Two little birds have told me that Rick Perry will not be the Republican nominee because an undefined "something" is going to come out soon. When the first bird said this, I shrugged. When the second said much the same thing, I started to wonder what that "something" might be.

Neither bird told me to look into a possible sex scandal, but that possibility seemed the logical starting point. What else could it be? Republicans don't care about financial scandals, at least not when one of their own is involved. All that their tiny little brains can comprehend is Gawd and misplaced wee-wees.

So I hit Google. Turns out there's a whole world of rumor out there. Start here.

Basically, what we have are two sets of allegations: Either Perry has slept with some very curvaceous strippers and hookers, or he has slept with men. Or both.

A strange accuser. The rumors are being stoked by a Ron Paul operative named Robert Morrow, who runs something he calls the "Committee Against Sexual Hypocrisy," which has an amusing acronym. CASH took out an ad in the Austin Chronicle:

"Are you a stripper, an escort, or just a young "hottie" impressed by an arrogant, entitled governor of Texas? Contact CASH and we will help you publicize your direct dealings with a Christian-buzzwords spouting family values hypocrite and fraud."

Morrow delineates his findings here. (Also here.)

I had an attractive stripper tell me about her direct dealings with Rick Perry. She said that she was attempting a Monica Lewinsky-type act upon Gov. Rick Perry (oral sex) but that in her words Perry was “too coked up” to perform sexually! When it came time for the stripper to leave, Perry gave her an outrageous amount of money, so large in fact that it probably means that Perry is taking cash bribes or illegal gifts to fund his extracurricular activities. Perry is not a rich man and I doubt he is spending that much of his own money on the women. (Actually sweetheart real estate deals have made the man unusual money.)

Another young woman, who has had direct dealings with Perry’s enabling entourage, told me that Perry is especially flagrantly adulterous when he goes on the road. She said that Perry has sex with the “young hotties” and that Perry and his entourage are literally having orgies in his hotel room. They are either calling escort services or picking up “young hotties” impressed by an arrogant, entitled governor of Texas.

And so on. It's all very droll. None of it, alas, is backed by someone willing to go on the record. At least -- not so far.

Morrow, Morrow...where have I heard that name before? His Facebook page is here. If we visit that page, we will find...

Oh no. No no no. JFK assassination stuff.

First, let's clear up a possible source of confusion. There are two Robert Morrows in JFK-land. I do not know if they are related; probably not.

The first was a CIA operative named Robert D. Morrow, born in 1930, who wrote two books about the JFK assassination in which he claimed to be an indirect participant. These books (Betrayal, 1976, and First Hand Knowledge, 1992) are clever disinformation, mixing little-known spook stuff with utter nonsense (and weird misspellings).

The other Robert Morrow -- Robert P. Morrow, the one we are dealing with here -- has loudly claimed that the assassination was engineered by LBJ. Morrow also asserts that the real mastermind was Poppy Bush. The "blame GHWB" scenario has become very popular among the libertarian conspiracist types, as represented by Alex Jones.

The LBJ theory has one fatal flaw: LBJ is on record as dissing the Warren Commission.

The latter-day "Bush diddit" nonsense is demolished by Jim DiEugenio in a talk given here.

Here's where things can get confusing, especially for Democrats and liberals. When libertarians become conspiracy theorists, they often have a tendency to demonize the Bush clan, because that clan represents a competing faction within conservatism. Problem is, the Bushes have actually done a lot of shit which both liberals (such as moi) and libertarians (detested by moi) would consider demonic.

Bottom line: Tread carefully in these realms. As I always counsel, the enemy of your enemy is not necessarily your friend. And if the enemy of your enemy is (like Robert P. Morrow) a friend to Ron Paul -- watch yer ass.

Although I think that a right-wing conspiracy killed JFK, this latter-day "Bush diddit" bullshit is infuriating. Nevertheless: The fact that I don't agree with RPM (may I call him that?) on the JFK thing does not necessarily mean that he is wrong about Perry. I just can't help wishing that we had a source on this that makes me feel more comfortable.

RPM seems to have an affection for photos of large-breasted lasses in various states of un- and semi-dress. He also claims to be a lover of both men and women. Maybe the P stands for priapic.

All of which brings us back to Rick Perry. You may have noticed that we don't really have anything on him yet, do we?

All we have done so far is demonstrate that his chief accuser is an odd duck -- a guy who likes both other guys and curvy B-girls. And he accuses Perry of liking both other guys and curvy B-girls. That's a bit suspicious right there.

Oddly enough, Morrow is not the source for most of the "Gay Perry" stories you'll find out there. Here, for example.

Stories about Perry’s alleged homosexuality are nothing new in the Lone Star State – dating back to the 1980s when he was first elected to the Texas House of Representatives. The rumors first hit the national radar in 2009 during his gubernatorial primary campaign against U.S. Sen. Kay Bailey Hutchinson. Perry wasn’t directly accused of being gay during that election, but Hutchinson’s website curiously included the term “Perry gay” in its website coding.

There never was a good explanation for that. I think someone on Hutchinson's staff caught wind of something.

Perry has railed against gay marriage, has compared homosexuality to alcoholism, and has hobnobbed with militantly anti-gay religious freak David Barton. So any gay hook-ups in his past would mark him as one of history's more audacious hypocrites.

The other noted source on the "Gay Perry" front is blogger Mike Stark.

As I began looking into this, I repeatedly heard detailed rumors of a past gay relationship between the Governor and his former Secretary of State, Geoff Connor. A version of this story included Perry’s wife, Anita, catching Connor and Perry in the act and screaming at him the next day from her office phone. The most common retelling has it that the Governor was caught, struck a quick (and expensive) deal with his wife that allowed him to avoid an immediate trip to divorce court, and swore everyone involved to secrecy.

I also learned of a new rumor making the rounds. Several sources told me they had heard that the Governor is in a current gay relationship with one of the two (male) chefs that Perry he keeps on staff at the tax-payer funded ($10,000 a month) temporary governor’s mansion.

Maddening. As with Morrow, no-one will go on the record.

Mike Stark is not another Robert Morrow. Stark has written some good stuff. This (for example) is on Kos, and you know how I feel about Kos. But it's still good stuff.

Is it possible that Stark is onto something?

I heard rather similar "gay" reports from a Republican source when Mike Huffington (Arianna's ex) was running for senator. Those rumors turned out to be based on fact. That's the thing about Republicans: When they start looking into tales of other Republicans who may or may not be guilty of wee-wee misplacement, they can do some pretty tenacious snooping.

If my little birds weren't making coy reference to the Perry sex rumors -- then what were they tweeting about?

Hypocrisy watch: I'm on record as saying that I don't think political careers should hinge or hang on sex scandals. I never wanted Mark Foley to resign, for example -- although I did get plenty of snickers from his travails. And back in 2008, I knew a little something about a certain someone that, if revealed, might have prevented Obama from taking the oath of office. I didn't reveal what I knew because, even though I would have (marginally) preferred a McCain win, I didn't want him to win that way.

So why a post about the Perry rumors? Am I being hypocritical?

No. Our business here is not moral judgment but prediction.

The question is: Will Perry be the GOP nominee? The factors that matter to Republican primary voters are not necessarily factors that I personally would give a rat's ass about. Permalink

The Blair Witch project: Tony Blair is the godfather to Rupert Murdoch's young daughter.

Murdoch's third wife, Wendi Deng, who let slip the information in an interview with Vogue, described Blair as one of Rupert's closest friends. Blair's account of the relationship in his memoirs is somewhat different, portraying Murdoch as the big bad beast, who won his grudging respect. That is clearly disingenuous. As other memoirs and diaries from the Blair period are published, we see how close Murdoch was to the prime minister and the centre of power when really important decisions, such as the Iraq invasion, were being made.

For the longest time -- even after the Iraq invasion -- I tried to convince myself that Blair wasn't such a bad fellow. He reminded me of Bill Clinton, at least at first. Now he reminds me of Obama: The man who ruined his party.

Come to think of it: Maybe Blair provided the Obama template...?

"The name's Cole. Juan Cole." Juan Cole has worked for the CIA, or at least has offered consultations to the Agency.

This is not to claim that Cole is on a mission for the CIA to convince the left to support the imperial wars, most notably at the moment the war on Libya. Nor is this a claim that the revelation about the White House seeking information on Cole was a contrived psyops effort to rehabilitate Cole so that he could continue such a mission. That cannot be claimed, because there is as yet no evidence for it. But information flows two ways in any consultation, and it is even possible that Cole was being loaded with war-friendly information in hopes he would transmit it.

We shall see. I'm not sure what to make of this right now. For one thing: It is, in fact, a matter of some dispute as to whether or not the CIA favored the invasion of Iraq in the first place.

The end of Wikileaks? I was going to offer a shorter version of this affair, and may yet do so. But you would do better to read this history of the Great Wikileaks Fuckup in Der Spiegel. It's in English, and it's a gripping read.

Once you've devoured that piece, you may agree with my view that it is a bit silly to harp on Guardian writer David Leigh for publishing the password to that fabled (and still largely unexplored) treasure trove of secret cables. Leigh has made clear that he was told that the password would be good for only a limited time -- maybe hours, maybe days.

That said, it is obvious that he didn't need to publish any password. I think Leigh was going for writerly verisimilitude and went too far.

Leigh is a good writer, so I'm willing to cut him so slack. I was very impressed with his work on the Wilson plot.

Unbeknownst to him, Daniel Domscheit-Berg -- a former Assange associate -- put the whole secret file onto bittorrent, and let it be known that the thing could be opened with the password published in Leigh's book. Once the file was on bittorrent, it could not be called back.

The question now is whether Domscheit-Berg (who has founded his own version of Wikileaks) is a spook of some sort. Assange, from what I've been told, seems to think so.

Note that Domscheit-Berg redacted material about the Bank of America and various neo-Nazi groups in Europe -- but he allowed dissemination of raw State Department cables revealing the names of sources and informants. (Previously, Assange has usually been pretty good about redacting that stuff.)

Sources and informants will now think twice before talking to U.S. personnel. So, yeah, Assange got screwed -- but the U.S. got screwed much worse. And the screw-ER, in this case, was not Julian Assange.

Yet the Nazis and the B of A were protected.

Anyone who trusts DomScheisse-Berg and his new "OpenLeaks" operation is an idiot. Deutschland, Deutschland, ueber Alles...

(By the way: I am positive that poor Bradley Manning did not make those cables available. But don't be surprised if he one day so confesses.) Permalink

Normally, I save non-political posts for the weekend. Here is a small exception.

Artists understand if you dicker over the price of a painting. We all want bargains.

But if you acquire the work for less than the artist asks, and if you later run into that artist, do not -- do NOT -- brag about how much you spent on the frame. The artist will not be flattered.

That is all. Permalink

First, let's talk about the stimulus. Propagandists have convinced many that Obama tried a "socialist" approach which failed. But -- as even David Frum has pointed out --

Americans wonder: "Where's our Hoover Dam? Where's our East River Drive?"

Frum raises a fair point: What did we get for the stimulus outlay?

In fact, the stim package was much smaller than most believe. Propagandists have misled the public into confusing the stimulus with the much larger bank bailout, which was and is unpopular.

From an excellent piece by "albrt" in Corrente and Kos:

The most visible effect of the 2009 Obama stimulus package was to discredit the idea that the government in general, and the Obama administration in particular, could do anything effective about the economy.

President Obama believes the federal government literally cannot create jobs in any meaningful way:

So when I took office, I put in place a plan -- an economic plan to help small businesses. And we were guided by a simple idea: Government can’t guarantee success, but it can knock down barriers to success, like the lack of affordable credit. Government can’t replace -- can’t create jobs to replace the millions that we lost in the recession, but it can create the conditions for small businesses to hire more people, through steps like tax breaks.

That’s why we cut taxes for small businesses eight times.

Yet small business is in a bad way, due to lack of demand. (Not due to over-regulation, although the propagandists would have you so believe.) Moral of the story: Tax cuts don't work. Tax cuts don't work. Tax cuts don't work.

Nevertheless, much of the stim package went to tax cuts. Another big chunk went to keep the hard-hit states afloat. Another big chunk went to keep unemployment checks rolling. Very, very little went to the creation of jobs.

"Socialism"? Hardly.

Do you remember the phrase "shovel-ready"?

In late 2008 and early 2009, there was much discussion of the need for "shovel-ready" jobs on which to spend the stimulus money. The phrase indicated that Obama wanted to spend only on temp solutions, not on long-term job creation.

Ultimately, the only jobs that were "shovel-ready" involved infrastructure maintenance, which needed doing anyways. There was no new TVA or WPA or Hoover Dam or anything like that.

Why the emphasis on "shovel-ready" employment? Because anyone in government who thinks in the long term will be damned as a godless Bolshie.

If that's the case, then the Lexus is a MarxMobile.

Whenever the words "socialist" and "automobile" appear in the same sentence, people usually picture ugmo vehicles like the Lada or the Yugo. They don't think about the Lexus.

Newsflash: Toyota and the other Asian auto giants would not be what they are today without what the tea partiers would call "socialism."

Of course, back in the day, few used that term as freely as people do nowadays. "Socialism," in the 1950s, had a more restrictive meaning: The word usually referred to a direct government takeover of the means of production. It did not refer to government partnership -- direct or indirect -- with a private enterprise.

Toyota used to make looms. They still do. Without "socialism" (in quotes), the company might be doing little else. More likely, Toyota would be non-existent.

According to Wikipedia, sale of a loom patent to a British firm gave Toyota, then called Toyoda, the start-up capital to get into the auto business. They came out with their first car in 1936.

The libertarians would have you believe that the story ends there. But there's more.

Toyota was not a particularly successful car-maker at first. The product was sold only in the domestic market. Everyone laughed at the idea of marketing a Japanese car in the United States. If you are as old as I am, you can recall a time when "Made in Japan" was synonymous with "Cheap crap."

In the 1950s, Japan was in severe straits, having just come out on the wrong end of a big, bad, expensive war. The country did not have a whole lot of natural resources. But the Japanese had one huge advantage: Nobody making decisions gave a fuck about anything said by the disciples of Ayn Rand, Milton Friedman, or Friedrich Hayek.

The Japanese government decided that they had to think long-term. Forget "shovel-ready."

The story is best told by Ha-Joon Chang in his book Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism.

Once upon a time, the leading car maker of a developing country exported its first passenger cars to the US. Up to that day, the little company had only made shoddy products – poor copies of quality items made by richer countries. The car was nothing too sophisticated – just a cheap subcompact (one could have called it ‘four wheels and an ashtray’). But it was a big moment for the country and its exporters felt proud.

Unfortunately, the product failed.Most thought the little car looked lousy and savvy buyers were reluctant to spend serious money on a family car that came from a place where only second-rate products were made. The car had to be withdrawn from the US market. This disaster led to a major debate among the country’s citizens.

Many argued that the company should have stuck to its original business of making simple textile machinery. After all, the country’s biggest export item was silk. If the company could not make good cars after 25 years of trying, there was no future for it. The government had given the car maker every opportunity to succeed. It had ensured high profits for it at home through high tariffs and draconian controls on foreign investment in the car industry. Fewer than ten years ago, it even gave public money to save the company from imminent bankruptcy. So, the critics argued, foreign cars should now be let in freely and foreign car makers, who had been kicked out 20 years before, allowed to set up shop again.

Others disagreed. They argued that no country had got anywhere without developing ‘serious’ industries like automobile production. They just needed more time to make cars that appealed to everyone.

The year was 1958 and the country was, in fact, Japan. The company was Toyota, and the car was called the Toyopet. Toyota started out as a manufacturer of textile machinery (Toyoda Automatic Loom) and moved into car production in 1933. The Japanese government kicked out General Motors and Ford in 1939 and bailed out Toyota with money from the central bank (Bank of Japan) in 1949. Today, Japanese cars are considered as ‘natural’ as Scottish salmon or French wine, but fewer than 50 years ago, most people, including many Japanese, thought the Japanese car industry simply should not exist.

However, the fact is that, had the Japanese government followed the free-trade economists back in the early 1960s, there would have been no Lexus. Toyota today would, at best, be a junior partner to some western car manufacturer, or worse, have been wiped out. The same would have been true for the entire Japanese economy. Had the country donned Friedman’s Golden Straitjacket early on, Japan would have remained the third-rate industrial power that it was in the 1960s, with its income level on a par with Chile, Argentina and South Africa – it was then a country whose prime minister was insultingly dismissed as ‘a transistor-radio salesman’ by the French president, Charles De Gaulle. In other words, had they followed Friedman’s advice, the Japanese would now not be exporting the Lexus but still be fighting over who owns which mulberry tree.

(Those who decry the recent bailout of General Motors never tell you that Toyota once received a similar aid package.)

We are now in bad straits. Not just America: The entire world. The virus of neo-liberal economic thinking has thrust us into a new Depression.

In order to get out of this ditch, we need to start thinking the way Japan thought in the 1950s. Alas, the national ideology -- and our fear of "socialism" -- prevents us from doing so.

Suppose that, instead of concentrating on the "shovel-ready," Obama had told the country: "We are going to invest our resources in a Great Whatzit. And we are going to work with private enterprise to create this Whatzit." The Whatzit might have been a high-tech source of alternative energy, a new type of car, massive infrastructure investment, faster-than-light spaceships, chewing gum that gives people orgasms -- anything. As long as the result was plenty of American jobs, I would have been pro-Whatzit.

What would have happened had we embarked on a great Whatzit adventure?

Well, we would have heard shrieks of "Socialism!" from the Randroids and the Murdochians. Of course, we heard those shrieks anyways -- so, like, same diff.

Night after night, the talking heads on Fox News would have denounced the Whatzit as a boondoggle. No matter how efficiently the enterprise was run, they would scream about all the wasted money.

Remember, Toyota came out with its first car in 1936 and did not have an internationally successful product until the 1960s. A Whatzit cannot succeed unless the people running Whatzit Inc. are allowed to think long term. Often, they can't think that way unless Uncle has their back.

Unfortunately, laissez-faire capitalists increasingly do not, cannot think long-term.

One of the main lessons we glean from the many books about the Wall Street debacle is that the people running AIG and the great investment houses made decisions that endangered their firms. Why should they have cared whether the firms survived? As long as you are able to stash a few hundred million in an off-shore account now, why think about whether your company survives another five or ten or twenty years?

The same problem assails what is left of American manufacturing, as this remarkably good piece in Naked Capitalism demonstrates.

We need a government that has the ideological breathing room to set a goal, to decide what America's next Great Whatzit will be. The Randroids and the Freidmanites always tell us that government cannot do this. They are wrong. The capitalists have proven that they cannot think ahead.

Politicians must work with capitalists, and all parties must think long term. If a product fails -- and those initial Toyota products failed spectacularly -- everyone must keep trying.

More than that: There must be political control of the company owners and managers. Obscene CEO compensation must be tamed. Managers and owners cannot be allowed to bleed the firm dry for a quick personal profit. The purpose of a business enterprise is to create goods and services and to provide jobs over the long term -- not to give sharks an excuse to make a quick kill.

Can we do this? Of course. Japan did it. So did Germany. That's why the Germans are selling a bunch of really well-made high-end stuff to China.

Only one thing is stopping us: Ideology.

The libertarian conspiracy is killing us.
Permalink

In today's must-read piece, Salon writer Matt Stoller makes the case against Obama and for an intra-party primary battle:

Obama has ruined the Democratic Party. The 2010 wipeout was an electoral catastrophe so bad you'd have to go back to 1894 to find comparable losses. From 2008 to 2010, according to Gallup, the fastest growing demographic party label was former Democrat. Obama took over the party in 2008 with 36 percent of Americans considering themselves Democrats. Within just two years, that number had dropped to 31 percent, which tied a 22-year low.

If would be one thing if Obama were failing because he was too close to party orthodoxy. Yet his failures have come precisely because Obama has not listened to Democratic Party voters. He continued idiotic wars, bailed out banks, ignored luminaries like Paul Krugman, and generally did whatever he could to repudiate the New Deal. The Democratic Party should be the party of pay raises and homes, but under Obama it has become the party of pay cuts and foreclosures. Getting rid of Obama as the head of the party is the first step in reverting to form.

They're singing the song we've been singing since before this presidency began.

Can a fresh Democratic nominee win? I doubt it. But I have even stronger doubts that Obama can prevail. This much is certain: Whether Obama wins or loses in 2012, the Democratic party will fall by the wayside if it does not remake itself. The way to start that process is for true Dems to point to Obama and say: This man does not represent us.

As for many, the last few years have shattered my faith in the political process. Obama has basically endorsed every major plank of George Bush's administration, yet Democrats still grant their approval. What we're finding out is that Obama's pathologically pro-establishment and conflict-averse DNA was funded by party insiders and embraced by liberal constituency groups in 2008 for a reason.

This last comment by Stoller indicates that he too is wondering what the hell happened in 2008.

In that light, let's look at one Salon reader's reaction to Stoller:

I thought the left were the smart ones, immune to advertising and catchy meaningless memes. So gullible you were, so easily led astray. Now tell us again how intellectually superior liberals are.

2008 -- like 1968 -- is one of those years that will haunt the country forever. What hit us? One day (I suspect), we'll learn about some behind-the-scenes shit that may now seem hard to believe.

Oh -- and you'll also want to check out this Hillary-v-Obama poll in the Orange County Register. The reader comments are pretty interesting.

Speaking of history: Stoller writes: "The 2010 wipeout was an electoral catastrophe so bad you'd have to go back to 1894 to find comparable losses."

In 2010, the Republicans gained 63 seats in the House. In 1912, the Democrats gained 61 seats. That, I think, is comparable.

Then again: Any election would be "comparable" to any other election. In fact, anything anywhere is comparable to anything else -- yes, apples are comparable to oranges. I've said it before and I'll say it again: I wish people would look up the meaning of the word "compare" -- and I wish writers would stop using the word "comparable" when they mean "similar."

Only Dejah Thoris of Mars is incomparable.
Permalink

Via Daily PUMA, I learned about a new piece of "investigative reporting" published on this site. What we're dealing with here is an alleged pro-Hillary blog which was originally called Pumas Unleashed; it is now known as God Bless America. Today's installment features an alleged interview with an alleged (anonymous) Wall Street insider who talks about what an "empty shell" Obama is.

Bullshit like this makes me almost feel sympathetic to Obama -- and I say that as someone who thinks that President O is one of the worst things ever to happen to the Democratic party.

Bottom line: This interview is an obvious hoax. This thing is pure Republican propaganda, a fake so thuddingly unsubtle that even Karl Rove would be ashamed to claim it as his own.

Ulsterman: But wouldn’t you say this particular administration has been more aggressive against Wall Street? Much more aggressive?

Wall Street: (pause) Yes. Yes they have.

Ulsterman: Why is that? Why has the Obama administration been so tough on Wall Street? Banks? Investment institutions?

Wall Street: Politics. Same old game. Nothing new really – just the…intensity of it.

Oh right. Surrrre. We're supposed to believe not only that this President has used Wall Street as a punching bag, but that every President does likewise to those poor, poor bankers. As opposed to, you know, coddling the investment bankers in order to garner campaign contributions.

On General Motors:

The bond holders were pushed aside – illegally mind you, totally without legal basis… and the keys to that company handed over to the labor union. I am going to remain calm…trying to remain – respectful…but what happened at that time was…it should have never happened. Never. Not in this country. Venezuela perhaps – but not here.

Well, need I go on? These are not the actual ramblings of an actual Wall Street guy. The whole thing is as bogus as the Protocols of the Learned Elders of Zion or Silent Weapons for Secret Wars.

The same can be said for the site as a whole. Although the people running the joint claim to be huge fans of Hillary Clinton, all of the links in their blogroll go to conservative sites.

Another story pushed by God Bless America features this absurd title: "Obama will threaten Race Riots to Win… Big F-You to White America..." The "proof" comes in the form of yet another fake interview with yet another fake insider. And still another fake interview plumps for Jerome Corsi and Birtherism. (If you read the piece, you'll see that the writer who engineered this fake probably does not himself buy into that Birther crap -- but he doesn't mind if gullible, low-IQ readers get hooked into that nonsense.)

We've seen this kind of deception operation before. There was one fake "pro-Hillary" site that even accused Cannonfire of taking payments from the dreaded George Soros. (I'm also reminded of the "Voice of the White House" fakery published by TBR "News.")

If you opposed Obama in 2008, if you yearn for a Democratic challenger in 2012 -- be careful. Be ultra-careful. Republican operatives are out to play you for suckers.

By the way: The real PUMA sites no longer use that term. (For the most part.) See, for example, The Confluence, where the label was born. Riverdaughter has a good article up right now about the possibility that Hillary might primary Obama. There is increasing talk along those lines. But...no. She won't do it.

Another former PUMA is Dakinikat, who has an excellent compendium piece up called "The Awakening." I take the liberty of stealing the cartoon she published. (If you can't read it, click to enlarge it.) Y'know, not too long ago, this cartoon would have been denounced as "racist" by Kos writers with a talent for abstruse reasoning and ersatz outrage. Things have changed...


Permalink

I should have written about this earlier, but better late than never. This piece in Antifascist Calling offers a little-known view of the Standard & Poors downgrade of the U.S.:

It now appears that insiders at Standard and Poor's or the Treasury Department, take your pick, may have leaked information to privileged clients on the recent U.S. credit downgrade, with confirmation coming from a surprising source.

Last week, AntiSec cyber-guerrillas (a loose alliance amongst individuals affiliated with LulzSec and Anonymous) released a 1GB cache of emails filched from security contractor Vanguard Defense Industries (VDI).

VDI makes UAVs. Killer drones. (I'll betcha that many "UFO" sightings can be credited to tests of VDI products -- but that's a post for another time, and perhaps another blogger.)

A VP at VDI is named Richard T. Garcia. (I'm tempted to call him RTG, but this post already has way too many TLAs.) On April 25, he wrote an email to an associate. Garcia said that a contact at Merrill Lynch had

"advised that Standard and Poors, may lower the credit rating of the US Government which could cause a run on US Banks that will affect the Federal Reserve. They give the US Govt. 2 years to correct the current situation, which they believe both the Republican and Democratic solutions do not do enough and both parties may make this a political situation for the 2012 Presidential election and never come up with a answer to correct the situation within the two years set by Standard and Poors. She did not see any real Cyber issue that could change the situation."

On Wall Street, there were plenty of rumors about an imminent downgrade just before Standard and Poors did what it did. Obviously, someone knew something. But the Garcia email occurred four months before the downgrade, and it projected a scenario across the span of two years.

That scenario includes a run on U.S. banks. Something to think about.

Even if Standard & Poors revealed insider knowledge, would it have broken the law? Antifascist seems to doubt it. However, this August 9 piece in Naked Capitalism (a post which also notes evidence of "inside dope") cites an SEC regulation which would indicate that the law was, in fact, broken.

Disclosing news of a ratings decision is required under SEC rules to be made publicly. All the discussion with favored parties is clear regulatory violation.

Okay. So why isn't Garcia's contact at Merrill Lynch being dragged before a congressional oversight committee?

That contact, incidentally, is a woman named Cindy Cook, of Austin, TX. She is a "wealth management adviser." You may want to click on that link so you can see the face of the lady who knows before anyone else what fresh Hells await us. Cindy, if you're reading this -- care to tell the readers how you came to know all that stuff? Can we have some more details about the run on U.S. banks that you're predicting? And since you manage wealth, let me run this by you: Having just found an extra four quarters under the bed, I need to decide which to go for -- the McChicken or the McDouble. Whaddya think?

As we have noted in earlier posts, the same rating agency that downgraded the United States also gave AAA ratings to weirdo financial instruments backed by crap mortgages.

According to congressional testimony by an SEC whistleblower, which sparked an investigation by that agency's Inspector General, the commission's enforcement division, under orders from higher-ups, who went on to secure well-paid positions with the firms they were charged to regulate, shredded a mountain of incriminating evidence detailing wrongdoing by some of the world's top financial firms.

How many files, called "Matters Under Investigation" or MUI were destroyed? According to whistleblower Darcy Flynn, the SEC's enforcement division "disappeared" some 18,000 files, including those of convicted fraudster Bernie Madoff, accused swindler, suspected CIA banker and drug money launderer R. Allen Stanford, as well as accusations that top-tier Wall Street investment banks such as J.P. Morgan Chase had engaged in insider trading.

Taibbi writes that "under a deal the SEC worked out with the National Archives and Records Administration, all of the agency's records--'including case files relating to preliminary investigations'--are supposed to be maintained for at least 25 years. But the SEC, using history-altering practices that for once actually deserve the overused and usually hysterical term 'Orwellian,' devised an elaborate and possibly illegal system under which staffers were directed to dispose of the documents from any preliminary inquiry that did not receive approval from senior staff to become a full-blown, formal investigation."

And that kind of evidence destruction is illegal. Definitely.

Then again, it's sort of like running a stop sign. You need to worry about the way the law reads only if a cop sees you do it.

By the way: Don't tell me that there are no secrets in Washington. Do you think that Garcia or Cindy Cook would have disclosed what they knew if the email had not come to light? Permalink

David Frum is a former speechwriter for George W. Bush who once wrote a book with Richard Perle. He is an opinon-shaper who helped pave the way for the Iraq war disaster. Given that resume, a saner society would have relegated this individual to the fringes ages ago.

It says much about our culture that Frum is, in our debauched public discourse, considered a centrist.

A few days ago, Frum published a piece about Obama's failed stimulus. (Also see the follow-up here.) I should have commented on it at that time; his words have lingered in my head like a bad stench.

Arguably, an analysis like Frum's is more dangerous than are the bleatings of the tea partiers, because Frum has a greater likelihood of impacting those who consider themselves reasonable and moderate. Worse: Frum says some of the right things. The presence of those "right things" makes all of the wrong things more insidious.

First, let's talk about what Frum gets right.

He gets the number correct (at least in his follow-up piece) when he says that the stim package came in at nearly $800 billion. Most Republicans have intentionally misled the public on this point. Their propaganda confuses the bank bailout with the stimulus.

Frum, to his credit, is honest enough to admit the key fact that most Republicans will never tell you: The largest item in the Obama stim package was tax cuts. Not only that: Frum confesses that not enough of the package went to jobs creation.

Only about $100 billion of the stimulus -- one dollar in eight -- went to support new infrastructure projects. When Americans wonder: "Where's our Hoover Dam? Where's our East River Drive?" the answer is directly traced to Obama's abdication of decision-making in 2009.

So far, so good. Or at least, so not bad: I question that "abdication" presumption.

But.

Frum's main argument is that the stimulus package was ruined by the Democrats in Congress, who couldn't resist the temptation to pork up:

Congress larded up the stimulus with ancient Democratic wish lists utterly irrelevant to the crisis at hand: $15 billion for more Pell grants, $9 billion for community and rural development, $20 billion for the renewable energy tax credit and so on.

Frum tries to create the impression that most of the $800 billion went to beloved but unhelpful liberal boondoggles. That is not the case.

$15 billion in Pell grants did not create a $14 trillion deficit. This country has had a much more generous Pell Grants program in the past (measured in constant dollars) without breaking the bank.

The logic behind helping people stay in school was clear: Cash-strapped states hiked university fees dramatically, which threatened to force students out of college and onto an already overstrained job market. Competition for jobs would have increased. Unemployment would have shot up even more dramatically than it did. There would have been even more downward pressure on wages. Consumption would have gone even lower even faster.

As it was, most students still had to struggle, and quite a few had to interrupt their educations, because the Pell grant increases often did not match tuition increases.

(Of course, libertarians would prefer to see the riff-raff leave our campuses; to them, colleges belong to the sons and daughters of privilege.)

Obama may have assumed that if his first stimulus failed, he could always go back for a second. But his mission in 2009 was to overwhelm the crisis. Instead, he allowed congressional Democratic spending priorities to overwhelm his economic leadership.

"Democratic spending priorities" did no such thing.

This is an important point. We cannot allow people like Frum to twist history in order to blame the liberal wing of the Democratic party.

In fact, the problems were caused by the conservative Blue Dogs and the Republicans. They were the ones who made it politically difficult -- if not impossible -- for the creation of an FDR-style jobs program.

(Presuming that Obama wanted such a thing. That would be quite a presumption indeed.)

To placate the conservatives within both parties, the major item in the stim package was a tax cut. To his credit, Obama enacted a tax cut which favored the workers. Today's GOP presidential candidates have boldly admitted that they want to increase taxes on the working class.

Even though the 2009 cuts went to the right people, the ultimate message is the same as the message we gleaned from the 2008 Bush tax cut, as well as the earlier Bush tax cuts for the rich: Tax cuts don't work. Tax cuts don't work. Tax cuts don't work.

Frum can't say those words. If ever he did, he'd be asked to leave the club.

The most he can say is that "most economists warned" that the tax rebates "would do little or nothing to stimulate economic activity." Just who were these economists? I don't recall many prominent warnings along those lines in early 2009.

In his follow up piece, Frum writes:

Jared Bernstein denies that the administration abdicated in the face of Democratic congressional spending demands. Really? So why then did the plan take the weird and inadequate shape that it did?

I'll tell you why: Republicans and conservative Democrats felt extreme discomfort with the very notion of spending on jobs. Contrary to the impression Frum gives you, the people who de-fanged the stimulus weren't chanting "spend, spend, spend." Just the opposite: They were chanting "Don't spend. Don't spend. Don't spend."

They certainly did not want to spend in an innovative fashion. Increasing funding for an already-existing program of proven popularity carries much less political risk.

Conservative Demcorats feared -- no doubt correctly -- that if they did invest in (say) a modern-day TVA, they would encounter a massive propaganda campaign designed to portray such a project as a waste-filled boondoggle. And let's face it: There would have been waste in any kind of TVA-style program. Waste, like shit, happens. Somewhere along the line, there would have been mis-spent dollars or over-compensated overseers or embezzlement or something. And when examples of waste came to light, how would the Murdochian hordes have reacted?

In sum and in short: Fox and Rush still shape our nation's discourse. That all-important fact made a real stimulus impossible.

Frum also states that

$87 billion was used to bail out state governments that had overspent on Medicaid.

No. They had come to rely on property tax revenues, and did not plan for the possibility of massive foreclosures and lowered property values. In other words, they believed the hype being emitted daily from the mouths of "most economists."

Obama failed to mobilize the Federal Reserve to support his fiscal stimulus.

During the financial meltdown of 2008-09, the Fed acted boldly and decisively to save the banking system. Once the banking crisis was contained, however, the Fed's boldness faded. It ended its first round of quantitative easing in spring 2010, for fear of sparking inflation. Yet inflation barely existed as a problem in 2010, while unemployment remained desperate.

That's because the Fed cares only about bankers, not about the jobless. Throughout that period, there was a hideous amount of propaganda designed to scare us about the menace posed by inflation. Only a few marginal bloggers such as moi dared to ask: "Inflation? What inflation?"

I didn't notice Frum asking that question in 2009. Obama sure as hell didn't.

Yes, the Fed is independent of the president. But presidents can shape the Fed through their power to name Federal Reserve governors. Obama has failed to get his people on the board.

What the hell is Frum talking about?

The Board of Governors has seven members; here they are. They normally serve fourteen year terms. In 2010, Obama nominated three members: Peter Diamond of MIT (for an abbreviated term ending in 2014), Janet Yellen of the San Francisco Federal Reserve Bank (for a full term) and Sarah Bloom Raskin, the Maryland state banking regulator (for a partial term ending in 2016). Pete didn't make it (thanks to nonstop Republican opposition), but Janet and Sarah were confirmed unanimously.

Two out of three, as they say, is not bad.

It's not as though things would be radically different if Peter Diamond had gotten in -- he was the mentor to Ben Bernanke, the Fed chairman. Diamond is in his 70s now -- and even back in the day, he never seemed particularly radical. This dude ain't Zorro.

Bernanke, incidentally, was nominated for a second term by Barack Obama; previously, he was appointed by George W. Bush.

So just who are these bold individuals that Obama "failed" to get on the board? I wish Frum would humor us by dropping a few names.

This post will rankle some of my readers, whose disdain for Obama has morphed into a lumpish, thuggish and simplistic disdain for Democrats in general. But incalculable damage is done by pundits like Frum, who unfairly try to blame Obama's failures on the liberal wing of the Democratic party. In fact, the damage was done by the party's conservative wing -- and, I would argue, by the innate conservatism of our media infrastructure, and of the president himself.
Permalink

From the NYT:

The federal agency that oversees the mortgage giants Fannie Mae and Freddie Mac is set to file suits against more than a dozen big banks, accusing them of misrepresenting the quality of mortgage securities they assembled and sold at the height of the housing bubble, and seeking billions of dollars in compensation.

The Federal Housing Finance Agency suits, which are expected to be filed in the coming days in federal court, are aimed at Bank of America, JPMorgan Chase, Goldman Sachs and Deutsche Bank, among others, according to three individuals briefed on the matter.

This is right move, not at the right time. Something like this should have happened years ago.

Much the same can be said about the choice of Alan Krueger. Summers and Ghouls-bee are gone. Geithner, alas, is still there.

Is it possible -- is it just possible that the pressure lefties have placed on Obama has started to show some results?

When the Tea Party leaders assail Obama and the Federal Housing Finance Agency for this lawsuit, they will reveal themselves to be the puppets of Wall Street -- even though many baggers joined the movement because they were outraged by the big bank bailouts. Maybe this situation will educate the otherwise ineducable baggers about who is really in charge of their movement.

The impending litigation underscores how almost exactly three years after the collapse of Lehman Brothers and the beginning of a financial crisis caused in large part by subprime lending, the legal fallout is mounting.

Besides the angry investors, 50 state attorneys general are in the final stages of negotiating a settlement to address abuses by the largest mortgage servicers, including Bank of America, JPMorgan and Citigroup. The attorneys general, as well as federal officials, are pressing the banks to pay at least $20 billion in that case, with much of the money earmarked to reduce mortgages of homeowners facing foreclosure.

And last month, the insurance giant American International Group filed a $10 billion suit against Bank of America, accusing the bank and its Countrywide Financial and Merrill Lynch units of misrepresenting the quality of mortgages that backed the securities A.I.G. bought.

The only problem with these lawsuits are the numbers. $10 billion is not going to make 'em scream.

If the banks are ever truly threatened, you'll be hearing a scream like you've never heard before. And suddenly the Republicans will be forced to support Wall Street in very public ways, under the rubric of fighting "socialism." That will demonstrate only the disingenuous nature of their rhetoric.

Incidentally, the guy in charge of the FHFA is named Edward DeMarco. Here's some background on him. We are going to be hearing his name more often, methinks. The politics of the situation are intriguing: He was a Bush appointee who has been at loggerheads with Obama and Geithner So when the baggers slam Obama for the upcoming lawsuits -- and believe me, they will -- they will be slamming someone whom Obama doesn't consider a team player.

So the FHFA lawsuits may be happening in spite of Obama -- who, for his part, is hoping to get some lolly from the Wall Streeters for his relection bid. Even though the bankers have made clear that they hate him.

This could get interesting!

SEC reform. These lawsuits would never have had any need to exist if the SEC had not been corrupt to its core. Matt Taibbi has a great column about SEC reform. Basically, the idea is to stop the "revolving door" practices cold, and to make sure that the SEC has an enforcement division.

The revolving door issue is the big one. As things stand, the SEC can refer cases to the Justice Department. Referrals have gone way, way, WAY done over the past decade or so. And that's yer problem, right there.

Back to Obama. The big question is: Is it too late? For most of my readers -- and, to a large degree, for myself -- the answer will be yes. The pooch has been well and truly screwed. On the other hand, there is this election coming up.

Wavering Democratic voters will face a tough choice: Do they support (with clothespin attached to nose) a bad Dem president who has started to do some of the right things, but only when re-election came into view? Or do they sit this one out and allow someone like the abominable Perry to win?

Laff of the day: On YouTube, the following comment was made about my film "Libertarian Lies":

"Obama put Larry Summers and Tim Geithner in charge of the economy. If that makes him socialist, I'm the King of Peru."

Well then smart guy, by the very implications of your own stupid fucking statement, you must be the King of Peru. Dumbass.

Has anyone seen my pet bear? He used to be around here somewhere. His name is Paddington.
Permalink