“Heads We Win, Tails The Taxpayers Lose”: Wall Street’s Revenge; Dodd-Frank Damaged In The Budget Bill
On Wall Street, 2010 was the year of “Obama rage,” in which financial tycoons went ballistic over the president’s suggestion that some bankers helped cause the financial crisis. They were also, of course, angry about the Dodd-Frank financial reform, which placed some limits on their wheeling and dealing.
The Masters of the Universe, it turns out, are a bunch of whiners. But they’re whiners with war chests, and now they’ve bought themselves a Congress.
Before I get to specifics, a word about the changing politics of high finance.
Most interest groups have stable political loyalties. For example, the coal industry always gives the vast bulk of its political contributions to Republicans, while teachers’ unions do the same for Democrats. You might have expected Wall Street to favor the G.O.P., which is always eager to cut taxes on the rich. In fact, however, the securities and investment industry — perhaps affected by New York’s social liberalism, perhaps recognizing the tendency of stocks to do much better when Democrats hold the White House — has historically split its support more or less equally between the two parties.
But that all changed with the onset of Obama rage. Wall Street overwhelmingly backed Mitt Romney in 2012, and invested heavily in Republicans once again this year. And the first payoff to that investment has already been realized. Last week Congress passed a bill to maintain funding for the U.S. government into next year, and included in that bill was a rollback of one provision of the 2010 financial reform.
In itself, this rollback is significant but not a fatal blow to reform. But it’s utterly indefensible. The incoming congressional majority has revealed its agenda — and it’s all about rewarding bad actors.
So, about that provision. One of the goals of financial reform was to stop banks from taking big risks with depositors’ money. Why? Well, bank deposits are insured against loss, and this creates a well-known problem of “moral hazard”: If banks are free to gamble, they can play a game of heads we win, tails the taxpayers lose. That’s what happened after savings-and-loan institutions were deregulated in the 1980s, and promptly ran wild.
Dodd-Frank tried to limit this kind of moral hazard in various ways, including a rule barring insured institutions from dealing in exotic securities, the kind that played such a big role in the financial crisis. And that’s the rule that has just been rolled back.
Now, this isn’t the death of financial reform. In fact, I’d argue that regulating insured banks is something of a sideshow, since the 2008 crisis was brought on mainly by uninsured institutions like Lehman Brothers and A.I.G. The really important parts of reform involve consumer protection and the enhanced ability of regulators both to police the actions of “systemically important” financial institutions (which needn’t be conventional banks) and to take such institutions into receivership at times of crisis.
But what Congress did is still outrageous — and both sides of the ideological divide should agree. After all, even if you believe (in defiance of the lessons of history) that financial institutions can be trusted to police themselves, even if you believe the grotesquely false narrative that bleeding-heart liberals caused the financial crisis by pressuring banks to lend to poor people, especially minority borrowers, you should be against letting Wall Street play games with government-guaranteed funds. What just went down isn’t about free-market economics; it’s pure crony capitalism.
And sure enough, Citigroup literally wrote the deregulation language that was inserted into the funding bill.
Again, in itself last week’s action wasn’t decisive. But it was clearly the first skirmish in a war to roll back much if not all of the financial reform. And if you want to know who stands where in this coming war, follow the money: Wall Street is giving mainly to Republicans for a reason.
It’s true that most of the political headlines these past few days have been about Democratic division, with Senator Elizabeth Warren urging rejection of a funding bill the White House wanted passed. But this was mainly a divide about tactics, with few Democrats actually believing that undoing Dodd-Frank is a good idea.
Meanwhile, it’s hard to find Republicans expressing major reservations about undoing reform. You sometimes hear claims that the Tea Party is as opposed to bailing out bankers as it is to aiding the poor, but there’s no sign that this alleged hostility to Wall Street is having any influence at all on Republican priorities.
So the people who brought the economy to its knees are seeking the chance to do it all over again. And they have powerful allies, who are doing all they can to make Wall Street’s dream come true.
By: Paul Krugman, Op-Ed Columnist, The New York Times, December 15, 2014
“Painfully Obscene”: Dick Cheney’s Tortured Appearance On ‘Meet The Press’ Should Be His Public Swan Song
It pretty much goes without saying that any pundit or political writer coming from the left side of center can be expected to presume Vice President Dick Cheney to be nothing less than the political equivalent of Darth Vader.
However, there has remained a small cadre of left leaning pundits and commentators willing to give a fair hearing to the man who was arguably the most powerful Vice-President in the nation’s history—a group I previously would have included myself to be among.
After Mr. Cheney’s appearance on Sunday’s “Meet The Press”—where he employed twisted rationales coupled with outright, provable and painful lies to support his position on torture—finding a commentator from either side of the aisle willing to give credibility to Cheney, let alone those from the left, should prove exponentially harder if not completely impossible.
While there was nothing particularly surprising or odd about Cheney highlighting the politics that may have played a role in last week’s release of the Senate torture report, even the most ardent Cheney supporter had to question the logic of the Vice President’s answers—which are better characterized as retorts—most notably Mr. Cheney’s constant deflection of a question asking for his definition of illegal treatment of detainees.
Cheney’s response?
Torture is “an American citizen on his cellphone making a last call to his four young daughters shortly before he burns to death in the upper levels of the Trade Center in New York on 9/11.”
Cheney would be right were he to pose this as an example rather than the defining metric when seeking to determine an act of torture. The horrendous, unthinkable experience referred to by Cheney is, unquestionably, one example of inflicting torture—and a pretty good example of horrific torture at that—but hardly the sole method that Cheney insisted on pretending to be the case.
Yet, each time Cheney was asked for a more realistic and more encompassing definition of torture that would rationally go beyond any one particular example, he continuously returned to the experiences of our lost countrymen on 9-11. This seemed, in the mind of Dick Cheney, to be the only standard to be applied when determining if our interrogation methods may have exceeded the legal bounds imposed by the Geneva Convention for the treatment of detainees.
At a point, it became more than clear that Cheney had pre-planned this “non-answer” for his appearance, thinking it to be very clever.
By pretending that only a horrible infliction of agony similar to what was heaped on the victims of 9-11 would rise to a level that could be termed torture, the Vice-President was simply sending a coded message to his supporters to remind them that, given what the bad guys did to us, there was nothing too horrible that we could do to them—Geneva Convention be damned.
Of course, that includes waterboarding, a practice that Cheney continued to argue is not an interrogation method that constitutes torture or a violation of international law.
I can appreciate that there are a great many Americans who agree that torture should be employed in the circumstances we have faced in our battle with terrorists. Indeed, a CBS News poll out today reveals that while more than half of all Americans believe that waterboarding is torture, just a bit less than half of the American public believes that the use of torture is sometimes appropriate .
If Cheney had shown up on “Meet The Press” and argued that what we did was torture but that, in his estimation, it was completely appropriate to engage in such torture under the circumstances, a far more meaningful discussion could have ensured.
Instead, Cheney played a game of saying that what we did was not torture while winking to his loyal supporters in the audience in an effort to say that what we did certainly was torture…but you know you loved it.
In what might have otherwise been amusing, had the entire performance not been so painfully obscene, Cheney actually went on to admit that there did exist actions that constitute torture, separate and apart from the one and only criteria he was willing to subscribe to involving 9-11 victims.
When Chuck Todd reminded the Vice-President that the United States prosecuted and hung Japanese soldiers following WWII for engaging in the waterboarding of American soldiers, Cheney answered that this was not the reason we hung offending Japanese soldiers. According to Cheney, we prosecuted these people, “For a lot of stuff, not for waterboarding… and they did a lot of other stuff.”
By: Rick Ungar, Forbes, December 15, 2014
“Another ‘Price’ To Pay”: New Budget Committee Chief; Time For A New Debt-Ceiling Standoff
Almost immediately after the 2014 elections, the conventional wisdom among much of the Beltway media was that power would change Republicans for the better. By taking control of both chambers of Congress, the argument went, GOP lawmakers would have no choice but to become a responsible governing party. They would prove, at long last, that they’re capable of acting like grown-ups.
Just one month later, there’s already ample evidence that those assumptions about Republican maturity were completely wrong.
Republican Tom Price, the incoming House Budget Committee chairman, said his party could demand steep spending cuts in exchange for raising the debt ceiling next year, the most provocative comments by a senior GOP member to date on how negotiations could play out.
The Georgia congressman, during an hour-long briefing with reporters Friday, said the expected mid-2015 debate over whether to raise or suspend the debt ceiling offered Republicans an opportunity to make a sizable imprint on government policy.
The far-right Georgian added that he wants to see Republicans bring back the so-called “Boehner rule” – an arbitrary policy that demands a dollar in cuts for every dollar increase in the debt limit – that even Republicans recognized as ridiculous a couple of years ago.
“I prefer to think about it as opportunities and pinch points,” Price said, apparently using “pinch points” as a euphemism for “causing deliberate national harm.”
It’s worth emphasizing that Price isn’t some random, fringe figure, shouting from the sidelines – the Georgia Republican next month will fill Paul Ryan’s shoes as chairman of the House Budget Committee.
In other words, it matters that Price envisions a strategy in which Republicans threaten to hurt Americans on purpose unless Democrats meet the GOP’s demands.
That said, Price would be wise to start lowering expectations – his intention to create a deliberate crisis will almost certainly fail.
The gist of the plan is effectively identical to the scheme hated by House Republicans in 2011. Next year, the Treasury Department will alert Congress to the fact that it’s time to borrow the funds necessary to pay for the things Congress has already bought. As Price sees it, the GOP-led Congress will tell the Obama administration, “We’ll cooperate, but only if you slash public investments. If not, we’ll default on our debts, crash the economy, and destroy the full faith and credit of the United States.”
Why Price or anyone else would want to slash public investments right now – hurting the economy, just as the recovery gains steam – is a bit of a mystery.
Regardless, the problem with this ridiculously dangerous and politically violent scheme is that President Obama has already said he won’t play the GOP’s game. Indeed, earlier this year, Republican leaders suggested they would once again hold the debt ceiling hostage, but the White House called their bluff and refused to pay any ransom.
Soon after, Republicans backed down, and a new precedent was set.
Hostage crises only work when there’s a credible threat. In this case, Democrats have to actually believe that Republicans would do deliberate harm to the country unless Dems paid a ransom. But once Obama realized that GOP leaders had no intention of crashing the economy on purpose, the fear disappeared and the incentive to hold the nation hostage again vanished with it.
On Friday, Tom Price said in effect, “Maybe we can go back to the way things were in 2011?” And the polite response from the Oval Office and sensible adults everywhere will be, simply, “No.”
Let’s not forget that incoming Senate Majority Leader Mitch McConnell (R-Ky.) recently explained, “There will be no government shutdown or default on the national debt.” And with those simple words, it became quite obvious that attempts to exploit the debt ceiling won’t work because Republicans won’t follow through on their threats to harm the hostage.
Someone probably ought to explain all of this to the incoming chairman of the House Budget Committee.
By: Steve Benen, The Maddow Blog, December 15, 2014
“Make This Monster Pay A Price”: Why We Needed To Hear From Dick Cheney One Last Time
Former Vice President Dick Cheney’s time is about up, in many senses. For a Republican Party trying to look forward, he shouldn’t be a go-to voice for the media on national security policy. His sneering attacks on President Obama aren’t news anymore. The man who famously said, “It’s my new heart, not someone else’s old heart,” about the donor to his taxpayer-funded heart transplant should have lost the power to shock us by now. Unless he has a sudden attack of conscience, and apologizes for his career, he has nothing to say worth hearing.
Except on the Senate Intelligence Committee’s torture report. There’s been some anger on the left that Cheney took his seat yet again on NBC’s “Meet the Press” on Sunday, but I think he belonged there, one last time. Let the American people hear from the man who claims that interrogation methods we prosecuted after World War II, as well as others even more depraved, aren’t actually torture.
Cheney is such a monster that he couldn’t even keep himself from defending “rectal feeding.” While he acknowledged that it “was not one of the techniques that was approved,” he sanctioned it nonetheless. “I believe it was done for medical reasons. … It wasn’t torture in terms of it wasn’t part of the program.”
That would seem to imply that anything that was “part of the program” was torture, which of course Cheney denies.
Ironically, earlier on Fox News Cheney said, “I don’t know anything about” rectal feeding or rectal rehydration (he may well have been lying). But by the time he got to “MTP,” he wasn’t willing to let any torture method go undefended. And even host Chuck Todd noting that “the medical community has said there is no medical reason to do this” didn’t shame him.
Todd asked Cheney some tough questions about U.S. prosecution of Japanese officials who waterboarded Americans, about the fact that at least a quarter of the detainees were innocent and, of course, about rectal feeding. Unfortunately, Cheney either dodged or lied.
Their exchange about innocent detainees showed Cheney at his most sociopathic:
TODD: Twenty-five percent of the detainees, though, twenty-five percent turned out to be innocent. They were released.
CHENEY: Where are you going to draw the line, Chuck? How are –
TODD: Well, I’m asking you.
CHENEY: — you going to know?
(CROSSTALK)
TODD: Is that too high? You’re okay with that margin for error?
CHENEY: I have no problem as long as we achieve our objective. And our objective is to get the guys who did 9/11 and it is to avoid another attack against the United States. I was prepared and we did. We got the authorization from the president and authorization from the Justice Department to go forward with the program. It worked. It worked now for 13 years.
“I have no problem” if 25 percent of the people we detained and potentially tortured were innocent. Take that in. It’s the same mentality that leads to police shooting unarmed black men in the name of public safety. But it squares with Cheney’s famous “one percent doctrine” that governed the aftermath to 9/11: If there’s even 1 percent chance that terrorists might have a weapon of mass destruction, the U.S. should act as if it’s a certainty, and do whatever it takes to stop them.
It also squares with Cheney telling Larry King, about his lifesaving heart donor, “I don’t spend time wondering who had it, what they’d done, what kind of person.”
America’s torture architect got a new heart, but he can never get a soul. Americans needed to see that display of authoritarian arrogance on Sunday. But now let’s hope he goes away.
By: Joan Walsh, Editor at Large, Salon, December 15, 2014
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