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November 29, 2008

Major League Baseball Catches Outsourcing Fever

Or maybe this is better described as insourcing....

The Pittsburgh Pirates hope Rinku Singh and Dinesh Patel really do have million-dollar arms.

The two 20-year-old pitchers, neither of whom had picked up a baseball until earlier this year, signed free-agent contracts Monday with the Pirates. They are believed to be the first athletes from India to sign professional baseball contracts outside their country.

Singh and Patel came to the United States six months ago after being the top finishers in an Indian reality TV show called the "Million Dollar Arm" that drew about 30,000 contestants. The show sought to find athletes who could throw strikes at 85 miles per hour or faster.

The article notes that when Singh and Patel (picture) first came to the United States and began playing catch, they "were mystified by the concept of gloves and had to be taught not to try to catch the ball with their bare hands." But the article also notes that the pair has athletic experience throwing the javelin, so this will definitely end well.

What Do Obama's Foreign Policy Appointments Tell Us About Future of the Israeli-Palestinian Conflict?

Depends on if you're considering General James Jones, likely National Security Advisor in the upcoming Obama Administration, or Senator Hillary Clinton, likely Secretary of State. Their professional histories send conflicting messages about Obama's intentions in the region. Check out Eli Lake in TNR for more.

Must-Reads on the End of the Bush Administration

There are two great stories out discussing what we should do with all the national security secrets that, if made public, could (1) expose the full extent of the Bush Administration's torture, detention, rendition, and wiretapping programs, (2) make Bush Administration officials vulnerable to criminal prosecution, (3) create a public circus that overshadows the Obama Administration's early actions and spoils a moment of goodwill that Obama wants to exploit, and (4) potentially make our defenses weaker in the war on terror.

Result (1) is obviously a good thing. Is (2)? Even if it comes with effects (3) and (4)? Is there a way to do this that avoids (4) entirely?

Check out the thoughts of Dahlia Lithwick in Slate and Charles Homans in the Washington Monthly. Obama seems interested in establishing a commission that ferrets out the who/what/where/when/why, but doesn't initiate criminal proceedings. That's probably the approach the majority of the country would prefer, but is bound to anger some on both the right and the left.

November 26, 2008

Iraqi Parliament to Vote Today on "Status of Forces Agreement"

The Iraqi Parliament is expected to vote today on the "Status of Forces Agreement" (SOFA), a document that, if passed, will establish guidelines for US forces in Iraq and, more importantly, set a timetable for their withdrawal. Washington and Baghdad signed on to a draft of the agreement earlier this month. If it is accepted today by at least 138 of the 275 members of Iraq's parliament, the document will then go to the Iraqi presidential council for final approval. SOFA, which the Iraqis are already informally calling "the withdrawal agreement," mandates that US forces pull out of Iraqi cities by June 30, 2009, and leave the country entirely by December 31, 2011, effectively ending the US occupation of Iraq.

According to Peter Galbraith, a senior diplomatic fellow at the Center for Arms Control and Non-Proliferation, who has written extensively on the American occupation for the New York Review of Books, the agreement represents "a stunning and humiliating reversal of course by the Bush administration, which had vehemently opposed any timetable for withdrawal from Iraq." But things change, and especially with Barack Obama's impending inauguration, SOFA is perhaps more acceptable to the current administration than leaving the timetable for withdrawal entirely in the hands of its successor. "The signing of this agreement, along with the election of a new president who ran on a platform to end the war in Iraq, suggests that anti-Iraq efforts have not been in vain," says John Isaacs, executive director of the Council for a Livable World. "The agreement reflects the views held by the majority of Iraqis and Americans that it is time for US combat forces to start getting out of Iraq."

Still, not all Iraqis are eager to see US forces leave. A Sunni bloc within the Iraqi Parliament, joined by a few renegade Kurds, are said to be holding out on ratification of SOFA. Their primary concern is "how they'll be treated by the Shiite government of Prime Minister Nouri al-Maliki" once US forces depart, according to today's Wall Street Journal. Iraqi Sunnis formed the bulk of the insurgency in past years, but have more recently become partners in the American occupation, primarily to counter the ascendance of Shiite parties. US and Iraqi officials have been negotiating for Sunni support in the final hours leading up to today's vote.

Galbraith shares in the Sunnis' concern. "For the last two years, President Bush has pretended that Prime Minister Nouri al-Maliki is a democrat and an American ally," he says. "In fact, Maliki is a sectarian Shiite politician who heads a government dominated by pro-Iranian religious parties. The US presence is now no longer serves the interests of Iraq's ruling Shiite religious parties or their Iranian allies, so we are now being asked to leave."

UPDATE: The Iraqi parliament has decided to put off the vote until tomorrow morning, allowing more time for SOFA's backers to persuade opponents of the agreement.

November 25, 2008

Glenn Greenwald, Andrew Sullivan Celebrate "Exceptional News": John Brennan Won't Be CIA Director

John Brennan, a top adviser to Barack Obama on intelligence issues who had been widely rumored to be the President-elect's top choice for CIA director, has taken himself out of the running. Bloggers, including Salon's Glenn Greenwald and the Atlantic's Andrew Sullivan, had vociferously opposed Brennan on the grounds that he had reportedly supported the torture of terrorist detainees and the governments extraordinary rendition program. In his letter to Obama, Brennan writes that he "was not involved in the decision-making process for any of these controversial policies," but Greenwald emphasizes that being involved with the decision-making process was never the issue. It was the fact that Brennan supported those decisions that was the problem, whether or not he actually had the decision-making power himself. And the evidence is pretty clear that Brennan did not draw a bright line on torture. Brennan was onetime CIA director George Tenet's chief of staff (which is a bad sign on its own), and the estimable Jane Mayer described him in New Yorker as a "supporter" of the Bush administration's "interrogation and detention" program. Brennan told Mayer that drawing the line on how to treat detainees "all comes down to individual moral barometers." No, it doesn't.

It's true that Brennan did oppose some of the most heinous Bush administration techniques—waterboarding, for example. But his past support for parts of the torture program is well-documented. And even if waterboarding didn't pass Brennan's "individual moral barometer" test, other torture techniques apparently did. It's not just waterboarding that is the problem. And if Obama is going to make a clean break from the Bush administration's interrogation policies, it's probably for the best that Brennan will not be along for the ride.

Conservative Publisher's New Book: "If There Had Been No Civil War, the South Would Have Abolished Slavery Peaceably"

Regnery Publishing, the home of such conservative stalwarts as Swift Boat Veteran John O'Neill (who wrote Unfit for Command, which contained falsehoods about John Kerry) and author Jerome Corsi (who co-wrote Unfit for Command and wrote The Obama Nation, which contained falsehoods about Barack Obama) just emailed me to promote one of their newest releases. This time, it's The Politically Incorrect Guide to The Civil War, which, you guessed it, reveals how "conventional 'wisdom' about the Civil War, slavery, and states' rights has been hijacked by Northeast liberals." (Update: I just noticed that the book's cover, pictured to the right, advertises an "Afterword by Jefferson Davis.") Among the book's claims: "How the Confederate States of America might have helped the Allies win World War I sooner," and, of course, "How, if there had been no Civil War, the South would have abolished slavery peaceably."

I know it's probably just because I suffer from the "liberal self-hatred that vilifies America's greatest heroes," but I find the idea of the slave states voluntarily giving up their slaves to be really, really dumb. The Southern states seceded largely because they didn't want to be ruled by Lincoln, who had argued against expanding slavery into new territories. The Confederate constitution says, "No bill of attainder, ex post facto law, or law denying or impairing the right of property in negro slaves shall be passed." But in case you don't believe me, I asked retired army Lt. Colonel Robert Mackey, author of The UnCivil War and bona fide Civil War geek. Dr. Mackey, a combat veteran who was Assistant Professor of Military History at the U.S. Military Academy at West Point, says it's "a heaping pile of bulls**t" and offers up a few reasons why:

1. Slaves represented real property value. The South's biggest asset wasn't cotton, it was human beings. That is why the Southern economy collapsed after 1865—old Nathan Bedford Forrest himself said "I went into the war a millionaire and came out a pauper." Why? All his 'wealth' was in slaves.

2. The virtual serfdom of poor whites and blacks in the South after Reconstruction. The entire economic system, which only fell apart because of the Depression and the great migration of blacks to the North in WWI and WWII, was based on sharecropping. Sharecropping only worked because the "New South" replaced antebellum planters with bankers, etc. It was a form of slavery as well—just one in which "the owners" had no moral or ethical responsibility to care for the slave...since they had no 'property rights.'

3. There is zero evidence slavery would have naturally ended. There was no antebellum abolitionist movement in the South. On the contrary, the entire social system was set up to reinforce slavery.

Lastly, just imagine how easy it would have been for anti-labor industrialists to move factories South, where you not only did not have labor unions, but could contract for workers from their 'owners' at a set, low rate. It would have been horror, and the death of any hope of democracy in America.

So I hope that ridiculousness has been suitably debunked. But Civil War "political incorrectness" and Democratic presidential candidate bashing isn't all Regnery publishes. They also publish non-peer-reviewed "science" written by controversial authors. In 2003, Chris Mooney wrote in Mother Jones about John Lott, a Regnery author whose pro-gun social science came under fire:

Pressed by critics, [Lott] failed to produce evidence of the existence of a survey—which supposedly found that "98 percent of the time that people use guns defensively, they merely have to brandish a weapon to break off an attack"—that he claimed to have conducted in the second edition of "More Guns, Less Crime". Lott then made matters even worse by posing as a former student, "Mary Rosh," and using the alias to attack his critics and defend his work online.

Lott's pro-gun writing for Regnery must have endeared the company to other gun-toting types, because in February, Blackwater founder and CEO Erik Prince signed a book deal with the company. I look forward to the Regnery email promoting "Blackwater's Politically Incorrect Guide to the Iraq War," or whatever they end up calling it.

(Mother Jones has covered Regnery many times before. Last year, Debra Dickerson wrote about how some of the company's authors were suing their publisher for depriving them of royalties. In 2004, Bradford Plumer—now of The New Republic—interviewed Media Matters for America's David Brock on the subject of the "Republican Noise Machine." Regnery comes up.)

The Dems' Charlie Rangel Problem

Congressional Democrats have a serious dilemma on their hands. And he goes by the name of Charlie Rangel (D-NY). Since July, the nineteen-term congressman and chairman of the powerful ways and means committee has been fighting for his political life over a series of alleged ethical lapses, ranging from his use of congressional stationary to solicit donations for the Charles B. Rangel Center for Public Service at the City College of New York to his failure to report rental income from his villa in the Dominican Republic. And things just got worse for Rangel. Today, the New York Times reports that he "played a pivotal role" in preserving a tax loophole benefiting an oil drilling company, Nabors Industries, whose chief executive pledged $1 million to the center that was named in Rangel's honor. Rangel and Nabors' CEO Eugene Isenberg have denied that there was any quid pro quo here, but the Times story does not paint a pretty picture. Among other things, it notes, Rangel was at one point firmly against the tax shelter in question before suddenly coming out in favor of leaving the loophole in place—a move that saves "Nabors an estimated tens of millions of dollars annually." And then there's this: "while the issue was before his committee, Mr. Rangel met with Mr. Isenberg and a lobbyist for Nabors and discussed it, on the same morning that the congressman and Mr. Isenberg met to talk about the chief executive’s potential support for the Rangel center."

If you're House Speaker Nancy Pelosi (D-Calif.), this news has got to give you pause. Despite the fact that Rangel is already under investigation by the (notoriously timid) House Ethics Committee for his Rangel Center fundraising, among other matters, he recently managed to maintain his grasp on the chairmanship of the ways and means committee. But keeping Rangel in charge of a committee that crafts federal tax policy while he faces serious allegations that he abused his office—and indeed, accusations of his own tax improprieties—doesn't seem like a strategy that's going to bode well for the Democrats, who assumed control of Congress, in part, by promising to crack down on congressional corruption. According to Politico, Rangel's clout has been muted somewhat in recent months, and Pelosi "has shown ample willingness to intervene directly in his committee’s affairs." That said, Rangel's ability to weather this current storm should not be underestimated. After all, he didn't maneuver himself into one of the most powerful perches in Congress by being anything less than a shrewd political operator.

Bad Signs for Chrysler: Buy One Truck, Get One Free

We all knew the Big Three were in trouble when the top executives of Chrysler, Ford, and General Motors flew their private jets to Washington last week, hat in hand, asking for taxpayers' money to save their companies. But this is getting ridiculous. Online consumer watchdog Consumerist.com noticed this ad:

There's some fine print, but basically the deal is the deal: buy one truck, get a second one free. Maybe those private-jet-flying car company executives really do need a bailout.

November 24, 2008

Susan Rice to the UN: A Positive Sign for UN-US Relations

article_image.php.jpg ABC is reporting that Susan Rice, a former member of President Bill Clinton's National Security Council and a former Assistant Secretary of State for African Affairs, is about to be named US Ambassador to the United Nations in the Obama Administration. Why is this of note? Rice is extremely close to Obama, and has been for years. Mark Goldberg, of UN Dispatch, is jazzed about what that means for the future of US-UN relations:

This is great news. The fact that President-elect Obama is entrusting US diplomacy at the United Nations to such a close adviser is a sure sign of the high priority to which the new administration will place US-UN relations. Deeper still, her background as a regional Africa expert will come in handy. About 2/3rds of all discussions at the Security Council are about situations in Africa.

More broadly, Rice is known in foreign policy circles as an innovative, forward thinking foreign policy wonk who pays special attention to the connectivity of today's threats and challenges. As a diplomat, I expect her to be fairly sharp-elbowed, which is not a bad quality for Turtle Bay!

I suspect this is a sign that Obama will be involved in (or his administration will be a full partner in) worldwide efforts to bring stability to places like Darfur and Somalia. That's great news. And just take a moment to consider the difference between the Obama Administration and the Bush one. Bush named to this same post John Bolton, a man who believes force is always the right option and is so hostile toward the United Nations that he once said wiping out 10 floors of UN headquarters wouldn't make a "bit of difference." And now we have someone who has spent years studying how to engage in the world in order to reduce conflict. The democratic transfer of power is a remarkable thing.

Solicitor General Says Uighur Detainees Have An Immigration Problem

The Bush administration is clearly getting desperate: Monday, it sent the Solicitor General of the United States to federal court to try once again to justify its detention of 17 innocent Uighur detainees held for the past six years at Guantanamo Bay. The administration's top litigator, Greg Garre usually spends his time at the Supreme Court, but the administration dispatched its big gun to the DC Circuit courtroom to make its best possible case that no court in the land has the power to tell the Bush administration what to do. It will not go down in history as one of Garre's finest moments.

To take pity on the SG, Garre had a tough assignment as the lawyer for the Bush administration, which still adamantly refuses to admit that it might, once in a blue moon, be subject to judicial oversight. As backdrop: last month, a federal district court judge ordered that the government bring the Uighurs, a group of Central Asian Muslims hailing from western China, to the US, where they would be released into the American Uighur community until the rest of their status could be resolved. The Uighurs have languished for nearly seven years in Cuba because, even though they have been found not to be enemy combatants, everyone agrees, if they return to China, they will be persecuted.

Unfortunately, thanks to the Pentagon's description of the Uighurs as a threat to the public, the State Department can't find another country willing to take them, despite nearly four years of trying. As Judge Ricardo Urbina concluded last month, their only real option is to come to the US. But the Bush administration sees that order as a huge affront on its exercise of executive power and its desire to be free of judicial meddling. So it has argued that only the political branches of government have the authority to decide whether aliens can enter the country or not.

To make that case, Garre reached back to another paranoid, xenophobic era of American history: the 1950s, when the Communist Red Scare produced a body of law not unlike that of the war on terror. The government is relying on a 1952 decision known as Mezei v Shaughnessy to argue that it has the power to detain the Uighurs forever, even though they've never been charged with a crime, much less taken up armed combat against the US (even when they had the chance in Afghanistan). In 1950, a man named Ignatz Mezei found himself in a situation rather like the Uighurs. He was born on a boat in the straits of Gibraltar and came to the US in 1923, where he lived until 1948. On hearing the news that his mother in Romania was sick, he left the US and went to Hungary, where he tried to get a visa to travel to Romania. She died before he succeeded, so while in Hungary, Mezei procured a visa to the US and sailed to Ellis Island.

When he arrived, the government refused to let him in based on secret evidence that he was a Communist. Because he had no citizenship elsewhere, no other country would allow him in after the US determination, so he was essentially stuck at Ellis Island, a man without a country. Like the Uighurs, Mezei filed a writ of habeas corpus to challenge his detention. And as with the Uighurs, a lower court judge recognized the injustice of his situation and ordered him released. (He went to Buffalo.) But the Supreme Court eventually reviewed the case after the government argued that releasing Mezei constituted a threat to national security, because it would allow other enemies of the US to get spies onto American soil simply by depositing them at Ellis Island and refusing to take them back. In a 5-4 decision, the court came down on the side of the government and sent Mezei back to Ellis Island in a decision that was heavily criticized at the time and since then. (President Eisenhower eventually paroled Mezei after four years of imprisonment at Ellis Island, shortly before Ellis Island was closed, and he lived in the US for many years after.)

But you can hear echoes of the Uighur case in the elegant dissent from Barack Obama hero Justice Robert Jackson, who noted the difference between simply keeping someone out of the country and detaining him indefinitely. He wrote, "It is evident that confinement of respondent no longer can be justified as a step in the process of turning him back to the country whence he came. Confinement is no longer ancillary to exclusion…It is an end in itself." In the same dissent, Jackson said, "It is inconceivable to me that this measure of simple justice and fair dealing would menace the security of this country. No one can make me believe that we are that far gone."

At the DC Circuit in the Uighur case, at least one of the judges hearing the arguments, Judith Rogers, seemed to channel Jackson. She wasn't buying the Mezei argument, and she spent a great deal of time sparring with Garre about whether the Uighurs could apply for asylum in the US and why the Department of Homeland Security wasn't involved in this case on the immigration front. Garre, who was clearly not having his best day, managed to elicit his only laughs when, in response to a question about whether Guantanamo is in fact a prison, he said, "We can debate whether any facility operated by the Department of Defense is a prison," suggesting that the government does not actually consider the Uighurs to be imprisoned.

Indeed, Garre went on to suggest that they had actually been "conditionally released" because they live in practically lush accommodations at the naval station, where they have separate quarters from the other detainees and "have access to DVDs and special libraries." And of course, he noted, they are entirely free to return to China, which Uighur lawyer Sabin Willett noted would be the equivalent of "putting a bullet to their heads." (Willett also told the court that it was hard to imagine that Guantanamo was not a prison given that when he meets with his clients, the military chains them to the floor.)

Garre also provoked Rogers' ire towards the end of the hearing when he offered, in response to a question from Randolph, that the men had been training in terrorist camps and would not in all likelihood be allowed into the US as refugees if they tried to go that route. Rogers cut him off with a surprisingly ferocious outburst, saying, "You can not make those representations here! Let's be very careful here before we taint people without evidence." She noted that the government had never challenged the Uighurs' legal briefs stating that they were innocent of those charges, and that when specifically asked by the federal court to provide evidence of their connection to terrorism or weapons training, the government failed to do so.

Rogers, though, may be in the minority on the panel. It seems clear that the Supreme Court is going to get a chance to revisit its opinion in Mezei and declare whether or not it really thinks the president has the power to detain innocent people forever and a day, provided it continues to "look" for somewhere else for them to go. As Willett said last week in an interview, the government's argument is basically that "as long as we try really hard to find [the Uighurs] somewhere to go, they can hold them indefinitely." As such, the case creates a judicial power problem because the Supreme Court has said that the detainees have the right to challenge their detention in federal court. But if those same courts can't order some of the detainees released, he asks, "What's the point?"

As Obama Taps Larry Summers, Recalling Summer's Days as a Regulation Foe

On Monday, President-elect Barack Obama announced his economic team, noting that Lawrence Summers would be the director of his National Economic Council. In touting Summers, Obama praised the former treasury secretary for his work during the Clinton years

Larry helped guide us through several major international financial crises – and was a central architect of the policies that led to the longest economic expansion in American history, with record surpluses, rising family incomes and more than 20 million new jobs. He also championed a range of measures – from tax credits to enhanced lending programs to consumer financial protections – that greatly benefited middle income families.

As a thought leader, Larry has urged us to confront the problems of income inequality and the middle class squeeze, consistently arguing that the key to a strong economy is a strong and growing middle class....And as one of the great economic minds of our time, Larry has earned a global reputation for being able to cut to the heart of the most complex and novel policy challenges.

While some of that might be true, Summers has been a controversial figure, and it's likely no accident that he is being handed a position that does require him to be confirmed by the Senate.

But despite Summer's intellect and experience, it's worth remembering that he did blow one of the major calls of the 1990s: what to do about financial derivatives--those esoteric financial products (such as credit default swaps) that helped grease the way to the subprime meltdown. Not only did Summers oppose greater regulation for those financial instruments; he led the opposition against it.

Back in May 1998, the Commodity Futures Trading Commission, then chaired by Brooksley Born, issued a memo noting it was "re-examining its approach to the over-the-counter (OTC) derivatives market." It noted:

While OTC derivatives serve important economic functions, these products, like any complex financial instrument, can present significant risks if misused or misunderstood. A number of large, well-publicized financial losses over the last few years have focused the attention of the financial services industry, its regulators, derivatives end-users and the general public on potential problems and abuses in the OTC derivatives market.

At the time the OTC derivatives market was valued at $28 trillion, according to the CFTC. The CFTC noted that it was time "to review its regulator approach to OTC derivatives." The CFTC was suggesting the time had come for it to regulate this complicated, opaque corner--or hidden continent--of the economy.

Summers, then the deputy secretary of the Treasury, had another idea--as did Robert Rubin, the secretary of the Treasury, and Alan Greenspan, the chairman of the Federal Reserve. These wise men each gazed with horror upon Born's proposed consideration of regulation for derivatives. Speaking for them, on July 30, 1998, Summers testified in the Senate against the notion of the CFTC even pondering rules governing the trading of derivatives. By releasing its memo, the CFTC, Summers complained, "has cast the shadow of regulatory uncertainty over an otherwise thriving market--raising risks for the stability and competitiveness of American derivative trading."

Summers blasted the CFTC for having raised" the possibility of increased regulation over this market." And he hailed derivatives:

The dramatic growth of the market in recent years is testament not merely to the dynamism of modern financial markets, but to the benefits that derivatives provide for American businesses.

By helping participants manage their risk exposures better and lower their financing costs, derivatives facilitate domestic and international commerce and support a more efficient allocation of capital across the economy. They can also improve the functioning of financial markets themselves by potentially raising liquidity....OTC derivatives directly and indirectly support higher investment and growth in living standards in the United States and around the world.

Even "small regulatory changes," Summers cautioned, could throw the whole system out of whack. Determined to slap down the CFTC, his Treasury Department, the Fed, and the Securities and Exchange Commission crafted a proposal that would prohibit the CFTC from issuing new rules regulating any swap or "hybrid instrument."

Summers told the Senate he and his fellow economic bigfoots were not slamming Born and the CFTC cavalierly:

We understood the seriousness of making this proposal. To question an independent agency's concept of its jurisdiction and then to propose legislation that would temporarily curtail that agency's ability to act is not something we do lightly. We concluded, however, that such legislation was necessary to avoid disruption and dislocation in the market while the underlying issues were being considered by Congress.

Congress in late 2000 did end up implementing the Summers approach, when Senator Phil Gramm, then the head of the Senate banking committee, used a back-room maneuver to slip into a must-pass spending bill a measure that prevented the CFTC or the SEC from regulating derivatives.

During that 1998 Senate appearance, Summers did acknowledge that there could be problems with derivatives:

They can also be abused. And there have been certain problems that have arisen in recent years in both the OTC and exchange-traded derivatives market, as well as problems arising from inappropriate investments in complex securities with embedded derivatives. More broadly, questions have been raised as to whether the derivatives markets could exacerbate a large, sudden market decline.

But all he--and Rubin and Greenspan--wanted to do at the time was to study the matter. After all, Summers noted, the Big Finance institutions buying and selling "these kinds of contract are largely sophisticated financial institutions that would appear to be eminently capable of protecting themselves" from any problems with derivatives. In other words: fear not, the high-flyers of Wall Street and the world's financial markets know what they are doing.

Summers got that wrong. (See Citigroup.) While others--such as Born and her staff at the CFTC--presciently spotted potential problems arising from the exploding derivatives market, Summers, Rubin and Greenspan blithely fell back on the conventional view: regulation is a growth-killer. Summers' 1998 testimony was imbued with the hubris that led to the current financial disaster. Obama--and the rest of the nation--should hope that when it comes to thinking about regulation these days, Summers has experienced a market-driven correction.

An Immediate Obama Effect in African-American Communities?

Spotted over at Ben Smith's space, an attempt by the Washington DC police department to stop gun violence by invoking the President-elect.

A quick look at the crime map application hosted by the DC police department shows that 1,726 crimes have been committed in the District of Columbia since Obama's election on November 4, an 11 percent drop from the same period last year. Unfortunately, homicides are up 100 percent, suggesting the need for this initiative and many others.

New Report Shows What The Economic Bailout Is Really Costing Us

Today, as Obama introduced his economic team, the Institute for Policy Studies (IPS) released a new report (.pdf) adding some context to the sheer sums of money being thrown at the financial-industry bailout. The top-line finding? The US and Europe have committed about $4.1 trillion so far, or about 40 times as much as they've spent on combating climate change and global poverty this year. The report, called "Skewed Priorities," speculates that Western governments will use the economic crisis as an excuse to pull back from their commitments to climate and development programs.

According to IPS Director John Cavanagh, “The financial crisis is only one of multiple crises that will affect every nation — rich or poor. Skyrocketing poverty and unemployment in the developing world will mean even more brutal global competition for jobs. Climate change imperils the very future of the planet. And yet thus far, the richest nations in the world appear fixated almost entirely on responding to the financial crisis, and specifically, on propping up their own financial firms.”

Yes, the bailout seems necessary (at least that's what they tell us... and, as any of my childhood math teachers would attest, I am not one to make a judgment on that issue), but the IPS report does at least let us know what we're sacrificing in the name of righting our financial ship. From a press release announcing the report's publication:

RATIO OF FINANCIAL BAILOUTS TO DEVELOPMENT AID: U.S. and European governments have committed approximately $4.1 trillion to aid struggling banks and other financial institutions. That’s more than 45 times the sums they spent on development aid last year.

AIG BAILOUT ALONE TOPS AID: The U.S. government’s $152.5 billion rescue plan for one single company — AIG — far exceeds the $90.7 billion U.S. and European governments spent on development aid in 2007.

BEAR STEARNS REAPS MORE THAN U.S. AID RECIPIENTS: The U.S. government spent $23.2 billion in aid to all developing countries in 2007 — far less than the $29 billion bailout for investment bank Bear Stearns.

FANNIE/FREDDIE BAILOUT NEARLY 1,000 TIMES U.S HAITI AID: The U.S. government has committed $200 billion to prop up mortgage lenders Fannie Mae and Freddie Mac, a figure that dwarfs the $209 million in economic aid in 2007 to Haiti, the Western Hemisphere’s poorest country.

RATIO OF FINANCIAL BAILOUTS TO CLIMATE FINANCE: Although the climate crisis poses catastrophic risks to the global economy, U.S. and Western European governments have committed 313 times more to rescuing financial firms than the $13.1 billion in total new commitments made to help developing countries respond to the climate crisis over the next several years.

UBS BAILOUT FIVE TIMES CLIMATE FINANCE: The Swiss government has committed $60 billion to rescue the ailing investment bank UBS. That’s more than five times the amount that all Western European governments have committed, above and beyond development aid, in climate finance for developing countries.

U.S. CONTRIBUTIONS TO CLIMATE FINANCE = $0: The U.S. Congress hasn’t approved any contributions to the developing world’s climate change efforts, in part because the Bush administration insisted such financing be channeled through the World Bank, an institution with a poor environmental track record.

Obama’s Economic Stimulus Package: Whose Pump Will It Prime?

“I’m not going to discuss numbers right now,” Barack Obama said this morning at his press conference, where he introduced his economic team but held off on providing details of their plans to respond to the deepening recession. In fact, the devil will be in those details. They will be a test of the president-elect’s willingness to take bold action, as well as of his basic ideological approach to economics and social justice.

While various experts have projected a stimulus package costing anywhere from $600 billion to $1 trillion, Obama would only say that “we need a big stimulus package.” At the same time, he declared, “95 percent of workers will receive a net tax cut,” with those earning over $250,000 a year eventually paying “a little bit more.” He has also indicated that he may take no immediate action to roll back Bush’s tax cuts to the rich, but simply let them expire in 2010. So how will the Obama administration pay for a big stimulus program? For the most part through Keynesian style pump-priming—government spending that increases the huge deficit over the short term, in hopes of reducing it later under a recovered economy. It’s the approach taken, most famously, by FDR—the man to whom the Obama is now being compared on a daily basis.

In fact, deficit spending has long been undertaken not only by New Deal Democrats, but by Republicans from Ronald Reagan to George W. Bush. These so-called fiscal conservatives have been only too happy to run up the national debt when it suits their ideological goals, whether they be military buildups or corporate handouts. Obama and his team will need to decide which larger goals their deficit spending will serve—what pumps they want to prime, and how. In particular, will their program to stimulate the economy reject the discredited “trickle down” approach, and address the extremes of wealth and poverty created over the last 30 years?

Some ideas on this front came earlier this morning from a teleconference by Robert Greenstein, who heads the Center for Budget and Policy Priorities, a Washington-based research group. CPBB has outlined a series of immediate steps to stregthen the social safety net so as to alleviate the downturn’s most dire affects on low-income Americans, and at the same time stimulate the economy.

CPBB’s proposals include extending unemployment so that it covers more low-income workers: As it stands, only 40 percent of unemployed Americans actually receive any assistance from the government. The Center also advocates an increase in the food stamp program on a temporary basis, and a simple voucher system to provide assistance to renters forced out by foreclosures, who are being largely ignored by programs serving homeowners. Finally, CPBB recommends that the federal government increase the amount of money it pays states to help them shoulder the cost of Medicaid, whose roles are sure to swell as unemployment pushes people off private health insurance. This would be part of a broader aid program to states that are facing serious budget crunches.

CPBB provided a detailed analysis of just how the recession is likely to effect low-income Americans. Without federal help, the situation will be extraordinarily bleak. Forty one states are facing budget deficits. Almost all states are required to balance their budgets, which will leave them with no other choice than to eliminate or make deep cuts to essential social programs, which have already endured decades of cuts. “The safety net is weaker today than it was in previous large recessions,” Greenstein said this morning.

Projections show unemployment may reach 9 percent in the coming year. If no federal action is taken, the Center estimates that in that period, the numbers of people in poverty will rise by 7.5 to 10.3 million. (At the time of the 2006 census, 36.5 million people were living in poverty in the United States.) The number of poor children will increase by 2.6 to 3.3 million, and the number of children in deep poverty—at less than half of the federal poverty level--will climb by 1.5 to 2.0 million.

None of CPBB’s proposals are the least bit radical. The price tag for these initiatives would be modest relative to the banking bailouts. And as Greenstein and others have pointed out, resources placed in the hands of poor people and those on the brink of poverty are a practical way to stimulate the economy, as well as a compassionate one: Any government funds received by these people are virtually guaranteed to be channeled directly into the economy, since they will be used to purchase basic needs. On the other hand, funds for failing banks and other corporations, as well as tax cuts for the rich, can simply be hoarded, as the last few months have shown.

It remains an open question as to whether Obama and the Democratic leadership will propose such measures, or whether they can find enough support for them even within their own Congressional majority, considering the such conservative elements the Blue Dog Democrats and the adherents of the Democratic Leadership Council. If they fail to do so, however, Obama will soon begin to look less like FDR, and more like Ronald Reagan.

Will Ken Starr Defend Prop 8 in CA Supreme Court?

ken%20starr.jpg Overheard last week in DC at a right-wing legal convention: "We've all but confirmed that Ken Starr is going to take the case."--Jordan Lorence, senior counsel, Alliance Defense Fund.

The involvement of the former Clinton special prosecutor in efforts to preserve California's new ban on gay marriage really wouldn't come as much of a surprise. Two years ago, Starr, now dean of the Pepperdine law school, represented a bunch of anti-gay marriage groups, including the Mormon Church, in amicus briefs in some of California's gay marriage litigation. He's been involved in the issue for a while, now. Given the intense interest in other people's sex lives that Starr demonstrated during his investigation of the Lewinsky scandal, he seems a perfect fit for the job.

Of course, when I asked him at the Federalist Society conference to confirm the gossip, he said with a laugh, "No comment." Later, I asked Lorence whether he had indeed confirmed Starr as counsel. Looking a bit shocked that he'd been caught blabbing out of school, he pleaded ignorance, suggesting that he had no intelligence on the matter whatsoever, despite his earlier boasts to a Harvard law student about his inside line to Starr. He did confirm that he would not be doing the arguing himself, nor would another lawyer from the alliance who has argued such cases before. I take all this to mean that Starr is likely to take the case.

Hillary to State Appears a Done Deal, But What About Bill's Overseas Donors?

It appears to be a done deal: President-elect Barack Obama will appoint Senator Hillary Clinton to be his secretary of state. But while the Obama camp's vetting of Bill Clinton's foreign entanglements and activities continues, there is one thorny matter that needs to be addressed publicly: the identity of the donors to Bill Clinton's foundation and presidential library.

The former president has raised millions of dollars from overseas officials and corporations for his foundation and library--while also pocketing mega-speaking fees from businesses abroad. (He's also struck an unusual deal with transnational mining conglomerate head Frank Giustra.) All of this raises potential conflicts and ethics questions. The basic dilemma: can Bill Clinton receive millions of dollars from foreign nations and corporations that may have an interest in US foreign policy while his wife oversees US foreign policy? Unless Clinton opts out of his (often admirable) globe-trotting activities, this situation seems almost too knotty to be untied.

But aides to Obama and Bill Clinton aides are trying to work out rules that would govern the former president's actions. Last week, The Washington Post reported:

Clinton advisers say they diligently worked to resolve questions. The Clinton Foundation, for instance, turned over 208,000 donor names for review by Obama's transition team, even though many donated with promises of anonymity.

But where's the sunshine? The Clinton Foundation merely gave the names of his donors to the Obama camp for a private review. As The New York Times reported:

People close to the vetting said Mr. Clinton turned over the names of all 208,000 donors to his foundation and library and agreed to every condition requested by Mr. Obama’s transition team, including restrictions on his paid speeches and his role at his international foundation. The lawyers agreed to notify all of the donors that their identities would be revealed to the Obama team, but it was not clear if they would all be made public.

As of yet, there's no indication there will be true transparency regarding Bill Clinton's donors.

If Hillary Clinton is to be the secretary of state, she will serve not just President Obama but the citizens and taxpayers of the nation. If her husband continues to solicit and bank millions from overseas sources--or domestic sources with overseas interests--the public ought to know the details. It will not be sufficient for Obama vetters to pronounce Clinton and his foundation and library clear of potential conflicts. Americans should be able to review the information and reach their own conclusions.

Is Bill Clinton willing to engage in that level of openness? This morning I contacted his office and asked if he would make the names of his donors public. So far, no reply.

As the vetting process continues, the vetters should keep in mind that the critical question is not whether they believe that the Clinton situation is free of conflicts, but whether the public can have confidence that it is.

Photo by flickr user dbking used under a Creative Commons license.

November 23, 2008

Obama's Treasury Nominee Tim Geithner: Yet More Power for the Federal Reserve

Barack Obama’s reported latest cabinet pick shows that even the collapse of the U.S. economy is not enough to challenge the unbridled power of the Federal Reserve. The president-elect's choice for Secretary of the Treasury is Tim Geithner, head of the New York Federal Reserve Bank, the most powerful bank in the system. The nation’s leadership in both parties spent the better part of two decades unquestioningly following the man they called “the Oracle”—Fed chair Alan Greenspan--down the road to ruin. Now, they eagerly await the arrival of another Fed insider to lead them back into the light.

Clearly, the new administration and the Democratic Congress do not plan to in any way challenge the fundamentally undemocratic and fatally compromised nature of the Fed, which is not a government agency, but a “quasi-public” system effectively owned and run by the banking industry itself. It’s no surprise, then, that the Fed so often operates in the interests of the private banks, even when they run counter to the public interest—as it did under Greenspan, when its policies fueled, rather than reigned in, the credit bubble and accompanying fiscal disasters. What is more suprising is the fact that those sworn to serve the public still show so little inclination to demand more transparency or accountability from this all-powerful institution.

Reformers who want to democratize the Federal Reserve System have suggested bringing it inside the government, where it would at least be subject to some some oversight by elected officials. Some have proposed placing it under the control of the Secretary of the Treasury. Instead, Obama has done just the opposite: He’s placed the Treasury Department under the power of a consummate member of the Fed inner circle who, like most of the system’s leadership, has close ties to the private banks it serves.

Geithner is credited as the central figure in the Bear Stearns buyout by JP Morgan-Chase, arranging the deal and putting up the money for it. The Fed collateral on that deal included lousy subprime mortgages. He is close to other members of the elite Wall Street club that runs the Fed, whose resumes show the revolving door between the Federal Reserve and the private banks they are supposed to oversee. These include sitting directors of the NY Fed Steven Friedman, former Goldman Sachs CEO and still a director of that company, and Jamie Dimon of JP Morgan-Chase. (Until the Lehman Brothers disaster last spring, Lehman head Richard Fuld also sat as a “public” representative on the NY Fed board.) Geithner’s informal network of advisors, according to a May 2008 profile in Portfolio by Gary Weiss, includes Gerald Corrigan, the former NY Fed chief who was later a managing director of Goldman Sachs and now chair of Goldman’s bank holding company GS Bank; Pete Peterson, also a former head of the NY Fed, Secretary of Commerce under Nixon, and co-founder of the investment firm Blackstone Group; and John Thain, former head of the New York Stock Exchange, and the last CEO of Merrill Lynch, now at its purchaser Bank of America. The great Greenspan is in Geithner’s corner as well, and one of his earliest jobs was doing research for Henry Kissinger.

It’s impossible to imagine a Treasury Secretary with Geithner’s background undertaking the kind of bold action to save the economy that was outlined by William Greider in the Nation last week. This is far from the free-for-all handout to big banks going on under Henry Paulson, with the support of many Democrats. “A genuine solution,” Greider writes, “means closing down the hopeless institutions and creating a more democratic system based on small to medium-sized banks, financial intermediaries that are less imperious and closer to the real economy of producers and consumers.” Greider cites the Levy Economics Institute, which argues that “the bailout is proceeding backward. Instead of saving Wall Street first, government should devote its heavy firepower to reviving jobs, incomes and business enterprises. The banks will not get well or begin normal lending until there is overall economic recovery.”