachs and Wells Fargo into that mix, too. The McCain-Cantwell legislation would give such institutions a year to break up their different banking arms.
The Depression-era law, you'll remember, was abolished in 1999 by the Gramm-Leach-Bliley Act, one of the most significant pieces of deregulatory legislation in the past few decades, paving the way for the emergence of financial behemoths like Wells Fargo, JPMorgan Chase, and Citigroup (though Citi received somewhat of an exemption to grow even before 1999). It's a long shot at this point, but bringing Glass-Steagall back would be a watershed moment for financial regulation and major step toward scaling back the excesses and ridiculous risk-taking of the past decade or so. At the very least it would protect consumers' savings from use in banks' riskier operations.
Rep. Maurice Hinchey (D-N.Y.) is going to introduce similar legislation in the House, the Wall Street Journalreported Wednesday. Hinchey tried to get his bill into the House's big financial-reform package earlier this month, but Democratic leadership blocked him.
Since the Senate probably won't take up financial regulation until early 2010, it's unclear how soon the McCain-Cantwell legislation will get its day in the sun. It could be tucked into the Senate's financial regulation plans, or introduced as an amendment later in the sausage-making process. Either way, it's a promising idea and an encouraging start to the Senate's financial overhaul.
Some articles make you less informed after you read them. Exhibit A is today's New York Times story on the federal debt limit, which was raised last night. Here's one paragraph that illustrates the problem:
Lawmakers quickly returned to partisan sniping before voting 218 to 214 to raise the federal debt limit, with each party blaming the other for running up the national debt over the last decade.
The article then continues on for another thirteen paragraphs without even attempting to inform the reader about anything other than the two parties' talking points. At no point does the Times let readers know that which party is mostly to blame for running up the national debt is an empirically verifiable fact. It's not a matter of partisan opinion. The Times could have even gone to its own reporting on this subject. In June, the Times ran an article by David Leonhardt explaining that most of the deficit is due to the recession and the Bush tax cuts—not overspending by Democrats in Congress, President Obama's budget, or even the bank bailouts. If the author wanted some partisan balance, he could have mentioned Leonhardt's conclusion that Obama doesn't have much of a plan for closing the gap.
The article could also have referred to this study by the Center on Budget and Policy Priorities, which was conveniently released just yesterday. It's called "President Obama Largely Inherited Today’s Huge Deficits: Economic Downturn, Financial Rescues, and Bush-Era Policies Drive the Numbers." It even comes with a pretty chart, which you can see to the right.
Times readers who relied on this failbag of an article are now less informed than they were before they read it. For all those readers know, President Al Gore and Speaker of the House Dick Gephardt were the ones running up the deficit after Clinton left office.
Why even bother writing the article if you're not going to try to adjudicate a factual dispute? Next time, the Times should simply republish the Democrats' and Republicans' press releases and be done with it. FAIL.
Almost half of unemployed workers in the United States experience mental-health problems. Some 40 percent of those with children say their kids show “behavioral changes.” One-quarter have lost their homes or are close to it. One-quarter receive food stamps. What Tuesday’s New York Timespoll didn’t mention are the social implications. Here's what your neighborhood can expect if the job situation isn't addressed:
More homeless — 19 out of 25 cities saw an average 12 percent rise in homelessness from November 2008 through this past October. "We're seeing a new trend and I would expect the number to rise substantially," Nan Roman, president of the Washington-based National Alliance to End Homelessness, told Reuters.
More homeless mentally ill — 20 to 25 percent of the 700,000-plus homeless people living on the street are thought to have a serious mental illness. Expect homelessness to exacerbate mental health issues—like severe depression—linked to job losses.
More people on Medicaid — States estimate that Medicaid enrollment will rise 6.6 percent over current level as a result of the recession. Enrollment grew by a state average of 5.4 percent in 2009, the highest rate in six years.
More children on Medicaid receiving antipsychotics for displaying “behavioral changes” — See Drugging the Poor.
This vicious poverty cycle may seem too daunting to tackle—where to begin?—but in these writings, Kevin Drum and James Ridgeway offer long-term solutions for some of the problems this new slew of poor and their communities potentially face. Spoiler alert: The remedy involves progressive taxes for social services.
Over at the Blue Marble blog, MoJo and our collaborators are deep into the second week of climate talks in Copenhagen. And things are getting messy. While the US hasn't exactly been a climate hero, our friendly neighbors to the north have emerged as climate's enemy #1: Canada has negotiated so hard for soft emissions targets that the Yes Men pranksters targeted them earlier this week. And it's about to get worse: On Tuesday, leaked documents from the Harper administration indicated that the nation is considering even weaker emission reduction targets for fossil fuel industries.
Meanwhile, the world's poorest nations have been fighting for a binding treaty. Will it happen? A recent Gallup poll found that 55 percent of Americans support signing such a treaty, while thirty-eight percent give it a thumbs down. California Gov. Arnold Schwarzenegger isn't about to let all the uncertainty get to him. In fact, he thinks the conference has been a resounding success.
Plus: Comedian Eugene Mirman skulks around the Bella Center, makes new friends, and even makes a local apologize for the loud dance music played in all the restaurants in Copenhagen.
Last week, the Indian government announced that it would move to split the southern state of Andhra Pradesh in two, caving to the demands of a local politician who "vowed to starve himself to death if India didn't redraw the map." Shortly thereafter, similar movements sprang up across the country, all demanding statehood for their particular ethnic region. As one Indian commentator fretted, "Now people will think all you have to do is fast and you can get your own state." Somewhere, Joe Lieberman is taking notes.
It’s all kind of a mess, but it raises a great question: Why don’t we do the same thing? Take any major contemporary policy issue (climate change, health care, or, why not, farm subsidies) and odds are that the ability to address it is hindered by the fact that the US Senate, as Matthew Yglesias has noted, is incredibly unrepresentative of the nation as a whole. All you need to do is pick up a map: There are two Dakotas and just one California; there’s a Delaware and a Rhode Island but no Washington, DC (at least in Congress). Simply put, we need better states.
So what changes would you make to the map? Have at it in the comments. And to get your creative juices flowing, here’s Jonathan Chait’s epic takedown of the state of Delaware.
Investigative journalist Shane Bauer and two companions "will be tried by Iran's judiciary system and verdicts will be issued," the Islamic republic's foreign minister, Manouchehr Mottaki, announced at a news conference Monday. The group was arrested in July after allegedly straying into Iran during a hiking trip near the Iraqi city of Sulaimaniya. While Abbas Jafari Dowlatabadi, Tehran's chief prosecutor, accused the three University of California-Berkeley grads of espionage in November—a charge that can carry the death sentence—Mottaki said only that "relevant sentences" would be issued.
After the statement by Mottaki, Secretary of State Hillary Clinton made another call for the release of Bauer, 27, Sarah Shourd, 31, and Josh Fattal, 27. "The three young people who were detained by the Iranians have absolutely no connection with any kind of action against the Iranian state or government," Clinton told reporters. "We appeal to the Iranian leadership to release these three young people and free them as soon as possible."
"When we hear this, the roller coaster goes again," Shourd's mother, Nora told the New York Times. "It’s like we just have to pull ourselves back and realize that nothing has happened yet. They’re waiting in their way, and we’re waiting impatiently in ours."
Diplomatic tensions have complicated the fate of the wayward hikers. For several years, Iran has been pursuing nuclear power in the face of opposition from Western governments, which suspect it is trying to assemble materials for a nuclear bomb. In a September interview with NBC News, Iranian President Mahmoud Ahmadinejad alleged that America is holding several Iranian citizens "in US prisons right now with no good reason."
The US has relied on Swiss diplomats for updates on Bauer and his friends. The US government ended direct diplomatic relations in the wake of Iranian hostage crisis and now works with Switzerland's embassy in Tehran to communicate with the Iranian goverment. The Swiss, who have visted Bauer and the hikers twice in the infamous Evin prison where they are being held, say the Americans are healthy.
This Tuesday, the ACLU and the US government faced off before the 9th Circuit Court of Appeals over controversial state secrets privileges. Since President Obama was inaugurated in January, his supporters have been disappointed by his administration's embrace of Bush-era secrecy protections. Most recently, Obama's Justice Department has asked the court to dismiss a lawsuit on behalf of five foreign civilians whom the CIA allegedly detained illegally, transported to secret locations with the help of Boeing subsidiary Jeppesen Dataplan, and subjected to harsh interrogation tactics.
At the Mohamed et al v. Jeppesen Dataplan hearing, both sides were equally dramatic. Arguing on behalf of the plaintiffs, the ACLU’s Ben Wizner warned that if the court endorses the government's sweeping claim to secrecy, "it will do tremendous harm to our democratic principles." Representing the United States, Douglas Letter doubled down on the government's assertion that simply allowing the case to be heard would result in the disclosure of classified information that could harm national security.
At issue is the "extraordinary rendition" practice used by the Bush administration to arrest and question foreign nationals with supposed ties to terrorists. The ACLU claims that the plaintiffs were unlawfully detained and, with Jeppesen's assistance, taken beyond the reach of American anti-torture laws for questioning. The government has argued that by confirming or denying a contract with the CIA, Jeppesen would reveal important state secrets. First a lower court dismissed the case, but in April, a three-judge panel reversed that decision and allowed it to proceed. However, at the request of government lawyers the appeals court agreed to rehear the arguments before its entire 11-judge roster.
Two Security Forces members of Provincial Reconstruction Team Ghazni secure the landing zone while Polish medics arrive to provide medical care to a third team member during training, Ghazni Province, Afghanistan, Dec. 7, 2009. Polish medics and Special Forces along with US Army personnel conducted 9-line medevac rescue procedures and secure the area on the side of a mountain inside Ghazni Province, Afghanistan. (US Air Force photo by Master Sgt. Sarah Webb.)