“The Public Be Damned”: GOP Senators Threaten Obstruction Unless Consumer Protection Bureau Is Weakened
When the Dodd-Frank financial reform law first passed, Senate Republicans refused to confirm a director for the newly-created Consumer Financial Protection Bureau. They promised to block any nominee — regardless of that nominee’s qualifications for the job — unless the Bureau was weakened and made subservient to the same bank regulators who failed to prevent the 2008 financial crisis.
President Obama was thus forced to recess appoint Ohio Attorney General Richard Cordray to be the Bureau’s first director. Now that Obama has renewed Cordray’s nomination, the Senate GOP is again promising to block any nominee unless the Bureau is watered down:
In a letter sent to President Obama on Friday, 43 Republican senators committed to refusing approval of any nominee to head the consumer watchdog until the bureau underwent significant reform. Lawmakers signing on to the letter included Senate Minority Leader Mitch McConnell (R-Ky.) and Sen. Mike Crapo (R-Idaho), the ranking member of the Senate Banking Committee.
“The CFPB as created by the deeply flawed Dodd-Frank Act is one of the least accountable in Washington,” said McConnell. “Today’s letter reaffirms a commitment by 43 Senators to fix the poorly thought structure of this agency that has unprecedented reach and control over individual consumer decisions — but an unprecedented lack of oversight and accountability.” […]
In particular, Republicans want to see the top of the bureau changed so it is run by a bipartisan, five-member commission, as opposed to a lone director.
They also want to see the bureau’s funding fall under the control of congressional appropriators — it currently is funded via a revenue stream directly from the Federal Reserve.
Republicans want to implement a commission (instead of a lone director) and subject the CFPB to the appropriations process in order to stuff it full of appointees with no interest in regulating and starve it of funds. The other financial system regulators that have to go before Congress for their funds already don’t have the resources to implement Dodd-Frank, thanks the House GOP, leaving large swathes of it unfinished. There are also a host of other reasons that the CFPB needs to be both independently funded and have a strong, independent director.
The CFPB has done important work on behalf of consumers, winning wide praise from consumer advocates and the financial industry. Senate Republicans, meanwhile, have made it abundantly clear that they believe that blocking any and all nominees is an acceptable strategy.
By: Pat Garofalo, Think Progress, February 2, 2013
“The Big Freaking Deal”: Progressives Might Want To Take A Brief Break From Anxiety And Savor Their Real Victories
On the day President Obama signed the Affordable Care Act into law, an exuberant Vice President Biden famously pronounced the reform a “big something deal” — except that he didn’t use the word “something.” And he was right.
In fact, I’d suggest using this phrase to describe the Obama administration as a whole. F.D.R. had his New Deal; well, Mr. Obama has his Big Deal. He hasn’t delivered everything his supporters wanted, and at times the survival of his achievements seemed very much in doubt. But if progressives look at where we are as the second term begins, they’ll find grounds for a lot of (qualified) satisfaction.
Consider, in particular, three areas: health care, inequality and financial reform.
Health reform is, as Mr. Biden suggested, the centerpiece of the Big Deal. Progressives have been trying to get some form of universal health insurance since the days of Harry Truman; they’ve finally succeeded.
True, this wasn’t the health reform many were looking for. Rather than simply providing health insurance to everyone by extending Medicare to cover the whole population, we’ve constructed a Rube Goldberg device of regulations and subsidies that will cost more than single-payer and have many more cracks for people to fall through.
But this was what was possible given the political reality — the power of the insurance industry, the general reluctance of voters with good insurance to accept change. And experience with Romneycare in Massachusetts — hey, this is a great age for irony — shows that such a system is indeed workable, and it can provide Americans with a huge improvement in medical and financial security.
What about inequality? On that front, sad to say, the Big Deal falls very far short of the New Deal. Like F.D.R., Mr. Obama took office in a nation marked by huge disparities in income and wealth. But where the New Deal had a revolutionary impact, empowering workers and creating a middle-class society that lasted for 40 years, the Big Deal has been limited to equalizing policies at the margin.
That said, health reform will provide substantial aid to the bottom half of the income distribution, paid for largely through new taxes targeted on the top 1 percent, and the “fiscal cliff” deal further raises taxes on the affluent. Over all, 1-percenters will see their after-tax income fall around 6 percent; for the top tenth of a percent, the hit rises to around 9 percent. This will reverse only a fraction of the huge upward redistribution that has taken place since 1980, but it’s not trivial.
Finally, there’s financial reform. The Dodd-Frank reform bill is often disparaged as toothless, and it’s certainly not the kind of dramatic regime change one might have hoped for after runaway bankers brought the world economy to its knees.
Still, if plutocratic rage is any indication, the reform isn’t as toothless as all that. And Wall Street put its money where its mouth is. For example, hedge funds strongly favored Mr. Obama in 2008 — but in 2012 they gave three-quarters of their money to Republicans (and lost).
All in all, then, the Big Deal has been, well, a pretty big deal. But will its achievements last?
Mr. Obama overcame the biggest threat to his legacy simply by winning re-election. But George W. Bush also won re-election, a victory widely heralded as signaling the coming of a permanent conservative majority. So will Mr. Obama’s moment of glory prove equally fleeting? I don’t think so.
For one thing, the Big Deal’s main policy initiatives are already law. This is a contrast with Mr. Bush, who didn’t try to privatize Social Security until his second term — and it turned out that a “khaki” election won by posing as the nation’s defender against terrorists didn’t give him a mandate to dismantle a highly popular program.
And there’s another contrast: the Big Deal agenda is, in fact, fairly popular — and will become more popular once Obamacare goes into effect and people see both its real benefits and the fact that it won’t send Grandma to the death panels.
Finally, progressives have the demographic and cultural wind at their backs. Right-wingers flourished for decades by exploiting racial and social divisions — but that strategy has now turned against them as we become an increasingly diverse, socially liberal nation.
Now, none of what I’ve just said should be taken as grounds for progressive complacency. The plutocrats may have lost a round, but their wealth and the influence it gives them in a money-driven political system remain. Meanwhile, the deficit scolds (largely financed by those same plutocrats) are still trying to bully Mr. Obama into slashing social programs.
So the story is far from over. Still, maybe progressives — an ever-worried group — might want to take a brief break from anxiety and savor their real, if limited, victories.
By: Paul Krugman, Op-Ed Columist, The New York Times, January 20, 2013
“A Delusional One-Percenter”: The Case Against Mitt Romney
Every election is a choice between imperfect alternatives. I will examine both choices in turn, but the first one, Mitt Romney, has rendered the normal analytic tools useless. The different iterations of his career differ so wildly, yet comport so perfectly with his political ambitions of the moment, that it is simply impossible to separate his panders from his actual beliefs, the means from the ends. It is easy to present Romney’s constant reinventions as a character flaw, but all politicians tailor their beliefs to suit the moment; Romney’s unique misfortune is that he has had to court such divergent electorates — first a liberal general electorate in Massachusetts, then Republican primary voters of an increasingly rabid bent in 2008 and 2012, and finally America as a whole after securing the nomination.
One can plausibly imagine Romney as a genuine right-winger, first implanted in hostile deep blue territory, hiding his arch-conservative beliefs in order to secure the brass ring he coveted before he was liberated from running for reelection and unmasked himself to his fellow Republicans nationwide as the “conservative businessman” he always was. One can just as plausibly imagine him as his father’s true political heir, covertly plotting to move his party sharply leftward, a turn he would execute only once he had burrowed undetected beneath its ideological perimeter.
The true picture is a mystery, probably lying somewhere between these points. Undoubtedly, what Romney believes in above all is himself. As a friend of his told Politico last month, at a moment when his campaign appeared hopeless, Romney approaches politics like a business deal: “Just do and say what you need to do to get the deal done, and then when it’s done, do what you know actually needs to be done to make the company a success.” (This was the reporters’ paraphrase, not the friend’s own words.)
He meant this not in the spirit of exposing Romney’s fraudulence, but in an elegiac way — a lament for a great man who would do good if only given a chance. From a certain perspective, there is an understandable and even admirable elitism at work. Romney truly believes in his own abilities and — unlike George W. Bush, who was handed every professional success in his life — has justification for his confidence. He is a highly intelligent, accomplished individual.
Some version of Romney’s own fantasy — that, once in office, he will craft sensible and data-driven, and perhaps even bipartisan, solutions to our problems — surely accounts for his political resurrection. Starting with the transformative first presidential debate, Romney has wafted the sweet, nostalgic scent of moderate Republicanism into the air. Might he offer the sort of pragmatic leadership that was the hallmark of his party in a bygone era — a George H.W. Bush, a second-term Reagan, an Eisenhower, a Nixon minus the criminal paranoia? Some moderates supporting him, like reformist conservative Ross Douthat or the Des Moines Register editorial board, have filled the many voids of Romney’s program with some version of this fantasy. It is an attractive scenario to many, and one worth considering seriously.
This hopeful vision immediately runs into a wall of deductive logic. If Romney were truly planning to govern from the center, why would he leave himself so exposed to Obama’s attacks that he is a plutocrat peddling warmed-over Bushonomics? The election offers Romney his moment of maximal leverage over his party’s right-wing base. If he actually wanted to cut a budget deal along the lines of Bowles-Simpson, or replace Dodd-Frank with some other way of preventing the next financial crisis, or replace Obamacare with some other plan to cover the uninsured, there would be no better time to announce it than now, when he could sorely use some hard evidence of his moderation. He has not done so — either because he does not want to or because he fears a revolt by the Republican base. But if he fears such a revolt now, when his base has no recourse but to withhold support and reelect Obama, he will also fear it once in office, when conservatives could oppose him without making their worst political nightmare come true as a result.
And so the reality remains that a vote for Romney is a vote for his party — a party that, by almost universal acclimation, utterly failed when last entrusted with governing. Romney may be brainier, more competent, and more mentally nimble than George W. Bush. But his party has, unbelievably, grown far more extreme in the years since Bush departed. Unbelievable though it may sound to those outside the conservative movement, conservative introspection into the Bush years has yielded the conclusion that the party erred only in its excessive compassion — it permitted too much social spending and, perhaps, cut taxes too much on the poor. Barely any points of contact remain between party doctrine and the consensus views of economists and other experts. The party has almost no capacity to respond to the conditions and problems that actually exist in the world.
Economists have coalesced around aggressive monetary easing in order to pump liquidity into a shocked market; Republicans have instead embraced the gold standard and warned incessantly of imminent inflation, undaunted by their total wrongness. In the face of a consensus for short-term fiscal stimulus, they have turned back to ancient Austrian doctrines and urged immediate spending cuts. In the face of rising global temperatures and a hardening scientific consensus on the role of carbon emissions, their energy plan is to dig up and burn every last molecule of coal and oil as rapidly as possible. Confronted by skyrocketing income inequality, they insist on cutting the top tax rate and slashing — to levels of around half — programs like Medicaid, food stamps, and children’s health insurance. They refuse to allow any tax increase to soften the depth of such cuts and the catastrophic social impact they would unleash.
The last element may be the most instructive and revealing. The most important intellectual pathology to afflict conservatism during the Obama era is its embrace of Ayn Rand’s moral philosophy of capitalism. Rand considered the free market a perfect arbiter of a person’s worth; their market earnings reflect their contribution to society, and their right to keep those earnings was absolute. Politics, as she saw it, was essentially a struggle of the market’s virtuous winners to protect their wealth from confiscation by the hordes of inferiors who could outnumber them.
Paul Ryan, a figure who (unlike Romney) commands vast personal and ideological loyalty from the party, is also its most famous Randian. He has repeatedly praised Rand as a visionary and cited her work as the touchstone of his entire political career. But the Randian toxin has spread throughout the party. It’s the basis of Ryan’s frequently proclaimed belief that society is divided between “makers” and “takers.” It also informed Romney’s infamous diatribe against the lazy, freeloading 47 percenters. It is a grotesque, cruel, and disqualifying ethical framework for governing.
Naturally, this circles us back to the irrepressible question of what Romney himself actually believes. The vast industry devoted to exploring the unknowable question of Romney’s true beliefs has largely ignored a simple and obvious possibility: That Romney has undergone the same political and/or psychological transformation that so many members of his class have since 2009. If there is one hard fact that American journalism has established since 2009, it is that many of America’s rich have gone flat-out bonkers under President Obama. Gabriel Sherman first documented this phenomenon in his fantastic 2009 profile in this magazine, “The Wail of the 1%,” which described how the financial elite had come to see themselves as persecuted, largely faultless targets of Obama and their greedy countrymen. Alec MacGillis and Chrystia Freeland have painted a similar picture.
The ranks of the panicked, angry rich include Democrats as well as Republicans and elites from various fields, but the most vociferous strains have occurred among the financial industry and among Republicans. All this is to say, had he retired from public life after 2008, super-wealthy Republican financier Mitt Romney is exactly the kind of person you’d expect to have lost his mind, the perfect socioeconomic profile of a man raging at Obama and his mob. Indeed, it would be strange if, at the very time his entire life had come to focus on the goal of unseating Obama, and he was ensconced among Obama’s most affluent and most implacable enemies, Romney was somehow immune to the psychological maladies sweeping through his class.
Seen in this light, Romney’s belief in himself as a just and deserving leader is not merely a form of personal ambition free of ideological content. His faith in himself blends seamlessly into a faith in his fellow Übermenschen — the Job Creators who make our country go, who surround him and whose views shaped his program. To think of Romney as torn between two poles, then, is a mistake. Both his fealty to his party and his belief in his own abilities point in the same direction: the entitlement of the superrich to govern the country.
By: Jonathan Chait, Daily Intel, October 31, 2012
“Unconnected To A Concern With The Truth”: Mitt Romney’s Implausible Bid For The High Road
Politics is tough, and most politicians—including President Obama—are willing to bend the truth to win an election. But there’s a difference between the small distortions of all campaigns, and the brazen dishonesty we’re seeing from Romney. In a 48-hour period, Mitt Romney has doubled-down on the false charge that Obama has ended work requirements for welfare, lied about the Affordable Care Act’s Medicare cost savings, and kicked up a storm over comments made by Vice President Joe Biden. That last one is noteworthy for the sheer chutzpah of Romney’s complaint.
During an event in Danville, Virginia (pronounced Dan-vul) with African-American supporters of the president, Biden deployed somewhat unfortunate language in attacking Romney’s promised repeal of financial reform:
“Romney wants to let the — he said the first 100 days — he’s gonna let the big banks once again write their own rules. Unchain Wall Street,” Biden said at an event in Danville, Va. “They gonna put y’all back in chains.”
“Unchain” was a reference to Paul Ryan’s promise to “unshackle” the economy by repealing financial regulations and health care reform. And while Biden’s message is clear, it’s probably wise to avoid an allusion to slavery when talking to an audience of black people. Even still, it’s not a huge deal.
Wrong.
Team Romney wasted no time in jumping on the vice president’s rhetoric. “Well, there’s going to be folks across the country that will try and take that as some kind of code word that is going to suggest that the Republicans are trying to be racial in their programs,” said former New Hampshire governor John Sununu. Yesterday evening, while campaigning in Ohio, Romney referenced Biden’s remarks, attacking the Obama campaign for its “divisive” campaign:
“This is what an angry and desperate presidency looks like. President Obama knows better, promised better, and America deserves better,” Romney told a roaring crowd of about 5,000 supporters in Chillicothe. “His campaign strategy is to smash America apart and then try to cobble together 51 percent of the pieces. If an American president wins that way, we all lose.”
Romney added, “Mr. President, take your campaign of division and anger and hate back to Chicago and let us get about rebuilding and reuniting America.”
It’s hard to take this seriously. As I said earlier, Romney began this week with two huge whoppers. In an ad called “Long History,” Romney repeats the charge that Obama has ended welfare’s work requirements, “On July 12th, Obama quietly ended work requirements for welfare. You wouldn’t have to work, and wouldn’t have to train for a job.” Romney used this line last week, and was promptly denounced for his mendacity, and not just from the usual collection of fact-checkers; both Ron Haskins (who built welfare reform) and Bill Clinton (who signed it) weighed in to dispute Romney’s claim, which Clinton called “not true.”
The most disgraceful thing about Romney’s welfare attack—which he continues to use—is that it’s an obvious ploy to associate Obama with “handouts.” Welfare is one of the most racialized issues in American politics, and Romney’s attacks are a clear callback to the “welfare queens” and “young bucks” that punctuated Ronald Reagan’s rhetoric. It’s only a little more subtle than Newt Gingrich’s declaration that Obama is a “food stamp” president, and serves a similar purpose: to erode Obama’s standing among white voters who reflexively oppose anything that might hand benefits to the “undeserving.”
The same idea (and goal) underlies Romney’s attacks on the Medicare savings in the Affordable Care Act—“The money you paid for guaranteed health care is now going to a massive government program, that’s not for you.” With the backdrop of a white senior, the message of this ad is plain to see: Obama is giving your tax dollars to minorities.
(Since this is bound to inspire protest from readers, I will point you in the direction of research detailing the tight connection between racial attitudes and support for government programs.)
This is why it’s hard to stomach Romney’s complaints about “anger” and “divisiveness”; they come less than two days after he has renewed his attempt to split white voters from Obama with tired tropes about the undeserving poor. And when you look at the whole of his general-election campaign—which includes regular attacks on Obama’s fictional “apology tour,” and routine lies about his job-creation record—there’s no way in which Romney is in a position to take the high road.
Philosopher Harry Frankfurt famously defined “bullshit” as a statement made without regard to its truth value. Whether it’s true or false is irrelevant—the point is to persuade. “[B]ullshitters seek to convey a certain impression of themselves without being concerned about whether anything at all is true.”
If this doesn’t describe Mitt Romney, I’m not sure what does.
By: Jamelle Bouie, The American Prospect, August 15, 2012
“Why We Regulate”: The Arrogance Of Wall Street And The Lessons Of History
One of the characters in the classic 1939 film “Stagecoach” is a banker named Gatewood who lectures his captive audience on the evils of big government, especially bank regulation — “As if we bankers don’t know how to run our own banks!” he exclaims. As the film progresses, we learn that Gatewood is in fact skipping town with a satchel full of embezzled cash.
As far as we know, Jamie Dimon, the chairman and C.E.O. of JPMorgan Chase, isn’t planning anything similar. He has, however, been fond of giving Gatewood-like speeches about how he and his colleagues know what they’re doing, and don’t need the government looking over their shoulders. So there’s a large heap of poetic justice — and a major policy lesson — in JPMorgan’s shock announcement that it somehow managed to lose $2 billion in a failed bit of financial wheeling-dealing.
Just to be clear, businessmen are human — although the lords of finance have a tendency to forget that — and they make money-losing mistakes all the time. That in itself is no reason for the government to get involved. But banks are special, because the risks they take are borne, in large part, by taxpayers and the economy as a whole. And what JPMorgan has just demonstrated is that even supposedly smart bankers must be sharply limited in the kinds of risk they’re allowed to take on.
Why, exactly, are banks special? Because history tells us that banking is and always has been subject to occasional destructive “panics,” which can wreak havoc with the economy as a whole. Current right-wing mythology has it that bad banking is always the result of government intervention, whether from the Federal Reserve or meddling liberals in Congress. In fact, however, Gilded Age America — a land with minimal government and no Fed — was subject to panics roughly once every six years. And some of these panics inflicted major economic losses.
So what can be done? In the 1930s, after the mother of all banking panics, we arrived at a workable solution, involving both guarantees and oversight. On one side, the scope for panic was limited via government-backed deposit insurance; on the other, banks were subject to regulations intended to keep them from abusing the privileged status they derived from deposit insurance, which is in effect a government guarantee of their debts. Most notably, banks with government-guaranteed deposits weren’t allowed to engage in the often risky speculation characteristic of investment banks like Lehman Brothers.
This system gave us half a century of relative financial stability. Eventually, however, the lessons of history were forgotten. New forms of banking without government guarantees proliferated, while both conventional and newfangled banks were allowed to take on ever-greater risks. Sure enough, we eventually suffered the 21st-century version of a Gilded Age banking panic, with terrible consequences.
It’s clear, then, that we need to restore the sorts of safeguards that gave us a couple of generations without major banking panics. It’s clear, that is, to everyone except bankers and the politicians they bankroll — for now that they have been bailed out, the bankers would of course like to go back to business as usual. Did I mention that Wall Street is giving vast sums to Mitt Romney, who has promised to repeal recent financial reforms?
Enter Mr. Dimon. JPMorgan, to its — and his — credit, managed to avoid many of the bad investments that brought other banks to their knees. This apparent demonstration of prudence has made Mr. Dimon the point man in Wall Street’s fight to delay, water down and/or repeal financial reform. He has been particularly vocal in his opposition to the so-called Volcker Rule, which would prevent banks with government-guaranteed deposits from engaging in “proprietary trading,” basically speculating with depositors’ money. Just trust us, the JPMorgan chief has in effect been saying; everything’s under control.
Apparently not.
What did JPMorgan actually do? As far as we can tell, it used the market for derivatives — complex financial instruments — to make a huge bet on the safety of corporate debt, something like the bets that the insurer A.I.G. made on housing debt a few years ago. The key point is not that the bet went bad; it is that institutions playing a key role in the financial system have no business making such bets, least of all when those institutions are backed by taxpayer guarantees.
For the moment Mr. Dimon seems chastened, even admitting that maybe the proponents of stronger regulation have a point. It probably won’t last; I expect Wall Street to be back to its usual arrogance within weeks if not days.
But the truth is that we’ve just seen an object demonstration of why Wall Street does, in fact, need to be regulated. Thank you, Mr. Dimon.
By: Paul Krugman, Op-Ed Columnist, The New York Times, May 13, 2012
Share This Blog
Unknown Feed- An error has occurred; the feed is probably down. Try again later.
mykeystrokes.com 