Destabilizers and Laying Blame

Set aside S&P's credibility problems and their $2 Trillion oopsie (also, somewhat credible defenses from Ezra Klein and Felix Salmon), and what they're saying is we don't care exactly how you do it, as long as everyone agrees to do it for longer than the next election cycle.  Cuts are super, no revenue increases = unrealistic, and someone we aren't serious enough to name specifically used the prospect of default as a bargaining chip, and that's just crazy.

The reasons for the downgrade, in a nutshell: dysfunctional politics.  And NYU's Jay Rosen nails it in a tweet:

If we are to credit S & P's clear thinking, as says, then the opinion should have read: the Republicans destabilized the system.

But saying that directly in a report that could (probably not) further weaken the US economy would be uncivil! Let's just dance around it, fan the flames of dysfunction, and scurry back before Goldman Sachs yells at us again.

In the end, the downgrade may be useful in elevating a legitimate point from progressive circles to, oh, say, the White House and Senate Dems:  The House of Representatives is held hostage by a pack of simple minded zealots who don't give two shits about governance, economics, or reality. The Daily Beast profiles 19 freshmen who'd like to see it all burn:

If there is one thing clear from the Tea Party caucus’ first triumph, it is that its members don’t adhere to Washington convention or care about public sentiment. The greater the criticism, the more they stiffen. Their singular focus is collapsing the size of government, at any cost.

No tactic is too extreme, no issue too small (debt-ceiling votes used to be routine before they came to Washington), and no offer of a federal project for their district or a glitzy committee assignment can lure them from the stubborn line they intend to hold against spending.

“So you’re sitting down with [Speaker] Boehner and [House Majority Leader] Cantor, and they’re offering you stuff for a vote,” Walsh, the Illinois Republican, recalls. “They can help you and do some things, you know, committee assignments and help moving up the chain.

“But whew,” he says, making a whistling sound and sweeping his hand over his head. “You’re talking beyond me. I just don’t care.”

Calling this a mere lack of adherance to "Washington convention" is like calling Charlie Manson a "free thinker."  It's clear, for what it's worth, that S&P puts a lot of the reason for the downgrade on a handful of lawmakers with a near-religious fidelity to an American history they've re-imagined in their own image.  It's not just that the President shouldn't be open to negotiating with the lowest common demoninators, it's that you can't negoatiate with them, and they rule the GOP.

Also via Tweet, Robert Reich sees a way around it for Obama:

Mr President: Put forth bold jobs plan, challenge Rs to support it, and if they refuse make it center of your 2012 campaign.

Keyword: bold.  Drew Westen writes today that the President's problem is messaging.  He didn't tell a story with clearly defined villains, Westen says.  I agree.  But while the blame for the downgrade itself may be clear, blame for the situation right now should be spread on Democrats across the board.  More from the Daily Beast:

This time the geometry of triangulation is different. Obama is hunkered in one corner with House and Senate Democrats, who are increasingly alienated by the president’s willingness to compromise with the conservative wing of the GOP.

House and Senate Democrats are alienated?  Valid criticism -- and important going forward -- but Democratic lawmakers get a pass now considering their track record and the Legislative Meh they've served up again and again?  The POTUS and Democratic lawmakers shoulder the blame for the 2010 outcome.  Sure the story could have been better told by Obama. Also true, legislative agendas under a Democratic majority haven't lent themselves well to defining a compelling narrative. For every legislative success there is a contradicting backstory.  For every bold challenge, a walk back.  Where's the inspiration in running away from a pre-election Bush Tax Cut fight? Where's the vision in letting Max Bacchus wander health care reform through the woods for months?  NYT's Timothy Egan wrote in August 2010, foretelling Democratic losses, "[Democrats] have been terrible at trying to explain who they stand for and the larger goal of their governance."

The public has long been soured on the tea party, even in conservative meccas.  They support tax reforms and increased contributions from the nation's most wealthy.  They've cooled on the overly-simplistic Republican slogans and warmed to blaming them for failure to solve our country's problems.  They want Social Security and Medicare strengthened not shredded

Now if they could only find a party that stood for those things!

The Historical Antecedents of Grover Norquist

Earlier this week, Jane Hamsher of Firedoglake wrote a letter to Attorney General Eric Holder calling for an investigation into Rahm Emanuel's activities at Freddie Mac and suggesting that there was a White House conspiracy led by the Chief of Staff to thwart an investigation into financial accounting improprieties that may include intentional, and thus criminal, earning misstatements during Mr. Emanuel's brief but lucrative tenure on the board of directors of Freddie Mac. The allegations that the White House is blocking the appointment of an Inspector General who would look into the financial mess at both Fannie Mae and Freddie Mac are serious and in part based on this story in the Chicago Tribune. Nonetheless what has mostly garnered attention, at least so far, is the fact that Jane co-authored the letter with Grover Norquist, the head of anti-tax advocacy group Americans for Tax Reform and a board member of both the National Rifle Association and the American Conservative Union.

The pairing has sparked a flood of commentary on the peculiarity of the alliance but only a trickle on the substantive issues addressed by the joint letter. Chris Good of The Atlantic noted that "Grover Norquist and Jane Hamsher are not often on the same side of anything, beyond both usually being in the Western Hemisphere." Mr. Good quoted the letter in full and notes the seriousness of the allegations but not much more. Bret Baier of Fox News opined that "politics can make for strange bedfellows" and then devoted but a single paragraph to the substance of their charges. More thorough was the New York Times who called them an "odd couple" before adding that "ideological opposites Jane Hamsher and Grover Norquist have found common ground in a common enemy" in the White House Chief of Staff, Rahm Emanuel. Even so, the nation's paper of record buried the story by Jackie Calmes in its Caucus Blog section with five short paragraphs on the substance of the joint letter with another five short paragraphs on "the strangest odd-couplings since James Carville and Mary Matalin married." The Times finds while Mr. Norquist is a familiar GOP provocateur, "Ms. Hamsher’s role, however, reflects her emergence as a leading cyber-voice for a Democratic left wing increasingly disaffected by what it sees as the sell-out centrist policies of the Obama administration" adding "for that it blames Mr. Emanuel, viewing himi [sic] as a sort of presidential puppet-master."

A number of blogs have also covered the joint letter. The Huffington Post reported the story in a completely straightforward manner with the post receiving over 2,500 comments mostly critical or outrightly hostile of Jane and her efforts. The Daily Kos has had both a front page story by Jed Lewison entitled Sheer Nonsense and at least one diary critical of the alliance. Oliver Willis accused Jane of "jumping the shark" adding that "no progressive should be locking arms" with Grover Norquist. Over at Jack and Jill Politics, they find that "Hamsher has crossed the line."

However, Jane's efforts have found support in the liberal progressive blogosphere including a diary on the Le Grand Orange. Cenk Uygur of the Young Turks finds that "on the substance, Jane Hamsher and Grover Norquist are right." Uygur believes that the left has to hold Obama's centrist feet to the fire and that "somebody has to throw some punches and in steps Jane Hamsher with a two by four and she just clocked Rahm Emanuel across the head" because a joint letter with Grover Norquist is bound to "get everybody's attention." Perhaps so but what they are largely talking about is the oddity of the Hamsher-Norquist alliance and not the merits of their charges. An exception is Yves Smith of Naked Capitalism who is supportive of Jane Hamsher's efforts. More importantly, Yves provides the relevant background that speaks to the merits of the joint Hamsher-Norquist letter. Yves, as always, is well worth the read. Her conclusion is particularly noteworthy:

I [sic] addition to his role as White House Chief of Staff, Mr. Emanuel is heavily involved in decisions made by the Treasury Department . The Wall Street Journal reported in May that "Rahm wants it" has become an unofficial mantra in the Department. It is therefore of grave concern that the New York Times reports the Treasury is negotiating to increase their commitment to Fannie and Freddie, in the absence of independent oversight: "Fannie Mae and Freddie Mac, which buy and resell mortgages, have used $112 billion -- including $15 billion for Fannie in November -- of a total $400 billion pledge from the Treasury. Now, according to people close to the talks, officials are discussing the possibility of increasing that commitment, possibly to $400 billion for each company, by year-end, after which the Treasury would need Congressional approval to extend it. Company and government officials declined to comment."

Still my conscience dictates that I bring up one additional point for as much as Jane Hamsher wants to connect the Freddie Mac dots to Rahm Emanuel it is as important to be informed of the full measure of Mr. Norquist's past associations. While Mr. Norquist is best known for his anti-government, anti-tax crusade as evidenced by his infamous quip: "I don't want to abolish government. I simply want to reduce it to the size where I can drag it into the bathroom and drown it in the bathtub." What isn't as well-known, or perhaps better put well-remembered, is his support for international terrorism. His support for Angola's UNITA rebels and Mozambique's RENAMO - both of which were allied with South Africa's apartheid regime - is not just morally reprehensible but criminal - Mr. Norquist was neck deep in plots to overthrow at least three legally constituted governments. This is, in my mind, what should disqualify Mr. Norquist from any podium.

From 1981 to 1985, Mr. Norquist was the front-man for Jonas Savambi, the leader of Angola's UNITA, in Washington serving as his unofficial ambassador and was instrumental in securing some $15 to $20 million annually in covert US military aid during the Reagan-Bush years and in tapping millions more from various conservative sources helping to prolong an unnecessary civil war. At least a portion of Mr. Norquist's wealth can be traced to fate of Africans who died in the blood diamond trade. It bears reminding that the Angolan Civil War claimed a half million lives and because these rebel movements made fertile use of land mines, they are still killing and maiming people to this day. Physicians Against Land Mines estimate that 1 in every 334 Angolans has lost an arm or a leg to landmine injury. The number of amputees in Angola is 70,000 - 8,000 of these are children under the age of fifteen. These children's prostheses have to be replaced every six months as they grow out of them. Most victims do not die: land mines are intended to maim, not kill, with the heavier consequences on cost of medical care and morale. Fewer than 7 percent of landmine victims in Angola die immediately, instead land mines beget a nation of amputees. Mr. Norquist's Angolan and Mozambican clients together laid over half of all land mines in Africa, land mines whose victims are 98 percent civilians. This is the legacy of Grover Norquist. It is regrettable that Jane Hamsher is either unaware or has overlooked Mr. Norquist's role in abetting a human tragedy and one that will continue for generations to come for land mines can lay dormant for decades. It is for this reason that I cannot sign the petition, notwithstanding its own merits. If you care to do so, you may do so here. My disagreement here is tactical, not on the merits.

I'll note that if the suggestion of a conspiracy inside the White House to prevent an investigation at Freddie Mac is even remotely true, then it is likely to throw the Obama Administration into disarray. It's clear why Grover Norquist would welcome such a development. Jane Hamsher is certainly within her rights to take a principled stand against Rahm Emanuel but I hope she also is cognizant that the repercussions of such extend far beyond Rahm Emanuel. Furthermore, I am beginning to suspect that dragging Obama leftwards is a quixotic quest though I agree with John Judis who last month noted that "Obama and the Democrats need active, unruly, and independent pressure from the left to combat Republican conservatives, intimidate Democratic fence-sitters, and persuade business that, if it doesn’t back Obama’s reforms, it could face much more radical measures." Active, unruly and independent is Jane Hamsher to a tee.

Knowing and appreciating Jane's fearlessness and tenacity, I suspect that we will learn more on this story especially given the Christmas Eve news dump by the Obama Administration to provide unlimited financial assistance to mortgage giants Fannie Mae and Freddie Mac. The move allows the Treasury Department to exceed the current $400 billion cap on emergency aid without seeking permission from a bailout-weary Congress. The Geithner Treasury Department can continue to run the mortgage companies, which were seized last year, as arms of the government for the rest of President Obama's current term. Coupled with the fact that Fannie Mae and Freddie Mac disclosed that they had received approval from their federal regulator to pay $42 million in Wall Street-style compensation packages to its top 12 executives for 2009, there is bound to be further outrage and a bleeding of support for the Obama Administration. While Jane is calling for Rahm's dismissal, I, among others, have been calling for Tim Geithner to be fired. Rahm serves the President, Geithner should be serving the American people and he is clearly not. At some point one does have to wonder about whether the Administration is evenly remotely aware of the mood of the country.

There's more...

Why California Is Dying Is A Question of Process, Not Personality

A must-read primer on the roots of California's fiscal crisis. While it may feel good to pile on the failure of Arnold as governor and the obstructionism of the Republican minority in the state legislature, the only way we're going to be able to truly tackle what ails the state is by understanding how broken the system by which California runs (or doesn't) is and how it came to be that way. - Todd

Just to update everyone on the meltdown out here in California - last night the Republicans in the State Senate engineered a putsch, deposing their leader in the dead of night because he was insufficiently unconcerned about the welfare of the state.

Around 11 p.m., a group of GOP senators, unhappy with the higher taxes that Senate leader Dave Cogdill of Modesto agreed to as part of a deal with the governor and Democrats, voted to replace him in a private caucus meeting in Cogdill's office. Shortly before midnight, it was still unclear who would replace him.

Cogdill's ouster could be a major setback to budget negotiations. Cogdill was a lead negotiator on the budget package and had committed to voting for it. If he were removed from his leadership post, a new Senate minority leader would likely try to renegotiate the deal, which lawmakers spent three months forging.

Zed Hollingsworth (I'm calling him Zed because, like the recently excavated mammoth at the La Brea Tar Pits of the same name, he's a prehistoric elephant) is indeed trying to reopen budget talks and take taxes off the table, and if there's not a breakthrough in a couple days, he may succeed.  Darrell Steinberg, the Democratic leader, is vowing to hold out, but he doesn't have much left to offer the holdouts, as they remain 1 vote short in the Senate.

Meanwhile, 20,000 state employees are getting pink slips, and continued delay will make the state ineligible for federal transportation dollars because they can't provide matching funds, costing the state billions.  The Republican obstructionists have cost the state untold amounts in shutdown/start-up costs, higher rates of borrowing due to the uncertainty, etc.

Given all this, I have to wholeheartedly agree with Robert Cruickshank's take on how this all does nothing but highlight the need for fundamental reform and a return to democracy in California.  He did an admirable job going over the history and the menu of options, but I want to make the more emotional argument for a return to majority rule.  Scott Lemieux at Lawyers, Guns and Money did the best and most concise job of explaining why, despite the essential truth of the Republican Zombie Death Cult, it's the process-based enabling that is the original sin.

Although Krugman is of course right to blame a "fanatical, irrational minority" for the current crisis in California, it can't be emphasized enough that what really matters is the incredibly stupid institutional rules that empower this minority: namely, the idiotic super-majority for tax increases and an initiative system that both created that supermajority requirement and provides incentives to vote for every tax cut while mandating certain kinds of spending because the issues are isolated. Fortunately, the federal level (while it has too many veto points) is not quite at this level yet, and at least the stupid filibuster rule doesn't apply to budgets.

It's very easy to get people excited and motivated about a PERSON.  Not so much about a process.  And yet, as we all know, without the process, the villains in this melodrama would be sidelined, a fact which actually serves both parties.

We on the left often obsess over whether the electorate can figure out who to blame in these crises.  This 2/3 requirement for budgets and tax increases in California is a powerful enabler for that confusion.  Because the elected representatives of the majority party are not allowed to impose their will on how the state is to be run, they cannot be held to account.  Because the elected representatives of the minority party are in the minority party, they cannot be held to account.  Therefore we have a political cycle that mirrors the economic cycle resulting from the inevitable bad policies.  The powerful stay powerful, the voiceless stay voiceless, people lose faith in the process, leading to more entrenched power and more voiceless, and so on.

Greg Lucas at California's Capitol makes the moral case for a majority-vote budget along these lines, that it is the only way for true accountability in the system.

If the huckstering of the President's Day Weekend demonstrated anything at all, it's that the majority party should be able to pass the budget it considers best for California.

If its awful the governor, should he or she be of a different political party, can slice-and-dice it through the miracle of the veto process.

Should the governor be of the same political party and warmly endorse the spending plan well he or she can be thrown out by voters.

And, if the non-partisan commission created by Proposition 11 last November to draw new legislative boundaries does its job it will be possible to throw out members of the party that passed the budget as well.

I don't agree about the panacea of redistricting - the available data shows virtually no link between gerrymandering and political polarization - but on balance Lucas is right.  It's not a marketplace of ideas unless citizens can buy one idea or the other and make their decision based on the evidence.  Democracies work when ideas are allowed to stand strong or wither on the strength of results.  We do not have that here in California.  This is also true on the national level.  Senate leaders string their constituents along with the need for more Democrats to overcome a self-imposed hurdle of the filibuster.  

The extreme version of this madness is here in the Golden State.  The 2/3 rule is the prime mover for all the dysfunction we see.  It was actually put into place in the 1930s to stop the New Deal from reaching these shores.  It was modified in the 1960s and in 1978, Prop. 13 added a 2/3 barrier for tax increases to the budget.  We've been feeling the effects ever since, as taxes are flattened and ratcheted down and the state is governed for the sake of people in gated commnunities and not the least of society.  It creates an artificial conservative veto over policy.  The expressed goal was to save homeowners money - the actual goal was to destroy government.  California is the house that Grover Norquist built, and the results are predictable.

As to my point that this serves both parties?  Greg Lucas:

Just to sweeten the majority-vote budget pot a little, there's a fairly hefty number of folks who work both in and around the Capitol who assert that whichever team wins the power to run roughshod over the minority party will be so scared of exclusive blame for any badness in the budget being exclusively their fault that they won't do anything real drastic.

This is what they are scared of CURRENTLY.  There are lots of checks and balances in political systems.  There is no need for an artificial veto.  Democrats will remain timid to stick their necks out (they're politicians), but at least they would have no excuses.  And who knows, maybe they would realize they have a little bit of power and they would use it!

Arnold Schwarzenegger is irrelevant and a failure. State Democrats are spineless jellyfish.  The death-cult Republican Party is a collection of flat-earthers bent on destruction.  All well and good.  Yet all of these discrete groups are enabled by a political system that does violent disservice to the people of the state and the concept of democracy.  We must have a return to majority rule as soon as possible.  For the sake of accountability.

No "Reagan Day," Say Some Guvs

Great piece in the Capital Times (Madison, WI) on the refusal of Gov. Jim Doyle (D-WI) and others to proclaim Feb. 6 (last Friday) as "Ronald Reagan Day."

Reagan was a fool whose utter lack of comprehension of the polices enacted were on display each time Reagan held a press conference.

Compare that with what we will see tonight as Pres. Obama holds his first prime-time news conference expected to be dominated by questions on the economy as today's news has the "International Monetary Fund chief Dominique Strauss-Kahn said the world's advanced economies -- the U.S., Western Europe and Japan -- are 'already in depression.'"

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'Political Archaeologists' Find 'A Hell of an Empire'

"For a bunch of small-government Republicans," one former denizen of the White House who has now stepped back inside for the first time in eight years, "these guys built a hell of an empire."

The political archaeologists in this case being former Clinton staffers returning to survey their once and future home only to discover an infrastructure of government several magnitudes greater even as the Republic which it governed lays in waste. The former Clinton staffers soon to be Obama staffers are dumbstruck by size of the enterprise they are about to inherit but I say wait until they uncover the not yet fully visible damage that the Republicans have wrought. I am sure as the Democrats regain the levers of power and bring to the full light of day all that has transpired since January 20, 2001, we will find ourselves in shock and disbelief if not outraged, perplexed and angered. Who knows the full extent of the damage that the Bush Administration has wrought?

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