Eliminate Filibuster Now: A "First 100 Days" of Year 2, Avoid Supreme Court Fight, Win 2010 Elections.

Police Lt.: Well, Denham, the airplanes got him.
Denham: No, it wasn't the airplanes. It was beauty killed the beast (King Kong, 1933)

The filibuster will be eliminated this year. One, and possibly two, Justices will retire at the end of the term in June. There is a 100% guarantee that Republicans will filibuster anyone President Obama appoints, claiming approval should await the outcome of the November elections. The President has shown a belief, unsupported by events, to try to be acceptable at least to some Republicans so they will vote for him, in this case, his nominee.

They won't.

So, we will get a lukewarm nominee, and no Supreme Court Justice. The Republicans know theatre very well--that situation will be perceived as the pathetic end of a dysfunctional government.

At that point, Democrats will truly be in a no-win position. If they eliminate the filibuster at that time, for that single purpose, Republicans will have a couple of months right before the election to denounce the 'trickery' to get 'activist' Justices seated. Nonetheless, they will have to eliminate the filibuster then because not to do so would alienate all their constituencies, and guarantee a shellacking in the 2010 elections.

More importantly, Democrats will be in a no-win position because the government will have been dysfunctional for another year and, despite it being Republicans' fault, the Democrats will be blamed because they are in control. And, they have 59 votes, more than Republicans ever had when they rammed through their agenda, and ran the country into the ground.

So, why not recognize the inevitable? Eliminate the filibuster right now. Then, the Republicans' pompous posturing will dissipate after a couple of months now, not near the election, and the Democrats will have a chance to do a "First Hundred Days" of year 2, to pass a robust agenda that will indeed have brought about change:

1) A jobs bill that actually creates jobs;
2) Approve all the President's appointments, together, one vote.
3) A financial reform bill that incorporates Elizabeth Warren's consumer protection agency and (my hope) reinstitution of Glass-Steagall.
4) Healthcare reform incorporating Joe Lieberman's former love, buy-in to medicare for those 55 and older; and a public option; and a combination of taxing high-end plans + a surtax on the wealthy (House + Senate version).
5) Student loan reform
6) Energy tax and rebate (Senator Cantwell's proposal).

While the Republicans bellyache about being steamrollered, Democrats can pass the agenda for which the nation voted in 2008, but soured because of the dithering and dealmaking the existence of the filibuster created. Without the filibuster, no one would have had to talk to Joe Lieberman or Blanche Lincoln or Ben Nelson. [And, since no one would have had to talk to them, I bet they would have been more supportive!].

Without a filibuster, when the summer arrives, and the 1-2 Justices announce their retirements, the President can nominate really good people to the bench. One might suspect that the caliber of those people would be significantly higher than whom he might choose in the vain attempt to get Republican support.

Today, the world is disintegrating. Republicans fear the President's success, both at home and abroad. So does al-Qaeda and Ahmadinejad. They are all reveling in his troubles, because his capacity to force change abroad is limited by his inability to do it at home.

I am late to the "end the filibuster" movement because I worry about what Bush et al. might have done if there were no filibuster then. Social security would have been privatized--and decimated by the financial collapse. Stem cell research would have been totally outlawed (passed twice by the House).

But, I am willing to take those future chances, because the country and the world cannot await an even greater than 60-vote majority that Lyndon Johnson had in the 1960s that will never happen. Eliminating the filibuster means we have to deliver for the American people, and maintain constant vigilance against another radical rightwing takeover.

Although the President is not himself a "boomer", those who control the Congress are. Many of them had their hopes and dreams for a better America, and a safer and more just world, dashed when Robert Kennedy was assassinated. It was then hijacked by George W Bush.

This is their last chance. It starts with eliminating the filibuster.

Now.

 

Weekly Audit: Don’t Let Citizens United Wreck Our Economy

By Zach Carter, Media Consortium Blogger

In a landmark decision last week, the Supreme Court ruled that corporations could spend unlimited funds to influence American elections, overturning a century of legal precedent. The Court’s ruling in Citizens United v. FEC undermines the integrity of the U.S. government, as President Barack Obama emphasized at his State of the Union address. But the decision also deals a damaging blow to the U.S. economy by encouraging lawmakers to write economic rules that benefit specific companies at the expense of everyone else.

The editors of The Nation lay out the High Court’s hubris in no uncertain terms:

The Citizens United campaign finance decision by Chief Justice John Roberts and a Supreme Court majority of conservative judicial activists is a dramatic assault on American democracy, overturning more than a century of precedent in order to give corporations the ultimate authority over elections and governing. This decision tips the balance against active citizenship and the rule of law by making it possible for the nation’s most powerful economic interests to manipulate not just individual politicians and electoral contests but political discourse itself.

Citizens United and the financial crisis

How does this ruling have any bearing on the economy? Markets are not simply the product of random interactions between consumers and producers. Even under the most radical, laissez-faire economic theories, markets are defined, coordinated and policed by the government. For the economy to function at all, we need the government to define what constitutes fair play.

But over the past few decades, we’ve watched Congress and the executive branch rewrite those rules of the game under heavy corporate influence, creating artificial profits for a set of favored companies with very bad consequences for the broader economy.

The U.S. banking industry serves as a prime example. Since the 1980s, banks have been spending like crazy in all kinds of elections, and getting just about anything they want in return. I interviewed Harvard University Law Professor and TARP Oversight Panel Chair Elizabeth Warren for AlterNet, and she presented a concise but unsettling economic history of consumer protection law:

Thirty years ago we had laws that put some basic fairness into the consumer credit market. Over time, the large financial institutions captured the regulators who were supposed to be the cops on the beat to enforce those laws. They also pumped hundreds of millions of dollars into Washington to make sure that no new cops were put on the beat. Without good laws, the industry started selling ever-more-deceptive products, and their friendly regulators looked the other way.

The bank lobby and the AIG bailout

In Mother Jones, Corbin Hiar reveals how even a bank that engineered a massive tax fraud scheme was able to benefit from the AIG bailout. Major financial institutions convinced Congress to block any regulation of credit default swaps (CDS) all the way back in 2000. CDS contracts were essentially insurance on the value of financial assets—if the assets lost value, banks would still get paid as if they were highly profitable.

CDS insurance encouraged banks to engage in risky mortgage lending, and allowed them to book huge profits on those risky mortgages during the housing boom, even though many of those mortgages were doomed from the get-go. AIG binged so heavily on CDS that the company was on the brink of bankruptcy in the fall of 2008. But an AIG bankruptcy would have hammered the major banks who served as AIG’s betting partners, most notably Goldman Sachs. Those banks would have received just pennies on the dollar from a bankrupt AIG. But under the bailout, the New York Federal Reserve paid the banks off at full value, without demanding any concessions whatsoever.

“The credit crunch was an existential threat to every over-leveraged big bank. What’s most shocking about the AIG bailout … is that these endangered banks were able to extract such a sweet deal from the government,” Hiar writes. “The banks were paid the full value of all the CDS contracts they had made with AIG—including those mortgage-backed securities they had bought when it was clear the subprime market was collapsing.”

The only AIG counterparty to even consider taking CDS losses was Swiss banking giant UBS, which was negotiating a separate settlement with the U.S. government over a massive tax evasion scheme. But even the tax fraudsters at UBS ultimately received full payment on their CDS exposure, and it now appears that the Swiss bank will be able to protect its wealthy tax-evading clients.

With the AIG bailout, the corporate takeover came full-circle. The banks purchased radical deregulation in Congress, and when the deregulated banks destroyed themselves, the government paid out billions to save them. The rest of the economy was ravaged by predatory lending, and taxpayers, not bankers, footed the bill for bank losses.

Redefining corruption

So the Citizens United decision will not introduce corporate influence in elections. Instead, it takes an uneven playing field and tilts it further in the favor of corporate executives. The Roberts court didn’t just open the floodgates for corporate cash in U.S. elections and call it a day. It also explicitly redefined “corruption” to give corporations—and anyone else—greater leeway to financially curry favor with politicians. Heather K. Gerken details the new definition for The American Prospect:

The most important line in the decision … was this one: “ingratiation and access … are not corruption.” For many years, the Court had gradually expanded the corruption rationale to extend beyond quid pro quo corruption (donor dollars for legislative votes). It had licensed Congress to regulate even when the threat was simply that large donors had better access to politicians or that politicians had become “too compliant with the[ir] wishes.” Indeed, at times the Court went so far as to say that even the mere appearance of “undue influence” or the public’s “cynical assumption that large donors call the tune” was enough to justify regulation. “Ingratiation and access,” in other words, were corruption as far as the Court was concerned.

Most of us would consider the key lawmakers ensnared in the Jack Abramoff scandal as fundamentally corrupt—Abramoff flew former Republican Whip Tom DeLay of Texas to Scotland for golfing vacations in an effort to win greater leverage over DeLay’s legislative agenda. The court’s ruling claims that this kind of activity is not corrupt, and bars Congress from passing any laws to counteract it. As filmmaker Alex Gibney emphasizes in an interview with Amy Goodman of Democracy Now!, the court has essentially taken Tom DeLay’s corporatist philosophy and made it a piece of constitutional law.

“Tom DeLay’s view is, we spend more money on potato chips than we do on political campaigns. His view would be, let the money rush down like great waters,,” Gibney says. “I think the court was channeling Tom DeLay when they issued their recent decision.”

Why citizens need to speak out now

So what can we do about this? As GRITtv’s Laura Flanders discusses in a roundtable discussion with several progressive leaders, there will be a long fight for a Constitutional Amendment to ban corporate influence in politics. Until then, as progressive strategist Mike Lux explains, citizens will have to take an aggressive stance against Corporate America as shareholders. Corporate power is exercised by a handful of executives, but the resources that support that power come from ordinary Americans who own stock in those companies, primarily through retirement plans. By demanding that the giant firms we own do not highjack our democracy with lobbying, we can limit some of the damage from the court’s recent decision.

If you liked the bank bailouts, then there’s plenty for you to love about the Citizens United decision. If you didn’t, then it’s time to speak up.

This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Mulch, The Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.

Criticism of Obama's $75 Billion Mortgage Program Mounts

Peter Goodman of the New York Times writes a stinging takedown of the Obama administration’s $75 billion program to protect homeowners from foreclosure.

Since President Obama announced the program in February, it has lowered mortgage payments on a trial basis for hundreds of thousands of people but has largely failed to provide permanent relief. Critics increasingly argue that the program, Making Home Affordable, has raised false hopes among people who simply cannot afford their homes.
As a result, desperate homeowners have sent payments to banks in often-futile efforts to keep their homes, which some see as wasting dollars they could have saved in preparation for moving to cheaper rental residences. Some borrowers have seen their credit tarnished while falsely assuming that loan modifications involved no negative reports to credit agencies.
Some experts argue the program has impeded economic recovery by delaying a wrenching yet cleansing process through which borrowers give up unaffordable homes and banks fully reckon with their disastrous bets on real estate, enabling money to flow more freely through the financial system.
"The choice we appear to be making is trying to modify our way out of this, which has the effect of lengthening the crisis," said Kevin Katari, managing member of Watershed Asset Management, a San Francisco-based hedge fund. "We have simply slowed the foreclosure pipeline, with people staying in houses they are ultimately not going to be able to afford anyway."
Mr. Katari contends that banks have been using temporary loan modifications under the Obama plan as justification to avoid an honest accounting of the mortgage losses still on their books. Only after banks are forced to acknowledge losses and the real estate market absorbs a now pent-up surge of foreclosed properties will housing prices drop to levels at which enough Americans can afford to buy, he argues.

Over at Naked Capitalism, they think that the "pointed mainstream media coverage of the Administration’s limp wristed, industry-favoring financial 'reform' plans" is long overdue. Yves Smith finds that "object lesson of the day is Peter Goodman’s story at the New York Times on the Treasury’s mortgage mod program, which was old Bush/Paulson wine in new bottles."

 

Weekly Audit: Why the Rich Can't Afford to Get Richer

Weekly Audit: Why the Rich Can't Afford to Get Richer

by Zach Carter, TMC MediaWire Blogger

If we want our economy to be strong and stable, we have to start thinking about it as a product of community--not a get rich quick scheme. As unemployment escalates and the housing crisis deepens, ordinary people are feeling the economic pinch. In the meantime, corporate executives and shareholders are coasting above the storm. If we want to tear down the useless casino that is Wall Street, our wealthiest citizens will have to pitch in when times get tough.

Salon carries an excellent three-part email exchange between Simon Johnson, former Chief Economist for the International Monetary Fund, and John Talbott, a reformed Goldman Sachs investment banker. Taken together, the emails constitute a thorough, in-depth analysis of the causes of the economic crisis, needed reforms and political hurdles to making policy changes. Johnson's basic argument is as frightening as it is accurate: Bankers line our elected representatives' pocketbooks, convincing them to re-write regulations that made big bonuses for bankers and a catastrophe for everyone else.

Some of Talbott's most interesting observations concern Wall Street's epic transformation. Over the past three decades, our financial sector has morphed from a kind of economic rebar to a wrecking ball. Once upon a time, the financial industry provided loansto businesses and entrepreneurs and funded constructive enterprises. Today, almost all of this activity has been replaced by hedge fund speculation. As a result of excessive deregulation, a wild array of complex transactions called derivatives have developed on Wall Street. Many derivatives, including the credit default swaps that brought down AIG, are intended to provide insurance against losses.

But this readily available "insurance" has removed any sense of risk from the minds of U.S. financiers. All kinds of casino experiments have come in play over the last several years because traders could insure any bet, however crazy, against losses. The whole point of a financial sector is to make sure that good ideas get funding. Instead, we've guaranteed that risky ideas gets funding, even when the idea is socially destructive and financially unsound, like, say, subprime lending.

As David Sirota emphasizes in Truthdig, this financial recklessness has only deepened existing economic inequality. The wealthiest 1% of U.S. citizens have the greatest share of the nation's income since 1929, the onset year of the Great Depression. That's not just a coincidence. When economic inequality is out of control, the economy itself becomes unstable. If everybody is broke, no one has enough to buy the stuff that makes the economy go-round.

There's a paradox buried in all the instability. Even though outrageous inequality is bad for business, it's not necessarily bad for businessmen (Yes, businessmen. Women are still largely excluded from the top tier of corporate decision-making). When the whole economy pays the price for executive excess, the executives themselves don't actually take the hit. Even when elites lose their jobs, they stay rich. When people who depend on their paychecks for survival get the axe, it's a life-altering, often devastating, experience.

There's something we can do about this, Sirota notes. We need to treat the rich like members of a community, rather than an isolated special interest whose demands must be balanced against other special interests. When a community needs to pay for something, the people who can afford to pay pony up. We have real problems right now. There's nothing wrong with taxing the wealthy to fund them.

But why worry? The bailout is working, and banks on the mend, right? Maybe not so much. The Real News explains how bank profits don't always equal economic progress. Wells Fargo just booked a massive second-quarter profit, but the numbers are largely divorced from any economically useful activity.

Foreclosures are soaring, and bank lending is way down. Even though the banks are booking big profits, they aren't putting much money into the economy. How is this possible? Well, banking basically involves two steps. First, the bank borrows money at a low interest rate. Then, it makes a loan at a higher interest rate. The difference is the profit. Right now financing costs for banks are next to nothing, thanks to a host of government programs. Even if you don't make many loans, it's hard to lose money when you can borrow it for free.

As Steve Benen emphasizes for The Washington Monthly, using the stock market as as measure of economic vitality has proven pretty silly over the past few years. Back in February, just about every conservative pundit was screaming that the decline in the Dow Jones Industrial Average was purely a result of President Barack Obama's economic policies.

Obama's economic record is not perfect. He has continued the Bush administration's bank bailouts, and his stimulus package wasn't nearly big enough to fight this recession. But some of Obama's reform ideas have been very good, and he actually got a stimulus package through a very reluctant Congress. Now that the Dow is back on the ascent, are any of those conservative talking heads cheering Obama's proposal to create a new financial regulator focused on protecting consumers? Well, no. As it turns out, the stock market is pretty fickle. Its daily and weekly movements can rarely be attributed to individual economic policies. The things that make stocks advance don't necessarily create new jobs.

That new consumer regulator is by far the best part of Obama's financial regulatory overhaul. Harvard Professor and bailout watchdog Elizabeth Warren explains why in this video, available at AlterNet. They've also published a piece I wrote on the bank lobby's insane assault on the plan.

But even if the entire crazy bailout actually does work, the solution won't last without other major economic reforms. In The Progressive, Naomi Klein argues that the surreal boom-and-bust cycle of U.S. capitalism is an awful lot like a Sarah Palin fairy tale, a world in which the most outrageous structural imbalances never result in problems for ordinary people because a new dose of market magic swoops in at the last minute to save the day.

"What Palin was saying is what is built into the very DNA of capitalism: the idea that the world has no limits. She was saying that there is no such thing as consequences, or real-world deficits. Because there will always be another frontier, another Alaska, another bubble. Just move on and discover it. Tomorrow will never come," Klein writes.

If we want to get away from this predatory cycle, we have to give ordinary citizens more influence over the legislative process. As Talbott noted in Salon, that means demanding our due.

This post features links to the best independent, progressive reporting about the economy. Visit StimulusPlan.NewsLadder.net and Economy.NewsLadder.net for complete lists of articles on the economy, or follow us on Twitter. And for the best progressive reporting on critical health and immigration issues, check out Healthcare.NewsLadder.net and Immigration.NewsLadder.net. This is a project of The Media Consortium, a network of 50 leading independent media outlets, and was created by NewsLadder.

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Weekly Audit: Obama's Regulation Overhaul Comes Up Short

by Zach Carter, TMC MediaWire Blogger 

President Barack Obama rolled out his plan to overhaul financial regulation last week. While much of the Obama plan relies on the same regulators and structures that led to the current meltdown, there is one key exception. The establishment of an independent Consumer Financial Protection Agency would give ordinary citizens a seat at the financial policy table for the first time and prevent the abuses in credit card and mortgage lending that have wreaked havoc on households all over the country.  

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