Thursday, August 5, 2010

Last Call

On the same day that the Social Security Trustees Report is released, one day ahead of the July unemployment numbers, on a day where news of a possible major bailout of Fannie and Freddie underwater homeowners is broken, we now see chief White House economic adviser Christina Romer supposedly about to announce her resignation.
"She has been frustrated," a source with insight into the WH economics team said. "She doesn't feel that she has a direct line to the president. She would be giving different advice than Larry Summers [director of the National Economic Council], who does have a direct line to the president."
"She is ostensibly the chief economic adviser, but she doesn't seem to be playing that role," the source said. The WH has been pounded for its faulty forecast that unemployment would not top 8% after its economic stimulus proposal passed.
Instead, the jobless rate is 9.5%, after exceeding 10% last year. It was "a horribly inaccurate forecast," said Bert Ely, a banking consultant. "You have to wonder why Summers isn't the one that should be taking the fall. But Larry is a pretty good bureaucratic infighter."
So that leaves Larry Summers and Timmy.   Not good, according to Tyler Durden.
First Orszag, now Romer? If the latest rumor about the imminent defection of one of the three remaining policy stalwarts is true, it means the administration's economic policy is on the verge of collapse. Hotline Oncall reports: "Christina Romer, chairwoman of Pres. Obama's Council of Economic Advisers, has decided to resign, according to a source familiar with her plans. Romer, an economics professor at the University of California (Berkeley) before taking the key admin post, did not respond to repeated calls to her office." The sad reality is that Romer's (who has largely been a mere figurehead and staffed to provide soundbites to CNBCs how every worsening NFP report is in reality a dramatic improvement, a job which even Steve Liesman can do with a passing grade) departure will only make the remaining two people in Obama's economic circle, Tim Geithner and Larry Summers, even more powerful. Why couldn't those two leave?
I don't like any of this.  Separately those are all worrisome, but combined I'm thinking something major is brewing economically and is going to be happening very, very quickly while Congress isn't in session.

Character Moose-sassin

Via the Rumpies, Sarah Palin has declared war on after they called her out on the ol' Bush Tax Cuts expiring being the Democrats causing the "largest tax increase in history".  
Palin said, "Democrats are poised now to cause this largest tax increase in U.S. history." She was asked about tax cuts for the top 2 percent. Either Palin is confused about the revenue numbers involved with extending the tax cuts, or she's willfully distorting the Democratic plans. We'll let you be the judge of that. Regardless, Wallace was very specific about asking her about tax increases for the top 2 percent. And that does not represent the largest tax increase in history. The unlikely outcome that she seems to be talking about -- that all of the Bush tax cuts will be repealed -- wouldn't be the largest tax increase in history either. Palin read the number on her hand correctly, but that's about all she got right. So we rate her statement Pants on Fire.
But Sarah Palin wasn't about to let stupid things like math or fact to get in her way, oh no.
To prevent PolitiFact from making similar mistakes in future, it would be helpful if the White House and the Democratic Congressional leadership finally mustered the courage to table their plans to let the 2001 and 2003 tax cuts expire. Mr. President, publish your proposals, and we'll duke it out. You can argue in favor of a multi-trillion dollar tax hike in an age of economic uncertainty and mass unemployment, and we'll argue for fiscal sanity combined with serious spending cuts. I for one look forward to such a debate.
Naturally the Idiocracy now believes Sarah Palin now has more credibility than PolitiFact.

Of course, someone forgot to tell Moose Lady that proposal has been out for months now and called the Fiscal Year 2011 Budget.
Allow the Bush Tax Cuts for Households Earning More Than $250,000 to Expire. In the last Administration, those at the very top enjoyed large tax breaks and income gains while almost everyone else struggled and real income for the middle class declined. Our Nation cannot afford to continue these tax cuts, which is why the President supports allowing those tax cuts that affect families earning more than $250,000 a year to expire and committing these resources to reducing the deficit instead. This step will have no effect on the 98 percent of all households who make less than $250,000.
What part of "Sarah Palin was completely wrong" do the Wingers not get?

Another Milepost On The Road To Oblivion

Coked-up Stimulus Monkeys.

That is all.

Social Insecurity

The Social Security Trustees' Report is out, and it's...not good.
For the first time in nearly 30 years, the system will pay out more benefits than it receives in payroll taxes both this year and next, the government officials who oversee Social Security said on Thursday.

And while Social Security cash flow will likely head back into the black for a few years after that, starting in 2015 it looks to stay in the red for the long haul, the trustees said in their annual report.

"The improving economy is expected to result in rough balance between Social Security taxes and expenditures for several years before the retirement of the baby boom generation swells the beneficiary population and causes deficits to grow rapidly," Treasury Secretary Tim Geithner said.

As for this year's dip into the red, Geithner said the recession is to blame.
Well yes, 9.5% unemployment means less payroll taxes being paid in to cover SS payouts.  There's a no brainer.  Medicare is doing a lot better with the Health Care Reform bill boosting the program's bottom line until 2029, but the real question is what will Obama's Fiscal Commission do about it?  Raise taxes?  Cut spending?  Both?  And by how much?

Even more than his two SCOTUS picks, this could be Obama's lasting legacy.  Clinton and Bush punted on this majorly.  Obama doesn't have that luxury.

Kaganology: Graduation

The GOP filibuster of Elena Kagan never materialized, mainly because Republicans were happy with trading one functional liberal for another kinda meh moderate.  As such, Kagan's nomination to SCOTUS passed the Senate this afternoon on a 63-37 vote.
Kagan was Obama's solicitor general, arguing government cases before the Supreme Court, when he named her in May as his choice to replace the retiring liberal Justice John Paul Stevens. 
The 50-year-old Kagan, who will be the third woman on the current court, is not expected to change the ideological balance of power on the closely divided panel, which for years has been dominated by a 5-4 conservative majority.
All the Democratic senators but one voted for her, two independent senators voted for her and five Republicans voted for her. All the other Republican senators opposed her nomination.
No surprises here, all five Republicans who said they would vote for her did, as did Liberman and Sanders, and Ben Nelson voted no.  Still, the Prop 8 case still leaves Justice Kennedy as the swing vote, but Kagan's tabula rasa approach still may mean that she could jump ship over to the Roberts bloc once in a while, and probably will more than most people expect her to.

Still, this means Obama is two for two on SCOTUS picks in two years.

Playing Digg Dug

A fascinating Alternet article on the news aggregate site Digg:  turns out there's a dedicated group of wingers on Digg whose only goal is to downvote and bury as many progressive stories as they can, and they've been doing it for over a year now.
The concept behind the site is simple. Submitted webpages (news, videos, or images) can be voted up (digging) or down (burying) by each user, sort of a democracy in the internet model. If an article gets enough diggs, it leaves the upcoming section and reaches the front page where most users spend their time, and can generate thousands of page views.

This model also made it very susceptible to external gaming whereby users from certain groups attempt to push their viewpoint or articles to the front page to give them traction. This was evident with the daily spamming of the upcoming Political section with white supremacist material from the British National Party (articles which rarely reached the front page). The inverse of this effect is more devastating however. Bury brigades could effectively remove stories from the upcoming sections by collectively burying them.

One bury brigade in particular is a conservative group that has become so organized and influential that they are able to bury over 90% of the articles by certain users and websites submitted within 1-3 hours, regardless of subject material. Literally thousands of stories have already been artificially removed from Digg due to this group. When a story is buried, it is removed from the upcoming section (where it is usually at for ~24 hours) and cannot reach the front page, so by doing this, this one group is removing the ability of the community as a whole to judge the merits or interest of these stories on their own (in essence: censoring content). This group is known as the Digg “Patriots”.
The Digg Patriots would regularly manipulate the Digg community voting system in order to flush any progressive or pro-Obama articles off the site with multiple accounts, mass voting, submitting their own articles and pushing them to the top, etc.  The article details a massive campaign to turn Digg as conservative as possible in order to give the impression that the Digg community was far more right-wing than it actually was.

From both a social and technical perspective it's a pretty fascinating read, and just another reminder that if a system can be manipulated, it will be. They knew how to game it and did it for over a year.

Food for thought.

No Longer Propped Up After Prop 8

In the wake of the Prop 8 ruling, I completely agree with what Greg Sargent surmises:  President Obama's stance against gay marriage is no longer tenable, socially, legally or politically.  First, the White House still opposes gay marriage:
This morning, senior White House adviser David Axelrod struggled to defend this position. Here's what he said:
"The president opposed Proposition 8 at the time. He felt that it was divisive. He felt that it was mean-spirited, and he opposed it at the time. So we reiterated that position yesterday. The president does oppose same-sex marriage, but he supports equality for gay and lesbian couples, and benefits and other issues, and that has been effectuated in federal agencies under his control. He's supports civil unions, and that's been his position throughout. So nothing has changed."
But as John Aravosis says, everything has changed.
I still cannot fathom the mind-numbing despair that hearing "separate but equal" coming out of a Democratic administration is.  It is, as I said, not longer tenable.  Greg continues as to why:
The problem for the White House is that the Prop 8 decision will force this issue onto full boil nationally, just as the Arizona law did with illegal immigration. And heading into his 2012 reelection campaign, the gay and lesbian community -- an important Dem constituency -- will be demanding full support for gay marriage, and a repeal of DOMA.

They'll be demanding complete consistency, and won't want to be lectured about what is and isn't possible amid some arbitrarily defined "political reality." 
Obama either has to back up his party on this or face being on the wrong side of history.  And history will not be kind to him unless he changes his tune soon.

Google Goes Evil

Net neutrality is effectively dead as Google and Verizon sign the first major internet "pay for access" deal for net traffic.  HuffPo's Josh Silver has the post-mortem of the internet you knew and what it means.
The deal marks the beginning of the end of the Internet as you know it. Since its beginnings, the Net was a level playing field that allowed all content to move at the same speed, whether it's ABC News or your uncle's video blog. That's all about to change, and the result couldn't be more bleak for the future of the Internet, for television, radio and independent voices.

How did this happen? We have a Federal Communications Commission that has been denied authority by the courts to police the activities of Internet service providers like Verizon and Comcast. All because of a bad decision by the Bush-era FCC. We have a pro-industry FCC Chairman who is terrified of making a decision, conducting back room dealmaking, and willing to sit on his hands rather than reassert his agency's authority. We have a president who promised to "take a back seat to no one on Net Neutrality" yet remains silent. We have a congress that is nearly completely captured by industry. Yes, more than half of the US congress will do pretty much whatever the phone and cable companies ask them to. Add the clout of Google, and you have near-complete control of Capitol Hill.

A non-neutral Internet means that companies like AT&T, Comcast, Verizon and Google can turn the Net into cable TV and pick winners and losers online. A problem just for Internet geeks? You wish. All video, radio, phone and other services will soon be delivered through an Internet connection. Ending Net Neutrality would end the revolutionary potential that any website can act as a television or radio network. It would spell the end of our opportunity to wrest access and distribution of media content away from the handful of massive media corporations that currently control the television and radio dial.

So the Google-Verizon deal can be summed up as this: "FCC, you have no authority over us and you're not going to do anything about it. Congress, we own you, and we'll get whatever legislation we want. And American people, you can't stop us."
And now this means Google traffic gets preferential treatment on Verizon's networks at the expense of everything else.  Internet carriers will of course want to see everyone pay for this, including you.  Not rich enough to afford a Google-sized deal?  Sorry, your network traffic will take a back seat to those who can pay.  And guess who's going to get charged fees to cover these content deals?

What, you thought Google was going to remain free?  The era of free content on the internet just ended.  the era of pay for play is here.  Expect deals like this to explode in the months to come.  Don't have the cash to pay Verizon or AT&T for premium traffic service?  Your web site is going nowhere.

Expect your internet provider to start hitting you up for "premium services" soon.

[UPDATE]  On Twitter, Google's public policy blog says they have not reached a deal with Verizon, and that the NY Times article that began all this is "wrong".


Putting Together The Pieces

Steve Benen does a laudable job summarizing just how lost the Republicans are as a party right now.
Our politics has gotten worse, and it keeps getting even worse as Republicans push the boundaries of what's acceptable in the American mainstream.

Take a moment to consider what's become fairly common in GOP circles of late. A sitting Republican congressman and governor have openly speculated about secession. A Senate candidate in Nevada has raised the specter of armed insurrection against the United States government. A Senate candidate in Kentucky has spoken out against the Civil Rights Act of 1964. A gubernatorial candidate in Minnesota believes states should be able to ignore federal laws they don't like. None of these developments have drawn even mild rebukes from the party establishment.

Indeed, the conversations driving the GOP discourse focus around a series of stories -- Cordoba House, Prop 8, New Black Panther Party, Shirley Sherrod -- that have one thing in common: they're intended to make white voters afraid of "the other," whether that be on the basis of religion, race, or sexual orientation.

And if Republican candidates excel in the midterms, the party will believe the American electorate rewarded the GOP for its divisiveness, bigotry, and demagoguery, making it more likely these tactics will be the centerpiece of future campaigns.

The RNC has a "Political Achievements" page on its website, and oddly enough, it touts "Republicans Passed the 14th Amendment" as one of the party's proudest accomplishments.

The party has come a long way in the last 142 years. That's not a compliment.
If that theme sounds familiar, it's what I've been saying for almost two years now on this blog.  The Republicans have plenty of fear and scapegoating, always trying to pitch everything as a zero-sum game on rights, or economics, or social and political power, where "the other" is taking it all from "Real Americans".

And once again, America will have to choose to listen to that as our economy continues to crumble and people look to find someone to blame for it.

Fannie And Freddie Forgiveness?

Our old friend Jim "Evil Felix Salmon" Pethokoukis is back, this time screaming about how Obama is about to order virtual cramdown by making Fannie and Freddie forgive large chunks of mortgage debt in an effort to, you know, prevent a continuing deflationary residential real estate depression spiral.

For once, I hope Jimmy here is right.
Main Street may be about to get its own gigantic bailout. Rumors are running wild from Washington to Wall Street that the Obama administration is about to order government-controlled lenders Fannie Mae and Freddie Mac to forgive a portion of the mortgage debt of millions of Americans who owe more than what their homes are worth. An estimated 15 million U.S. mortgages – one in five – are underwater with negative equity of some $800 billion. Recall that on Christmas Eve 2009, the Treasury Department waived a $400 billion limit on financial assistance to Fannie and Freddie, pledging unlimited help. The actual vehicle for the bailout could be the Bush-era Home Affordable Refinance Program, or HARP, a sister program to Obama’s loan modification effort. HARP was just extended through June 30, 2011.

The move, if it happens, would be a stunning political and economic bombshell less than 100 days before a midterm election in which Democrats are currently expected to suffer massive, if not historic losses. The key date to watch is August 17 when the Treasury Department holds a much-hyped meeting on the future of Fannie and Freddie.
Well now.  That would certainly solve a considerable majority of underwater mortgages (although not jumbo mortgages, as Fannie and Freddie aren't allowed to hold any of those by law.)   I'm not sure where Jimmy is hearing this from, but quite frankly if we can forgive trillions in bank debt for just Wall Street banks, we can do something for millions of homeowners who are underwater and threatening to swamp the economy all over again.

Will this be how QE 2.0 begins?  It's a very likely target here in an election year.  Keep an eye on this Fannie/Freddie story.

[UPDATECalcRisk calls bullshit on Jimmy and considers in Drudge Bait at best:
This nonsense is part of the silly season. Sure, some small changes could be made to Fannie and Freddie, but nothing like this post would suggest.

Not. Gonna. Happen.
Alert Drudge and the tinfoil hat sites - they will run with this story. It is a political post ... I'm already sorry I mentioned it. 
Fair argument for this.  Yes, Obama's failure on HAMP really is bad enough to make this plan look great.

If It's Thursday...

New jobless claims up 19k to 479k.  Continuing claims down slightly to 4.54 million.

That 479k number is not good.  If we get above 500k again, that's the warning sign.  July unemployment numbers out tomorrow, and they are expected to show 90k new private sector jobs created.  As Atrios would say, I'm taking the under on that one.

No Hate, Prop 8: The Morning After

Logan Penza at The Moderate Voice argues that because same-sex marriage continues to have a significant majority of Americans against it, that Judge Vaughn's decision will only end up fueling that opposition into increasingly more radical approaches to end it, namely a "Roe v Wade" style approach where state legislatures doing everything they can to limit gay rights or to make exercising them so onerous that they are nearly impossible to engender, or even a Constitutional Amendment banning same-sex marriage completely.

Even if the Supreme Court does uphold the law, the result could even then not be final.  The reason the Republican Party has exploited the gay marriage issue in recent elections is because polling consistently indicates clear majorities in most states against it.  (And although civil unions result in a much more complex set of voter preferences, the judge’s decision throws that compromise option out.)  It is highly questionable whether the backlash against a Supreme Court affirmation would result in a successful constitutional amendment permanently enshrining anti-gay prejudice, but you can be sure it would be a long and hard fight.  This is the problem with using court decisions as a replacement for the hard work of education and persuasion in making sweeping social changes.

Lest anyone should misunderstand, let me note that I personally support marriage rights for gay couples.  I think court decisions are a very bad way to achieve that goal, for the reasons discussed above as well as because court decisions tend to lengthen political conflicts rather than resolve them.  It is worth remembering that in 1973 there was a clear trend among the states in favor of abortion rights.  The main accomplishment of Roe may have been to make abortion formally legal, but the decades-long firestorm of controversy has made actual exercise of those rights difficult in many areas of the country.  Using the courts is a way to an emotionally satisfying quick “win” on issues where the legal elite runs ahead of broader social attitudes, but that emotional rush often leads to a big crash in the longer term.  Temporary success can lead to long-term failure that is even more firmly entrenched than it was before.

I also don’t think that every desirable social policy enjoys the status of constitutional right.

But the game is definitely on and the result will be one of the most significant Supreme Court decisions in the last 50 years.
Penza is correct here.  31 states have held elections on referendums or state constitutional amendments to ban same sex marriages and they went 31 for 31.  38 such election victories would be needed to ratify a Constitutional Amendment that passed two-thirds of the House and Senate.  It's certainly within the realm of possibility and both sides of this legal fight know it.

And while Penza does have a very valid point, namely that the battle over gay rights in this country has now entered a new and much more high-stakes stage, and that the battle is far from over, the reality is that there are times where the judicial leading the way on social justice protecting the rights of a unpopular minority from the tyranny of the majority is absolutely necessary, especially when the legislative and executive will not act.  Clearly this is one of those times.

Still, Penza's warning resonates all the more powerfully now, given the fanatical fundamentalist motivation of the opponents of Prop 8 and the Republican plan to rewrite the Constitution, and not just on gay marriage either.

As I said last night, the fundamental argument here is whether or not you believe the goal of American democracy is to enshrine the rights of the popular, or to extend rights to all Americans.  We eventually to get around to the right choice on that as a people, but the battle is always long, hard, and bloody.


Related Posts with Thumbnails