Thursday, January 31, 2008

Updated Congressional resignations, retirements

I last posted a list of the Congressional resignations and retirements on January 25, 2008 and there are another three Congresspersons who have bailed out since then. So I am updating the list again.

Each list is sorted first by party, then alphabetically by last name.


1Allen, TomDME-01Run for SenateD+12
2Carson, JuliaDIN-07DiedD+16
3McNulty, Michael RDNY-21RetireD+13
4Udall, TomDNM-03Run for SenateD+9
5Udal, MarkDCO-02Run for SenateD+17
6 ##Baker, RichardRLA-06Become lobbiestR+19
7Cubin, BarbaraRWY-At lgRetireR+40
8Davis, Jo AnnRVA-01DiedR+21
9Davis, Tom R VA-11
10Dolittle, JohnRCA-04RetireR+24
11Everett, TerryRAL-02RetireR+34
12Ferguson, MikeRNJ-07RetireR+6
13Gilmore, PaulROH-05DiedR+22
14Hastert, DennisRIL-14ResignedR+11
15Hobson, DaveROH-07RetireR+14
16Hunter, DuncanRCA-52RetireR+23
17Hulshof, KennyRMO-09Run for Gov.R+18
18LaHood, RayRIL-18RetireR+16
19Lewis, RonRKY-02RetireR+31
20McCrery, JimRLA-04RetireR+19
21Pickering, ChipRMS-03RetireR+31
22Pryce, DeborahROH-15RetireD+0 *
23Ramstad, JimRMN-03RetireR+3 *
24Regula, RalphROH-16RetireR+8
25###Reynolds, TomRNY-26RetireR+12
26Renzi, RickRAZ-01RetireR+8
27Saxton, JimRNJ-03RetireR+2 *
28 #Shadegg, John RCO-03RetireR+17
29Tancredo, TomRCO-06RetireR+21
30Walsh, JimRNY-25RetireR+2 *
31Weldon, DaveRFL-15RetireR+14
32Weller, JerryRIL-11RetireR+7
33Wilson, HeatherRNM-01Run for SenateR+3


1Allard, WayneRCORetiringR+5 *
2Craig, LarryRIDRetiringR+38
3Domenici, PeteRNMRetiringR+1 *
4Hagel, ChuckRNBRetiringR+33
5Lott, TrentRMSResigningR+19
6Warner, JohnRVARetiringR+9

"Retiring" means serving to end of term. Will not run for reelection.
"Resigning" means announced resignation and intends to leave before end of term.
"Resigned" means has already officially left office during this term.
"At Lg" means the only congress person in the state.

The final column reflects the Presidential vote in 2004. D+13 means Kerry received 13% more of the vote than Bush did. Districts or states in which the difference was 5% or less are indicated by an asterisk (*) because they will be likely change, particularly if the winning presidential candidate has "coattails". Deborah Pryce's Ohio 15th district was effectively tie in the 2004 Presidential race, so it is shown as D+0. The score there is only an indicator and reflects political conditions three years ago, so while Virginia is listed a R+9, in 2006 Virginia elected Democrat Jim Webb as Senator so it is probably a tossup state.

In the House, 25 (12.4%) of the 202 Republicans have resigned, died, or announced they are not running for reelection. Of those 25, only Heather Wilson of New Mexico is running for higher office (the Senate in her case) and Kenny Hulshuf is running for Governor. The other 23 Congress people are leaving politics.

Of the 233 Democrats, 5 (2.1%) have announced that they are not running for reelection, and three are running for Senate seats. Tom Udall is running for the same New Mexico Senate seat that Heather Wilson is, so one of them is gone from Congress after November.

Clearly Republican turnover is much higher than that of the Democrats, which suggests that the Republicans expect to remain in the minority after the 2008 election.

Bush and Gen Petreaus have greatly lowered American casualties in Iraq so that Iraq has moved out of the news. It will thus have less influence on the November 2008 election than expected unless something changes sharply. The Recession that is currently building will clearly have an effect, with voters being more likely to vote against incumbents and particularly Republicans. Because the Primaries have been moved to such early dates, the latest information on the coming Recession will not permit many intra-party challenges of incumbents. That's unfortunate, because there are a lot of Blue Dog Democrats who need to be challenged and removed from office.

If you are curious about the changes, my two previous lists of retirements and resignations are found at .

Addendum February 12, 2008
# Adding John Shadegg as another retiree, announced yesterday.
This is 26 of the current 202 Congressional Republicans who are leaving or have left office this year. That is 12.9% of the current incumbents.

## Adding Richard Baker, announced about three weeks ago. This makes 27 Republicans leaving the House, which is 13.3 % of the Republican incumbents.

NPR today said there were 29 Republicans leaving, so I am looking for two others.

Addendum March 20, 2008
### Adding Tom Reynolds to the list of those who have announced that they are retiring from the House and will not run for reelection.

Blue eyes: result of a recent mutation which has been identified

Originally all human beings had brown eyes. Then, sometime between 6,000 and 10,000 years ago, there was a mutation to "the so-called OCA2 gene, which is involved in the production of melanin, the pigment that gives color to our hair, eyes and skin." Jeanna Bryner at MSNBC reports the story.
"A genetic mutation affecting the OCA2 gene in our chromosomes resulted in the creation of a 'switch,' which literally 'turned off' the ability to produce brown eyes," Eiberg said.

The genetic switch is located in the gene adjacent to OCA2 and rather than completely turning off the gene, the switch limits its action, which reduces the production of melanin in the iris. In effect, the turned-down switch diluted brown eyes to blue.

If the OCA2 gene had been completely shut down, our hair, eyes and skin would be melanin-less, a condition known as albinism. [Snip]

[from the Department of Cellular and Molecular Medicine at the University of Copenhagen.] and his team examined DNA from mitochondria, the cells' energy-making structures, of blue-eyed individuals in countries including Jordan, Denmark and Turkey. This genetic material comes from females, so it can trace maternal lineages. [Snip]

...we can conclude that all blue-eyed individuals are linked to the same ancestor," Eiberg said. "They have all inherited the same switch at exactly the same spot in their DNA." Eiberg and his colleagues detailed their study in the Jan. 3 online edition of the journal Human Genetics.

That genetic switch somehow spread throughout Europe and now other parts of the world.

"The question really is, 'Why did we go from having nobody on Earth with blue eyes 10,000 years ago to having 20 or 40 percent of Europeans having blue eyes now?" Hawks said. "This gene does something good for people. It makes them have more kids."
I find this fascinating.

Now, just to satisfy my curiosity, when will the Chinese geneticists tell us about the history of the epicanthal fold that many people of East Asian and Southeast Asian descent have. But that is probably not something that can be pinned down to a single mutation so easily, and I'd guess that it's a little older than the blue-eye mutation. both are a direct result of the migration of human beings north out of Africa, as described in Nicholas Wade's outstanding book Before the Dawn: Recovering the Lost History of Our Ancestors.

Oh, wait. We don't need to find out those things, because the fundamentalist theological schools have already told us - those things are the results of decisions by the "Intelligent Designer." Such things are much to complicated for us mere human beings to understand, so we make a mistake trying. It is for us to do nothing more than worship the Intelligent Designer, obey the superior church leaders and tithe so that they can buy better cars and bigger mansions. Why would we mere sheep have to know about such things that are so far above our God-given station?

[Makes me want to contribute to some genetics research somewhere, just to spite the Discovery Institute and Mike Huckabee.]

Bush is leaving America a gutted Army

One thing that Bush has succeeded in doing is destroying the effectiveness of the U.S. Army. Dana Priest of the Washington Post explains what what has become of the Army:
Suicides among active-duty soldiers in 2007 reached their highest level since the Army began keeping such records in 1980, according to a draft internal study obtained by The Washington Post. Last year, 121 soldiers took their own lives, nearly 20 percent more than in 2006.

At the same time, the number of attempted suicides or self-inflicted injuries in the Army has jumped sixfold since the Iraq war began. Last year, about 2,100 soldiers injured themselves or attempted suicide, compared with about 350 in 2002, according to the U.S. Army Medical Command Suicide Prevention Action Plan.

The Army was unprepared for the high number of suicides and cases of post-traumatic stress disorder among its troops, as the wars in Iraq and Afghanistan have continued far longer than anticipated. Many Army posts still do not offer enough individual counseling and some soldiers suffering psychological problems complain that they are stigmatized by commanders. Over the past year, four high-level commissions have recommended reforms and Congress has given the military hundreds of millions of dollars to improve its mental health care, but critics charge that significant progress has not been made.

The conflicts in Iraq and Afghanistan have placed severe stress on the Army, caused in part by repeated and lengthened deployments. Historically, suicide rates tend to decrease when soldiers are in conflicts overseas, but that trend has reversed in recent years. From a suicide rate of 9.8 per 100,000 active-duty soldiers in 2001 -- the lowest rate on record -- the Army reached an all-time high of 17.5 suicides per 100,000 active-duty soldiers in 2006.

Last year, twice as many soldier suicides occurred in the United States than in Iraq and Afghanistan.

Col. Elspeth Cameron Ritchie, the Army's top psychiatrist and author of the study, said that suicides and attempted suicides "are continuing to rise despite a lot of things we're doing now and have been doing." Ritchie added: "We need to improve training and education. We need to improve our capacity to provide behavioral health care."

Ritchie's team conducted more than 200 interviews in the United States and overseas, and found that the common factors in suicides and attempted suicides include failed personal relationships; legal, financial or occupational problems; and the frequency and length of overseas deployments.
America would not have accepted a draft to fight in Iraq. Bush knew that and never tried to get one, nor did he every try to fund the war. He has just borrowed the money to pay the bills and used up the superb volunteer Army he inherited from Bill Clinton.

The next President of the U.S. will enter office without any significant ground military capability to depend on. Bush, Cheney and Rumsfeld have used it up in their failed military adventures.

How is McCain going to propose to rebuild the Army Bush has gutted, now the Bush has also driven the U.S. into Recession?

President or Tyrant? Bush is the latter.

Also from Juan Cole:
Bush signed a law forbidding him from spending money to make permanent bases in Iraq but at the same time issued a signing statement making clear he had no intention of paying any attention to that or several other provisions in the legislation. What do you call a leader unconstrained by his legislature? An absolute monarch. I thought we had a revolution to get rid of that sort of thing.
George Bush is an un-American tyrant, and our political leaders are either cheering him on or refusing to act as the Constitution directs by impeaching him.

How is the tyrant George Bush any better than a Communist dictator of the kind America fought a four-decade Cold War to avoid? McCain or Romney will be merely a continuation of the same anti-democratic tyrannical government.

As Glenn Greenwald wrote this morning of the new Attorney General:
Mukasey is the federal judge who, when presiding over the Padilla case in 2002, endorsed the most tyrannical and un-American power there is, when he ruled that the President even has the power to imprison U.S. citizens indefinitely, even when detained on U.S. soil, with no process of any kind -- a position he refused to repudiate during his confirmation hearing.
So the new American norm is that the President is above the law, eliminating the Rule of Law. The lack of the Rule of Law guts the Constitution by making it unenforceable. Mukasey's ruling also paves the way to the creation of legal gulags which are recognized under the court approved law.

When these anti-American tyrants come for you, don't say you weren't warned. All you can truthfully say is that you ignored the warnings.

America is winning in Iraq

Here, from Juan Cole is a description of how the invasion of Iraq and the removal of Saddam are benefiting the Iraqi people:

A new professional poll carried out by a British firm in Iraq concludes that excess deaths from violence since March 19, 2003 through summer 2007 came to just over 1 million. Note that excess deaths from violence do not necessarily imply that they are directly war-related. Thus, murders of a criminal sort, tribal feuding, and so forth would be included. Since Bush interfered with the establishment of a strong new government after his invasion, he promoted the sort of insecurity that permitted high rates of violence, whether political, criminal or war-related. This poll tracks with the findings of the studies of Gilbert Burnham and Les Roberts, published in the Lancet and disputes lower numbers found by a recent WHO study (which, however, only ran through June 2006 and was limited solely to civilians--this British study goes to 2007 and seems to include everyone.)

The British findings are also consistent with estimates of between 1 million and 2 million widows in Iraq. These widows, many of them young, face extreme poverty without a breadwinner. As the Iraqi street has been captured by religious parties and militias, gender segregation and female seclusion have increased, which prevents single young women from going out to work in mixed-gender settings like stores and workshops. In short, Iraq is being Talibanized by Bush's war.
If this means we are winning the war in Iraq, I wonder what losing looks like?

There are two different responses to these reports. The first one is to question why we remain in Iraq and what we are doing. Are we actually trying to stop the violence and allow the Iraqis to return to some form of stability as a nation? Will we turn Iraq over to a Taliban-level Islamic state as long as the killing of American soldiers is reduced? Why? What does America get out of such interference in that poor benighted state?

The second response is pure "ostrich." Those who choose the "ostrich option" simply ignore any reports that contradict their faith in ultimate victory, They have faith in the redemption of their "conservative principles."

It is possible to refuse to recognize the truth of these reports, at least for Americans who do nothing more active in the occupation of Iraq than sit back and cheer it on, gaining some kind of sports fan satisfaction that our team is playing well. Unfortunately the occupation of Iraq is not a game. There are no rules and there is no goal line that can be crossed to symbolize victory. While there is no vision of what winning would consist of, the game can still be played as long as the Bush administration does not define victory and refuses to admit the on-going loss in Iraq, while continuing to shovel manure in hopes that a pony might be discovered.

It really looks as though the Bush administration believed after 9/11 that if they flexed the power of the clearly most powerful military in the world that they could awe the ignorant Islamic denizens of the Middle East into political passivity. Conservative ideology supported the idea that removing "the yoke of the dead hand of government from the necks of the people" would release a massive explosion of creative economic growth and democratic political activity that would cause peace to break out and create a level of wealth for those middle eastern nations who have previously been blocked from it. It was this strange faith in conservatism and military power that led Secretary of Defense Don Rumsfeld to declare that he was unleashing to power of "Shock and Awe."

The idea behind the invasion of Iraq appears to have been that by applying American military "shock and awe" it would be possible to remove the socialist-style government of Iraq and then the application of conservative free market principles to the Iraqi economy would release the pent-up energies of the Iraqi people. The result would be a new, westernized and much more powerful Iraqi nation that would be an effective counterweight to the hide-bound Iranians and which would demonstrate to Palestinians and Islamic extremists that they should put their efforts into creating economic wealth instead of bombing and shooting others.

The invasion of Iraq became a massive experiment to prove the validity of those conservative and militaristic beliefs. As an experiment, it was completely successful - in debunking those beliefs within weeks of the initial invasion and the fall of Baghdad. The conservative theories that the invasion and the CPA under Jerry Bremer were to test were totally debunked.

Instead of creating an economic free market paradise in Iraq, the Iraqi nation was destroyed as a single entity and as a regional power that was a counterweight to Iraq. The Kurds to the north have demonstrated that being released from the Iraqi dictatorship has permitted some economic improvement, but the international political repercussions have required America to defend them. They will not become a middle east superpower, any more than Lebanon has. They are, and will remain, a thorn in the side of our ally Turkey and of Iran, and they will remain opposed to rejoining a greater Iraqi nation. The Iraqi Shiites have, of necessity, become closely allied to the Shiites of Iran, while the Iraqi Sunnis are protected by the American military and are provided support by the Sunni nations of the Middle East as a counterweight to the Iraqi and Iranian Shiites. Overall, Iran has come out of the mess created by the American invasion of Iraq as the great Middle Eastern Superpower.

In short, the invasion of Iraq - the great experiment of American militarism and the application of American conservative free market principles after the military removal of the Baathist socialist government has failed in every respect.

Such utter failure was predictable, and the expectation of failure was widely expressed before the invasion. But those true believers who committed themselves to the Iraqi invasion cannot now abandon their commitment. Now they can only search for excuses for their failure while continuing the occupation, because there are clearly predictable bad expectations from our departure from Iraq. Once you have grabbed the tiger's tail, how do you let it go?

But that's all the American military occupation of Iraq has left to offer. There is no upside to be expected from keeping American troops in Iraq, nor can America continue to afford to do so.

The Bush administration and the entire conservative movement has chosen option two, the "ostrich option." Winning the occupation of Iraq has been redefined as "We are now in Iraq, and we cannot leave without losing." So we continue to shovel the manure in hopes of finding the imaginary pony of victory.

Tuesday, January 29, 2008

Unregulated and unobserved banking results in ...

From the Wall Street Journal:
WASHINGTON – Federal investigators have opened criminal inquiries into 14 companies as part of a wide-ranging investigation of the subprime mortgage crisis, focusing on accounting fraud, securitization of loans and insider trading, among other areas, the Federal Bureau of Investigation said.

The FBI wouldn't identify the companies under investigation but said that generally the bureau is looking into allegations of fraud in various stages of mortgage securitization, from those who bundled the loans, to the banks that ended up holding them
This is just Wall Street, right? Uh, well, you know that French bank where a single rogue trader lost over $7 billion last week? Here's the report I expected:

Trader who lost $7 billion says bosses approved:
PARIS - The trader accused of causing about $7 billion in losses at Societe Generale told investigators that he believes his bosses were aware of his massive risk-taking on markets but turned a blind eye as long as he earned money, a judicial official said Tuesday.

Societe Generale, which said last week that Kerviel’s actions cost it nearly 5 billion euros, quickly accused Kerviel of lying. In another twist to the multifaceted case, France’s financial markets authority opened an investigation into the bank, France’s second-largest.

Kerviel, a 31-year-old junior trader, told investigators of efforts to mask his massive transactions, but said the bank must nonetheless have noticed something suspicious, according to excerpts of his police testimony published in Le Monde newspaper. Kerviel’s remarks were confirmed by Isabelle Montagne, a spokeswoman for the Paris prosecutor’s office.

“I can’t believe that my superiors were not aware of the amounts I was committing, it is impossible to generate such profits with small positions,” Kerviel said, according to the account confirmed by Montagne.
If you want a stable economy, then you have to have honest, trustworthy bankers.

But Bankers are not honest and trustworth unless there are outsiders carefully watching every move they make. An unwatched banker cannot be trusted. The potential profits in banking are simply too big, the biggest profits come from the greatest risk of loss, and the damage that can be done to the overall economy by such massive bank losses are too big to trust bankers.

Score another failure for the Reagan Revolution and Sen. Phil Gramm's deregulation of banking together with the elimination of the Glass-Stegal act.

What to expect from the Recession and what to do about it.

The Pollyanna days of denial by financial professionals and Economists abruptly ended last week, and now no one is ignoring the economic downturn the bursting of the housing bubble and the resulting credit crunch have brought us. The most optimistic of the financial professionals are reduced to objecting that the current economy is not officially in recession, because the committee of economists (a grizzly concept in itself) that officially determines the beginning and ending dates of recessions does not yet have enough data to make an official pronouncement of what happened in reality.

Only most of us live in reality and do not need a conclave of economists to tell us what that reality is. Even the Bush administration economists, with their vested interest in not admitting to a recession during an election year, have hit rock bottom and convinced their political masers that they simply have to stop trying to convince others of their irrational denial and actually try to look like they are doing something. Unfortunately, they are trapped in the same conservative ideology that President Herbert Hoover was from 1929 to 1933. Conservative free market ideology states that there is nothing the government CAN do to alleviate a recession, so they choose to permit only government actions that look good politically while the continue to work to enrich the wealthy. That's why the stimulus program is a fraud. So let's face it. The Recession has begun, and for political reasons rather than economic, there really is nothing the government is going to do about it that is effective.

So a recession has started. So what? What does it matter? John Schmitt and Dean Baker of the Center for Policy Research have published a paper telling us what to expect.

A recession is officially two quarters in which total gross domestic production is lower than previously. A mild-to-moderate recession would last either two or three calendar quarters or roughly six to nine months long. A severe recession can be expected to last about two years.

The two most recent recessions, those of the early 1990s and early 2000s, were mild recessions. Each was kept from getting more severe because the federal reserve lowered interest rates and created the conditions for an economic bubble, first the dot com bubble and then the housing bubble. The "double-dip" downturn of 1980-82 was a severe recession, one created by then Fed Chairman Paul Volker by sharply increasing interest rates in order to wring inflationary expectations out of the economy. But the reduction of overall gross domestic product (GDP) only measured national economic product. The most important effects on the economy are the labor effects, and those last longer than the production effects do.

The unemployment rate in 2008 can be expected to increase somewhere between 2.1 percent in the case of a mild-to-moderate recession up to 3.8 percentage points if the recession is severe. That means somewhere between 3.2 million and 5.8 million unemployed Americans. But that's not the end of it. The unemployment rate outlasts the official economic downturn. In the case of a mild-to-moderate recession unemployment can be expected to rise up to 6.7 percent through 2010, and in the case of a severe recession we can expect unemployment to rise to 8.4 percent and last through 2011.

The unemployment rate among Blacks, and especially Black teenagers, will go significantly higher than those average figures, and even in the case of a mild recession an additional 4.2 million people will lose health insurance coverage. And the loss of income? In a mild-to-moderate recession the median family will lose about $2,000 per year by 2010. The median family loss in a severe recession would be almost $3,750 per year by 2011. These numbers are in constant, inflation-adjusted dollars. Obviously the national poverty rate will increase, going up between 1.6% and 3.5% from the 2006 level of 12.3%. That's an increase of between 4.7 million and 10.4 million people living in poverty.

So the next logical question is whether we should expect a mild, moderate or severe recession. That will depend on how the economy comes out of it.

The last two recessions were mild because the interest rates were lowered to the level that a boom was created. But they didn't last primarily because workers didn't get any significant level of the new income that was created. That new income all went to making the wealthy richer. But 70% of economic demand comes from consumption.

If the economy is going to grow, then economic demand has to increase, and that means consumers have to get increased wages for their labor. The dot com bubble was created in large part by Alan Greenspan as he eased interest rates to keep the American economy buying. The Southeast Asian financial bust threatened to put the entire world into recession, so Greenspan pumped up American purchases to protect the world economy. He overdid it. The dot com bubble was allowed to last too long because it was the only major source of increased wages for consumers, but when the projects that were making financial deal-makers rich got too irrational the bubble collapsed.

So Greenspan lowered interest rates again, prompting irrational increases in housing prices, and he encouraged Americans to refinance their homes to get the artificially inflated wealth out of those homes and into consumption. Essentially the first recession was kept mild by low interest rates and the dot com bubble, but it created the second recession which was kept mild by low interest rates, the housing bubble, and consumption pumped up by wealth extracted from the artificially increased home prices. Like the dot com bubble, the housing bubble was extended by making irrational and non economic deals.

The result is the collapse of home prices (still to go down 20% to 30% in the most effected areas), the collapse of the credit system when bankers and investors found that no one knew they were undervaluing the risk they invested in, and now the recession which will be validated later as it is proven that GDP has declined. The clear symptom of unemployment is already recognizable.

This is the normal boom-and-bust cycle of an economy in which all the rewards of productivity are passed to the wealthy owners and investors while wage earners are not rewarded for their increased productivity.

A strong, stable and growing economy requires a strong, well-paid middle and laboring class in order to avoid the recurring boom-and-bust events. It has been obvious since 2000 that the consumers were not getting real wage increases, so they had to be somehow artificially provided with funds to increase consumption. Those funds have come in the absence of savings and in new and more efficient methods of extracting wealth from (artificially over-valued) homes. In short, the financial community and the government have artificially pumped up consumption by getting consumers to borrow future income. They had to, since consumers were not getting increased income from the economy!

But even that had to end, and now it has. So lets recap.
  • Since the Reagan Revolution America's economic structure has been changed so that the rewards from the economy have flowed to the wealthiest individuals.
  • American labor has not had real increases in wages since 1970. Increased consumption came about because
    • Housewives entered the labor market to increase household wages.
    • Households have stopped saving.
    • Credit has been eased so that almost everyone can borrow money.
    • Usury laws were eliminated so that banks could make more loans to riskier customers.
    • Mortgages laws and procedures were eased so that consumers could get access to the increased value of their homes caused by lower interest rates.
    • Credit standards were eased, making it easier to make loans to more people.
    • Regulations of businesses were eased or eliminated so that no one was in a position to question irrational or exploitative transactions.
  • Since 1980 the U.S. has undergone three recessions and is now heading into the fourth.
  • While the recession of 1980 - 82 was caused by Paul Volker of the fed tightening interest rates to depress the economy until inflationary expectations were eliminated, both of the two since then were caused by a combination of excessively low interest rates by the fed and by a failure of consumers to consume enough to keep the economy growing.
  • The redistribution of wealth in America since 1980 has redirected the gains in the economy to the wealthiest Americans and away from the workers who are the consuming class.
  • Investments do not boost consumption.
  • Investments are made when demand for a product or service (demand is both desire for the product or service together with the necessary money to buy it) is recognized. When demand does not exist, any additional money will be invested in bonds or other international economies with better prospects.
So the redistribution of money from the working classes to the wealthy investor classes in America has resulted in a series of recessions. This is the inevitable result of the Reagan Revolution and the Conservative movement.

What's the cure?
  • Vote the conservatives out of office at all levels.
  • Invest in the single most productive factor of production in America - its labor.
    • Subsidize more education. Give grants instead of loans. Fund more K to 12 education from general revenue rather than property taxes.
    • Provide Universal health care.
    • Generally rebuild the safety net for unemployment and illness.
  • Reregulate banks and financial businesses so that the excesses that have created and extend the last two bubbles cannot happen.
  • Stop shifting economic risk from businesses to individuals, and reverse the trend so that families can predictably raise and educate their children.
And that's a start.

Monday, January 28, 2008

Bernanke has the on-coming Recession figured wrong

How are the 1929 Great Depression, the 1990's Japanese long period of really poor economic performance and the current American Recession alike? For one thing, each was caused by economic mismanagement by the central bank and by the the government, and each was prolonged by mismanagement by those two entities. Michael "Mish" Shedlock, thinks that Ben Bernanke has the dynamic of the current American recession wrong, and he explains why he thinks so in his article Crash Course For Bernanke. He quotes from an article that Bernanke published in 2000:
The downturn following the collapse of Japan’s so-called bubble economy of the 1980s was not as severe as the Great Depression. However, in some crucial aspects, Japan in the 1990s was a slow-motion replay of the U.S. experience 60 years earlier. After effectively precipitating the crash in stock and real estate prices through sharp increases in interest rates (in much the same way that the Fed triggered the crash of 1929), the Bank of Japan seemed in no hurry to ease monetary policy and did not cut rates significantly until 1994. As a result, prices in Japan have fallen about 1 percent annually since 1992. And much like U.S. officials during the 1930s, Japanese policymakers were unconscionably slow in tackling the severe banking crisis that impaired the economy’s ability to function normally.
[Shedlock's comment] It's amazing that anyone could possibly think that if only Japan had started cutting rates in 1992 instead of 1994 that it would have made any difference. Unfortunately for the world, we now get to test out Bernanke's theories in real life.
Let's hope that Bernanke is right and Shedlock is wrong, but I don't count on it. Go read the article for the details.

As you read it, though, you might want to keep this statement from the New York Times today in mind:
Sales of new homes fell last year by 26 percent, the steepest drop since records began in 1963, the Commerce Department said on Monday.
Until the prices of existing homes fall to a level that fits with rents and current incomes, this drop in the sales of new homes will continue to fall. Unfortunately, the homes in the housing bubble areas are still overpriced by 20% to 30%. Housing markets move slowly, so those prices will probably not get down to a reasonable level for at least a year, maybe two. Only after that will the degree of damage our economy has absorbed over the last two decades begin to become clear and possibly be corrected to some extent.

The problems are deep and the solutions will be slow in coming.

Another failure of conservative government

The so-called stimulus program that is all Bush will permit does not include funding to keep state and local governments functioning. Here is an example of what can happen, and what WILL happen even more as the Recession reduces state and local government tax revenue:
CNN earlier today was running disturbing video of a man who fell through the ice of a pond in Weymouth, MA. He thankfully was rescued, but because of budget cuts, that almost didn't happen.

The Associated Pres reported: "Authorities say they were lucky to have the canoe to help the rescue. A fire station a half-mile from the pond has an ice boat, but the station was closed because of budget constraints." The Weymouth fire chief told the Boston Globe that "had it been open, the situation might have been less hazardous for the victim, who spent '20 to 30 minutes' in the frigid water."

If a recession hits, state government budgets will be squeezed further. But the stimulus package compromise between the White House and the House does not include additional support for state governments."
And why does the stimulus program not include assistance to state and local governments? Because the stimulus program is designed as a PR tool to show that the Republican conservatives are taking action, and that action will be demonstrated as voters and business people get tax rebate checks. The stimulus program is about buying votes for conservatives, not about dealing with the recession. State and Local governments don't vote, so in spite of the fact that assistance to them would be one of the most effective forms of dealing with the on-rushing (conservative caused) recession, it will be avoided.

To conservatives, government has only one function. It is a great pot of money which is extracted from the poor and middle class to be redistributed to the wealthy conservatives. Public Relations, bribes and corruption are the primary functions of conservative-run government. Effective programs that don't perform those key functions are simply ignored.

Democratic voter turnout in South Carolina

One thing I really found most remarkable from the primary in South Carolina was the level of Democratic voter turnout. Here is Steve Benen's comment on it.
Consider this tidbit: Hillary Clinton was trounced by Barack Obama yesterday, but her vote total was almost identical to John McCain’s vote total in the Republican primary — and he won. This, in one of the most reliably right-wing states in the Union.
I have been looking for someone to publish a good post-election voter poll to tell me what the demographics of the vote were, but the turnout appears to result from a combination of voter objection to Republican policies, Barack Obama's personal charisma, the strong press coverage of the competition between Hillary and Obama, Black and liberal White turnout for the first ever serious African-American Presidential contender with a possibility to reach the White House, and Obama's very effective get-out-the-vote effort. Some decent specific poll numbers from a good exit poll would clarify which of those factors were significant and which were not. Overall, though, the high turnout looks like a strong indicator of complete voter rejection of the conservative movement.

Race, interestingly, does not appear to have been Obama's strongest draw. Here is Steve Benen's description of the race issue as it effected the Primary:
As for all the talk about race, there were some polls in the last few days showing Obama’s support dropping to just 10% of white South Carolinians. The reality proved to be far different — Obama over-performed among white voters, winning a clear majority of younger whites and tying Clinton among white men.
So obviously race was significant - how could it not be, in this nation so bedeviled by Racism for 400 years - but it was not the decisive factor. Besides the extremely high turnout in the Democratic primary, this is probably the best news South Carolina has given us.

Super Tuesday is going to give some really good figures that can be used to predict the November election, but Saturday's South Carolina Primary looks really good for the Democratic Party.

Totally off-topic, but I do wonder if Blogger's spell checker will ever start recognizing Obama's name and not flagging it as a possible misspelling. All it would take is adding "Barack" and "Obama" to the dictionary the computer uses.

What are the Democrats going to do with the Presidency?

The race for the Democratic nomination for President has rather clearly been narrowing down to a two person race between Obama and Hillary that leave John Edwards out of contention.

Damn. Edwards is still my preferred candidate. His vision of what America needs to be doing and becoming is, in my opinion, the best vision being offered. But the Democrats this year have an abundance of talent.

Hillary, in my opinion, is too trapped by the corporate-dominated past, but she clearly has the capability to get things done in Congress. Of course, once she gets out of the "window" of the election campaign in which every statement she makes will be carefully parsed and might lose her votes, she is very intelligent and quite educable. (This assumes that her aging 90's left-over advisers can be sidelined - not an assured process.) She is also probably the best "vetted" Democratic candidate and of the three remaining candidates for the nomination, she is the most likely to be able to deal with the expected Republican nasty and illegal politics which everyone knows will start as soon as the Democrats settle on a nominee.

Obama has clearly demonstrated an ability to draw enthusiastic voters who have not generally participated in the political process in the past, and at the same time his very candidacy promises to be another major step for America away from the curse of Racism that has bent our American politics and society in some very sick directions. Obama has shown the ability to organize the get-out-the-vote extremely effectively in both Iowa and South Carolina. I'll be looking to see if his ability extends to Super Tuesday. I have some (strong) doubts that Obama really understands what the Republican conservative movement means and what methods is is willing to use to get its way, and I don't think he is sufficiently Progressive to build the kind of effective America for the future that remains true to the dream of 1776 and which is embodied in the U.S. Constitution. Can he really repair the damage the conservative movement has done to America if he becomes President? I still have my doubts, but he certainly has convinced a lot of voters that he is the best person running for the nomination and may well get it. If he does, then all my quibbles go to the side and I support him 110% in the general election because there is no competent Republican running. Like Hillary, I suspect that he is very educable and is reality-oriented.

The real issue for November is not which of the three Democratic contenders gets the nomination. What really matters is that Democrats are appointed to fill the roughly over 7,000 Federal civil service leadership and support positions listed in the Plum Book. Those are the jobs that Dick Cheney was responsible for filling in the legislative
and executive branches of the Federal Government. They are generally subject to noncompetitive appointment (e.g., positions such as agency heads and their immediate subordinates, policy executives and advisers, and aides who report to these officials), and the people who fill those jobs are the ones who dominate the Federal government for the President's term of office.

It was Cheney's ability to fill those positions with his personal loyalists that has made Dick Cheney more powerful in many ways than George W. Bush himself. The result has been a federal government that is not only dominated by movement conservatives and religious nuts who ignore reality, but also one that reflects Dick Cheney's personal paranoia.

Whoever the Democrats elect as President (and they must elect the next President if any form of Constitutional American democratic government can hope to survive) needs to quickly strip out the authoritarian movement conservatives and Republicans from the "Plum book" positions and replace them with pro-American Democrats. That's what the election in November is really about.

To get there, it currently looks like Barack Obama is going to become the Democratic nominee. This is, of course, subject to the results of the primaries and caucuses held on super Tuesday, but the good bet today is that Obama will get more delegates than Hillary will. If the concept of political "momentum" has any real meaning, that will effectively give Obama the nomination at the Democratic National Convention.

So what happens to Hillary and Edwards is Obama gets the nomination? Matthew Mosk in today's Washington Post suggests that a President Obama appoint John Edwards as Attorney General. Not a bad move, but what if Obama takes Edwards on as Vice President? That would combine the ability of Obama to bring in younger voters, African American voters, and those of us who think he represents the best social vision of a great future America, with the Progressive policies championed by John Edwards. I think that combination would be a real win-win proposition.

But I don't want to leave Hillary out. She has shown that she is an effective Senator who is well-respected on both sides of the Senate aisle. I also understand that Harry Reid would like to leave the job as Majority Leader. That would be a perfect position for Hillary Clinton.

A real problem in the Democratic nomination race has been the abundance of talent. It's been hard to decide which single person to choose as the Presidential nominee. well, it looks like that problem is being resolved and will be resolved in the near future. Now, just imagine a President Barack Obama, Vice President John Edwards, Senate Majority Leader Hillary Clinton, and a Secretary of State Bill Richardson. Then I am sure that retired Gen. Wesley Clark would be a strong contender for the job of Secretary of Defense.

I'm not sure it could get much better than that.

Eggs. Yet to hatch. Counting Chickens. It's going to be a long, rough election this year. Still, a man can dream ....

Saturday, January 26, 2008

The Washington D.C. Establishment

Glenn Greenwald has another very interesting article posted today. His focus is the surprise that the Washington D.C. establishment has had as it tried to pass the FISA extension that contains retroactive immunity for the criminal actions of the telecoms who aided the incoming Bush administration in its effort to spy on American citizens without any warrant or legal justification.

Don't forget - the Bush administration started those spy actions in February 2001 at a time they were denying that there was any terrorist problem other than state-supported terrorists. Those illegal spying operations were obviously for internal American political use, not for American security, and both the telecoms and the Bush administration knew such actions were illegal. They just never expected to be exposed. First I'll summarize Glenn's discussion, then I want to focus on who belongs to the Washington establishment and how they operate.

The "establishment" has standards that describe "How things in Washington are done." The members of the establishment become upset when those standards aren't followed. The process of passing the FISA extension has violated those standards. As Glenn points out, the FISA extension with retroactive telecom immunity is an issue that is a highly technical one that the Washington establishment normally would get quietly passed through Congress. The public would probably never know it had happened. Even in the unlikely case the public did learn of it, it wouldn't matter. It would have been a done deal. Essentially the Congressional leadership of both parties, as members of the establishment, would quietly include the telecom immunity in the FISA extension as requested by Dick Cheney and pass it. The Press, also a part of the D.C. establishment, would never bother to write about the issue.

As Glenn says that's just the way "The Establishment" has always handled things in Washington. It hasn't mattered if the leadership in Washington was Republican or Democrat. These issues are handled quietly so that they go away. The public is not to know of them.
The establishment media has virtually ignored these matters from the beginning. Most establishment-serving pundits who have paid any attention — the David Ignatiuses and Joe Kleins and Fred Hiatts — have done so by advocating, as usual, the Establishment position: retroactive immunity and warrantless eavesdropping powers are the right thing to do. Although there is no citizen-constituency whatsoever crying out for telecom immunity or new warrantless eavesdropping powers, the forces behind those provisions are the ones which typically dictate what Congress does: namely, the largest corporations and their lobbyists, who have been working, as always, in the dark to ensure that the law they want is enacted.

That’s typically the way Washington works — the most significant laws are seamlessly enacted with little real debate or attention, driven by corporations and lobbyists working in secret with Senators, cheered on by the Serious media pundits, with bipartisan pools of lawmakers silently and obediently on board. And once those forces line up behind any measure, it is normally almost impossible to stop it — not just stop it, but even disrupt it at all. That’s the insulated Beltway parlor, virtually impervious to outside influences, least of all the opinions of the citizen-rabble.
Only this time it hasn't worked. Harry Reid has been prepared to do his job as expected by the Establishment, only to find that some Senators (particularly Chris Dodd) have been blocking him, and they are supported by a movement of concerned citizens outside of Washington.

Dodd himself has never been one to break with the establishment, and he's been a Senator for 24 years. Suddenly he is now going up against the wishes of the establishmentWhat happened? Dodd explained in a Senate floor speech:
I’ve promised to fight those scare tactics with all the power any one senator can muster. And I’m here today to keep that promise. For several months now, I’ve listened to the building frustration over this immunity and this administration’s campaign of lawlessness. I’ve seen it in person, in mail, online — the passion and eloquence of citizens who are just fed up. They’ve inspired me more than they know.
This is what's new, and it has clearly been a shock to Harry Reid. There is a counter establishment movement growing. It is aware of some of these secret establishment deals that are bad for the country, and that movement has begun to show some effectiveness in exposing them, and now even blocking the passage of telecom immunity (so far.)

Go read Glenn's article for the details. I want to focus on who belongs to the Washington Establishment. Who are they and how did they get there?

So who does that Establishment consist of? Let's recap. Clearly it includes all of the Congressional leadership of both parties. Then it includes the White House personnel and the top administrators in the various Cabinet offices. It also includes the main pundits, both Print and TV, who cover Washington. David Broder's unofficial title as "Dean of the Washington Press Corps" is recognition that he is a key member of the establishment. Arch Neo conservative William Krystol is also part of the establishment, which is why he recently got a sweetheart deal on the editorial page of the New York Times. So are the hosts of all the Sunday morning Talking Heads TV shows. After that the establisment includes many of the powerful lobbyists from K-Street as well as other former high bureaucrats and legislators. The most effective and highly paid lobbyists are establishment members who sell their ability to work their Washington establishment contacts. Corporations and other moneyed organizations that want something done in Washington are willing to pay a lot for such insider expertise. Additionally, certain individuals (like Sally Quinn) who give insider Washington parties are also part of the Establishment. If you want a list of who is part of the Washington Establishment, a good one could be compiled by seeing who was on the guest lists of the various Washington insider parties. A few establishment members wouldn't be on that list, but most would. Those parties are where a lot of their contacts are made.

What do all the establishment members have in common? They have all been in Washington D.C. and closely associated with politics at a high level for a long time. They all know each other, and they all have reputations as being "Serious People."

They also all want to work hard to remain members of the Establishment. Having been there a long time, they have been socialized and vetted by other in the Establishment, and they each know that as long as they remain as part of the Establishment they protected against personal error - as long as they act as expected.

This is the Washington D.C. establishment, and its members are proud that, as a group, they run American government. These are the people that Harry Reid and Sen. Jay Rockefeller have been trying to please as they worked to pass the FISA extension with telecom immunity included.

These are also the people who are afraid of political populists like both John Edwards and Mike Huckabee. The establishment members have no interest in real democracy since they do not control it. The members of the establishment consider the political netroots to be extremists because they are non-establishment people who make demands that are not establishment approved, and they are beginning to have an effect on Washington politics that "serious people" don't like. Outsiders are automatically rejected by the insiders of the establishment.

It is this establishment, both members and wannabee members, who have neutered media coverage of the federal government even before the Bush administration cut off intrusive reporters from normal handouts and leaks. Establishment reporters and editors don't rat out the handshake deals of other establishment members, not if they want to remain in the establishment. They do want to remain in the establishment because that's where their sources are. Their careers depend on being inside and in good graces of the establishment.

The reason why the Press is harder on Hillary, Obama and Edwards is that none of them are part of the establishment. Hillary rejected the party circuit back in 1993, and has never joined, while neither Obama nor Edwards have become sufficiently powerful in Congress to become "establishment-accepted."

It is this current establishment that is going to have to be converted, because they currently have accepted the ideas behind the Reagan Revolution as the way things are to be done. Conservative "free market, small government, low taxes and strong military" rhetoric is the core of current establishment rhetoric. Such conversion of establishment members will largely occur by turnover once the new administration gets in, but such turnover and conversion will be strongly resisted, just as it was when Bill Clinton took office in 1993. The Republican takeover of Congress in 1994 saved the old Reagan/Bush 41 establishment. That establishment was still in place in 2001 and was passed off to the Bush 43 period. So the current Washington establishment has been in place nearly thirty years. They cannot imagine any other way things in Washington could operate.

This is going to be interesting. Watch for complaints from the "serious people" when the new Democratic administration comes in. It's going to happen, as sure as God make little green apples. The changeover is going to be a rough time for them members. The old establishment will find itself being pushed out of the limelight, and they will hate it.

But that's the Washington establishment. Even if its membership changes, the establishment itself will remain. That's where the handshake deals of government are done.

The right-wing culture war and its Communist antecedents

What happens to a society in which a minor segment of that society objects to the very premises of that society, then decides to change the basic political institutions that teach those premises and have them instead teach the ideology of the minority to everyone?

Paul Rosenberg explains that this is what movement conservatism has been attempting to do to America since the 1960's, and it is the basis of what is being called America's culture war. The strategy was first defined by the Italian Marxist theorist, Antonio Gramsci, as he attempted to explain why workers did not become Communists as Communist theory said they would. His explanation was that the central institutions of existing society indoctrinated workers so that instead of becoming Communists, they instead aspired to become members of the bourgeois themselves. Gramsci's proposed solution was that ideological Communists had to take control of the basic social institutions and use them to teach Communist ideology.

This is a good description of what the American right wing conservatives have been doing for fifty years. Recently they have been somewhat politically successful, but have totally failed to change the ideological premises of the majority of Americans. This has caused them a great deal of frustration and has resulted in their redoubled and more extreme efforts to destroy basic American ideology and replace it with their conservative social, economic and religious ideologies.

Paul uses this discussion to briefly address Obama's Kumbaya politics. In Paul's view, Obama's idea is based on the assumption that the culture wars are the result of equal warfare between both the extremist right-wing and the left-wing Americans, but Paul considers this a flawed assumption. Instead the American "left-wing" has not been fighting to repress the right-wing. The aggressive fight and the attempt to repress the ideas of their opponents comes entirely from the side of the movement conservatives.

I think that Paul's description of the flaw behind Obama's Kumbaya politics is correct. America has simply not taken the movement conservative threat to basic American values seriously, since one of the most basic American values is that both sides in any argument should be freely heard and then Americans will independently decide which is correct. The movement conservatives use this basic American value to present their side, but then work extremely hard to repress their opponents is much the same manner as the Communist ideologues did. This leads to a failure of the American system to deal with the threat to its very existence. Paul attributes this to a failure to understand that there really is a highly organized and well-financed effort to create the culture war and use it to destroy America's basic values so that those of the right-wing conservatives can replace them.

I'm not yet sure how far I agree with Paul Rosenberg, but some of what he writes does strike a chord. He plans a series of articles which explain what the right-wingers have been doing, and that may clarify the situation and answer my questions. But in the meantime, he is offering an interesting explanation of what the culture wars is all about, one that certainly supports my belief that Obama's Kumbaya politics is both flawed and dangerous.

So go read his article and see what you think.

Movement conservative dynamics

Mike Lux reports an interesting train ride in which Rick Santorum shows how much movement conservatives hate John McCain.

Santorum demonstrates also what America is up against as it struggles with the conservative-caused economic problems. America won a big battle with Rick Santorum lost his bid for reelection. Those movement conservatives demand total control and they will stomp anyone in their way. Everything is pure power and irrational ideology. There is no discussion or compromise in them.

Hear that, Obama? How do you make your Kumbaya politics work with Rick Santorum on the other side?

[ h/t to Atrios ]

Why is economic stimulus only now being enacted? The problem has existed for nearly a year.

David Sirota points to the fraud of economic stimulus and explains what it really means:
Why are we talking about “stimulus” only now? After all, most people have been hurting for quite a while. Paychecks have been stagnating, foreclosures have become commonplace, health care premiums continue their double-digit increases—and up until recently, conservatives greeted such hardships with saccharine fantasy.

Following government reports showing a surge in income inequality, Treasury Secretary Hank Paulson last year gushed that the economy is “as strong as I have seen it in any time.” In the summer, as the housing crisis exploded, President Bush said the economy was “thriving.” This month, as the Labor Department reported another drop in wages, Republican Rep. Michele Bachmann of Minnesota said not to worry, her state is doing just great because “we have more people that are working longer hours, we have people that are working two jobs.” And with word that there are now 195,000 homeless veterans nationwide, Bill O’Reilly insisted on Fox News that really, “there’s not many [homeless veterans] out there.”

Message: Nothing to see here. The economy is fabulous. Move along.

Lately, though, the rhetoric has switched. Paulson now says there is an “urgent need” for action, and President Bush is demanding a “stimulus” package from Congress.

And that gets us back to the critical question: Why the sudden shift? Because the group demanding help has changed.

Before, it was just commoners complaining—regular homeowners, wage earners, troops coming home from Iraq, you know, the 99 percent of us who can’t afford the thousand-dollar-a-plate political fundraisers.

But now Wall Street is panicking. In the last month, the financial industry’s profit margins dropped, thanks to mortgage defaults brought on by irresponsible lending. And when the corporate executives who underwrite campaigns start whining, politicians develop “stimulus” schemes using the blight of layoffs, foreclosures and wage cuts to justify tax cuts for those doing the laying off, foreclosing and wage cutting.

Specifically, most GOP presidential candidates are demanding corporate tax cuts as the “stimulus” to improve American competitiveness, ignoring a recent Treasury Department report noting that the United States already has among the lowest effective corporate tax rates in the developed world. Republicans like John McCain, fresh off a Merrill Lynch fundraiser, say we need not expand unemployment benefits and food stamps to help workers and give the economy a reliable Keynesian boost. No, they say we must hand over more cash to the same financial industry that just gave its executives $39 billion worth of year-end bonuses.

Leading figures of both parties seem eager to help limit the debate over “stimulus” and make the final package a corporate goodie bag. According to the Washington Post, Democratic Sen. Max Baucus of Montana asked economists affiliated with the Hamilton Project—a Citigroup-backed think tank—to testify to Congress at its initial hearings on a stimulus package. Labor economists, by contrast, were not invited.
Think the stimulus is not a fraud? The banking industry is hemorrhaging money so badly they don't dare lend to most customers, yet the still give their executives $39 billion in year-end bonuses?

Compare that the to Congressional stimulus package of $150 billion, $70 billion of which is going to be given directly to businesses that are paying these year-end bonuses to their failed leaders. Those $39 billion in bonuses to banks who are now to afraid to lend money to get economic projects working amount to 26% of the $70 billion the government is going to give businesses as "stimulus." The taxpayers are paying for the bonuses that the failed financial industry just gave its failed executives.

That's fraud. Pure and simple. It is also the Reagan Revolution at work.

Tom Friedman has economic development all wrong

Chalmers Johnson offers a good review on an interesting book called Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism by Ha-Joon Chang, a Cambridge Economist and historian who considers Thomas Friedman's book "The Lexus and the Olive Tree" quite laughable. Here is a sample from Johnson's review:
In Chang’s conception, there are two kinds of Bad Samaritans. There are the genuine, powerful “ladder-kickers” working in the “unholy trinity” of the International Monetary Fund (IMF), the World Bank, and the World Trade Organization (WTO). Then there are the “ideologues—those who believe in Bad Samaritan policies because they think those policies are ‘right,’ not because they personally benefit from them much, if at all.” Both groups adhere to a doctrine they call “neoliberalism.” It became the dominant economic model of the English-speaking world in the 1970s and prevails at the present time. Neoliberalism (sometimes called the “Washington Consensus") is a rerun of what economists suffering from “historical amnesia” believe were the key characteristics of the international economy in the golden age of liberalism (1870-1913).

Thomas Friedman calls this complex of policies the “Golden Straitjacket,” the wearing of which, no matter how uncomfortable, is allegedly the only route to economic success. The complex includes privatizing state-owned enterprises, maintaining low inflation, shrinking the size of the state bureaucracy, balancing the national budget, liberalizing trade, deregulating foreign investment, making the currency freely convertible, reducing corruption, and privatizing pensions. It is called neoliberalism because of its acceptance of rich-country monopolies over intellectual property rights (patents, copyrights, etc.), the granting to a country’s central bank of a monopoly to issue bank notes, and its assertion that political democracy is conducive to economic growth, none of which were parts of classical liberalism. The Golden Straitjacket is what the unholy trinity tries to force on poor countries. It is the doctrinal orthodoxy taught in all mainstream academic economics departments and for which numerous Nobel prizes in economics have been awarded.

In addition to being an economist, Ha-Joon Chang is a historian and an empiricist (as distinct from a deductive theorist working from what are stipulated to be laws of economic behavior). He notes that the histories of today’s rich countries contradict virtually all the Golden Straitjacket dicta, many of which are logically a result rather than a cause of economic growth (for example, trade liberalization). His basic conclusion: “Practically all of today’s developed countries, including Britain and the US, the supposed homes of the free market and free trade, have become rich on the basis of policy recipes that go against neo-liberal economics.” All of today’s rich countries used protection and subsidies to encourage their manufacturing industries, and they discriminated powerfully against foreign investors. All such policies are anathema in today’s economic orthodoxy and are now severely restricted by multilateral treaties, like the WTO agreements, and proscribed by aid donors and international financial organizations, particularly the IMF and the World Bank.
This is a very different way of looking at economic development, and has a lot of historical support.

Bankers are crooks.

Really. Was there ever any doubt? Read Robert Scheer. I had been unaware of Dennis Kucinich's history.

Friday, January 25, 2008

Congressional Resignations - Retirements, updated

I last posted a list of the Congressional resignations and retirements on December 8, 2007 and there are three more Congresspersons who have bailed out since then. So I am updating the list, and also adding the difference in the 2004 Presidential vote as a final column to show what the Democratic vs. Republican tendency is for each District or State.

I am also correcting an error in the earlier list. I had listed Michael R. McNulty of New York's 21st congressional district as a Republican. I sincerely apologize for insulting a good Democrat.

Each list is sorted first by party, then alphabetically by last name.


1Allen, TomDME-01Run for SenateD+12
2Carson, JuliaDIN-07DiedD+16
3McNulty, Michael RDNY-21RetireD+13
4Udall, TomDNM-03Run for SenateD+9
5Udal, MarkDCO-02Run for SenateD+17
6Cubin, BarbaraRWY-At lgRetireR+40
7Davis, Jo AnnRVA-01DiedR+21
8Dolittle, JohnRCA-04RetireR+24
9Everett, TerryRAL-02RetireR+34
10Ferguson, MikeRNJ-07RetireR+6
11Gilmore, PaulROH-05DiedR+22
12Hastert, DennisRIL-14ResignedR+11
13Hobson, DaveROH-07RetireR+14
14Hunter, DuncanRCA-52RetireR+23
15LaHood, RayRIL-18RetireR+16
16McCrery, JimRLA-04RetireR+19
17Pickering, ChipRMS-03RetireR+31
18Pryce, DeborahROH-15RetireD+0 *
19Ramstad, JimRMN-03RetireR+3 *
20Regula, RalphROH-16RetireR+8
21Renzi, RickRAZ-01RetireR+8
22Saxton, JimRNJ-03RetireR+2 *
23Tancredo, TomRCO-06RetireR+21
24Walsh, JimRNY-25RetireR+2 *
25Weldon, DaveRFL-15RetireR+14
26Weller, JerryRIL-11RetireR+7
27Wilson, HeatherRNM-01Run for SenateR+3


1Allard, WayneRCORetiringR+5 *
2Craig, LarryRIDRetiringR+38
3Domenici, PeteRNMRetiringR+1 *
4Hagel, ChuckRNBRetiringR+33
5Lott, TrentRMSResigningR+19
6Warner, JohnRVARetiringR+9

"Retiring" means serving to end of term. Will not run for reelection.
"Resigning" means announced resignation and intends to leave before end of term.
"Resigned" means has already officially left office during this term.
"At Lg" means the only congress person in the state.

The final column reflects the Presidential vote in 2004. D+13 means Kerry received 13% more of the vote than Bush did. Districts or states in which the difference was 5% or less are indicated by an asterisk (*) because they will be likely change, particularly if the winning presidential candidate has "coattails". Deborah Pryce's Ohio 15th district was effectively tie in the 2004 Presidential race, so it is shown as D+0. The score there is only an indicator and reflects political conditions three years ago, so while Virginia is listed a R+9, in 2006 Virginia elected Democrat Jim Webb as Senator so it is probably a tossup state.

In the House, 22 (10.9%) of the 202 Republicans have resigned, died, or announced they are not running for reelection. Of those 22, only Heather Wilson of New Mexico is running for higher office (the Senate in her case.) The other 21 Congress people are leaving politics.

Of the 233 Democrats, 5 (2.1%) have announced that they are not running for reelection, and three are running for Senate seats. Tom Udall is running for the same New Mexico Senate seat that Heather Wilson is, so one of them is gone from Congress after November.

Clearly Republican turnover is much higher than that of the Democrats, which suggests that the Republicans expect to remain in the minority after the 2008 election.

Bush and Gen Petreaus have greatly lowered American casualties in Iraq so that Iraq has moved out of the news. It will thus have less influence on the November 2008 election than expected unless something changes sharply. The Recession that is currently building will clearly have an effect, with voters being more likely to vote against incumbents and particularly Republicans. Because the Primaries have been moved to such early dates, the latest information on the coming Recession will not permit many intra-party challenges of incumbents. That's unfortunate, because there are a lot of Blue Dog Democrats who need to be challenged and removed from office.

How long will the recession last and what caused it?

The American economy is now entering a recession, and it will be much harder and longer lasting than the two most recent economic downturns. This is primarily because of mismanagement of the macro economy by the Federal Reserve for the last twenty years combined with excessive deregulation by the Federal government as the theories behind the Reagan Revolution have been put into place.

Last Monday the Stock Markets around the world suddenly panicked. The collective bad economic news that has been appearing for nearly a year now in a drip - drip - drip process has allowed both Wall Street traders and government economic leaders to continually say that, while there are some difficulties in the economy (sub prime mortgage crisis, sharply increasing home foreclosures, general credit crisis world wide, increase in the unemployment rate in December, etc.) the American economy is both resilient and powerful, and all this bad news will soon go away. Finally a few stockholders decided that it wasn't going away, so they sold stocks, and the rest of the markets took notice. A lot of wealth disappeared in the stock market sell off.

The growing evidence that the economy isn't doing well for an awful lot of average people did not get the attention of either the federal reserve or the Bush administration, but the disappearance of a lot of wealth on the stock market got their attention. That's why the Fed took the unusual action of dropping the interest rate a large three quarters of one percent in an unscheduled meeting. Then Wednesday the New York Times published an article that questioned whether the economy has really been working well at all.
The recent financial turmoil has many causes, but they are tied to a basic fear that some of the economic successes of the last generation may yet turn out to be a mirage. That helps explain why problems in the American subprime mortgage market could have spread so quickly through the world’s financial system. On Tuesday, Mr. Bernanke, who is now the Fed chairman, presided over the steepest one-day interest rate cut in the central bank’s history.

The great moderation now seems to have depended — in part — on a huge speculative bubble, first in stocks and then real estate, that hid the economy’s rough edges. Everyone from first-time home buyers to Wall Street chief executives made bets they did not fully understand, and then spent money as if those bets couldn’t go bad. For the past 16 years, American consumers have increased their overall spending every single quarter, which is almost twice as long as any previous streak.

Now, some worry, comes the payback. Martin Feldstein, the √©minence grise of Republican economists, says he is concerned that the economy “could slip into a recession and that the recession could be a long, deep, severe one.” In Monday’s Democratic presidential debate, Barack Obama made the same argument: “We could be sliding into an extraordinary recession,” he said. [Snip]

But a recession is now more likely than not. It may well have started already. The Philadelphia Fed reported Tuesday that the economy shrank in 23 states last month, including Ohio, Missouri and Arizona, and was stagnant in seven others. California and Florida, with their plunging home values, may soon join the recession list.

The bigger question is how severe the recession will be if it does come to pass. The last two, in 1990-1 and 2001, have been rather mild, which is a crucial part of the great moderation mystique. There are three reasons, though, to think the next recession may not be.

First, Wall Street hasn’t yet come clean. Even after last week, when JPMorgan Chase and Wells Fargo announced big losses in their consumer credit businesses, financial service firms have still probably gone public with less than half of their mortgage-related losses, according to Moody’s They’re not being dishonest; they just haven’t untangled all of their complex investments.

“Part of the big uncertainty,” Raghuram G. Rajan, former chief economist at the International Monetary Fund, said, “is where the bodies are buried.” [Snip]

The second problem is that real estate and stocks remain fairly expensive. This shows just how big the bubbles were: despite the recent declines, stock prices and home values have still not returned to historical norms.

David Rosenberg, a Merrill Lynch economist, says that the stock market is overvalued by 10 percent relative to corporate earnings and interest rates. And remember that stocks usually fall more than they should during a bear market, much as they rise more than they should during a bull market.

The situation with house prices looks worse. Until 2000, the relationship between house prices and rents remained fairly steady. The same could be said about house prices relative to household incomes and mortgage rates. But the boom of the last decade changed this entirely.

For prices to return to the old norm, they would still need to fall 30 percent across much of Florida, California and the Southwest and about 20 percent in the Northeast. This could happen quickly, or prices could remain stagnant for years while incomes and rents caught up.

Cheaper stocks and houses will benefit many people — namely those who don’t yet own a home and still have most of their 401(k) investing in front of them. But the price declines will also lead directly to the third big economic problem.

Consumer spending kept on rising for the last 16 years largely because families tapped into their newfound wealth, often taking out loans to supplement their income. This increase in debt — as a recent study co-written by the vice chairman of the Fed dryly put it — “is not likely to be repeated.” So just as rising asset values cushioned the last two downturns, falling values could aggravate the next one. [Snip]

But it’s hard not to believe that the economy will pay a price for the speculative binge of the last two decades, either by going through a tough recession or an extended period of disappointing growth. As is already happening, banks will become less willing to lend money, households will become less willing to spend money they don’t have and investors will become more alert to risk.

[Highlighting mine - Editor WTF-o]
So the short story version is that the last two bubbles have made the economy seem to be protected from Recession, but both of those bubbles were created by excessively low interest rates as the federal Reserve under Alan Greenspan tried to manipulate the economy for largely political reasons. Those artificial manipulations have reached an end, so that the consumers can no longer support continued economic growth the way they have been for nearly two decades.

The interest rate manipulations have created an economy that is out of balance, which is why both stock and real estate remain too expensive. Both have to come down in price a great deal before the economy is back in reasonable balance. But the long period of artificially maintained growth had a negative effect on the financial markets. Lenders began to feel that the only way they could lose money was by not lending, so they threw out the rule book on reasonable standards for lending. Now no one knows which loans on the books are good and which ones are bad. This is complicated by the way banks have been packaging similar loans and selling the packages. This means that as bad loans go into default they also take down what might be good loans as they go bad, and no one knows which loans are bad and which ones might be repaid. It also means that there is little connection between the final purchasers of the loan packages, and in particular the people who own a loan have no mechanism for working out modified terms of repayment that could prevent default.

This is true for a great deal more than just mortgages, since lenders have sold mortgage loans to obtain more money to lend in other ways, but the mortgages they sold went with the right of the buyer to sell them back if they go into default. That means that taking back defaulted mortgages reduces bank capital to support other types of loans. There are at least two more big blocks of adjustable rate mortgages that are going to have payments sharply increased this year, and no one knows how many more mortgages will be driven into default as a result. So banks don't have funds to lend for other reasons besides home purchases because they literally have no idea how much they have in lendable funds.

That means that lending for any reason is going to be limited for at least a year, and there is uncertainty about how much longer. Uncertainty itself restricts lending. This is going to be particularly hard on mortgage lending since lenders are aware that much of the housing in Florida, California, the Southwest and the Northeast is still overpriced. Since increased activity in the housing industry is usually the first industry to lead the way out of a recession, that is going to make it even more difficult to end the recession.

The current economic downturn will be a Recession, and all indicators suggest that it will last until the bad loans are finally all identified and dealt with, until lending standards are cleaned up so that purchasers can trust the loans sellers sell them, and until housing prices come back to a level in line with what rental rates can pay for. That means that the American economy is very unlikely to recover in less than at least two years.

The cause of this Recession is primarily mismanagement of the macro economy by the federal government and the Federal Reserve. This is the easily predictable result of implementing the Reagan Revolution demands for deregulation of the financial industry along with Alan Greenspan's continued efforts to use the Federal Reserve to artificially prop up the economy. Without the Reagan Revolution prescriptions, the federal reserve mismanagement to try to cover up the problems caused by deregulations, and without Bush's economically irrational tax cuts for the wealthy and Bush's War in Iraq with the excessive borrowing and uncontrolled spending spending that has accompanied that war, America would currently have an economy that provided prosperity and stability. as it is, we have a perpetual war in Iraq together with at least a two year Recession that will probably be one of the most severe since the Great Depression.

Addendum 11:53 PM CST
Glad I didn't read this article by Robert Reich before I wrote the material above. He says much the same thing, but he says it a great deal better than I do. Here is his conclusion:
How much worse can it get? The housing bubble drove home prices up 20 to 40 percent above historic averages relative to earnings and rents. So now that the bubble is bursting, you can expect prices to drop by roughly the same amount, and new home construction to contract. The latter plunged last month to its lowest point in more than 16 years. A managing partner of a large Wall Street financial house told me a few days ago the scenario could get much worse. He gave a 20 percent chance of a depression.

Even if a stimulus package were precisely targeted to consumers most likely to spend any money they received, the housing slump could overwhelm it. According to a recent estimate by Merrill-Lynch, the slump will hit consumer spending to the tune of $360 billion this year and next. That’s more than double the size of the stimulus package President Bush or any leading Democrat is now talking about. And the Merrill-Lynch estimate is conservative.
[Editor's Note: The above paragraph was written before the Congressional agreement that removed $70 billion of the $150 billion and gave it to investors and Bush refused to permit an extension of unemployment benefits and expansion of food stamps. Don't forget that that the purpose of food stamps is to provide customers for grocery stores and agricultural distributors when unemployed customers can't get enough money to buy the product. So half the stimulus was removed from effective stimulus methods and tow of the most effective channels for stimulus were vetoed in negotiations with the white House because Bush doesn't believe the government should help people, just businesses, bankers and investors. This makes it much more likely that the stimulus effort will be overwhelmed by the housing slump. Now back to Reich's article.]
In reality, the crisis is both a credit crunch and the bursting of the housing bubble. Wall Street is in terrible shape and Main Street is about to be in terrible shape. And there’s not a whole lot that can be done about either of these problems — because they are the results of years of lax credit standards, get-rich-quick schemes, wild speculation on Wall Street and in the housing market, and gross irresponsibility by the Fed, the Treasury and the Comptroller of the Currency.
Essentially our economy has been running on life-support since at least 2000 and probably even earlier, and the chicanery that was conducted to keep it from going into recession in the past has done a great deal of institutional damage to the economy.

Now we are going to pay the price for the unrestrained lies, politics and greed.

Iraq war and occupation - the confederacy of Republican fools

How utterly ignorant and out of touch are the entire crop of Republican candidates for the Presidential nomination? Here is the absolutely clear answer.

It's really a shame that Ron Paul is such an out-and-out crackpot and dangerous politician on so many other issues. Here he is the only honest man.

Thursday, January 24, 2008

Progressives effecting media narrative of candidates but not media view of policy.

This is an interesting observation. dday writing at Digby's Hullabaloo point out how the media narrative on the Republician candidates has become pretty much the same narrative that progressives have been pushing since the various candidates for nomination began campaigning. Here's the transcript that he published as his example:
BLITZER: It wasn't exactly a shocker today, Jack, that Fred Thompson announced he's dropping out of this race. But let's take a look at the political fallout.

Among the Republicans, who gains, who loses?

CAFFERTY: Well, if he hadn't announced it, I'm not sure anybody would have noticed.


CAFFERTY: I mean I -- you know, it's like he hasn't -- he's only been here what -- you know, he wasn't that interested in campaigning. I think he would have liked it if somebody would have said you can be president. But he didn't want to work to get the job. And I'm not sure it means a heck of a lot for anybody. Somebody said that he might be trying to position himself to be vice president. He'll deny that.

BORGER: ...So watch for Mitt Romney, who is also running as a social conservative, to go after those six or seven Thompson voters that are out there.


BORGER: And he'll try -- he'll try and get them.

TOOBIN: You know, Wolf, you have to go all the way back to Rudolph Giuliani to find a campaign that has been singularly as unsuccessful as Fred Thompson's has been.


BORGER: That far back?

TOOBIN: You know, I just don't think it will have any impact at all, his departure...

BLITZER: Well, it could have a...

TOOBIN: ...just as his arrival didn't.

BORGER: You know...

BLITZER: It could have an impact in new episodes of "Law and Order," though.

BORGER: It could. It could. But, you know, this was such an interesting candidacy. It was created by the Republican establishment in Washington, who felt that they needed a new horse. They needed someone else. So they created this. They took a guy who was television. They said let's turn him into a presidential candidate. He will clearly appeal to the American public. And it totally flopped [...]

TOOBIN: That was the ultimate problem.

CAFFERTY: Take a look at all the other ideas the Republican establishment in Washington has had for the last seven years.


CAFFERTY: It's no surprise to me the Fred Thompson thing didn't go anywhere.

BLITZER: I can't tell you how many people in that Republican establishment -- especially here in Washington, the beltway, you know, the Republican lobbyists...

BORGER: Right.

BLITZER: ...the so-called elite, when they were even thinking of getting him in, they said this is the new Ronald Reagan. He's an actor.


BLITZER: He's media-genic. He's powerful. And he's really going to turn things around.

(CROSSTALK) CAFFERTY: If you want to look at the definition of irrelevant, look up the Republican establishment in Washington, D.C.

BORGER: Right.

CAFFERTY: That's irrelevant.


TOOBIN: Fred Thompson definitely was the tallest candidate.

BORGER: Right.


BORGER: But, you know, it's so...

CAFFERTY: And the baldest.

BORGER:'s so arrogant, though, you know, to think that you can be anointed in Washington and you're pretty good on television and you look pretty good and you -- and you have great name recognition because you're in "Law and Order," and, gee, I can then become president.

And I think they talked him into it. And I think they said to him, you know, you don't have to work that hard.


BORGER: You can actually just get this job, get in late, let the public take a look at you. You're different. You're going to win. It didn't work out that way.

CAFFERTY: He bought that part about not having to work very hard. He liked that part.


CAFFERTY: You can sit in the trailer until it's time for your close-up, Fred.

[dday's comment on the transcript.] It has the usual Village cattiness, but these are themes that progressives pushed from the moment Thompson entered the race. He's lazy, he's an actor who wants to play the role of the President, he was pushed upon people by the establishment. And this is true across the line: Romney's an insincere flip-flopper, Rudy's a homicidal maniac, Huckabee's a Jesus freak, McCain wants to bomb the whole world (this narrative took hold until McCain dropped off the map and we stopped pressuring him), etc.

Now, we're aided by a really terrible slate of candidates. But it's clear that progressives have shot these narratives into the media bloodstream. Initially, Thompson was the guy you could smell the Aqua Velva on, and Romney was a guy who has shoulders on which you can land a 747. I really think the movement is maturing and deserves a lot of credit.
dday then goes on to point out that this is only the media narrative, and not a set of policy arguments. Progressive policy arguments have not yet taken root in the media, so they are still reported as "extremist." (My word, not dday's.)

I suspect that this is a function of two factors. First, the Progressive Movement is very new, and still finding its way. There are not yet a lot of media-accepted spokespersons the media can quickly call on for "the other side of the issue." That is purely a matter of time and getting the right names onto TV Producer's and reporter's Rolodexes. Second, and probably more significant, the Republican candidates are clearly a poor bunch who demand explanation, and there is no entrenched explanation that has to be overcome. Since each of the candidates is working hard to establish an image nationally, it is relatively easy to point to the candidate himself and supply a reasonable but alternative image.

Most of the planks on the Progressive agenda do not have clear faces like the Republican candidates do. What is the "face" of a broken healthcare system? It is difficult to point to a clear image, so the no longer accurate entrenched existing ideas about the "greatest health care system in the world" is much more difficult to overcome. The facts no longer support that entrenched idea, but the insurance companies have a vested interest in maintaining it and they spend a lot of money on both advertising and lobbying to do exactly that.

It's no surprise, then, that the newly recreated progressive movement has made a lot less progress on getting the media to accept progressive policies as mainstream than they have in getting the media to accept the Progressive narratives on the Republican candidates for President. Both are true, both are really mainstream, but the media investment in the older policy prescriptions is a lot more entrenched deeper than are the images of the current crop of Republican candidates for nomination as President.

That would account for the slower adoption by the media of progressive prescriptions. It shouldn't take too long to bring the media into line, though. A majority of the American public is already there, and the media is caught between a large and growing portion of their public on the one side and the progressive movement on the other, while the reality of the economy is clearly closer to that described by the Progressives than that described by the conservatives. The media will be forced into line. It's just going to take more time and effort.