Mojo - July 2010

We're Still at War: Photo of the Day for July 20, 2010

Tue Jul. 20, 2010 2:00 AM PDT

 

US Army Sgt. Anthony Limon (right) and Sgt. Aaron Hestand, both from White Tank, 2nd Platoon, Delta Company, 1st Battalion, 4th Infantry Regiment, keep watch during a patrol near Combat Outpost Sangar, Zabul province, Afghanistan, on July 3, 2010. Photo via the US Army by Staff Sgt. William Tremblay.

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Goldline Finally Under Investigation

| Mon Jul. 19, 2010 12:29 PM PDT

Well, it's about time. Today, ABC News reports that the city attorney of Santa Monica, Ca., in conjunction with the Los Angeles District Attorney's office, has launched an investigation into Goldline International, the gold company that sponsors and is heavily promoted on Glenn Beck's TV and radio shows. Apparently, California authorities discovered what Mother Jones readers likely already knew, which is that Goldline misleads customers into buying overpriced gold coins that they weren't necessarily in the market for:

"There are two main types of complaints we're seeing," said Adam Radinsky of the Santa Monica City Attorney's office, which has launched what it described as a joint investigation with the Los Angeles County District Attorney's office. "One is that customers say that they were lied to and misled in entering into their purchases of gold coins," he said. "And the other group is saying that they received something different from what they had ordered."

Radinsky says that the investigation is in the preliminary stages but that it involves more than 100 consumer complaints about Goldline and the Superior Gold Group, which are both based in Santa Monica.

Goldline defended its practices to ABC by citing its superior rating from the Better Business Bureau. But as we reported here a few months ago, pretty much any Joe with a credit card can get such a rating. Goldline also claimed the investigation was politically motivated by people who don't like Beck, a charge Radinsky denied. He told ABC, "Glenn Beck has nothing to do with our investigation. Our investigation is about transactions with individual customers and the complaints that they've raised. And politics really has nothing to do with it. It's all about consumer protection for us," he said. Radinsky also said that people with Goldline complaints can now file them at a special website set up by his office, www.gold.smconsumer.org. If Beck seriously cared about his audience, he should plug that site on his show sometime.

Obamacare 1, Robert Samuelson 0

| Mon Jul. 19, 2010 11:32 AM PDT

Jon Cohn has already pretty thoroughly demolished Robert Samuelson's Washington Post "Obamacare" op-ed from this morning. But I wanted to highlight one especially amusing/depressing failure on Samuelson's part. In the column, which focuses on how problems for Massachusetts' health care system could become problems for Obamacare, Samuelson mentions a state commission's recommendation that Massachusetts move away from "fee-for-service—which ties reimbursement to individual services" because it "rewards quantity over quality and discourages coordinated care among doctors and hospitals." The commission, Samuelson explains: 

...recommended a 'global payments' system to force hospitals, doctors and clinics to create networks ('accountable care organizations'). These would receive flat per-patient payments to promote effective—not just expensive—care. Payments would be 'risk adjusted'; sicker patients would justify higher payments.

But the commission offered no blueprint, and efforts to craft consensus among providers, consumer groups and insurers have failed. State Senate President Therese Murray, an advocate of payment change, has given up for this year. "Nobody is in agreement on anything," she told the Boston Globe.

What Samuelson misses, however, is that the Affordable Care Act (dreaded "Obamacare") includes a provision implementing the recommendations of the commission. It's Section 2705 of the law, and it was inserted by Massachusetts Sen. John Kerry (see here, "modified Kerry #C3"). In other words, the Massachusetts senator successfully inserted the Massachusetts' commission's recommendation into the health reform law so Massachusetts could move forward on it. Sure, the Kerry provision only applies to Medicaid and is limited to five states. But the main point holds: The specific thing that Samuelson says isn't happening, but should, is actually happening right now.

More Doubt on Warren Nomination

| Mon Jul. 19, 2010 11:00 AM PDT

On Monday, a top congressional Democrat became the latest person to cast doubt on the potential nomination of Elizabeth Warren, the bailout watchdog and ardent consumer advocate, to lead the new Consumer Financial Protection Bureau. The CFPB is a centerpiece of the Dodd-Frank financial reform bill that passed the Senate last week and is due to be signed into law as early as this week.

Appearing on The Diane Rehm Show on NPR, Sen. Chris Dodd (D-Conn.), one of Congress' architects of financial reform, was somewhat skeptical on whether Warren—who's also a Harvard law professor—would win the approval of enough US senators to allow her to take over the bureau. "The question is, 'Is she confirmable?' There's a serious question about it," Dodd said. Dodd's comments aren't the first doubts that have been raised about Warren's viability as a nominee. Last Friday, the Huffington Post reported that Treasury Secretary Tim Geithner opposed Warren as CFPB chief. While the Treasury department quickly issued a statement that "Secretary Geithner believes that Elizabeth Warren is exceptionally well qualified to lead the new bureau," the signs are clear that a fresh controversy—is Washington ever without one?—is brewing.

As MoJo's DC Bureau chief David Corn wrote today, appointing Warren does have clear political risks. But it could also provide a much-needed boost to the Obama administration:

That might be Geithner's best argument against Warren: The banks and many Senate Republicans do not like her, and a Warren nomination could turn into a battle royal, akin to a contentious Supreme Court fight. But this is also an argument for Warren.

Presently, Obama's economic policies are made and sold by people like Geithner and Lawrence Summers, Obama's chief economic adviser. How many Americans really believe these guys are looking out for them? The president's economic team is short on non-Wall Streeters who can connect with folks at home. Placing Warren in a high-profile position would show that Obama recognizes that protecting American consumers is as important as bailing out big banks and auto companies. He would be adding a vital and clear voice to his administration. And in an election season—when Obama cannot do much to create 8 million jobs to make up for the ones lost before and after he became president—waging a fight against the banks and GOPers on behalf of a passionate consumer advocate would have political benefits.

John Kasich and Lehman, Cont.

| Mon Jul. 19, 2010 10:59 AM PDT

John Kasich, a former GOP congressman and onetime Lehman Brothers managing director, is running for governor of Ohio against incumbent Democrat Ted Strickland. He wants you to know he was just "one of 700" managing directors at the failed investment bank:

The fact that Kasich feels obligated to address his work at Lehman means that Strickland's "He's an outsider" attacks must be working. Eric Kleefeld says Kasich "clearly...wants to change the subject back to the bad economy." The problem, of course, is that Lehman Brothers and the bad economy are inextricably linked in most people's minds. So it's going to be hard for Kasich to talk jobs without talking about his old one. 

Clearly there's plenty of blame to go around for the financial crisis. But the idea (promoted by Kasich here) that you had to actually be running Lehman to bear some responsibility for its behavior is madness. I know it really hurts bankers' feelings when people suggest that Wall Street might have, you know, played a role in its own near-collapse. But it's true! And let's be honest about what Kasich was doing when he was working for Lehman in Columbus, Ohio. While he spent most of his time working with the private sector, he clearly did some work trying to convince state pension funds to trust Lehman with their money. 

It's not even clear to me why state pension funds should be playing the stock market in the first place. Stocks clearly aren't a safe bet (Ohio funds later invested at least $100 million with Lehman in unrelated deals), and people's retirements are at stake. But state pension funds have a ton of money, and Wall Street banks like Lehman have a huge incentive to try to get the fees that come from investing that kind of money.

So a lot of the interactions between pension funds and Wall Street (or Wall Street's middlemen) look kind of sleazy. The Wall Street firms (or their middlemen) hire former politicians or officials to talk up their old buddies (like they did with Kasich). Alternatively, they just go ahead and give big campaign donations to the politicians who oversee the funds—a move that even the SEC thinks looks a lot like pay-to-play

Meanwhile, it's abundantly clear that Kasich worries about Ohio voters knowing the full extent of the state's Lehman losses. In June, the Associated Press obtained an email sent by a Kasich campaign employee in which the employee asked an Ohio pension fund executive to be sure to explain that "not all the money it lost was a result of the Lehman bankruptcy." Lehman is Kasich's albatross, and it's not going away with one ad.

The Bush Legacy Project, Version 2.0

| Mon Jul. 19, 2010 9:49 AM PDT

Sen. John Cornyn and Rep. Pete Sessions are Republicans from Texas. So perhaps it shouldn't be surprising that the two lawmakers—who chair the GOP's Senate and House campaign committees, respectively—went on television this weekend to stand up for their fellow Texas Republican, former President George W. Bush. Here's the Washington Post's Chris Cillizza recapping the latest Bush reputation-rehabbing offensive:

"People had jobs when Republicans were not only in charge but George Bush was there," said National Republican Congressional Committee Chairman Pete Sessions (Texas) during an interview on NBC's "Meet the Press".

John Cornyn, chairman of the National Republican Senatorial Committee, told C-SPAN's "Newsmakers" program that "Bush's stock has gone up a lot since he left office," adding: "I think a lot people are looking back with more fondness on President Bush's administration, and I think history will treat him well."

The rhetoric from Cornyn and Sessions reflects a gamble by Republicans that Bush, who left office in 2008 deeply unpopular with broad swaths of the American public, will, as almost every president does, rebound in terms of his public image as time passes.

ThinkProgress does the (easy) spadework on this ridiculousness:

Clearly, though, the American public is still sour on Bush's record. A recent Time poll found that 71 percent blame Bush for the "balky economy," versus 27 percent who blame President Obama. By a whopping 53-to-33 percent margin, Americans favor Obama over Bush.

As for Cornyn's claim that "history will treat" Bush "well," the Siena Research Institute this month released its latest poll of presidential scholars, who ranked Bush as the worst president of the modern era and in the bottom five overall.

Jon Stewart actually addressed this issue a few weeks ago, noting that Bush "really was a terrible president who ran the country into the ground":

None of this should be surprising. Sessions and Cornyn are conservative Republicans. Conservative Republicans voted overwhelmingly for Bush in 2000 and 2004. Most conservative Republicans never thought of Bush as a bad or failed president. As late as December 2008, 72 percent of conservative Republicans still supported Bush. His overall approval rating was in the low 30s at the time. There's probably not much strategy behind the GOPers' comments: This is just what they really think.

When Sessions and Cornyn defend Bush, they're simply giving Americans a preview of what the GOP campaign committees have to offer: a return to the years when the country was run by conservative Republicans. Hey, at least people will know what to expect.

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Arpaio Plans to Jail Arizona Immigrants in 'Tent City'

| Mon Jul. 19, 2010 8:45 AM PDT

Infamous Arizona sheriff Joe Arpaio, Maricopa County's law-enforcement overlord, is planning to jail illegal immigrants convicted under the state's new immigration law in his notorious "Tent City"—an outpost of Army surplus tents in the desert that's been heavily criticized by immigration and human rights advocates. According to The Arizona Republic, Arpaio has declared that he has room for at least 1,000 new prisoners in the tents in the desert, where summer temperatures routinely hit the triple digits. Some Arizona officials have described the tents as a cost-saving measure, as they've served as an extension of overcrowded prisons that have housed a wide range of convicted criminals, in addition to immigrants. But Arpaio has made it clear that the "Tent City" is part of his larger plan to make life for prisoners humiliating and unbearable.

"I put them up next to the dump, the dog pound, the waste-disposal plant," Arpaio once said of his tactics, which have also included chain gangs (for men and women), public parades in pink underwear (for men only), and massive illegal-immigration sweeps. Arpaio's tactics have earned him the nickname "Hitler" among Tent City inmates, according to The New Yorker. They've also prompted thousands of lawsuits against "America's Toughest Sheriff," as well as a federal investigation into his immigration sweeps. "Sheriff Arpaio has absolute contempt for the dignity of the people in his custody and demonstrates this by treating people like circus animals," the ACLU wrote on its blog.

And with the rising anti-immigrant sentiment in the state, Arpaio stands no longer alone in his extreme approach to law enforcement. A reputed Neo-Nazi minuteman is now leading an armed militia in the Arizona desert to patrol against "narco-terrorists" and troll for illegal immigrants crossing the border. With the Arizona immigration law set to go into effect July 29—less than two weeks from now—such developments are only the beginning. Let the circus begin.

Cash Can't Fix the Dems' Problems

| Mon Jul. 19, 2010 7:47 AM PDT

The Democratic National Committee is pushing a USA Today story this morning, which reports that in toss-up House races, Dems generally have a cash advantage:

In 22 of the 31 House seats rated as tossups by the non-partisan Cook Political Report, vulnerable Democratic candidates had more cash available at the end of June than their GOP rivals, according to a USA TODAY analysis of reports covering activity from April 1 through June 30.

This is pretty weak tea. You can't run (or win) a House race without raising a bunch of money. Still, fundraising is a necessary but not sufficient prerequisite for winning elections. Steve Singiser had a good post on Daily Kos on Sunday pointing out that in wave elections, incumbents who outraise their challengers often lose anyway:

In the most recent wave election (2006), where the Democrats rode a 30-seat gain into the House majority, a total of twenty-two Republican incumbents tasted electoral defeat. Only three of those Democratic challengers (Joe Sestak, Paul Hodes and Brad Ellsworth) raised more than the incumbents they cast from office. Indeed, only four of the 22 (18%) Democratic winners raised anything close (defined as 85% of the incumbents take) to their Republican incumbents.

The most recent Republican wave election (1994) showed a somewhat similar pattern...In both cases, a significant number of challengers managed to attain victory despite raising 65% or less of the total raised by the incumbents they ejected from office. In the 1994 Republican wave, fifteen of the 34 (44%) GOP victors fell into that category. In the 2006 Democratic wave, ten of the 22 (45%) Democratic victors were outraised to that degree.

Bottom line: Dem incumbents with decent fundraising shouldn't think that makes them safe. It doesn't. 

WaPo's Blast: Post-9/11 Intel Ain't Working

| Mon Jul. 19, 2010 7:44 AM PDT

The troubled Washington Post still has some punch. On Monday morning, it unveiled a series on the growing and expensive post-9/11 intelligence system. The opening paragraph of the opening article was a knockout:

The top-secret world the government created in response to the terrorist attacks of Sept. 11, 2001, has become so large, so unwieldy and so secretive that no one knows how much money it costs, how many people it employs, how many programs exist within it or exactly how many agencies do the same work.

The story makes a critical point: This dark bureaucracy is beyond control. Defense Secretary Robert Gates told the paper, "There has been so much growth since 9/11 that getting your arms around that—not just for the DNI [Director of National Intelligence], but for any individual, for the director of the CIA, for the secretary of defense —is a challenge." And senior Pentagon officials who have access to these programs—they're called "Super Users"—told the Post they cannot keep up with all the secrets. One of them:

recounted that for his initial briefing, he was escorted into a tiny, dark room, seated at a small table and told he couldn't take notes. Program after program began flashing on a screen, he said, until he yelled ''Stop!" in frustration.

"I wasn't remembering any of it," he said.

Bottom line: this gigantic black network of government agencies and private contractors is not coordinated. So there's no way to know if the system is operating effectively. Retired Army Lt. General John Vines, who last year reviewed the Pentagon's method for tracking its most sensitive programs, said of this system, "We consequently can't effectively assess whether it is making us more safe." The series notes that the various agencies and programs produce far too much redundant and overlapping intelligence that clogs the system—meaning important intelligence is either not produced or is lost in the wash. This was the precisely the problem with intelligence before 9/11. Spending hundreds of billions of dollars since then has not redressed this fundamental flaw.

Beck's Favorite Gold Company Still At It

| Mon Jul. 19, 2010 6:35 AM PDT

Back in May, we posted an investigation into Glenn Beck's favorite gold company, Goldline International. The story documented how the company routinely scares people into buying overpriced gold coins—in fact, the firm had been sanctioned in Missouri for encouraging an elderly woman to liquidate some of her retirement investments to buy its overpriced products. Because Goldline isn't a licensed investment firm, and its salespeople aren't licensed investment advisors, they can't legally recommend that customers buy or sell securities.

Rep. Anthony Weiner (D-NY) released his own report that month that made similar findings and called on the Securities and Exchange Commission and the Federal Trade Commission to investigate Goldline's practices. Well, apparently even a congressional investigation wasn't enough to get the company to clean up its act. In its new August issue, Consumer Reports Money Advisor reports that Goldline is still dispensing what sounds an awful lot like investment advice. The story is not online, but the magazine writes:

"We were also concerned about advice we got from a company rep. Some financial experts recommend keeping about 5 percent of a portfolio in gold as an inflation hedge; a Goldline rep suggested we go as high as 20 percent. To raise the money, he suggested we liquidate IRAs or old 401(k)s."