Author: David Dayen

(Image: Lance Page/truthout; Adapted: Steve Wampler, epicharmus)

Kevin Drum thinks that we shouldn’t try to break up the megabanks because it’s functionally impossible:

My take is that that’s hopeless. There are things we can do to make banking simpler, but there’s just no way that we’re going back to the 70s. Not. Gonna. Happen. And the chances that Congress — which is barely willing to approve even watered-down consumer protections — will break up banks the way Teddy Roosevelt broke up Standard Oil? Forget it.

It’s useless to declare a problem unsolvable and then suggest instead that we tackle a problem that’s even more unsolvable. I don’t have much hope that Congress and the Fed are going to crack down on leverage in a way that’s anywhere near as broad or as strict as I’d like them to, but there’s at least a chance of making progress on this front. If we throw up our hands and declare it impossible, we’re effectively giving up on financial reform entirely.

This is basically the same argument as Jonathan Chait made last week, which discounts the value of long-term messaging campaigns that actually get the policy right. Even if you feel that breaking up the banks isn’t politically feasible at the time, shutting down discussion with that feasibility argument dooms the nation not just to technocratic, marginal fixes in the near term, but no vision of the desired end state in the long term, and thus the perception that as a politician or political party, you stand for nothing but the path of least resistance.

What’s interesting here is that Drum argues this to promote his own favored method of financial reform, focusing on capital requirements and leverage, which Steve Randy Waldman says, compellingly, cannot be properly measured. Indeed, Lehman Brothers didn’t have an outrageous leverage spread the day before they collapsed. Drum tries to rebut this even while declaring himself “out of his league” at the beginning of the argument. His argument, is, shall we say, less compelling. In doing so, he says that you can get at capital requirements by limiting shadow banking, and trading derivatives openly in exchanges, and getting rid of the off-balance-sheet deals and accounting that hampers true reporting results.

Well, this is EXACTLY WHAT PEOPLE WHO FAVOR REGULATING BANK SIZE HAVE BEEN SAYING. The non-financial bloggers in the wonkosphere seem to be constructing the mother of all straw men, arguing that those who want to break up the banks think that alone can solve the systemic problems at the root of the financial sector. Nobody I’ve read has been saying that. They all favor a both/and approach, including things like, well, derivative reform, and stronger regulations on shadow banking, and ending the accounting tricks, and even leverage and capital requirements. I don’t see the two sides in this debate at all in disagreement, other than what reforms they choose to emphasize. But there’s sure a lot of misunderstanding and misinterpreting at work. Maybe it’s because those making these arguments know them to be theoretical, as the likely outcome will probably be pathetic on all counts, with Democrats happier to get a “win” than anything fundamentally shaking up the system. Maybe everyone’s staking out higher ground.

That said, I think it’s worth reading this anonymous bank executive writing about what would happen if the banks got broken up:

Studies consistently cite that the efficiencies (economies) of scale end and $100B or so. If that is the case, does that not make the multi million dollar men at the top of the pyramid the actual problem? Money is diverted from the branch to the Executive ranks, Private Wealth, and the Investment Bank. It is reverse Robin Hood.

So what do the majority of bankers have to fear from a break up? Nothing. It would bring management closer to the customer and the employee, create a better customer experience, more equitable pay, better teamwork, and a return to values oriented banking.

Given this common sense, all branch based folks at the thousand and thousands of branches should write their congressmen and women and Senators and ask for the passage of strong TBTF legislation that would restore dignity to their profession. Let Private Wealth and the I-Bank float on their own. If you are a shareholder in your 401K or otherwise, you will still get a piece of that action. The value of the parts is generally greater than the value of the whole anyway. It is a win-win-win except in the Executive wing and on Wall Street, which is out of touch with Main Street anyway.

photo via alan(ator)

John Paul Stevens didn’t really break any news when he revealed this weekend that he would retire sometime within Barack Obama’s term. Thoughts of retirement and being 89 years old go together, and anyway Stevens hasn’t hired enough law clerks for the next court session. What is new is the speculation on replacements for Stevens, which has settled on the Solicitor General and two federal appeals court judges.

The White House has declined to comment on its preparations for selecting a successor, but those close to the process repeatedly have mentioned three names as likely to merit close consideration.

One is Mr. Obama’s solicitor general, Elena Kagan, a former dean of Harvard Law School who was considered for the nomination that ultimately went to Justice Sonia Sotomayor […]

Liberals see a surer voice in another finalist for last year’s vacancy, Judge Diane Wood of the Seventh U.S. Circuit Court of Appeals in Chicago. On a court known for its intellectual heft, Judge Wood has proven a serious counterweight to such influential conservative judges as Richard Posner and Frank Easterbrook, legal observers say […]

A third oft-mentioned name is Judge Merrick Garland of the U.S. Court of Appeals for the District of Columbia Circuit.

As a Justice Department official in the Clinton administration, Judge Garland oversaw investigations into the Oklahoma City federal building bombing and the Unabomber, Theodore Kaczynski.

I think the typical liberal reaction to these names would be “Huh,” but one informed in legal matters would prefer Wood, be wary of Kagan’s views on executive power (though she was generally fulfilling her duties as Solicitor General in that capacity) and be cool toward Garland.

Dylan Matthews is right to say that none of this picks would alter the ideological makeup of the Court, but I’m not sure that’s in the cards. There are a few judges and legal scholars out there, like Pam Karlan and Kathleen Sullivan, who would actually represent that rare constituency on the Court these days, liberals, but the GOP clearly wants to filibuster Obama’s next nominee, and with those above they would lock arms together and do so. Anyway, we have a President disinclined to pick high-profile fights. Wood represents probably the leftward edge of this selection.

I would say that just replacing judges, even if they fall in the same broad ideological category, has an impact on the Court. Sonia Sotomayor and whoever Obama picks to replace Stevens will sit on the bench for 20 years or more, anchoring the center-left spots. John Roberts replaced William Rehnquist, not changing the disposition of the Court to a great degree, but he lengthened the hold of the Chief Justice from a conservative perspective for a couple more decades. If Obama makes three appointments, even if they do nothing in the near term, they could have long-term effects.

In his first interview since a series of missteps last week. Michael Steele suggested race is a factor in his – and President Obama’s – struggles since their respective elections to positions of political power. I’m sure his cohorts in the Republican Party are thrilled that he just depicted them as a bunch of racists in front of the country:

“No,” was his simple answer saying that his critics have been calling for him to step down, “since the day I got the job.” […]

He also suggested that his race is an issue, “The honest answer is yes, it just is. Barack Obama has a slimmer margin. A lot of folks do. It means a different role for me to play and others to play.”

“But you take that as part of the nature of it,” Steele added. “It’s more because you’re not somebody they know. … Not old-boy network oriented. … My view on politics is much more grassroots oriented … so I tend to, you know, come at it a little bit stronger, a little bit more street-wise. That’s rubbed some feathers the wrong way.”

That’s an incoherent soundbite, but the top-line story here is that Michael Steele thinks people criticize him because of his race. Not because he’s generally failed at everything he’s tried, not because he has embarrassed the RNC throughout his tenure. Because of his race. And he thinks resistance to the President is racially motivated, too. He just indicted members of his own party, who now will have to take questions on whether they agree with Michael Steele, etc.

Michael Steele – losing the news cycle, one day at a time.

photo: KrisNFred via Flickr

As predicted by China’s warming to American foreign policy initiatives, the Treasury Department delayed an April 15 report that could have labeled China a currency manipulator. Timothy Geithner, who made the announcement on Saturday, tried to straddle the fence by vowing to press further for China to allow the renminbi to appreciate.

However, Geithner also tried to soothe angry U.S. lawmakers by saying he will use upcoming meetings of the Group of 20 and a U.S.-China economic summit in Beijing in May to try to get China to move.

“I believe these meetings are the best avenue for advancing U.S. interests at this time,” Geithner said in a statement issued at midday on the Easter holiday weekend.

Treasury gave no indication when it will actually release the report.

Nice dry wit from CNBC there. “Midday on the Easter holiday weekend” indeed.

Manufacturing interests and labor unions will be disappointed with the move. They blame China’s currency manipulation for the loss of millions of US jobs and an impossibility to compete on a level playing field.

In his statement, Geithner appeared to agree with this, saying that “China’s inflexible exchange rate has made it difficult for other emerging-market economies to let their currencies appreciate” and “A move by China to a more market-oriented exchange rate will make an essential contribution to global rebalancing.”

I wouldn’t expect this to stop lawmakers pushing for China to un-peg their currency from the dollar. Chuck Schumer and Lindsey Graham said they would seek a vote on their legislation offering penalties for China’s “currency misalignment” in the coming months.

U.S. Army soldiers on patrol near Khowst Province, Afghanistan (photo: DVIDSHUB via Flickr)

Justin Elliott decided to highlight an amazing passage in the New York Times from Gen. Stanley McChrystal, which garnered very little attention in subsequent days. In a town hall meeting with troops in Afghanistan, McChrystal said, “We’ve shot an amazing number of people and killed a number and, to my knowledge, none has proven to have been a real threat to the force.” Elliott got the full context of the remark:

Q: “On Escalation of force, have you considered engaging the local community on the issue? We could explain at the brigade/battalion level what behavior we find threatening, and how we are trained to react when we feel threatened. We could negotiate with the community leaders over mutually agreeable actions and reactions that are better understood by both and gives part ownership of the issue to the community and empowers them in line with our approach to reintegration.”
GEN McChrystal: “That’s a great point. I don’t know if we have, but we certainly ought to be doing that. We have so many escalation of force issues, and someone gets hurt in the process, and we say, ‘They didn’t respond like they were supposed to.’ Well, they may not have known how they were supposed to respond, so as they approached an area or checkpoint or whatever, they may have taken actions that seemed appropriate to them, and when a warning shot was fired they may have panicked. I think this is a great thing to do, to engage people and tell them the kind of behavior on their part that would lower the chance that they would run into problems.

“I do want to say something that everyone understands. We really ask a lot of our young service people out on the checkpoints because there’s danger, they’re asked to make very rapid decisions in often very unclear situations. However, to my knowledge, in the nine-plus months I’ve been here, not a single case where we have engaged in an escalation of force incident and hurt someone has it turned out that the vehicle had a suicide bomb or weapons in it and, in many cases, had families in it. That doesn’t mean I’m criticizing the people who are executing. I’m just giving you perspective. We’ve shot an amazing number of people and killed a number and, to my knowledge, none has proven to have been a real threat to the force.”

Every indication is that McChrystal is working to reduce the amount of civilian casualties, and of course there’s no explanation of the meaning of “amazing” numbers of people. The New York Times put the number in the story at 30 deaths and 80 wounded. And these are military checkpoint deaths, not airstrikes where the military leadership has more control.

But as Michael Cohen notes, this is mainly a reminder that a country engaging in occupation cannot possibly sanitize it to the level of perfectly avoiding civilian deaths. In fact, in the case of a counter-insurgency, with the proximity of troops closer to the people, it’s arguably a more hazardous environment for civilians.

It’s not that we shouldn’t try to protect civilians – or even that the American military shouldn’t take the issue incredibly seriously. We should and we do. But by placing 100,000 troops in Afghanistan we are actually increasing the likelihood that ordinary Afghans will be killed – no matter how much effort is expended to spare their lives. Our soldiers are trained to protect themselves and use overwhelming force when they are threatened; the notion that a directive from the commanding general in Afghanistan will change this overnight and turn American soldiers into “armed social workers” is pure fantasy: a fact that is being seen on the ground.

For all of the lovely sentiments about protecting civilians in Afghanistan the simple reality is that we have chosen to place furthering our national interests above protecting the lives of ordinary Afghans; the loss of civilian life while regrettable is a direct result of that decision. I suppose this is defensible – certainly countries that go to war do it all the time. But let’s at least be honest about why we’re there and the resulting effect on innocent civilians.

Somehow Hamid Karzai has to be criticized for a “scorching attack” on the occupying forces. Given the inevitable outcome of occupation on Karzai’s constituency, I don’t know how else any head of state is supposed to react. Karzai’s no saint, obviously, but the experience of the past several occupations shows that political survival is connected to denouncing the needless deaths of civilians from outside foreign powers.

[Ed. note: Because this important piece deserved much wider attention than it received, we’re elevating it to the front page. David Dayen is a blogger fellow with Brave New Films on their 16 Deaths Per Day campaign for worker safety. You can join them on Facebook.]

It’s hard to find a tougher job in America than harvesting in the fields. Throughout California, known as the nation’s salad bowl, farmworkers, frequently migrants with little knowledge of their rights as workers or even the English language, toil in triple-digit heat, often without shade or water breaks. Needless to say, this dangerous work has resulted in serious injury and even deaths.

Jose Rosario Valencia started feeling nauseated just after 9 a.m. on July 17. His heart rate sped up and his knees buckled.

Valencia was scared. He’d heard of other farmworkers dying of heat stroke in the fields.

“I thought about my family and how they would suffer,” said Valencia, 46, who moves irrigation pipes in the onion fields.

Even though California passed a groundbreaking law in 2005 to protect farmworkers from heat illness and death, there have been as many as 10 heat-related fatalities in the years since. Among the victims in 2008 were a pregnant teenager who died when her body temperature climbed to 108 degrees after working in a Lodi vineyard and a 37-year-old man who suffered heat stroke after loading table grapes near Bakersfield. The state has confirmed heat as the cause of six of the deaths and said it may have been a factor in the others.

Farmworkers get paid by the piece, based on how much they load, and their employers set quotas that they are expected to cover. They have every incentive to avoid breaks and work as hard as possible; in some cases, the water is simply out there for display. As a result, farmworkers skip bathroom breaks. They skip water breaks. They stay out in the fields under 100-degree heat with the fear that they would be fired if they did not. And as a result, workers die.

The most celebrated case in recent years was that of Maria Isabel Vasquez Jimenez, a 17 year-old farmworker who died of heat strike in the fields in the summer of 2008. She was pregnant at the time.

Maria collapsed while working for Merced Farm Labor in a vineyard owned by West Coast Grape Farming outside of Stockton, CA. Maria worked for nine hours in temperatures that reached 101 degrees. There was no water nearby. There was no shade.

After about 2 hours of delays, Maria was finally taken to a clinic. Her temperature upon arrival was 108.4 degrees. Maria’s heart stopped six times in the next two days before she passed away. Doctors said if emergency medical help had been summoned or she had been taken to the hospital sooner, she might have survived.

In 2009, Cal-OSHA, the state occupational safety board, delivered regulations to combat heat-stress related injuries and deaths. The employers first tried to amend the regulations, trying to classify the vines in the vineyard as “shade.” But they failed, as Cal-OSHA refused to rewrite the laws.

However, lobbying for changes in the law is only one way that employers evade oversight. Under the Schwarzenegger Administration and during the historic budget crisis in the state, funding for Cal-OSHA has shrunk. Only two HUNDRED inspectors monitor all the worksites in the nation’s most populous state, including the 35,000 farms. There are more fish and game wardens in California than worksite inspectors.

And if an employer is cited, they can use a favorable appeals process to reduce the fines or dismiss the violations, something which has been done repeatedly in recent years. All violations can be appealed to a judge, appointed by the appeals board. Then the appeals board can vacate the judge’s ruling. This offers many opportunities to game the system… (more…)

Yesterday featured yet another top official in the Obama Administration, this time economic advisor Austan Goolsbee, saying that unemployment is unacceptably high. In this case, he was talking about the minority community. But “unacceptably high” doesn’t make sense unless the Administration is doing whatever possible to drop that number. And what are they doing?

“When you look at construction and manufacturing in particular, those have been very hard hit in this recession,” Goolsbee said. “You’ve seen a lot of what the president’s talking about, be it infrastructure, be it clean energy manufacturing, and be it small business, those are three areas which would disproportionately help groups where the unemployment rates been really high.”

“Talking about,” but not in a way that actually advances any legislation in these areas. There’s a great local jobs bill that the White House has never discussed publicly. Their HomeStar program for energy retrofits hasn’t really gotten out of the box. You could through a series of bills design a stimulus that would approach the annual level of the Recovery Act, and it looked for a moment like this was the plan in Congress, but there’s been little movement and little attention paid to that agenda. And I don’t think a positive jobs report will spur action on that front.

If you look at what Andrea Mitchell says in her question right before Goolsbee talks about employment in the minority community, you can see what a box the White House is in right now. She asks if there’s anything that can be done, given the “fiscal crisis”:

Is there anything that can be targeted, I know that there is one bill, George Miller’s bill in Congress for job training, but is there anything on a broader scale, given the fiscal crisis, that can be done, or is this just going to be the stubborn part of the unemployment rate that you have to deal with on a long-term basis?

That’s a new phrase in the lexicon from Mrs. Greenspan, “fiscal crisis.” Interesting how this “fiscal crisis” just popped up after eight years of unfunded wars and a doubling of the national debt. Suddenly, a Democrat enters the White House and there’s a fiscal crisis and everything has to be paid for, and 16% unemployment in the African-American community is just something you have to “deal with.” And by “deal with,” presumably Mrs. Greenspan means “not attempt to fix in any way, because I have a piano recital to attend with my husband and anyway I’m employed so not my problem.”

The argument that the fiscal scolds are making, that the budget is in “crisis” and you simply have to crack down and “live within your means” during a time of mass unemployment, found purchase in certain parts of Eastern Europe, where they did deal with their “crises” with austere measures and spending slashes. So maybe Mrs. Greenspan and her beau can pop over to Lithuania and ask people how they like how things are going over there.

Faced with rising deficits that threatened to bankrupt the country, Lithuania cut public spending by 30 percent — including slashing public sector wages 20 to 30 percent and reducing pensions by as much as 11 percent. Even the prime minister, Andrius Kubilius, took a pay cut of 45 percent.

And the government didn’t stop there. It raised taxes on a wide variety of goods, like pharmaceutical products and alcohol. Corporate taxes rose to 20 percent, from 15 percent. The value-added tax rose to 21 percent, from 18 percent […]

But austerity has exacted its own price, in social and personal pain.

Pensioners, their benefits cut, swamped soup kitchens. Unemployment jumped to a high of 14 percent, from single digits — and an already wobbly economy shrank 15 percent last year […]

Monika Midveryte, a university student, and her mother are now supporting the family after her father lost his construction job. Now, she said, he sits at home in front of the television drinking his troubles away. “He has no hope.”

The psychological toll has been immense. Suicides have increased in a country where the suicide rate of 35 per 100,000 is already one of the world’s highest, local experts say.

According to figures collected by the Youth Psychological Aid Center, telephone calls to its hot line from people who said they were on the verge of committing suicide nearly doubled last year to 1,400, from 750.

But Moody’s just raised their credit rating, and the international bankers are quite happy, so no harm done.

Incidentally, Lithuania’s economy crashed after a wave of lending to first-time home buyers.

When someone tells you, no doubt with a “Obamunism” sign in their hands, that governments have to run their budget like a family, and we’re placing a massive debt burden on future generations, and the rest of the claptrap, hand them a brochure about Lithuania, and describe in painstaking detail the hell on Earth that exists there. Tell them about how they cut everything to the bone, and all it did was sink the country’s workers into depression. Tell them about how the country has the highest increase of emigration in decades, because there’s nothing for the people there. Tell them about how their austerity model has made things worse.

Come to think of it, tell Mrs. Greenspan, too.

Sen. Harry Reid (credit: TalkRadioNews via Flickr)

This sounds like something better done from Washington.

Senate Majority Leader Harry Reid (D-Nev.) urged Republicans Friday to stop blocking an extension of unemployment benefits.

In a statement responding to Friday’s jobs report, Reid said the high unemployment rate demonstrates the need for another extension.

“With so many families in Nevada and across the country still struggling to find work and make ends meet, it is imperative that Senate Republicans stop blocking the extension of critical unemployment insurance and health benefits — their obstruction endangers the economic certainty of millions of families,” Reid said.

All true enough. But with the expiration date for hundreds of thousands of jobless on Monday, and Congress having spent a week in their districts, taking the time now to demand movement on the extension misses the point a bit. The fact is that cloture could have been invoked much earlier, while the Senate was still in session, and a vote forced that would have made Republicans stand with either struggling families or Jim Bunning and Tom Coburn. If Bunning and Coburn won out, so be it; this statement would make more sense. As it is, Democrats tried to get unanimous consent on an extension, couldn’t, and went home, vowing to take it up later and make the benefits retroactive. That’s a costly activity that adds uncertainty to both families and state governments. And it didn’t really need to happen.

President signs the health insurance reform bill, which includes funding for CHCs. (Official White House Photo by Chuck Kennedy)

I first wrote about community health centers in the health care law in December, and have subsequently written at least 20 other articles referring to them. I maintain that it was the best money in the entire bill, adding the capacity for millions of people to access what amounts to a universal care program of free or near-free primary care medicine. They can also be centers for innovation in how we provide and even finance medical care, with the use of bundled payments and “medical homes” concepts.

Months and months later, the New York Times gets around to profiling one of these centers, in Portland, Maine.

First through the door of the Portland Community Health Center on Thursday morning was a stick figure of a man, oblivious to the homemade signs and the White House advance team across the street. He had a bald eagle drawn on his sweatshirt, a street-hard weariness in his eyes, and a throbbing pain in his right hand.

Sarah Andel, a nurse practitioner, knew this man, James Hierl: how he lived in a shelter; how his depression made eating seem futile. As she held his numbed hand, working to remove a painful wart with a blade, she coaxed and coddled him: You have to eat; you have to see your psychiatrist; and please, James, eat.

“You’re going to come back in a week,” Ms. Andel said, as her patient headed for the door, finger bandaged, cheeks concave, looking older than his 53 years. “O.K., James?”

Portland’s community health center is very new, having been established thanks to a stimulus grant last year. They provide care regardless of insurance or income, and patients pay a small fee on a sliding scale based on income ($3 per visit for someone making $10,000/year, for example). The center serves immigrants and low-income Mainers who would otherwise cost the state much more in uncompensated care. And the center appears to be a friendly spot for people to get both mental and physical health needs met.

With $11.5 billion in additional funding over the next five years, community health centers can play a major role in improving people’s daily lives, allowing them to be productive, even saving them from death. It’s an incredibly good, compassionate program and its importance should not be overlooked.

Army Secretary John McHugh said this week that he considers changes to the don’t ask don’t tell policy to represent a “de facto moratorium” on discharging gay soldiers, adding that he wouldn’t move to discharge soldiers who told him they were gay or lesbian.

Today, he backtracked on that statement:

Reversing course, Army Secretary John McHugh warned soldiers Thursday that they still can be discharged for acknowledging they are gay, saying he misspoke earlier this week when he suggested the military’s “don’t ask, don’t tell” policy had been temporarily suspended […]

“Until Congress repeals ‘don’t ask, don’t tell,’ it remains the law of the land and the Department of the Army and I will fulfill our obligation to uphold it,” McHugh said in a statement Thursday.

Earlier in the week, when pressed by reporters, McHugh said he wouldn’t try to discharge service members who in private conversations with him acknowledged being gay. He also said he believed that Defense Secretary Robert Gates had placed a moratorium on dismissals while the Pentagon surveyed troops on their opinions.

On Thursday, McHugh said he misspoke.

“There is no moratorium of the law and neither (Gates) nor I would support one,” McHugh said.

The key piece here is actually that Gates and McHugh wouldn’t support a moratorium, presumably not even one imposed by Congress. In that case, his words show the urgency of a full repeal, this year, of the policy. Because no matter how sensitively it gets applied, the fear still hangs over the head of any gay or lesbian service member, a fear that they will be discharged for who they are. And that policy, essentially labeled immoral by the Defense Secretary, Chairman of the Joint Chiefs and the President, has to stop.

Getting back to the change in implementation, it is clear from McHugh’s earlier statements and this story that the military is willing to overlook the policy.

Lt. Robin R. Chaurasiya wasn’t exactly asked, but she told anyway: She is a lesbian, and in a civil union with another woman.

Her commander at Scott Air Force Base in Illinois, Lt. Gen. Robert R. Allardice, could have discharged her under the Pentagon’s “don’t ask, don’t tell” policy. Instead, he determined in February that she should remain in the Air Force because she acknowledged her sexual orientation for the purpose of “avoiding and terminating military service.”

Chaurasiya says that is not true. But the general’s reasoning has the flavor of a Catch-22: If you admit to being homosexual you can be discharged from the military, but if you admit it for the purposes of being discharged you won’t be […]

At the very least, said Nathaniel Frank, an expert on “don’t ask, don’t tell,” the Chaurasiya case appears to turn the rationale behind the gay ban on its head.

“If commanders are ignoring or rejecting credible evidence of homosexuality because of the alleged motive of the person who makes the statement, the bottom line is they are keeping gay people in the service,” said Frank, a senior research fellow at UC Santa Barbara’s Palm Center. “That gives the lie that known gay people undercut the military.”

And it further cements the fact that the only reasons for perpetuating the ban on gay service members is political.

Sen. Blanche Lincoln (D-AR) at at presser with Sen. Max Baucus (D-MT) (photo: Wikipedia)

Blanche Lincoln’s fundraising, relative to primary challenger Bill Halter, is even worse than the numbers would indicate.

Democratic Sen. Blanche Lincoln’s campaign says she’s raised more than $1 million over the past three months for her re-election bid.

Lincoln’s campaign said Thursday that the incumbent senator has more than $4 million in the bank as she seeks a third term in office. Wednesday marked the deadline for first quarter contributions.

Lt. Gov. Bill Halter is Lincoln’s chief rival in the May 18 Democratic primary. Halter’s campaign said Wednesday night that he had raised more than $2 million since launching his bid March 1.

So Halter raised twice as much in a month as Lincoln did in three months. Of course, she had a cushion, and no primary challenger materialized until March 1. So she still has a healthy cash advantage for the last six weeks of the primary, although the independent expenditures from labor level the playing field.

Lincoln will return to center stage in Washington for that final six weeks. The Agriculture Committee has some control over the derivatives piece of financial regulation (there’s actually a reason for this; agriculture derivatives and swaps, in the form of commodity trading, is the oldest derivative market out there). So this crucial bit of the financial reform bill we’ll see heads over to the desk of… Blanche Lincoln, the chair of the committee. Guess what interests she’ll favor in creating those rules:

Committee Chairman Blanche Lincoln (D-Ark.) and ranking Republican Saxby Chambliss (Ga.) plan to shepherd a bipartisan bill through their committee soon after Congress returns from its two-week April recess. Lincoln said in a recent speech that she expects the legislation to be incorporated into a wide-ranging package, spearheaded by the Senate banking committee’s chairman, Christopher J. Dodd (D-Conn.), aimed at revamping the nation’s financial regulatory system […]

If Lincoln and Chambliss strike a workable bipartisan deal on derivatives — a goal that has eluded other lawmakers — it could help push Dodd’s legislation across the finish line. At the same time, some industry officials, who spoke on the condition of anonymity because they continue to lobby lawmakers on the issue, said they expect that legislation headed up by Lincoln could be more favorable to the financial industry than the language currently in Dodd’s bill.

Quoted in the article, Lincoln said, “The swaps market will be regulated, but let me say this. I don’t believe in overreaching or regulation for regulation’s sake. We must be surgical with how we regulate.” “Surgical” in this case should read “taking a scalpel to everything but the profits of the banks.”

Lincoln’s probably on safer ground undermining the financial bill than the health care bill, simply because derivatives are so obscure to the public, and therefore easily spinnable. But if she takes a high-profile position basically on the side of the banks right at the height of her primary campaign, that provides a major opening for her opponent.

(photo: Fibonacci Blue)

As expected, the Labor Department announced the largest job gain in three years today, with 162,000 additional jobs in March. The consensus number was 190,000, so this ended up a bit below expectations. However, despite the growth, the unemployment rate remained static at 9.7%, as more people re-entered the job market in the favorable economic climate.

The Bureau of Labor Statistics estimates that 48,000 of those hires came from the US Census for short-term jobs related to the decennial count. However, they saw an increase of 123,000 private sector jobs, much more than the disappointing ADP report from earlier this week, which showed a slight decrease.

This paragraph from the BLS report shows why even growth numbers like this fail to move the needle on the unemployment rate:

In March, the number of unemployed persons was little changed at 15.0 million, and the unemployment rate remained at 9.7 percent.

Among the major worker groups, the unemployment rates for adult men (10.0 percent), adult women (8.0 percent), teenagers (26.1 percent), whites (8.8 percent), blacks (16.5 percent), and Hispanics (12.6 percent) showed little or no change in March. The jobless rate for Asians was 7.5 percent, not seasonally adjusted.

The number of long-term unemployed (those jobless for 27 weeks and over) increased by 414,000 over the month to 6.5 million. In March, 44.1 percent of unemployed persons were jobless for 27 weeks or more.

When you add in part-time workers who want full-time work, and those who have given up looking for work, that rate actually ticked up this month, to 16.9%, from 16.8%.

Without massive gains, like 200,000 or 300,000 a month, the number of people entering for the first time or re-entering the labor market cannot be completely offset, and the rate stays the same.

Both January and February got revised upward, with January nudging into positive territory at +14,000, and Februrary just below positive at -14,000. Overall, we’re clearly in better shape than we were at the same time a year ago, and the trend is positive. However, unemployment is still, in Tim Geithner’s words, “unacceptably high”, and will remain that way for a while without action. The Obama Administration’s own numbers don’t show the unemployment rate dipping below 9% this year.

Tula Connell writes:

Although the March report is a big improvement from the hundreds of thousands of jobs lost each month during 2009, job growth is effectively stalled and long-term unemployment is eating away at people’s pocketbooks and the nation’s economy. More than two in every five unemployed workers in this country have been unemployed for more than six months […]

Some 150,000 new jobs a month are needed just to keep pace with the growth in the labor force, and a stunning 11 million jobs must be generated to return to pre-recession employment levels. Yet there are more than six workers for every one job. Such massive numbers of new jobs aren’t going to materialize on their own.

The AFL-CIO is pushing the Local Jobs for America Act and other actions to kickstart hiring. The problem is that these kind of topline growth numbers create a sense of false security, an impression that the labor market is returning to normalcy and nothing else needs to be done. However, the real crisis of the long-term unemployed, and the big numbers needed to counteract the huge losses, actually means that no time is better for real action on the jobs front. Sadly, I don’t think that’s coming soon.

Marcy Winograd

The fallout from the Bush Administration’s domestic spying program being ruled illegal once again has been incredibly mild. A few cover stories in the major papers noted the ruling, but pretty much left it there. Glenn Greenwald tweeted his puzzlement:

Should it be big news if a federal court rules the President violated the criminal law in how he spied w/o warrants on American citizens?

It should, but the culture of accountability has long faded in the United States, replaced with the culture of looking forward and not bankward.

However, Judge Vaughn Walker’s ruling may have salience in one Congressional race this year. It happens to be in the district where I’m typing this out.

Marcy Winograd is challenging incumbent Blue Dog Jane Harman in this coastal SoCal district, and she pounced on the ruling from Walker’s court. In her statement (which can be read in full below) she cited some major pieces of information tying her opponent to the crimes. First, as ranking member of the House Intelligence Committee, Harman never objected to the illegal wiretapping program despite having been read into it. In fact, she praised the program repeatedly, and according to documented reports she pressured the New York Times not to publish about the wiretapping program until after the 2004 elections. “On the eve of Bush’s re-election, my opponent pressured the New York Times to suppress a story on the massive illegal wiretaps,” Winograd said in the statement. “In essence, Jane Harman worked to re-elect George Bush.”

And now we have further proof that what Harman was working to keep out of the papers was in fact an illegal program of warrantless wiretapping, for which the US government is criminally liable. And Harman clearly knows this; after all, she was herself wiretapped in conversation with a suspected Israeli agent, and she subsequently expressed outrage at the “abuse of power” of the government listening in on innocent Americans (BTW, unlike the Al Haramain wiretaps, Harman’s was court-approved).

If there’s anywhere in the country where this ruling could have resonance and actually affect an election, it’s CA-36.

The full statement: (more…)

Rep. Ron Paul (still R-TX)

I would love to see the Republican Party try to remove the progenitor of the Tea Party movement from all his committees. They should really take a stand and do that, it’ll do wonders for the 2010 elections.

According to the New Orleans Times-Picayune, Reps. Anh “Joseph” Cao of Louisiana and Ron Paul of Texas have joined Rep. Don Young (AK) in requesting earmarks for the 2011 fiscal year, despite a House Republican caucus vote this month to institute a moratorium on earmarks for one year.

Those members’ committee assignments could be on the line, according to a spokesman for House Minority Leader John Boehner.

“The Leaders expect all House Republican members to comply with the moratorium,” the spokesman, Michael Steel, said in an email. “There will be situations where we have some confusion on how these rules are implemented, but if Members are deliberately breaking the rules, it will be a serious matter and one that the Steering Committee will consider.”

I cannot wait for the word back to the Tea Party community that Ron Paul just got tossed off of all his committees. I’m sure that would energize this new base.

The thing is, if you listen to Paul’s spokesman, he’s pretty much right on this issue:

Paul spokeswoman Rachel Mills said he thinks Washington already extracts too much money from his constituents, and “part of his job is to work hard in Washington, D.C., to get that money back to those constituents in any form that he can.” She said Paul also believes that earmarking is more transparent than the regular budget process because you know exactly where the money goes and that it doesn’t affect the total amount appropriated by one dime.

Yes, this conflicts with libertarian ideology in part, but not in the whole. I don’t think almost any attention should be paid to the ridiculous earmark issue, which accounts for around 1% of the federal budget. But to the extent there is attention, Paul is correct. No earmark affects total appropriations. And failing to earmark does leave appropriations up to the federal government and the related executive agencies to determine where the money goes. You can see a list of Paul’s earmark requests here.

The entire drama over earmarks is silly, so if it results in Ron Paul losing committee assignments and the GOP leadership having to explain that and have this debate, all the better.

photo: b4b2 via Flickr

This is the kind of statement that makes me want to go out and join a Tea Party.

Geithner also said that administration officials are ”very worried” about recovering the more than 8 million jobs lost in the recession. But he noted that business growth has been improving and expects the economy ”is going to start creating jobs again.”

The secretary agreed that the national jobless rate — now at 9.7 percent — is ‘’still terribly high and is going to stay unacceptably high for a very long time” because of the damage caused by the recession.

”Just because this was the worst economic crisis since the Great Depression,” Geithner said, ”a huge amount of damage was done to businesses and families across the country … and it’s going to take us a long time to heal that damage. ”

If you paired that highlighted statement with the notion that the Administration was doing everything they could to lower the jobless rate, it would maybe be acceptable. But they’re not. Obviously Congress bears some of this responsibility as well, but the government isn’t doing what’s necessary to arrest something “unacceptably high” with a more expansionary fiscal policy or monetary policy. The deficit scolds have succeeded in turning the conversation their way, prolonging the economic misery for millions of families. And the Federal Reserve (as well as some of the other assets in the monetary policy artillery, for that matter) seems too spooked by non-existent inflation to care about monetary expansion; in fact, they’re pulling back already.

You cannot say something will be “unacceptably high” for the distant future. That connotes an acceptance with the way things are. As Duncan Black says, “If they really think they’ve done all that is theoretically possible (not true) say it. If there’s something they’d like to do, but Congress won’t let it happen, tell us what it is.”

P.S. Just to extend this out a bit, here’s a story about the loss of a vital bus system in Clayton County, Georgia. This is just an example of public transit cutbacks, motivated most by shortfalls in state budgets, at a time when they are often the only affordable option for millions and ridership, adjusting for these cutbacks, is booming (up 31% since 1995). Public transit provides economic activity through freedom of movement, lowers greenhouse gas emissions and aids commuters in expanding their job-seeking opportunities. Why would we let it wither? It’s flat crazy. Yet the stimulus package provides DoT grants for new construction but not maintenance and operating expenses.

So there’s NOTHING the White House can do about that? Transit cuts must stay “unacceptably high”?

We know how to get the economy moving again. Keynes provided the model and it worked 75 years ago. The only thing unacceptable is a failure to use the proven tools.

Blanche Lincoln is celebrating the Passover holiday with some chutzpah:

Lincoln’s obstructionism on healthcare and a host of other fronts persuaded Arkansas Lieutenant Governor Bill Halter–a rising star in the state–to challenge her in the Democratic primary on May 18. Halter helped organize a free healthcare clinic for a thousand Arkansans in November 2009 and supported a public insurance option, along with passage of a final bill through reconciliation. He’s been endorsed by the AFL-CIO, SEIU and MoveOn, and recent polls show him gaining on Lincoln.

Now, in an attempt to court the Obama voters she’s repelled throughout the past year, Lincoln is running ads on African-American radio in Arkansas claiming she “stood with our president to pass healthcare reform.” The ad continues: “Even though the Tea Party and insurance companies attacked Blanche Lincoln, she never abandoned our president, nor you.”

I like the line “Blanche Lincoln stood with the President on health care, and that’s what I like about Blanche Lincoln.”

Regardless of what you think about the health care law, there’s no way this ad bears any resemblance to the truth. Lincoln was a pain in the ass from the beginning on health care and she voted against the reconciliation bill that finished it off. She proudly announced her role in killing the public option just this week.

Halter’s response ad is pretty good:

“Who is Blanche Lincoln trying to fool on healthcare?” says the narrator. “Here’s the deal: she didn’t stand up to the special interests, she worked for them. She sided with those Republicans who tried to kill President Obama’s reforms unless insurance company profits were protected. Insurance companies and HMOs rewarded Lincoln with more the $800,000 in campaign cash…Senator Lincoln, my people aren’t fooled. Bill Halter is the one who’ll stand up for us.”

There’s a line in there about her voting “against President Obama’s plan to lower prescription drug costs for seniors,” which is true, but Lincoln actually voted for drug reimportation, which violated Obama’s PhRMA deal. Other than that, though, Halter’s generally correct about who Lincoln valued in the health care debate.

Regardless of whatever else you think about this race, on purely pragmatic terms Lincoln has to be defeated. She has no chance of winning in November, with her recent ad blitz not having moved the needle an iota. And Halter, who is less well-known, does better in every head-to-head against a Republican than Lincoln; even if this Rasmussen poll has a house effect working against Democrats, an apples-to-apples comparison shows that only Halter has a chance of winning the race.

Lincoln manages to be neither the ideological choice OR the pragmatic choice. It just goes to show you how much she has screwed up her tenure in the Senate.

Muqtada al-Sadr

Actually not even really an April Fool’s Day joke:

Followers of Moktada al-Sadr, the militant cleric whose militia was a major force in the Shiite insurgency against American forces, announced Wednesday that they were arranging a special vote to pick Iraq’s next prime minister.

Mr. Sadr, who has been living in Iran, released a statement through his political office in Iraq that called for putting the “choice of prime minister into the hands of the Iraqi public through a referendum for all Iraqi people.”

The move appeared to be part political gimmick and part public relations masterstroke. The referendum would have no legal authority, but would continue the political maturing of a movement that moved away from violence, embraced the democratic process, and solidified its political force in the March 7 parliamentary election. The group won as many as 40 of the 325 seats, possibly pushing it past Kurdish groups in talks on forming a government.

That’s kind of genius. After holding the election, the way to pick the next Prime Minister is to… hold another election. And they’re really doing this, on Friday and Saturday. Polling places will be Sadrist offices around the country. The ballot will have five names: Iyad Allawi, Nouri al-Maliki, Jaafar Muhammad Baqir al-Sadr, Adil Abdul Mahdi, and Ibrahim Jaafari. Three of them have already been Prime Minister; Mahdi’s a current Vice President, and al-Sadr is the preferred choice for the State of Law party should they drop Maliki (and also Muqtada’s uncle).

While anyone would be able to vote, the assumption is that the electorate would look overwhelmingly Sadrist. And they know they can swing the choice of the next Prime Minister and the next government coalition by themselves. With no standards or Election Commission watching over the vote, they can make the results out to say basically whatever they want it to say. And if that gives them an excuse to demand the departure of Maliki from atop State of Law, the man who attacked the Mahdi Army in Basra,as a condition of their support, so be it.

Muqtada al-Sadr is Iraqi’s main populist, and he lives in Tehran. That’s smooth.