Monthly Archives: April 2010

Obama Dares Republicans To Fight Wall St. Bill

Follow this link to the story that is posted on

How ironic, that in the post Gates Says U.S. Lacks Policy to Curb Iran’s Nuclear Drive, I wrote:

At least this administration is a little more subtle about it.  It doesn’t challenge anybody to “bring it on.”

In this case, it think it is about time for the President and the Democrats to take on a more forceful attitude.  They have learned the lesson that negotiating with Republicans at this stage of the proceedings only tends to weaken the bill.  It doesn’t bring any votes from the Republicans, and it doesn’t stop them from lying about what is in the bill.

All the serious ideas from the Republicans have probably already been raised.  Those with merit have been included.  The rest is just political gamesmanship.

I also like the idea that the administration has challenged the media to do their job It is time to stop pretending that one cannot tell who is being honest and who is saying one thing while being paid to do another.

Gates Says U.S. Lacks Policy to Curb Iran’s Nuclear Drive

Follow this link to the New York Times article published April 17, 2010.

Defense Secretary Robert M. Gates has warned in a secret three-page memorandum to top White House officials that the United States does not have an effective long-range policy for dealing with Iran’s steady progress toward nuclear capability, according to government officials familiar with the document.

Has warned some months ago, I might add, just in case you thought this was a recent story.

In other words, in a carefully leaked story, the administration let Iran know that it was fully prepared to take military action.

In an interview on Friday, General Jones declined to speak about the memorandum. But he said: “On Iran, we are doing what we said we were going to do. The fact that we don’t announce publicly our entire strategy for the world to see doesn’t mean we don’t have a strategy that anticipates the full range of contingencies — we do.”

We all know that this is the way strategy should be discussed.  You leave it vague enough that the enemy does not know what you are planning, but you make sure they know you are planning something.  At least this administration is a little more subtle about it.  It doesn’t challenge anybody to bring it on.

Simon Johnson & James Kwak on Fin’l Reform (Moyers Journal) 1

On 16 April 2010, Bill Moyers Journal (PBS) aired an excellent interview with Simon Johnson and James Kwak on Financial Regulation Reform. [This link takes you to both an archived video and a transcript of the broadcast.] The interview is an indictment of the historical (and current) intertwining of large financial institutions and political legislators to create and maintain a financial oligarchy in this country. Shame on the members of Congress who are trying to thwart efforts to reform our financial system!

This interview is emblematic of the hard-hitting and well-reasoned analysis of Bill Moyers Journal. I am deeply saddened that Bill Moyers is retiring on 30 April 2010; I hope that PBS finds someone nearly as talented as Moyers to fill his shoes.

Simon Johnson is former Chief Economist at the International Monetary Fund and is currently a Professor at MIT’s Sloan School of Management and a Senior Fellow at the Peterson Institute.   James Kwak is  a former Consultant at McKinsey and Co. and is currently a student at Yale Law School.

Both Johnson and Kwak are co-founders of the financial crisis blog, BaselineScenario, and are co-authors of the recently published book, 13 Bankers. Here are two reviews of “13 Bankers”:

“The best explanation yet for how the smart guys on Wall Street led us to the brink of collapse. In the process, Johnson and Kwak demystify our financial system, stripping it down to expose the ruthless power grab that lies at its center.”
— Elizabeth Warren, Leo Gottlieb Professor of Law, Harvard Law School; and Chair, TARP Congressional Oversight Panel

“Too many discussions of the Great Recession present it as a purely economic phenomenon – the result of excessive leverage or errors of monetary policy or algorithms run mad. Simon Johnson was the first to point out that this was and is a crisis of political economy. His and James Kwak’s analysis of the unholy inter-twining of Washington and Wall Street – a cross between the gilded age and a banana republic – is essential reading.”
— Niall Ferguson, Professor of History, Harvard University; Professor, Harvard Business School; and author of The Ascent of Money


The SEC’s Case Against Goldman Sachs, Explained (Planet Money) 1

Planet Money’s 16 April 2010 piece, The SEC’s Case Against Goldman Sachs, Explained, briefly summarizes the SEC’s contention that a hedge fund (Paulson & Co) “wanted to bet against the housing market. It talked to Goldman about putting together a CDO full of mortgage-related assets that Paulson thought were likely to lose value. Paulson’s plan was to bet against the CDO, so it would profit if the CDO lost value.” “Goldman didn’t tell people who invested in the CDO about the hedge fund’s role” and intentions.

CDO stands for Collateralized Debt Obligation.

On 17 April 2010, Louise Story and Gretchen Morgenson (NYT) lay out some more detail in U.S. Accuses Goldman Sachs of Fraud in Mortgage Deal.


Mitch McConnell and Bank Bailouts

Follow this link to the Paul Krugman piece in the New York Times.

Krugman’s last sentence sums up the piece nicely:

So don’t be fooled. When Mitch McConnell denounces big bank bailouts, what he’s really trying to do is give the bankers everything they want.

As for whether or not we ought to just let banks fail, he says:

So it’s crucial to avoid disorderly bank collapses, just as it’s crucial to avoid out-of-control urban fires.

Frank Luntz Pens Memo to Kill Financial Regulatory Reform 1

SteveG’s post, Sen. Dodd Accuses Republican Leader of Lying About His Bill, points to a McClatchy article which in turn refers to a memo by Republican strategist and wordsmith Frank Luntz on how to defeat financial regulatory reform. Luntz is in the news because Republican Senate Minority Leader Mitch McConnell lifts phrases almost verbatim from Luntz’s “roadmap.”

Ezra Klein makes similar points in his 15 April 2010 Washington Post article, What’s the Republican Alternative to Bailouts?. Klein not only shows that Senator McConnell follows Luntz’s roadmap and also has misrepresented Senator Dodd’s bill but also goes on to say:

But there’s a good argument to be made that this bill doesn’t go far enough. On some level, so long as we have systemically important firms, there will be the risk of bailouts. Management and shareholders might not win out, but many creditors will do better than they should, and so too will some firms. Criticizing the Dodd bill for not entirely ending the problem of systemically-crucial firms — and thus rescues of some form or another — is a fair critique.

The ways to permanently end bailouts, however, are very radical: The most common suggestion is to break up large firms before they become too big to fail. Another option, put forward by Gary Gorton, is to insure the securities that banks lend to one another. Another option is to impose such enormous capital requirements on systemically important banks that they can’t take many risks and can mostly cover their debts.

If you want to read Luntz’s 17-page memo, you can find it in Sam Stein’s 1 February 2010 HuffPost article, Frank Luntz Pens Memo to Kill Financial Regulatory Reform.


Googled: The End of the World As We Know It

I have just finished reading this book Googled: The End of the World As We Know It by Ken Auletta.

I think it is a very worthwhile read to get you up to speed on how Google is affecting the media, advertising, and a raft of other everyday issues.

I was almost put off by the title of the book, but I am glad I didn’t let that stop me.

I have a few more words about the book on my Books page.

Don’t Kid Yourself, Civil War Was All About Slavery

Follow this link to the column by Leonard Pitts Jr.

In it he quotes a colonel from the Confederate Army.

We went to war on account of the thing we quarreled with the North about. I never heard of any other cause of quarrel than slavery. Men fight from sentiment. After the fight is over they invent some fanciful theory on which they imagine that they fought.’ – Confederate Col. John Mosby

I figured that this piece helps complete my previous post, Confederate History: An Exchange

Sen. Dodd Accuses Republican Leader Of Lying About His Bill

Follow this link to the story at the McClatchy web site.

Are you surprised that the Republicans would come up with a strategy that stands the truth on its head?

McConnell had accused Dodd of drafting partisan legislation, even though the Banking Committee chairman has worked for roughly half a year with key Senate Republicans and incorporated many of their ideas into his bill. McConnell also said the bill continues controversial bank bailouts, but it doesn’t.