March 30, 2009

Still We Do Nothing

As recently as a few years ago, despite being far from perfect, the United States was more than arguably the best example on the face of the planet of a country that adhered to the rule of law. Tragically, that came to an end under President George W. Bush with - among other things - the use of torture as official policy in the "War on Terror," and America's standing has been further eroded by our failure to pursue justice against violators of both international and domestic law within the government. While he is no longer in office and never officially held a title other than "president," our passivity and cowardice in the face of lawlessness from our chief executive effectively crowned George W. Bush a king.

We are unquestionably better off with Barack Obama in the White House, but even as our new president produces a swarm of ambitious initiatives related to the economy, foreign policy, energy, infrastructure, education and health care, there has been no movement to investigate war crimes committed by the Bush Administration. To make matters worse, other countries are putting our inaction to shame.

Great Britain, for instance, has launched a criminal investigation to determine whether officers of its intelligence services were involved in the torture of a British resident detained by the United States. But while our allies seek to restore their international standing, President Obama has so far failed to live up to statements he made from the campaign trail that he would have the Justice Department "immediately review" these issues to see if they warrant investigation. Instead, the president now says he is more focused on "get[ting] it right moving forward."

Even when the contents of a report from the International Committee of the Red Cross (ICRC) were leaked, revealing the conclusion that American interrogation techniques used on suspected al-Qaeda members "constituted torture," the silence from the Obama Administration has remained deafening.

The pressure of events and information, however, continues to mount. On Saturday, a Spanish court took the initial steps toward opening a criminal investigation into allegations that six former high-level Bush administration officials violated international law by providing the legal framework that justified the torture of prisoners at Guant√°namo Bay prison camp. One Spanish official noted that it was “highly probable” that the case would not only go forward, but lead to arrest warrants.

Lets be clear: this is not some crazy, liberal, paranoid fantasy about George W. Bush and Dick Cheney. There is a host of credible evidence that the American government sanctioned and carried out torture on people in its custody. And there isn't even refuge in assertions that American torture policy was justified; a report on Sunday divulged that the CIA has affirmed that not a single terrorist plot was revealed or foiled as a result of some of its most brutal tactics.

Yet, still, we do nothing, and our new Attorney General - who has stated that "no one is above the law" - sits idle.

Even with all the challenges that we face as country, this still matters, and it matters greatly. The United States either rests on a foundation of laws or on one made up of the whims of the ruling class, and we are far too close to the latter right now for comfort. These are not small or insignificant allegations, or even ones that can be explained away as policy differences. If an investigation reveals that laws were not broken and human rights were not violated, no one will be happier than I, but that inquiry needs to take place.

As embarrassing as it is that our 43rd president and members of his staff might be war criminals, it is nowhere near as shameful as confirming through collective indifference our current status as a nation of hypocrites when it comes to equal justice before the law. If we are willing to let our president - and by extension, ourselves - become accessories to a crime after the fact, we deserve everything that will surely follow.


Over at the Washington Post's White House Watch, Dan Froomkin has a comprehensive look at the claims that have been made about information gained through torture versus the reality. Please check out Bush's Torture Rationale Debunked.

March 25, 2009

The Two-Tiered State

For those unfamiliar with Matt Taibbi, he's an author and columnist who, in my opinion, is the closest thing we have to an heir to Hunter S. Thompson when he was in hard reporting mode. Over at Rolling Stone, the excellent (if sometimes profane) Mr. Taibbi has written a must-read piece entitled The Big Takeover that not only explains the fundamentals of the financial crisis in layman's terms, but pinpoints the key players responsible, and captures the crucial ramifications of what the current situation means for America in the long term. Highlights are below, but I urge you strongly to take 20 minutes and read the whole thing.

From the article:
People are pissed off about this financial crisis, and about this bailout, but they're not pissed off enough. The reality is that the worldwide economic meltdown and the bailout that followed were together a kind of revolution, a coup d'état. They cemented and formalized a political trend that has been snowballing for decades: the gradual takeover of the government by a small class of connected insiders, who used money to control elections, buy influence and systematically weaken financial regulations.
While the rest of America, and most of Congress, have been bugging out about the $700 billion bailout program called TARP, all of these newly created organisms in the Federal Reserve zoo have quietly been pumping not billions but trillions of dollars into the hands of private companies (at least $3 trillion so far in loans, with as much as $5.7 trillion more in guarantees of private investments). Although this technically isn't taxpayer money, it still affects taxpayers directly, because the activities of the Fed impact the economy as a whole. And this new, secretive activity by the Fed completely eclipses the TARP program in terms of its influence on the economy.
When one considers the comparatively extensive system of congressional checks and balances that goes into the spending of every dollar in the budget via the normal appropriations process, what's happening in the Fed amounts to something truly revolutionary — a kind of shadow government with a budget many times the size of the normal federal outlay, administered dictatorially by one man, Fed chairman Ben Bernanke. "We spend hours and hours and hours arguing over $10 million amendments on the floor of the Senate, but there has been no discussion about who has been receiving this $3 trillion," says Sen. Bernie Sanders. "It is beyond comprehension."
In essence, Paulson and his cronies turned the federal government into one gigantic, half-opaque holding company, one whose balance sheet includes the world's most appallingly large and risky hedge fund, a controlling stake in a dying insurance giant, huge investments in a group of teetering megabanks, and shares here and there in various auto-finance companies, student loans, and other failing businesses. Like AIG, this new federal holding company is a firm that has no mechanism for auditing itself and is run by leaders who have very little grasp of the daily operations of its disparate subsidiary operations.
As complex as all the finances are, the politics aren't hard to follow. By creating an urgent crisis that can only be solved by those fluent in a language too complex for ordinary people to understand, the Wall Street crowd has turned the vast majority of Americans into non-participants in their own political future. There is a reason it used to be a crime in the Confederate States to teach a slave to read: Literacy is power. In the age of the CDS and CDO, most of us are financial illiterates. By making an already too-complex economy even more complex, Wall Street has used the crisis to effect a historic, revolutionary change in our political system — transforming a democracy into a two-tiered state, one with plugged-in financial bureaucrats above and clueless customers below.
Go! Read The Big Takeover!

March 20, 2009

Not the Demise of Civilization

In a sea of hot button issues surrounding everything from the economy to climate change to energy policy, another polarizing issue has been lurking - only occasionally rearing its head - that is sure to draw significant attention in the coming weeks. That issue is the Employee Free Choice Act (EFCA), or, as it is known among its detractors, "card check".

Recently, Fox News' Neil Cavuto has gone after Stewart Acuff of the AFL-CIO over EFCA (rather unsuccessfully, I might add); CNN's Lou Dobbs has insisted the legislation would eliminate the secret ballot for workers considering unionization; and mere days after receiving $25 billion in taxpayer money, Bank of America hosted a conference call on which Bernard Marcus, co-founder of Home Depot, frothed that the Employee Free Choice Act was "the demise of ... civilization."

So what, exactly, has got corporate America and its cheerleaders so wound up?

In a nutshell, EFCA is intended to transform a union organizing process that is currently protracted, contentious and dominated by attorneys, into one that is a simple matter of getting a majority of employees to sign union cards. In addition to this “card check” or majority verification, EFCA includes provisions that are designed to prevent employers from weeding out or pressuring workers once they have selected a union, including automatic mediation after 90 days and treble back pay for the discriminatory firing of labor organizers. In short, the primary purpose of the Employee Free Choice Act is to make organizing workers easier.

There are certainly plenty of honest questions about whether that is a desirable thing - and we'll get to what I consider the most important in a bit - but the level of hyperbole, suspiciously new concern for worker privacy rights, and outright propaganda emanating from the EFCA's opposition is notable for its venom. So, before we proceed, let's take a look at a few of the claims that have been made against EFCA. (Or you can read the text of the bill itself using the link in the first paragraph):

MYTH: The Employee Free Choice Act abolishes the National Labor Relations Board (NLRB)'s "secret ballot" election process.
FACT: EFCA does not abolish the NLRB election process. Instead, it gives workers the additional choice to form a union through either an election or through majority sign-up. Majority sign-up has been a path to union representation since 1935, but workers may currently only use this process if their employer agrees. The Employee Free Choice Act puts that decision solely in the hands of employees, and a secret ballot remains available if 30% of the affected workers request one.

MYTH: The National Labor Relations Board’s “secret ballot” election protects workers’ democratic rights.
FACT: Secret ballots alone do not guarantee fair elections. Under an NLRB election, employees have no rights to free speech or protection against intimidation from supervisors. They are regularly forced to attend anti-union meetings and one-on-one interviews with their managers where they are pressured to reveal their position on unionization. By contrast, labor organizers are not allowed to set foot on company property. While there is nothing wrong with secret ballots or with management voicing its views on unions, the problem lies in the abuse of management power in the period between initial union card signing and the NLRB-sponsored secret ballot election.

MYTH: The EFCA would require public union card signings.
FACT: Under current law, employees must already sign cards or petitions saying they support a union in order to obtain an election. Further, when an employer agrees to a majority sign-up process, employees must sign cards to show the union's majority status. Union authorization cards under the Employee Free Choice Act are treated no differently than petitions for election or majority sign-up cards today.

MYTH: The Employee Free Choice Act will encourage intimidation and harassment by labor unions against workers.
FACT: Workers report much less pressure from all sides during majority sign-up campaigns than with NLRB elections. However, it's important to remember that unlike employers, union organizers can’t terminate employees, cut wages, or deny promotions. A recent report from the Center for Economic and Policy Research (CEPR) found that more than one quarter of all union election campaigns were marred by illegal firings.

MYTH: The EFCA requires a secret ballot election for workers to get rid of a union they no longer want.
FACT: Under current law, no election is necessary to disband a union, and the same would be true under the Employee Free Choice Act.

MYTH: The Employee Free Choice Act requires mandatory arbitration that will make businesses uncompetitive.
FACT: Even though workers may choose to form a union, employers often stall when it comes time to negotiate the first union contract, and current law provides no incentive for either party to come to an agreement. Under the EFCA, either employers or employees may request mediation from the Federal Mediation and Conciliation Service if an initial contract agreement has not been reached within 90 days. No reasonable arbitrator will force conditions on a business that will cause it to close its doors, but if an agreement cannot be mediated, the dispute is referred to binding arbitration. All time lines can be extended by mutual agreement.

Clearly then, there is a significant disinformation campaign underway against the Employee Free Choice Act. But even if these means are corrupt, are they justified by the desired ends? Should we be worried about a resurgence in organized labor, which has dipped to only 12% of the workforce? Haven't unions been the downfall of the American automobile industry, and don't they decrease productivity? Aren't unions a drag on national prosperity?

There is very strong evidence that the answer to all of these questions is "no."

Take for instance the claim that unions cripple productivity. This first graph shows the percentage of workers represented under collective bargaining in eight industrialized countries. The United States is unquestionably the least unionized of these nations.

This second graph depicts the growth of worker productivity between 1979 and 2005. If union penetration were correlated to diminished productivity, we would expect the U.S. to have far and away the highest productivity growth. Instead, what we see is that it is smack in the middle of a wide range of results, indicating that there is little relationship between unionization and productivity. (If anything, the most unionized nations appear to have the strongest productivity growth.)

This conclusion is supported by the performance of key economic indicators in the decades after World War II, as described in the charts below. (Click each chart to enlarge. Originals here.) The strongly unionized economies of the Eisenhower, Kennedy and Johnson Administrations were at least as successful - if not more so - than those of presidents in later years.

Likewise, the punch drunk state of the American car industry - whose leadership has made any number of poor strategic decisions (Can anyone tell me, for instance, why the Buick brand still exists, but why leadership in electric vehicle technology was simply tossed aside?) - can't be laid at the feet of unions. Labor costs amount to just one tenth of the cost of building a car, and despite claims from the right wing that U.S. auto workers are paid $75 an hour, wages at the Big Three are actually on par with those earned by Japanese auto makers.

Perhaps most importantly, the Employee Free Choice Act appears to be a viable tool to help address the underlying economic problems that created the current financial crisis, and ensure that the recovery is both fair and sustainable. Forty prominent economists, for instance - including three Nobel laureates - recently signed a statement (pdf) supporting the enactment of the Employee Free Choice Act as “a critically important step in rebuilding our economy.”

As the current recession has demonstrated, economic growth cannot be sustained on credit; it must come from real wage growth, which in turn drives consumption. Ensuring that workers have the freedom to bargain collectively is an effective way to once again reward rising productivity with higher wages, a sensible link that has largely disappeared over the past 30 years. (See graph at the top of this post.) Letting the people who produce economic value share in the success they create is not only the right thing to do, it will reinvigorate the beleaguered American middle class.

If there are legitimate concerns about the Employee Free Choice Act, its opponents have yet to produce them, instead relying on not only cheap exaggerations, but outright lies. To my mind, the politics of division are far more likely to bring about "the demise of civilization" than letting workers more easily obtain collective representation in the workplace.

March 15, 2009

The Real Message of the Stewart-Cramer Saga

Admittedly, this is a somewhat lazy post, composed as it is primarily of video clips, and only lightly sprinkled with text. However, with the earlier attention I gave Jon Stewart's demolition of CNBC's financial news coverage, I also genuinely felt I should follow up on the matter. With that in mind, I present the entire Stewart-CNBC-Jim Cramer saga below.

One thing I would ask readers and viewers to keep in mind, however, is that while this confrontation between Mr. Stewart and Mr. Cramer is great "spat TV," there are far more important layers to this story than a feud between television personalities, as The Daily Show's host has attempted to make clear. This is not about Jim Cramer in particular, or even CNBC; it's about the responsibility of journalists to the public - whether covering Wall Street or the run-up to the Iraq War - that has been increasingly abandoned.

Mr. Stewart made an example of Jim Cramer and CNBC not because they are the problem in particular, but because they are emblematic of the compromised, stenographic and incurious reportage that has become so common in the United States. How sad is it that the credibility of the mainstream media is so low, that potentially the best interviewer in the country is a comedian?

MARCH 4, 2009: Jon Stewart eviscerates Rick Santelli and CNBC

MARCH 9, 2009: Jon Stewart makes it clear that he has plenty of ammunition to answer critics of his March 4th commentary

MARCH 10, 2009: A less important piece (largely for completists!) touching on the network-wide closing of ranks around Jim Cramer

MARCH 12, 2009: Part 1 of Jon Stewart's interview with Jim Cramer
(NOTE: This clip is unedited, and may contain adult language.)

MARCH 12, 2009: Part 2 of Jon Stewart's interview with Jim Cramer
(NOTE: This clip is unedited, and may contain adult language.)

MARCH 12, 2009: Part 3 of Jon Stewart's interview with Jim Cramer
(NOTE: This clip is unedited, and may contain adult language.)

March 11, 2009

The Problem Remains the Banks, Not the Dow

[Click image for full size. Shaded portion denotes the Obama Administration.]

As the economy continues to flounder in the wake of George Bush's presidency, a new meme has been trotted out by the Republican opposition: the current state of the Dow Jones Industrial Average - which has continued to shed value despite what many appear to believe are mystical powers associated with the inauguration of a new chief executive - is Barack Obama's fault. The conservative echo chamber has picked it up, and the dishonesty inherent in this position was perhaps best exemplified in an opinion piece by free market ideologue Michael Boskin at that institution of fact-free blather, The Wall Street Journal editorial page.

Indeed, Mr. Boskin’s article hit all of the now-traditional high notes: spending in times of recession denies the lessons of history (studiously ignoring the fact that spending within FDR’s New Deal dug America out of the Great Depression); other countries have lower corporate tax rates than the United States (refusing to acknowledge the fairly important - if inconvenient fact - that most corporations pay no income taxes at all); etc., etc.

To be frank, the idea that President Obama, who has been in office for 50 days as of this writing, is responsible for the financial bloodletting on Wall Street is, simply, ridiculous. The downward trajectory of the Dow began long before he took office (see graph above), and as Dan McCrum from the Financial Times notes in this video, it is the economy driving the state of the stock market; not policies that have been in effect for less than seven weeks.

Now, saying that President Obama is not responsible for the stock market is not the same thing as saying that he has done everything he can to improve the economic conditions that underpin it. To be sure, he was successful in pushing through a stimulus package that will help soften the recession’s bite to some degree, but in my opinion, he has moved too cautiously with regard to the mess in the financial sector. The stock market only thrives when certain baseline assumptions are considered reliable, and in this case, the health of some of the country’s largest banks - a necessary baseline assumption if ever there was one - remains in doubt.

Piecemeal relief for these staggering financial behemoths hasn’t worked, and pursuing that course of action is just throwing good money after bad. A broad cross-section of public figures, from Nobel Prize-winning economist Paul Krugman to former Chairman of the Federal Reserve Alan Greenspan to rightwing mouthpiece Senator Lindsey Graham, agrees that the nationalization of insolvent banks needs to be on the table. As I wrote in What Really Drives the Debate Over Regulation, the Obama Administration appears strongly resistant to this idea, most likely through misguided principle, despite a chorus of support for it from across the political spectrum. (Discounting, of course, the base stupidity of people like Senator Richard Shelby - the ranking Republican on the Senate Banking Committee no less - who is touting his belief that bad banks can simply be allowed to close their doors without without fear of ripple effects on the broader economy.)

As Paul Krugman points out, the FDIC puts banks into federal receivership all the time - it’s “as American as apple pie”. If “nationalization” is a dirty word, fine; find another way to sell it to the Richard Shelby’s of the world. (Or not; managing receivership is the province of the executive branch, anyway.) Temporary nationalization would end the cycle of privatized gains and socialized losses that has been emblematic of Wall Street. It would enable American taxpayers to profit from their investment, as opposed to simply providing corporate welfare as we do now through bailouts. And perhaps most importantly, it would end uncertainty about the fate of insolvent banks, which is contributing to the doldrums in the Dow. It is not that Mr. Obama’s stimulus and spending plans are too radical; it is that he - or Treasury Secretary Geithner - has not been decisive enough in addressing the ongoing crisis in the financial sector.

All of that being said, however, it’s important to remember that the Dow Jones Industrial Average is but one measure of our nation’s financial health. Even if it suddenly soared, it would do little for the growing population of homeless in places like Sacramento who live in sprawling tent cities after losing their houses to foreclosure. President Obama’s approach must be bolder when it comes to the banks, but he is not the arbiter of the stock market’s current performance, nor is the standard to which he is being held by the conservative noise machine consistent, fair or even meaningful, as Jon Stewart (who has been on fire lately) reminds us:

March 6, 2009

Jon Stewart Eviscerates Rick Santelli and CNBC

For those of you who missed the video above, that's Rick Santelli, a CNBC business analyst and former derivatives trader late last month, decrying President Obama's plans to provide federal funds to help homeowners in danger of foreclosure stay in their houses. It became an instant classic among self-proclaimed champions of self reliance and personal responsibility to the point that White House Press Secretary Robert Gibbs addressed Mr. Santelli's rant directly the next day in response to a reporter's question.

Then things got a little weird, with Mr. Santelli characterizing Mr. Gibbs' comments as "a veiled threat", before backing away from that claim under questioning from Matt Lauer on The Today Show. Wednesday night, Mr. Santelli was supposed to appear on The Daily Show, but - unwisely, as it turns out - canceled, leaving host Jon Stewart to put things into proper perspective on his own...

March 1, 2009

Rush Limbaugh Continues His Efforts to Marginalize Conservatism

Yesterday, entertainment personality Rush Limbaugh spoke at the Conservative Political Action Conference (CPAC), the annual conclave for the rightest of the rightwing in American politics. Specifically, Mr. Limbaugh sought to address negative reaction to his previous and emphatic statements that he hopes President Obama fails in his efforts to repair the calamitous damage wrought on the United States by his predecessor, George W. Bush. Instead, however, his attempts to justify himself only served to demonstrate how badly modern conservativism has lost its way.

After watching the clip above, it is clear from Mr. Limbaugh's Super Bowl analogy that he regards politics as a team sport, and that he is completely disconnected from the idea that policies have very real consequences for everyday people. Taking this analogy and his stated support for Pittsburgh to its logical conclusion, he would prefer to see both the Super Bowl and the NFL fail than the Cardinals triumph, just as he would apparently rather the United States lapse into depression and social upheaval than grow and succeed through policies he finds distasteful.

On the one hand, I - like many citizens - have serious concerns about the level of debt that the United States is taking on through the economic stimulus package and the budget blueprint unveiled last week. That said, there aren't really any levers left with which to kick-start the economy besides government spending, and it would be pretty hard to argue that the budget priorities of the last eight years have done much for the average citizen. Most Americans approve of Mr. Obama's performance to date, so, what precisely, is Rush Limbaugh against? Here are fifteen of the priorities outlined in the president's budget package:
  1. A $634 billion down payment on fixing health care that will lay the foundation for a more efficient and affordable health care system that covers every single American.
  2. Tax cuts for 95% of working Americans and no increase in taxes for any family making less than $250,000 a year.
  3. More than $100 billion invested in clean energy technology that will create millions of green jobs that can never be outsourced.
  4. Bringing our troops home from Iraq on an actual timetable, ending a war that never should have been fought, and freeing up almost ten billion dollars a month for domestic priorities.
  5. Allowing the Bush tax cuts for the wealthiest Americans expire in order to help close the income gap and strengthen the middle class.
  6. Closing multi-billion-dollar tax loopholes for oil companies.
  7. The largest increase ever in funding for federal grants to help families pay for college.
  8. A plan to cut the deficit in half by 2013, despite the drastic measures required to address the enormous budget shortfall and economic damage inherited from President Bush.
  9. Dramatic increases to funding for the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), - the agencies responsible for policing Wall Street.
  10. An end to off-the-books accounting measures designed to hide costs and the use of taxpayer money from the public.
  11. Elimination of unnecessary government subsidies to large banks, health insurance companies and big agribusinesses.
  12. Expansion of access to early childhood education and improvements to schools by investing in programs to produce qualified, high-performing teachers.
  13. Negotiation for lower prescription drug prices through the use of Medicaid's bargaining power.
  14. Increased access to family planning for low-income women.
  15. A cap-and-trade system to address pollution that causes global warming.
Personally, I don't see anything on this list that I find other than desirable. My priority, however, is the national health of the United States, not whether some set of ideas that has failed us miserably gets another shot.

Of course, unlike Mr. Limbaugh, I don't regard American success as a zero-sum game or the failures of others as justification for amoral or thuggish behavior. Divisiveness and lies got us into our current mess, and it might just be me, but I fail to see how they can be expected to get us out. It's time to change direction, pull together, ignore the increasingly insane ranting of people like Rush Limbaugh and his groupies at CPAC, and get the country back on track.