As featured on p. 218 of "Bloggers on the Bus," under the name "a MyDD blogger."

Saturday, January 31, 2009

"No Major Violence"

That's how the AP describes Iraq's provincial elections. I mean, sure, they put the entire country under effective martial law for a day and had voters pass through security checkpoints and razor-wire, but there were no major incidents. See, this time, only eight candidates were assassinated prior to the vote.


I am actually hopeful that President Obama will live up to the security agreement and withdraw from Iraq, but let's not kid ourselves that the place is like Cape Cod on a windswept morning. It's still a war zone and we still broke it, and we'll need to be engaged diplomatically and financially for a long time.

Cernig has more that is interesting:

But there are still deep-seated problems in Iraq which these provincial election's won't touch, or will actually make worse. The Kurdish North didn't participate and neither did the disputed region of Kirkuk. Iraqi troops and Kurdish peshmerga have already faced off there a few times and most analysts see Kurdish aspirations as the primary future source of violence. Then there's the resurgent Sunni minority, where the old and entirely undemocratic tribal power structure is set to be the election winner. And among Shiites, factional infighting which has fractured Maliki's own coalition heavily, looks to be another potential source of future violence. We may not know the full results for a month or more and there are going to be divisive allegations of intimidation, vote-rigging and double-crossing to navigate.

These elections are a good thing, but they're not a universal panacea. Still, the American Right wants to have its cake and eat it. They want to pretend that provincial elections mean "victory" while getting ready to blame only Obama if Iraqi social fractures ignored by Bush for so long lead to more violence later.

...Sunnis in Baghdad were left off the voter rolls. Iraq IS learning about American-style democracy!

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American Made

I thought the most hollow rhetoric of the Presidential campaign was President Obama's vow to "stop tax breaks for companies that ship jobs overseas." It was a direct appropriation of a John Kerry line from 2004, and it had no oomph to it, no flourish, nothing beyond the boilerplate. In fact, this was symptomatic of all of Obama's rhetoric on trade. I always thought he believed at least nominally in the Washington consensus, that neoliberal trade was part of the globalized world and there was no way out of it. The fight over the "buy American" provisions in the stimulus plan are starting to confirm this belief.

The stimulus bill passed by the House last night contains a controversial provision that would mostly bar foreign steel and iron from the infrastructure projects laid out by the $819 billion economic package.

A Senate version, yet to be acted upon, goes further, requiring, with few exceptions, that all stimulus-funded projects use only American-made equipment and goods.

Proponents of expanding the "Buy American" provisions enacted during the Great Depression, including steel and iron manufacturers and labor unions, argue that it is the only way to ensure that the stimulus creates jobs at home and not overseas.

Opponents, including some of the biggest blue-chip names in American industry, say it amounts to a declaration of war against free trade. That, they say, could spark retaliation from abroad against U.S. companies and exacerbate the global financial crisis.

And today the Telegraph of London reports that Obama will work to gut the proposal.

The White House has promised to review the protectionist proposals, passed last week by Democratic allies in the House of Representatives, which would ban the use of non-American steel in the $800 billion of construction projects.

Privately, diplomats are withering about the "excitable" US rhetoric in support of the Buy America proposals...Europe is being helped by lobbyists on behalf of American companies like Caterpillar and General Electric...

They are hoping that free trade sympathisers in the Senate commerce committee will strike out clauses that would violate America's obligations to EU nations under World Trade Organisation rules. America has similar obligations to Canada and Mexico as part of Nafta, the North American Free Trade Area.

This is nothing more than American industry and foreign suppliers conspiring to maintain the status quo that has destroyed American manufacturing for 50 years. It's a legitimate concern that stimulus money, designed to spur American economic activity, would "leak out" of the US economy without benefiting US workers and taxpayers. The Buy America Act of 1982 already stipulates that recipients of federal money would use domestic suppliers in a variety of contracts, so this provision would simply extend existing law to the stimulus, and would not be subject to trade agreements. As David Sirota explains, Obama campaigned on this, and now he's looking to the Senate Commerce Committee to bail him out of his lukewarm commitments.

Further the Economic Policy Institute shows the crucial nature of this provision.

Multinational companies such as General Electric and Caterpillar, and their allies in the Chamber of Commerce, are attacking “Buy American” provisions included in the economic recovery bill passed by the House on January 28th. They claim that these provisions will provoke a “trade war” with foreign governments, but foreign governments have long histories of supporting their own domestic companies. These companies are self-interested, simply wanting unlimited access to imports, many of which are illegally subsidized and unfairly traded. U.S. and foreign multinational companies (MNCs) were responsible for nearly two-thirds of all U.S. imports in 2006, as shown in the chart below. U.S. firms led the way with $678 billion in imports, 36.4% of all U.S. goods imports.

Companies like Caterpillar, which will benefit from billions of dollars of infrastructure spending in the stimulus package, want unfettered access to cheap steel from countries like China, which poured more than $15 billion into energy subsidies into that sector in 2007 alone. Chinese steel imports more than doubled between January and November, while U.S. steel production fell nearly 40%. The Chamber of Commerce, which also opposes further “Buy American” provisions, represents the interests of U.S. companies like Caterpillar and IBM as well as foreign multinationals like Toyota and Siemens, all represented on its board of directors. Congress has finally realized that what’s good for big business is not always good for America, and that new rules are needed to rein in runaway corporations. That’s real progress.

Simply put, domestic suppliers exist on an unlevel playing field. Toyota wouldn't exist without generous subsidies from the Japanese government. Our multinationals that are allegedly based in the United States make up for that by racing to the very bottom for their materials and undercutting American workers. It ought to stop.

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The Incredible Shrinking Local Media

Under the stellar leadership of Sam Zell, the LA Times is cutting another 300 jobs and eliminating the California section:

Editor Russ Stanton said in a second memo that the cuts will include a 70-position reduction across the editorial department, or 11 percent, in the coming weeks.

Hartenstein said the paper will reduce the number of sections on March 2, folding the California section into the front section, which includes local, national and international news, while keeping Business, Sports and Calendar as daily fixtures.

The feature section lineup, including Health, Food, Home, Image, Travel and Arts & Books, will remain unchanged, he said.

Good thing there's nothing special happening in the state that would require coverage.

Anyone who thinks that the Times will continue to cover California in the same way by folding the section into the front page is delusional. The staff cuts will certainly come from the local beat. Keep in mind that this is the biggest daily in the state.

We have 38 million residents and maybe 10 full-time reporters making sense of Sacramento.

Let's not wonder why nobody will have good information on why they're getting IOUs in the mail in a few weeks instead of their tax refunds and public assistance checks.

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Labor Gets In The Game

The pushback on anti-union lies has been a long time coming.

I’ve just obtained an advance copy of a new TV ad that a labor group is launching to promote the Employee Free Choice Act, labor’s top priority — a spot that pushes back against the arguments being made by anti-EFCA forces.

But here’s the rub: A key target audience of the ad is Beltway journalists. The ad — to be launched by David Bonoir’s American Rights At Work — is set to run inside the Beltway this Sunday on networks and cable during the political chat shows.

The new ad partly represents an effort to get reporters, opinion-makers and members of Congress to stop mis-representing a key aspect of Employee Free Choice: The question of whether it would eliminate the so-called “secret ballot,” by which workers vote on whether to join a union.

Opponents of EFCA have tried to argue that the measure would eliminate the secret ballot option completely, as a way of painting the measure as undemocratic.

But proponents point out that the Employee Free Choice Act wouldn’t do that at all. Rather, it gives employees a choice between joining a union simply by having a majority sign up for one; or by holding a secret election.

And this is as it should be. It's not necessarily the fault of journalists - labor has not been out there in force defining the terms of the debate, and so the right wing anti-union forces stepped into the vacuum. For all of their huff and puff, they didn't change a lot of minds. And if the debate can be successfully re-framed, perhaps public opinion will move even more in the direction of free choice.

I think labor is being a little naive over how much they can influence the media, however. The Beltway crowd is pretty much predestined to reprint whatever Rick Berman and the Center for Union Facts sends their way. The "eliminate the secret ballot" meme got out in front early, and labor folks are dirty hippies to the Beltway gang (imagine!), so that may be a losing battle.

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Scenes From The Class Struggle In Capitol Hill

If you're on Twitter, I strongly recommend you find a right-wing mouth-breather Congressman to follow on the site and read them carefully. You'll get the talking points hours or even days before they show up on the teevee. For example, my favorite right-wing Twitterbug, Rep. Pete Hoekstra (R-MI), has offered his sage thoughts on this Tom Daschle tax story.

Daescle(sp?)/Geitner/Rangel all avoided/cheated on taxes!Daescle latest!They don't mind raising taxes because they don't pay them.

He got two of the three names wrong, including Daschle, who was Senate Majority Leader when Hoekstra chaired the Intelligence Committee (!) and therefore was in all the Gang of Eight meetings with him.

But let's get off spelling for a second. The soundbite is that Democrats don't mind raising taxes because they don't pay them. Har giggle snort glorf!! So let's pre-but this statement in case it's used by George Will or David Brooks tomorrow morning.

Because, sigh, if only failure to pay taxes or disclose income had anything to do with party and not class. And this happens through both illegal and legal means.

The average tax rate paid by the richest 400 Americans fell by a third to 17.2 percent through the first six years of the Bush administration and their average income doubled to $263.3 million, new IRS data show.

The 17.2 percent tax rate in 2006 was the lowest since the IRS began tracking the 400 largest taxpayers in 1992, although the richest 400 Americans paid more tax on an inflation-adjusted basis than any year since 2000.

The drop from 2001’s tax rate of 22.9 percent was due largely to ex-President George W. Bush’s push to cut tax rates on most capital gains to 15 percent in 2003.

And as long as we're talking about tax dodgers, let's bring in the biggest group of them bar none, corporations.

The news that more than 60 percent of U.S. corporations failed to pay any federal taxes from 1996 through 2000 when corporate profits were soaring and that corporate tax receipts had fallen to just 7.4 percent of overall federal tax revenue in 2003 – the lowest since 1983 and the second-lowest rate since 1934 – is an outrage. But it should come as no surprise to anyone who has been paying attention to national tax policy over the past few years. The General Accounting Office (GAO) report also found that an astonishing 94 percent of corporations reported tax liability of less than 5 percent of their total income during the same time period. Corporate tax dodging has gone on for far too long. But the policies of the Bush administration have exacerbated the problem by furthering the culture of tax avoidance by big corporations and creating a pervasive unfairness in our tax code.

We have a problem in this country with people not paying their taxes. And irrespective of anything else, those people are by and large rich and connected. They influence politicians in Washington to write breaks and favors into the tax code. They pass special gifts back and forth to one another. They claim that their corporate headquarters can fit into a mailbox in the Cayman Islands.

The tax code is multi-layered and complex. These tax problems happen at confirmation hearings every four years as a result. Because it's easy to evade taxes, by either legitimate oversight or outright theft, and for the wealthy that likelihood is multiplied. Don't take my word for it - take the leader of the Republican Party from 2000 to 2008:

WALLACE: How does [McCain] overcome all of that and...

BUSH: Because there's two big issues. One is, who's going to keep your taxes low? Most Americans feel overtaxed and I promise you the Democrat [sic] party is going to field a candidate who says I'm going to raise your tax.

If they're going to say, oh, we're only going to tax the rich people, but most people in America understand that the rich people hire good accountants and figure out how not to necessarily pay all the taxes and the middle class gets stuck.

We've had -- we've been through this drill before. We're only going to tax the rich and all you have to do is look at the history of that kind of language and see who gets stuck with the bill.

He said this over and over during the 2004 campaign. His team must have thought it was a mighty clever talking point. It was so much fun to see the President of the United States, with control over the IRS, helpfully explain that the rich evade taxes and there's nothing anyone can do about it.

7/14/2004 THE PRESIDENT: ...People need to be aware of this talk out of Washington, D.C. that says, oh, don't worry, we're just going to tax the rich. That's not the way it works in the tax code. The big rich dodge taxes, anyway. It's companies like this who end up paying more taxes.
8/3/2004 THE PRESIDENT: ...He said, tax the rich. You've heard that before haven't you? You know what that means. The rich dodge and you pay.
8/13/2004 THE PRESIDENT:...I'll give you one other thought. Let me just leave you with one other thought about taxing the rich. You know how that works. A lot of the rich are able to get accountants, so they don't -- they're able to dodge. You've seen it before. We're going to tax the rich, and then they figure out how not to get taxed.
8/28/2004 THE PRESIDENT: ...Every time they say, tax the rich, the rich dodge and you pay.
9/1/2004 THE PRESIDENT: ...You know what it means, tax the rich. It means the rich dodge and you get stuck with the bill.
9/3/2004 THE PRESIDENT: Yeah, we've heard that before, haven't we? First of all, you can't raise enough money by taxing the rich to support all his programs. Secondly, the rich figure out a way to dodge it, and you get stuck with the bill.
9/7/2004 THE PRESIDENT:Yes. Oh, don't worry, we'll tax the rich. Well, that's why the rich hire accountants and lawyers. They dodge, you pay...
10/11/2004 THE PRESIDENT: ...Something else about taxing the rich -- the rich hire lawyers and accountants for a reason, to dodge the tax bill and stick you with it.

This is the same guy who eliminated half of the IRS lawyers who audit the rich, and went after the middle class more often with audits and scrutiny.

Since 2000, authorities at the Internal Revenue Service have nearly tripled audits of tax returns filed by people making $25,000 to $100,000 as part of a broad change in audit strategy.

Audits of these middle-class taxpayers rose to nearly 436,000 last year, up from about 147,000 returns in 2000. For these 61 million individuals and married couples, who make up nearly half of all taxpayers, the odds of being audited rose from 1 in 377 to 1 in 140.

I'd be willing to bet that practically everyone of means in Capitol Hill has cheated on their taxes in one way or another. They're the Masters of the Universe and they see it as their due. If Republicans have gotten religion and suddenly want to end the practice, sounds good to me. We'll just put those auditors back to work and start poring over the returns of every corporation and every man and woman of wealth. We can even get rid of those loopholes and complexities that cause a lot of these problems. But don't tell me that this is an issue of party in any way. This is a class issue.

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Friday, January 30, 2009

The Return of the Friday News Dump!

Tom Daschle edition:

ABC News has learned that the nomination of former Senator Majority Leader Tom Daschle (D-SD) to be President Obama's Secretary of Health and Human Services has hit a traffic snarl on its way through the Senate Finance Committee.

The controversy deals with a car and driver lent to Mr. Daschle by a wealthy Democratic friend, a chauffeur service the former Senator used for years without declaring their use on his taxes.

It remains an open question as to whether this is a "speed bump," as a Democratic Senate ally of Daschle put it, or something more damaging."

More here. The "wealthy Democratic friend" is Leo Hindery, who was almost Obama's Commerce Secretary. Yikes!

President Obama’s pick for secretary of health and human services, Tom Daschle, filed amended tax returns and paid more than $100,000 in back taxes on Jan. 2, administration officials said on Friday.

Mr. Daschle concluded that he owed the taxes for free use of a car and driver that had been provided to him by Leo Hindery Jr., the founder of a private equity firm known as InterMedia Advisors, the officials said.

Mr. Daschle was chairman of the firm’s advisory board. In a financial disclosure statement filed this month with the Office of Government Ethics, Mr. Daschle reported that he had received large amounts of income from InterMedia, including more than $2 million for consulting and $182,520 in the form of “company-provided transportation.”

The larger problem, perhaps, is how easy it is for reasonably wealthy and well-connected people to cheat on their taxes. Or, if you're more forgiving, how hard it is to untangle the complex web of rules in the tax code.

And, with now three reports of trouble with nominations, you have to wonder how world-class that Obama vetting operation is.

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Friday Random Ten

This news day didn't thrill me, so I'm packing up and turning up the iPod. Your ten, people.

More Human Than Human - Rob Zombie
Insomnia - Buried Beds
Slow Hands - Interpol
Heartlight - Neil Diamond (you know you love it)
The Mess We're In - PJ Harvey feat. Thom Yorke
Atomic - Blondie
32 Footsteps - They Might Be Giants
Tokyo Moon - Windmill (one of those "I have no idea how this got on my iPod" tracks)
Roses - Outkast
Don't Stop - Brazilian Girls

Now that's electic.

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Bonus Babies

We're starting to see this weird backlash to the rising populist anger over bonus payouts to financial industry employees, who apparently prop up New York City all by their lonesome buying luxury goods so they deserve whatever they get for sending the economy into the tank.

To President Barack Obama, Wall Street's $18.4 billion in bonuses is "shameful." To thousands of bank employees who don't sit in corner offices, that money helps pay the bills. Outrage over the bonuses reached as high as the White House this week following news that financial firms were rewarding employees even as they were being bailed out with billions of taxpayer dollars. The feelings are understandable: The average Wall Street bonus of $112,000 was about twice the average American's income.

But the issue is a complicated one.

While Wall Street investment banks and other financial firms make headlines for the millions paid out to certain executives, more modest bonuses go to workers from human resources representatives to secretaries as well as employees who actually made money for their companies last year.

Jason Weisberg, vice president of the Wall Street brokerage Seaport Securities, said bank employees count on performance bonuses like salesmen count on commissions.

"What are you supposed to pay them?" Weisberg asked. "Or are you not supposed to pay them? And if you don't pay them, how do you expect that employee to stay employed at that company?"

I've worked for, what, between 15 and 20 years now, and I think I got one bonus in my life for a few hundred bucks, and another time I got a $5 Starbucks gift card and a picture frame. You have seriously got to be kidding me. Bonuses are not salaries. Only a self-absorbed and supremely entitled person would think so. If people are relying on bonuses their companies aren't paying them enough. If we're talking about pay for performance bonuses, you can cherry-pick a division or two, but by and large nobody made any money, in fact they crashed the economy, so this "bonus" you speak of - from insolvent banks - isn't deserved.

And I think it's clear that most people are talking about bonuses at the upper tier - for the executives who made the worst decisions that sunk the financial system. This is clever muddying of the waters by the PR staffs, but we're really talking about the ridiculous inequality and lack of accountability for those who failed their companies and the economy. And as I said yesterday, we can get real mad about bonuses, but bailing out these bad actors for trillions is really worth more of the ire. Congress and state Attorneys General can work to get the bonus money back, but if we don't fundamentally restructure the banking system after recapitalizing them, all the bonus clawbacks in the world isn't going to change the fact that we've been ripped off.

The creation of a government bad bank to buy toxic assets is necessary, but then the government will need to take control of and restructure major banks to fix the system, one economist at the World Economic Forum in Davos told

"They have to do a bad bank," Harvard Economics Professor Ken Rogoff said. But "if that's all they do then it's idiotic."

Institutions like Citi and Bank of America will have to go, boards will have to be fired and equity stakeholders will be wiped out, Rogoff said.

The plan could mirror the one Sweden implemented, where all troubled banks were nationalized, their balance sheets were cleaned up and the good parts of the businesses were sold to the private sector.

That solution was "much cleaner," he said.

But that's too clean for those with ideological blinders on.

...Claire McCaskill is pissed and is calling for a maximum wage (limiting execs who accept TARP money to no more salary than the President of the United States). Which is great, but again, they can have all the bonuses they want if we don't have to pay 4 trillion to make them solvent again.

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Single-Issue Silos Deeply Harmful To Fundamental Change In Sacramento

This certainly made for a great picture - thousands of teachers in Pershing Square in downtown LA rallying against budget cuts to education. You can put it next to state employees rallying against education cuts. And nurses rallying against health care cuts. And, I don't know, park rangers rallying against park closures. But social movements don't happen in a vacuum. History shows us that coalitions built across platforms succeed in galvanizing public opinion and forcing through progress. Teachers angry about education cuts is something I endorse. They're well within their sphere of expertise to complain about that area of the budget. I don't know that it's helpful at all in the midst of this crisis. Especially when it's so narrowcast and specific.

The California Teachers Association released a TV ad Friday that says "some Sacramento politicians are going too far" in considering changes to the schools budget.

Specifically, the teachers union attacks a proposal floating around the Capitol to give school administrators more flexibility in how to use so-called categorical money that is currently earmarked for class-size reduction.

"Tell your lawmakers: Ending the class size reduction program won't save California one dime. It only hurts our kids," the voice in the ad says.

Now, nobody wants class sizes to inflate. But when each single-issue silo zealously guards their small piece of power and tries to call to action only for that specific piece, several things happen. First of all, the counterpoint is easily cast as "special interests clinging to power." Second, there is absolutely no continuity of message across the groups, and in fact their messages can conflict with one another. As I've said many times, unity is the great need of the hour. And there seems to be no comprehension on the part of CTA or frankly any other progressive or labor group that budget money is fungible and everything that the state does affects their single issue in one form or another.

By way of example, how great would it be if CTA put up an ad saying, "Times are tough, and yet the state spends billions of dollars warehousing low-level drug offenders who need treatment and not jail. We need education and not incarceration. Tell the governor and your legislator to end 30 years of failure in our prisons and return to sensible sentencing policy to save us billions and help fund our schools." It's really not that hard. Even Dan Walters can do it.

The fastest growing segment of the state's deficit-ridden budget, by far, has been its prison system, reflecting severe overcrowding, generous labor contracts and federal court pressure to reform inmate health care.

"Corrections," an ironic misnomer, has jumped from less than $5 billion a year to more than $10 billion in the last decade, over twice as fast as school spending, the biggest budget item. It now costs about $45,000 a year to feed, clothe and medicate each of the state's 170,000-plus inmates, or roughly five times what taxpayers spend on a typical public school student. And that doesn't count what it costs to supervise tens of thousands of parolees.

One element of any plan to close the state's immense deficit, as well as relieve the overcrowding that invites federal intervention, must be to get a handle on prison costs by shedding some low-intensity inmates.

We could see the state employees union demand to restore the car tax. The firefighters could call for full funding of education. Etc.

If each group goes after their piece of the pie, ultimately we're all going to lose. History teaches us that only with a movement united together can we create prosperity and security for all Californians.

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Mr. President, Tear Down This Conservative Spin!

The Republicans are throwing a lot of crap up against the wall to try and derail the stimulus package. Not all of it fits into a coherent whole, but it's all generally negative, decrying the hateful liberals in the House and the "pork" they've stuffed into the bill. Meanwhile, Obama is sitting back, organizing house parties (which is something you do two months before the bill comes up for a vote, not while the horse-trading is going on), and trying to stay above the fray. Obviously there's no chance of that working in the Senate, where the bipartisan brigade is already taking the conservatives' side on the bill. First it was Ben Nelson and now Kent Conrad.

CONRAD: [T]here are other areas of the package that are really very questionable in terms of whether they’d stimulate the economy. Some of the programs that are given money only have ten percent spend-out in the next two years. … There’s very little done in this package to help housing. Very little done to help the financial sector.

I guess those trillions of dollars in TARP money and Fed outlays wasn't enough for the financial sector, they need more and more. Whatever happened to the Wall Street/Main Street construction?

The stimulus is slowly drifting, then. Nobody's out there explaining why government spending is urgently needed and fast, what the implications are for the economy, and why anything that creates a job makes sense right now. Everybody, on the other hand, is nitpicking one spending program or another, tarring it with the "pork" brush, and framing it like a giveaway instead of the last resort we have. There is no private investment happening right now, trade is way down, and so is consumer activity. NOBODY IS SPENDING and so government has to or we'll have a depression right quick. Now you don't have to lapse into econo-speak to explain that, and it just so happens we have a charismatic leader who can make the case clearly and elegantly to the public and get them on board. At least they should hear from SOMEBODY, right?

The country needs to be instructed about the logic and necessity of this stimulus plan because they clearly don't fully understand it. And because of that, the Republicans are making headway with their rhetoric of "fiscal responsibility," conflating stimulus with bailouts and the rest of their destructive obstructionism.

Despite his huge personal approval, Obama didn't start off with a lot of public support for the plan and support is inching down. He is asking for a huge amount of money and the promise of bipartisanship is not working out. I think it would be helpful if he explained what a stimulus is and why this plan will succeed. People want him to succeed and they will back him if he makes the explicit case and give the plan some time to work if he asks them for it. Not having congressional Republicans on the team won't matter if the American people stay behind him. But if he continues to make bipartisanship the test of the plan's success or failure, it really could fail whether it passes or not. One of the main components of the success of the plan is its ability to inspire confidence and the Republicans, the Blue Dogs and their friend in the media are doing everything they can to ensure that Americans believe it won't work.

This is very serious. Red-state Senators are pulling away from this bill because conservatives in their backyards are winning the rhetorical war. There's only one way to turn that around, by using the bully pulpit. The ads running from surrogates will help, but the message is "support Obama's plan for jobs, not Rush Limbaugh and the failed policies of the past." A good start, but it needs more meat on the bones. It's time for a fireside chat with a nervous public.

UPDATE: Chris Bowers has some worthy thoughts on this topic.

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Support For Labor? Prove It.

This morning at the White House, President Obama not only named his Task Force on the Middle Class headed up by Joe Biden, but signed three executive orders protecting labor rights.

So I'm going to be signing three executive orders designed to ensure that federal contracts serve taxpayers efficiently and effectively. One of these orders is going to prevent taxpayer dollars from going to reimburse federal contractors who spend money trying to influence the formation of unions. We will also require that federal contractors inform their employees of their rights under the National Labor Relations Act. Federal labor laws encourage collective bargaining, and employees should know their rights to avoid disruption of federal contracts.

And I'm issuing an order so that qualified employees will be able to keep their jobs even when a contract changes hands. We shouldn't deprive the government of these workers who have so much experience in making government work.

Labor leaders were invited to the signing ceremony today, and approved of the executive orders.

Our economy has always depended on working families. In our current economic crisis, their recovery is our country’s recovery. Now is the time to ensure that every worker has a living wage, affordable health care, a secure retirement, and a safe workplace.

The Executive Orders President Obama signed today are important first steps. This administration recognizes the federal government's responsibility, as the nation's largest purchaser of goods and services, to set model employment standards for private sector workers – and for the federal workforce.

All good stuff. But one thing struck me. Later on in the event, Joe Biden talked about "restoring labor's place in the Department of Labor." Seems to me that would begin by getting your Labor Secretary confirmed instead of having the GOP block her confirmation.

President Obama's choice to head the Labor Department is trying to overcome resistance to her nomination from Republican senators, who contend she dodged important questions during her confirmation hearing.

Rep. Hilda L. Solis, a Democrat from El Monte, is one of several prominent Cabinet nominees still awaiting confirmation more than a week after the president took office [...]

Solis' nomination has been in limbo since Jan. 9, when she failed to impress Republican senators during a confirmation hearing before the Health, Education, Labor and Pensions Committee, chaired by Sen. Edward M. Kennedy (D-Mass).

The committee has taken no action on her appointment and has none scheduled. In Solis' camp, frustration is mounting.

It looks like Mike Enzi, the ranking member on the committee, is driving this. They keep citing her "evasive answers" in hearings but that's a load of bull. Solis' record is crystal clear. Obama's people have no sense of urgency around this, which is weird. Major decisions are being made on the economy right now and the Labor Secretary is not in place. Seems to me that would be a good way to display support for organized labor.

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Grab The Popcorn

I haven't paid much attention to the RNC Chair's race because I don't think it matters at all who gets to play second-fiddle to Rush Limbaugh for the next four years. But it is kind of amusing that there's no consensus at all. After three ballots there is no favorite, and the guy who led after the first ballot, current Chair Mike Duncan, just dropped out of the race. This is supposed to be a "win" for those who want "change" in the party, but change to what? The guy who passed out the "Barack the Magic Negro" CD dropped out earlier. Katon Dawson, the South Carolina party chair who belonged to a whites-only country club, is still in it. Then there's Ken Blackwell, who stole Ohio for Bush in 2004 and lost by the biggest landslide imaginable in 2006; Michael Steele, who got pummeled in his race for Senate in Maryland and who claimed that protesters threw Oreos at him without any evidence; and the state party chair in Michigan, the state with the highest unemployment rate in the country and growing fully hostile to Republicans.

You're telling me this race matters?

Quite awesomely, RedState is down right now.

...Hilarious. Duncan dropped out so that the segregationist Katon Dawson could stop the black guy from winning. Just call them the Dred Scott Party.

...and they couldn't stop Michael Steele. I expect him to be on Meet The Press every Sunday until 2012. Judd Legum has some facts about the new Chairman.

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Drill Now, Stop Later Proposal Torched

The State Lands Commission scuttled a proposed compromise that would have brought new oil drilling to the Santa Barbara coast for the first time in California since 1969, in what is seemingly a victory for environmental and coastal protection advocates. However, some are arguing that the proposal, which would have mandated closure of 4 additional oil platforms off the coast within 13 years, should have gone through.

But a parade of local officials, residents and environmental activists insisted the plan would have advanced efforts to protect the coast by eventually closing four of the region's 20 platforms.

"For the first time in history, the public and the state will be able to shut down existing oil production," argued Linda Krop, an attorney for the Environmental Defense Center and one of the people behind the proposal. "Without this project, they'll continue indefinitely -- perhaps another 40 years." [...]

Nineteen of the 20 platforms that dot the ocean off Santa Barbara and Ventura counties are in federal waters. Shuttering four of them, says Krop of the Environmental Defense Center, would make it difficult for the federal government to lease underwater tracts accessible from those platforms.

And with closure of the two processing plants, the prospect would have been more unlikely, she said.

Read the whole article. There was a significant green alliance in favor of this drilling-for-closure exchange. I tend to agree with the Lands Commission that the proposal for closure wasn't completely enforceable, but then, that's their job to write the law with some enforcement, isn't it? (I guess their concern is that these are federal waters and the state would be limited to enforce end-dates.) I also understand John Garamendi's stated rationale, that approving one lease would set off a parade of oil companies coming to sully the coast, but off course those are approved on a case-by-case basis as well.

If we're going to talk seriously about drilling off the coast in the future, there should be at least a couple bright lines - closure deals like this, and the implementation of an oil severance tax so that we're not the only state in the country that doesn't charge a fee to industry for taking our natural resources out of the ground.

It's an interesting debate - legislators are split, with coastal Assemblymembers opposing but the locals in Santa Barbara in favor, and even Lois Capps thinks it's a worthwhile deal. Endless oil and gas concerns off the coast ought to be dealt with, it's a good question to ask whether this is the right way.

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What Am I Missing?

I fully understand hiring Sen. Judd Gregg to be Barack Obama's Commerce Secretary in the context of getting a 60th Democratic Senator. While 60 isn't a magic threshold (especially when you have people like Ben Nelson in the caucus willing to capitulate), another Democratic vote on many issues is both vital and also symbolically demoralizing to conservatives.

In the context of New Hampshire Governor John Lynch picking a Republican to succeed Gregg, the hiring makes no sense whatsoever.

The White House hopes to make the announcement for Commerce Secretary next Monday or Tuesday, with the precise date depending upon F.B.I background checks. Administration officials said that Mr. Gregg is one of the candidates for the post, but not the only person being considered. (New Mexico Gov. Bill Richardson withdrew his name from consideration for the post early this month because of an investigation into contracts in his state.)

One of several unresolved questions surrounding this story: Would New Hampshire Gov. John Lynch, a Democrat, consider replacing Mr. Gregg in the Senate with a Republican? That is the question being asked among Republicans in New Hampshire.

Political Wire has more on this, including a potential successor, former Republican Gov. Walter Peterson, who "was chair of the 'Republicans for Lynch' committee, would vote with Democrats as much as Maine's Senators do, and most likely wouldn't run in 2010."

OK, but... we can beat Judd Gregg in two years. And the fact that he's considering the Commerce Secretary position signals that he's on his way out of the Senate and may not even run in 2010. Getting a Republican who votes slightly more in the Democratic direction than Gregg for two years is something, I guess, but that won't supersede Gregg wreaking havoc at Commerce, to the extent that he can. Gregg is economically very conservative, he was a strong Bush ally throughout his two terms and he would bring nothing but bad ideas to Commerce. There's an open question of what he could actually do there, but you have to look at this as a trade-off. In exchange for the 60th Democrat, good trade. In exchange for another Republican, no matter how "good" the Republican, bad trade.

BTW, If Russ Feingold's Constitutional amendment were in place and this would go to a special election, I would say good trade, because Republicans are poison in New England.

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Crisis, Opportunity, Lather, Rinse, Repeat

The economy shrunk at a 3.8% rate in the 4th quarter of last year. There were expectations of a loss as much as 5.5%, so the economy actually beat the street. The Dow will probably go UP as a result. But that will be temporary.

Although the initial result was better than economists expected, the figure is likely to be revised even lower in the months ahead and some believe the economy is contracting in the current quarter at a pace of around 5 percent. The current January-March period, they said, will probably turn out to be the worse quarter for the recession.

"The downturn is intensifying. The fourth quarter is worse than it looks," said Mark Zandi, chief economist at Moody's [...]

A build-up in business inventories — which in calculating GDP adds to economic activity — masked the fourth-quarter's true weakness. When inventories are stripped out, the economy would have contracted at a 5.1 percent pace in the fourth quarter, closer to the 5.4 percent drop that economists expected. Businesses couldn't cut production fast enough in response to waning customer demand and got stuck with excess inventories, economists explained.

It looks really bleak out there unless you're unbelievably rich, and your taxes came in at a lower average rate (just 17.2%) than most of the middle class. Income inequality is a major element of this crisis. There is excess money in the economy not being spent and simply being passed among 400 wealthy families. With 2/3 of growth based on consumer spending, that excess is truly wretched. Which is why a task force on the middle class, which Joe Biden will lead, is a very good idea.

For the backbone of America, it's insult on top of injury. Over the course of America's last economic expansion, the middle class participated in very few of the benefits. But now in the midst of this historic economic downturn, the middle class sure is participating in all of the pain. Something is seriously wrong when the economic engine of this nation - the great middle class - is treated this way.

President Obama and I are determined to change this. Quite simply, a strong middle class equals a strong America. We can't have one without the other.

Tristero, who I'm glad to see back in my other perch at Hullabaloo, thinks that the near future will be far worse than anyone imagined, and that Obama is just trying to get Republicans on the hook for part of it. But that's not how people think, we have the disease of Presidentialism in this country, and ultimately Obama will be responsible, no matter how much it's the fault of 30 years of economic insanity.

David Leonhardt has a giant think piece in the New York Times Magazine asking if Team Obama can really transform the US economy. The fact that the current one isn't working, not for the majority of Americans and not even for investors anymore, makes it easier for that transformation to occur. Opportunity in crisis and all that.

The parallels to the modern-day United States, though not exact, are plain enough. This country’s long period of economic pre-eminence has produced a set of interest groups that, in Olson’s words, “reduce efficiency and aggregate income.” Home builders and real estate agents pushed for housing subsidies, which made many of them rich but made the real estate bubble possible. Doctors, drug makers and other medical companies persuaded the federal government to pay for expensive treatments that have scant evidence of being effective. Those treatments are the primary reason this country spends so much more than any other on medicine. In these cases, and in others, interest groups successfully lobbied for actions that benefited them and hurt the larger economy.

Surely no interest group fits Olson’s thesis as well as Wall Street. It used an enormous amount of leverage — debt — to grow to unprecedented size. At times Wall Street seemed ubiquitous. Eight Major League ballparks are named for financial-services companies, as are the theater for the Alvin Ailey dance company, a top children’s hospital in New York and even a planned entrance of the St. Louis Zoo. At Princeton, the financial-engineering program, meant to educate future titans of finance, enrolled more undergraduates than any of the traditional engineering programs. Before the stock market crashed last year, finance companies earned 27 percent of the nation’s corporate profits, up from about 15 percent in the 1970s and ’80s. These profits bought political influence. Congress taxed the income of hedge-fund managers at a lower rate than most everyone else’s. Regulators didn’t ask too many hard questions and then often moved on to a Wall Street job of their own.

In good times — or good-enough times — the political will to beat back such policies simply doesn’t exist. Their costs are too diffuse, and their benefits too concentrated. A crisis changes the dynamic. It’s an opportunity to do things you could not do before.

It's a good piece, you should read the whole thing. From the quotes from Larry Summers, Rahm Emanuel, Peter Orszag, you get the sense that the Administration knows they have to think big, but they are somehow constrained over how to do it politically. We haven't had the opportunity to go this big in 40 years, maybe 70. The muscles are a little unworked and untested. They have to deal with a Republican death cult, a newly adversarial press corps, a team of special interest groups looking for bits and pieces for their industries, a greedy financial sector with a great deal of power, and a Washington committed to the status quo. It's a minefield. Will Obama be willing, or even able, to resist all this, and leverage his popularity and his grassroots support to fundamentally change the economy? We'll see.

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He's Enjoying Himself

Rush Limbaugh had an op-ed in the Wall Street Journal yesterday, where he decided to speak for the entire Republican Party (and who's going to stop him) in offering his stimulus plan:

Yes, elections have consequences. But where's the bipartisanship, Mr. Obama? This does not have to be a divisive issue. My proposal is a genuine compromise.

Fifty-three percent of American voters voted for Barack Obama; 46% voted for John McCain, and 1% voted for wackos. Give that 1% to President Obama. Let's say the vote was 54% to 46%. As a way to bring the country together and at the same time determine the most effective way to deal with recessions, under the Obama-Limbaugh Stimulus Plan of 2009: 54% of the $900 billion -- $486 billion -- will be spent on infrastructure and pork as defined by Mr. Obama and the Democrats; 46% -- $414 billion -- will be directed toward tax cuts, as determined by me.

Then we compare. We see which stimulus actually works. This is bipartisanship! It would satisfy the American people's wishes, as polls currently note; and it would also serve as a measurable test as to which approach best stimulates job growth.

Did you know that we had a proportional representation based on the popular vote in this country? You doubtlessly remember George Bush getting 49% of his ideas passed in 2001, and Al Gore 51%.

Rush Limbaugh hasn't been this prominent since the Lewinsky affair. He's a preening, self-regarding fame addict, and because the Republican Party has basically handed the reins to him, he's going for it.

The talk radio king says Thursday he wants to personally present a stimulus proposal to the president.

“I am ready to build a road, build a bridge ... to the White House.”

As John Cole said, imagine Randi Rhodes drafting a bill and demanding an audience with George W. Bush. Imagine the Democratic Party allowing her to speak for them.

Limbaugh's "ideas," by the way, are the usual mix of cutting the corporate tax rate (even though 2/3 of our corporations use loopholes to pay no taxes) and suspending the capital gains tax (anyone you know have any capital GAINS this year?) and "get out of the way!" He's a front for unpatriotic corporate paymasters who don't think they owe the country anything for their charter.

Also, his ideas have been tried. That's what the Bush era was all about. They failed. His party is a failure. And their turning to him is very revealing. Also crippling for a party that doesn't have enough of a base to win a national election.

Democrats are licking their chops at this, by the way. These radio ads are fantastic.

“Every Republican member of the House chose to take Rush Limbaugh’s advice,” says the narrator after playing the conservative talk radio giant’s declaration that he hopes Obama “fails.”

“Every Republican voted with Limbaugh — and against creating 4 million new American jobs. We can understand why a extreme partisan like Rush Limbaugh wants President Obama’s Jobs program to fail — but the members of Congress elected to represent the citizens in their districts? That’s another matter. Now the Obama plan goes to the Senate, and the question is: Will our Senator"—here the ad is tailored by state to name George Voinovich in Ohio, Arlen Specter in Pennsylvania, and John Ensign in Nevada—"side with Rush Limbaugh too?”

Brilliant. Dems actually boxed the GOP in on this one.

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Richard Perle Was Right

George Bush got his statue in Iraq after all.

A sofa-sized statue of the shoe was unveiled Thursday in Tikrit, the hometown of the former Iraqi leader Saddam Hussein.

Baghdad-based artist Laith al-Amari described the fiberglass-and-copper work as a tribute to the pride of the Iraqi people.

The statue is inscribed with a poem honoring Muntadhar al-Zeidi, the Iraqi journalist who stunned the world when he whipped off his loafers and hurled them at Bush during a press conference on Dec. 14.

In the Arab world, even showing someone the sole of a shoe is considered a sign of disrespect.

Look at the picture on that page, there seems to be no way it's not from The Onion. And yet, with George Bush, anything is possible.

Heckuva job.

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Thursday, January 29, 2009

Kids Getting Health Care, Republic Doomed

SCHIP expansion passed the Senate. I guess there were some slight differences in the bill, so the House will have to re-pass this version, which shouldn't be a problem.

The Democratic-controlled Congress moved a step closer to handing President Barack Obama an early health care victory Thursday as the Senate passed a bill extending government-sponsored health insurance coverage to about 4 million uninsured children.

The bill, which was approved 66-32, authorizes an additional $32.8 billion over the next 4 1/2 years for the State Children's Health Insurance Program.

This is a start on health care reform. It's still fulfilling only part of the promise of the 2004 Kerry campaign, but it's a start. Getting 4 million kids health insurance is not trivial. Hopefully we can build on this and get a comprehensive solution that is the only way to bring down costs. Henry Waxman is optimistic.

Barack Obama has said he wants to pursue major health care reform this year. Two key committee chairmen in the Senate, Max Baucus and Ted Kennedy, have said they want to pursue health care this year. But what about the House? [...]

A few minutes ago, Congressman Henry Waxman made his feelings known -- and did so with no ambiguity. Speaking at the annual Health Action conference, sponsored by the health care advocacy group FamiliesUSA, Waxman announced, "This is our time.... We need to get this job accomplished this year and get a bill to the president."

Waxman is not in the House leadership, of course. But he is very close with Speaker Pelosi and, no less important, he is chairman of the Energy and Commerce Committee -- the committee that will likely take the lead on writing and then pushing health reform legislation.

Let's see it, you mad munchkin, you.

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What's Shameful Again?

Barack Obama is mad as hell and he's not going to take it anymore.

President Barack Obama issued a withering critique Thursday of Wall Street corporate behavior, calling it "the height of irresponsibility" for employees to be paid more than $18 billion in bonuses last year while their crumbling financial sector received a bailout from taxpayers. "It is shameful," Obama said from the Oval Office. "And part of what we're going to need is for the folks on Wall Street who are asking for help to show some restraint, and show some discipline, and show some sense of responsibility."

The president's comments, made with new Treasury Secretary Timothy Geithner at his side, came in swift response to a report that employees of the New York financial world garnered an estimated $18.4 billion in bonuses last year. The figure, from the New York state comptroller, drew prominent news coverage.

The bully pulpit is important, and Obama has actually been successful in shaming Wall Street corporate titans at the margins. Maybe he'll even claw back a couple billion in bonuses after this outburst.

Still and all, he IS the President, and he can probably get on the phone to Congress and, you know, tell them to pass the legislation the Senate is blocking that would put retroactive bonus limits on any firm who took TARP money.

[HR 384] Adds the stricter executive compensation limits from the auto bailout bill to firms that receive TARP money. The stricter limits include a ban on bonuses and incentives for to the 25 most highly compensated employees of a company, "any compensation plan that would encourage manipulation of such institution's reported earnings to enhance the compensation of any of its employees," and a mandate to divest in private airplanes. Notably, these stricter limits would apply retroactively to executives from companies that have already received TARP money.

Better than a "letter of assurance," any day.

Furthermore, given the fact that Obama's economic team and Wall Street executives have been in close collaboration about setting up a "bad bank," which would wildly overpay (with taxpayer money) for worthless securities and enrich bank CEOs to the tune of $250 billion, Obama's complaint borders on pathetic.

So, let me get this straight:

1. President Obama is outraged by the $18 billion going to salary bonuses on Wall Street;
2. President Obama and Treasury Secretary Geithner will make this point directly to Wall Street bankers;
3. The conversation will then return to exactly how President Obama and Treasury Secretary Geithner will give Wall Street bankers $250 billion in exchange for a bunch of worthless assests.

We'll be LUCKY to get away with $250 billion. That's only the remainder of the TARP II funds. The number being floated now by Wall Street is FOUR TRILLION. That's something like 30% of GDP.

The cost of restoring confidence in U.S. financial firms may reach $4 trillion if President Barack Obama moves ahead with a "bad bank" that buys up souring assets.

The figure far exceeds even the most pessimistic estimates of how great the loan losses might be because there is so much uncertainty about default rates, which means the government may need to take on a bigger chunk of bank debt to ease concerns.

Goldman Sachs estimated that it would take on the order of $4 trillion to buy troubled mortgage and consumer debt. That number could shrink if the program were limited to only certain loans or banks, but it could also grow if other asset classes such as commercial real estate loans were included.

New York Sen. Charles Schumer has said that a number of experts thought that up to $4 trillion may be needed to buy the bad assets, an estimate that a Senate aide said was based on informal conversations with people in the industry.

In Obama's defense, if you hide the words "billion" and "trillion," 18 is bigger than 4.

There's minor value in angry missives about bonuses, but there's major value in, uh, four trillion dollars. Especially when the more elegant solution is to take over the insolvent banks and stiff the shareholders. But such things are forbidden hippie-talk.

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NH-Sen: Bank Shot To Sixty?

Josh Orton links to a Roll Call report saying Sen. Judd Gregg may be offered the Secretary of Commerce position.

There is a strong possibility that Barack Obama will choose Republican Sen. Judd Gregg to serve as his Secretary of Commerce, Democratic Senate aides tell the Huffington Post.

The move would fill a vacancy that has lingered since Gov. Bill Richardson withdrew his nomination, and would give Democrats in the Senate a 60th caucusing member, as the state's Democratic governor, John Lynch, would be appointing Gregg's replacement.

I'm slightly concerned about Gregg heading up Commerce, but it's something of a useless cabinet position anyway. It is in charge of NOAA and the National Weather Service and the Census, and is supposed to "promote commerce". Honestly, does this need to exist? Maybe a smaller-government Republican like Gregg would vote to dissolve it and sell off the more important agencies to other departments (NOAA and the NWS should be at Interior, no?)

Meanwhile, another Dem Senator is vital, for a host of reasons, evidenced by the zero-Republican support for the House stimulus bill. It would also line up Republicans to vote for Russ Feingold's Constitutional amendment eliminating Senate appointments by governors, but not until this appointment is made of course. I would even call on the Governor of New Hampshire to open this one up to special election, why not, Paul Hodes is well-positioned to slaughter anyone in the state.

I'm not sure Gregg would do it, but if he did, I think the pros outweigh the cons. Dean Barker at Blue Hampshire thinks Gregg looks out for himself just enough to pull the trigger.

Shrewd on the part of the Obama team.

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Real-Life Slumdogs

This item from yesterday is going to get more and more ink as Slumdog Millionaire received more and more awards.

Their roles in Slumdog Millionaire have won them international acclaim and seen them rub shoulders with the film’s glamorous stars and its British director.

But the reality of life for Rubina Ali and Azharuddin Ismail is far closer to that of the characters they play in the story of love, violent crime and extreme poverty in India.

The child actors’ parents have accused the hit film’s producers of exploiting and underpaying the eight-year-olds, disclosing that both face uncertain futures in one of Mumbai’s most squalid slums.

Rubina was paid £500 for a year’s work ($710) while Azharuddin received £1,700 ($2414), according to the children's parents.

However a spokesman for the film’s American distributors, Fox Searchlight, disputed this saying the fees were more than three times the average annual salary an adult in their neighbourhood would receive. They would not disclose the actual sum.

Both children were found places in a local school and receive £20 a month for books and food. However, they continue to live in grinding poverty and their families say they have received no details of the trust funds set up in their names. Their parents said that they had hoped the film would be their ticket out of the slums, and that its success had made them realise how little their children had been paid.

The optics of a movie poised to make a $100 million dollars and two of the stars living in poverty is really bad. It is not the responsibility of the producers to end poverty for the lives of these kids and their families, but compared to how actors are paid in the United States, this is kind of outrageous. And the reason for that is that actors have aggressive, activist unions in this country to prevent this from happening. If a film is showing globally, the pay scales for everyone in the film probably ought to be standardized, as well. And this is an example of, as Dylan Matthews says, the importance of global unions.

Perhaps it's too much to ask for studios to use the same day rates when filming overseas as they do when filming domestically, but they should at the very least be obligated to let foreign actors collectively bargain. India's a special case, in that Bollywood actors already have a union from which foreign production teams can hire. Other countries with smaller film industries might not have enough actors to form a strong bargaining unit. What is to prevent an actor in, say, Laos from being exploited?

This is why we've got to get functioning global unions organized. We have federations, yes, but you don't see ITUC negotiating contracts with multinational corporations. Those kinds of negotiations need to happen if we're to avoid loopholes like this. As long as national unions are striking separate deals, and corporations are operating without much concern for borders, labor just won't be able to keep up. If, on the other hand, SAG and FWICE etc. joined into a Global Actors' Union which could then negotiate a global contract with Warners Bros, Sony, and the like, the studios won't be able to skirt off to the third world when they don't want to pay actors at union rates.

Film companies are constantly seeking out tax breaks and cost controls (not on their expansive marketing budgets, but on the raw costs), which is why we have runaway production. A level playing field would eliminate the possibility for them to race to the bottom. Union membership in the United States is finally back on the rise after a long period of decline. But in this interdependent, globalized world, the biggest disincentive to outsourcing would be global unions.

...while I'm on the union topic, a word about the rift between SEIU and UHW in California, which has led to UHW breaking away and trying to form their own union. I have friends on both sides of this rift, so I'm in no position to take anyone's side. Ultimately, I find these intra-union debates to be somewhat healthy and grounding for the labor movement. They are a model of what can happen in a bottom-up democratized setting. It's not always clean, but I'd rather it be messy, honestly. The other thing is that unions have un-affiliated and re-affiliated countless times historically. The Change to Win/AFL-CIO split was supposed to be groundbreaking and unprecedented, and now four years later they're talking about reuniting. There are real issues at stake here, but with the continuum of disunity and reunification, I'd just as well stay out of something so dynamic it'll probably change within a matter of months.

And this won't hurt the Employee Free Choice Act at all. That's stupid - there's such a thing as common ground.

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So the New York Times reports that Blackwater was denied a license by the Iraqi government to operate inside the country.

Blackwater Worldwide, the security firm whose guards killed 17 Iraqi civilians on a crowded Baghdad street in 2007, will not receive an operating license from the Iraqi government, a decision that will likely force American diplomats here to make new arrangements for their personal protection, officials said Thursday.

Unlike many security contractors in Iraq, Blackwater has been operating without an Iraqi government license, although it had recently applied for one.

The request was turned down during the past few weeks by the Iraqi government, officials said.

“They presented their request, and we rejected it,” said Ala’a Al-Taia, an official with Iraq’s Interior Ministry. “There are many marks against this company, specifically that they have a bad history and have been involved in the killing of so many civilians.”

Presumably this would mean they would have to leave the country and the State Department would have to find a new contractor or use US military personnel for security. But Noah Schachtman says that while Blackwater may have to go, their employees are likely to stay:

Sure, Blackwater as a corporate entity probably won't be roaming the streets of Baghdad or Mosul for much longer. But the individual mercenaries who've been working for years in Iraq, serving as a Praetorian Guard for the State Department's diplomats -- those guys likely will be able to stay.

The State Department has a contract for "Worldwide Personal Protective Services" with three firms: Blackwater, DynCorp, and Triple Canopy. If Blackwater is no longer allowed to operate in Iraq, a lawyer steeped in the field tells Danger Room, there's no legal reason why the other two firms can't scoop up Blackwater's employees. "State simply issues a new task order to DynCorp or Triple Canopy, who turn around and hire some or all of Blackwater's employees," he says.

The Iraqi government hasn't blackballed those who worked for Blackwater in the past, just the corporate entity. Those employees are willing to work in Iraq and experienced with high-level security. Despite their culpability in the indiscriminate murder of civilians, they'll be first in line for the new jobs. But not wearing Blackwater vests.

I guess that's progress?

(Actually, the real progress would be ending the use of private military contractors entirely)

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Blagojevich, Hair Removed From Office

I'm mainly grateful that the sideshow has ended.

The Illinois state senate on Thursday convicted Governor Rod Blagojevich of abuse of power, removing him from office amid charges that he tried to sell the U.S. Senate seat once held by President Barack Obama.

More than two-thirds of the 59 senators, acting as a jury following the two-term Democrat's impeachment on January 9, voted to find him guilty, effectively ousting him from office.

Blagojevich is the first sitting governor to be impeached and removed from office since Arizona's Evan Meacham in 1988, and just the eighth overall (and the first in the history of Illinois). And it was unanimous.

Lt. Governor Pat Quinn becomes the Governor now. And the bookers of The View and Larry King Live get nervous. How will they fill the time? Hint: there is a near-depression on.

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Slugging Back

Sometimes we in the netroots are too impatient, I will admit. I still think that the stimulus bill was unnecessarily pre-compromised to gain Republican support that was not coming no matter what. But at least Obama and his team appear to be seizing the rhetorical and political opportunity from the big goose egg that Republicans put on the board yesterday. Robert Gibbs previewed the strategy this morning:

Pushing back against the unanimous House Republican vote against President Obama’s stimulus plan, the White House plans to release state-by-state job figures “so we can put a number on what folks voted for an against,” an administration aide said.

“It’s clear the Republicans who voted against the stimulus represent constituents who will be stunned to learn their member of Congress voted against [saving or] creating 4 million jobs,” the aide said.

White House Press Secretary Robert Gibbs said the lawmakers will have to answer to their constituents.

“I do believe that there will be people in districts all over the country that will wonder why, when there’s a good bill to get the economy moving again, why we still seem to be playing political gotcha," Gibbs said.

In addition, surrogates for the Administration are slamming Republicans with a new ad that has a simple tag line: "Support the Obama plan for jobs, not the failed policies of the past."

That's bound to be helpful. And MoveOn has gone to their membership to help fund it.

I mean, this is elemental. More people are receiving unemployment benefits than at any time in history. Other economic indicators are bleak. New home sales are way down. Durable goods orders from businesses are way down. Without a massive stimulus the country will sink into something approaching a depression. And the GOP would rather root for failure? There's a very broad canvas here, and Obama has his sterling personal approval ratings on his side as well.

In response, House Republicans are whining, and trying again to use Obama's post-partisan unity shtick against him.

House Republicans are reacting strongly to reports that the White House plans a political onslaught to pressure Republicans into supporting the stimulus package and to punish those who don't.

House Republican Whip Eric Cantor (R-VA) will soon issue a statement contending that Obama's promise to "put an end to petty politics" is "threatened" as the White House and their allies "are making political threats rather than crafting a bipartisan economic stimulus plan."

He'll call on Obama to "immediately disavow" plans by liberal interest groups who have announced their intention to run attack ads against the Republicans. These groups, organized under the Americans United for Change umbrella, coordinate regularly with Congressional Democrats and are in touch with White House officials.

But look, everyone who went up against Obama in the election tried this, making the argument that "post-partisanship" means Obama can never criticize anyone, and it didn't work. With discredited Republicans making the argument, it won't work now either.

Better still, there are rumblings in the Democratic caucus that Republicans had their chance and now the bill must make sense instead of being targeted to appeal to their narrow interests.

Sen. John Kerry says Democrats should ignore Republicans’ demands about the stimulus plan if they’re going to vote against it anyway.

Reacting to Wednesday night’s vote in the House -- where not a single GOP member supported the stimulus package -- Kerry told Politico that “if Republicans aren’t prepared to vote for it, I don’t think we should be giving up things, where I think the money can be spent more effectively.”

“If they’re not going to vote for it, let’s go with a plan that we think is going to work.”

If this ends with Democrats and the White House learning that bipartisanship is a phantom and ultimately they'll be judged on effectiveness, so every decision from this point forward had better be based on what will work, then we'll end up in a pretty good place.

UPDATE: I want to see a story like this about a Republican every day.

A reliable source tells us that after voting against the economic stimulus package that would preserve and create jobs, Congresswoman Michele Bachmann sat in First Class on her way home on a Northwest flight from Washington to Minneapolis, via Detroit.

Upgrade with frequent flyer miles? Self-indulgence?

The disconnect between what real people are facing and Republican do-nothings should be made. It's not a cheap shot, it's political reality.

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$63 Billion?

Not sure where the LA Times is pulling this figure from.

A $5-million plan to replace 78 wood piles that support the pier is among the hundreds of California projects that stand to benefit from the federal stimulus measure. In fact, the first major initiative of the Obama administration could deliver as much as $63 billion to the state.

Some of the money would help ease California's budget crisis, although officials in Sacramento say it would cover only one-quarter of the nearly $42-billion deficit [...]

The $63-billion projection for California -- provided by the Center for American Progress, a liberal think tank with ties to President Obama -- includes about $44 billion to help pay for things such as infrastructure projects, healthcare for the poor and increased unemployment benefits.

The remaining $19 billion would cover the cost of the individual tax cuts to Californians.

To be fair, the story does make clear that state and local government relief would only directly impact about 1/4 of the budget hole. But I think it's dangerous to throw around $63 billion when there's still going to be a need for tough solutions on revenues and cuts in the budget. That number throws in the kitchen sink - it includes tax cuts to individuals and businesses, unemployment insurance extension, food stamp benefits, everything. The fact that more people have money to spend may positively impact the bottom line if California catches some of that cash in sales taxes, but the story - and really the projection by CAP - makes it sound like California will be handed a $63 billion dollar oversized novelty check. This will only serve to aid the radical Yacht Party agenda, allowing them to say that California just got a bailout so there's no need for tax increases. Every sane person knows that the federal windfall will help but not fix the budget, and talk of $63 billion like it's a sugar plum fairy really hurts the ability to make that fix happen.

For example, when citizens all over the state don't get their tax refunds in the coming months, with taxpayers on the low end of the income scale feeling the greatest effect, and they read stories about $63 billion flowing to the state, who do you think they're going to blame? And I'm sure the Yacht Party will be around to direct that blame, too.

It's fairly irresponsible to headline "$63 BILLION!" when we know only $10 billion of that will directly hit the budget.

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More Pushback

Here's some more institutional pushback from the military against President Obama - a military judge is continuing a Guantanamo hearing in contravention of an executive order.

A military judge in Guantanamo Bay today denied the Obama administration's request to delay proceedings for 120 days in the case of a detainee accused of planning the October 2000 attack on the USS Cole warship, an al-Qaeda strike that killed 17 service members and injured 50 others.

The decision throws into some disarray the administration's efforts to buy time to review individual detainee cases as part of its plan to close the U.S. military prison at the Guantanamo naval base in Cuba. The Pentagon may now be forced to temporarily withdraw the charges against Abd al Rahim al-Nashiri, a Saudi citizen of Yemeni descent.

Nashiri is facing arraignment on capital charges on Feb. 9, and Judge James Pohl, an Army colonel, said the case would go ahead.

"We just learned of the ruling here . . . and we are consulting with the Pentagon and the Department of Justice to explore our options in that case," White House spokesman Robert Gibbs said. Asked at a news briefing whether the decision would hamper the administration's ability to evaluate the cases of Guantanamo detainees, Gibbs replied: "No. Not at all."

Mcjoan says this isn't a matter of denying a simple request. There were two orders; one was a request that there be a delay in hearings for 120 days, and the other a direct order, from basically the prosecution in the various cases, to put a continuance on them.

Sec. 7. Military Commissions. The Secretary of Defense shall immediately take steps sufficient to ensure that during the pendency of the Review described in section 4 of this order, no charges are sworn, or referred to a military commission under the Military Commissions Act of 2006 and the Rules for Military Commissions, and that all proceedings of such military commissions to which charges have been referred but in which no judgment has been rendered, and all proceedings pending in the United States Court of Military Commission Review, are halted.

The executive branch directs military commissions. The executive called all ongoing proceedings to a halt. End of story. This Army Colonel is in violation of the law. BTD has more.

They're going to keep testing this guy until he hits back...

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Bad Bank, Bad!

Unwilling to take the plain fact that most banks are insolvent to its logical conclusion, it looks like the latest idea from the Obama Administration is to create a "bad bank" to warehouse all the toxic assets mucking up the balance sheets of the financial titans, until the economy recovers and they can be sold, possibly at a profit. This only way this works for the banks is if the government essentially buys the assets well above current value. If they buy them at face value to store in the "bad bank," the so-called "good banks" couldn't survive because they would all be insolvent. In other words, this is the same idea that was the initial impetus of the TARP program, where the government would buy up all these troubled assets. Paul Krugman put it in joke form:

As the Obama administration apparently prepares to launch Hankie Pankie II — buying troubled assets from banks at prices higher than they will fetch on the open market — it occurred to me that an updated version of an old Communist-era joke may be appropriate: under Bush, financial policy consisted of Wall Street types cutting sweet deals, at taxpayer expense, for Wall Street types. Under Obama, it’s precisely the reverse.

It seems that the Administration and its Treasury Secretary are misunderstanding who they serve - or perhaps understanding too much. As Barry Ritholtz explains, the emphasis is being put on saving the current private banking system. Geithner has said “We have a financial system that is run by private shareholders, managed by private institutions, and we’d like to do our best to preserve that system.”

No! Defending these idiots was your old gig. In the new job, you no longer work for the cretins responsible for bringing down the global economy. Please stop rationalizing their behavior, and preserving the status quo!

Yesterday’s 13% surge in bank stocks is a clue as to what an obscene taxpayer giveaway this “bad bank” plan is — its free money for the firms that caused the problems, many of whom still have the same incompetent management in place that caused the problem. Purging toxic assets from bank balance sheets, without punishing the management, shareholders and creditors of these institutions for their horrific judgment will only encourage more of the same in the future. Its moral hazard writ large.

Dean Baker also spells this out. We're trying to resuscitate a patient who has flatlined. The banks are insolvent; they have more liabilities than assets. And nothing is going to change that. Keeping them in business will mean another in a series of taxpayer giveaways where the public pays for the fiction that the banks can be saved. But, if nationalization remains such a dirty word, Baker has an idea.

While the more obvious way to deal with the problem is to simply take over the bankrupt banks, and then put their junk in a bad bank, like with we did with the bankrupt thrifts in the 80s, there is a relatively easy way to limit the extent to which the bad bank is simply bank welfare.

We can just attach a clawback provision, under which the bank will be forced to make up any money that the bad bank loses on their junk, plus a penalty. For example, if Citibank sells $100 billion in junk, and the bad bank ends up selling it for $70 billion, then Citibank has to cover this $30 billion loss, plus a 20 percent penalty ($6 billion). This structure will both ensure that Citibank doesn't run off with our money and also discourage banks from trying to mislead the bad bank about the true value of their junk. (Senator Dodd proposed a similar measure in the debate over the TARP.)

If investors like sovereign wealth funds, who hold lots of our debt, are angered by any threat to their assets and won't stand for it without causing major shocks to the financial system, that's one other element to consider. However, policymakers increasingly will not stand for privatizing profits and socializing risk. Republicans will knee-jerk oppose it because Democrats brought it up, and there's enough of a coalition on the left for that to fail. There had better be meaningful provisions in here that protects taxpayers instead of just savin the bacon of executives.

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Odierno's Revolt

In many ways, I feel for Barack Obama. His instincts obviously are to seek consensus, but he has an extremist Republican Party that wants no part of it. And he has multitudes of other enemies, like the Blue Dogs always whispering in his ear about fiscal responsibility in a time of economic meltdown, and several elements of the military, who will fight his plans and try to undermine his goals, particularly in Iraq:

Since taking office last week, Mr. Obama has recommitted to ending the war in Iraq but not to his specific campaign pledge to pull out roughly one combat brigade a month for the first 16 months of his presidency. His top commander in Iraq has proposed a slower start to the withdrawal, warning of the dangers of drawing down too quickly [...]

Among those consulted by the president was Gen. Ray Odierno, the top commander in Iraq, who has developed a plan that would move slower than Mr. Obama’s campaign timetable, by pulling out two brigades over the next six months. In an interview in Iraq on Wednesday, General Odierno suggested that it might take the rest of the year to determine exactly when United States forces could be drawn down significantly.

“I believe that if we can get through the next year peacefully, with incidents about what they are today or better, I think we’re getting close to enduring stability, which enables us to really reduce,” General Odierno said as he inspected a polling center south of Baghdad in advance of provincial elections on Saturday.

General Odierno said the period between this weekend’s elections and the national elections to be held about a year from now would be critical to determining the future of Iraq. While some American forces could be withdrawn before then, he suggested that the bulk of any pullout would probably come after that.

“We are going to reduce forces this year,” the general said. “It’s the right time to reduce our forces here. I believe that Iraqis are making progress. It’s time for us in some places to step back and give them more control.” He added, “What we want to do is to slowly shift our mission from one that’s focused on counterinsurgency to one that’s more focused on stability operations.”

Odierno is thinking from the perspective of a commander responsible just for Iraq, and employing a Freidman Unit strategy ensures that he isn't blamed for losing the war if things go awry. Ryan Crocker basically said the same thing the other day, warning against a "precipitous" withdrawal, but Odierno puts some numbers to it. And while there's probably less conflict that there appears to be, owing for press bias toward internal squabbling, Odierno's is a very shortsighted strategy. Marc Lynch explains this well.

The politics of this aside, I think that Odierno's intention of keeping troops in Iraq through the national elections is dangerously wrong. The CFR/Brookings/Odierno "go slow" approach ignores the reality of the new Status of Forces Agreement and the impending referendum this summer -- which may well fail if there is no sign of departing American troops. It sends the wrong messages to Iraqi politicians and the Iraqi population. It would badly hurt Obama's credibility in the region and with Iraqis, who will see his most important public commitment fall by the wayside. And it would lose the unique window of opportunity offered by the transition to signal real change.

This strategy is also a recipe for endless delay. Given the very catalog of Iraqi political fissures and emerging conflicts that Odierno cites as reason to stay, there is little reason to think that conditions will be so much more stable at the end of this proposed year of caution. At that point the exact same conversation will ensue about why drawdowns are imprudent at this time -- and does anybody believe that the people currently calling for prudence and high troop levels will suddenly reverse themselves a year from now when conditions look much the same as they do now? [...]

A "down payment" of a public, significant drawdown in the early spring would send the correct signals to all relevant actors, while allowing plenty of time for commanders in the field to assess the impact and adjust accordingly. I hope that Obama is able to head off a battle with the military -- and the military, a battle with Obama -- by working together on such a strategy. Remember: Obama won the election.

It doesn't surprise me that a commander in the field would ask for more troops, or want to postpone drawing down troops. Why would a commander in the field want less to work with? But the job of a president, as Obama well knows, is to balance competing commitments and to make these choices.

Look, at some point the fighting between internal forces in Iraq jockeying for power will bubble to the surface. Our presence or absence isn't going to change that. So while we have a honeymoon period with a new President, we need to honor our agreements and let the Iraqis invest in their own future again, rather than waiting around for us to get out before doing so. Failing to meet our responsibilities outlined in the SOFA will anger Iraqis and also the world.

In a broader context, I think it’s just difficult to overstate the importance of ending the war and occupation in Iraq to advancing America’s broader international agenda. There were a lot of things wrong with the Bush administration’s policy, but in concrete terms the world is looking for a new approach to detention and torture, a new approach to Israel and Palestine, and a new approach to Iraq. Obama has acted decisively on the first item, has shown a lot of promise on the second, and needs to follow through on the third. Diplomacy with Iran, a renewed focus on the Afghanistan/Pakistan situation, a rapprochement with Europe, a partnership with China and our allies in Asia on the global economic situation, etc. all require us to get out of an Iraq-focused foreign policy. And the complexities of Iraq are such that the best way to do that is to get out of Iraq.

Absolutely. Odierno is doing his job asking for more resources but Obama needs to guide this with an eye toward the overall foreign policy picture. Furthermore, his ability to control the military as commander-in-chief will be severely limited if he gives in on troop withdrawals. His attendant policy pronouncements will ring hollow. Obama has to hold to his campaign promise and a signed agreement with the Iraqis. It's time to leave Iraq.

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