Frameshop: Five Toxic Right Wing Lies

  The biggest complaint progressives have against the Obama administration may be the total failure to counter right wing frames that dominate the media and the culture of America's political landscape. For what it's worth, here are five radical right wing lies or "frames" put together by Andrew Kimbrell from Tikkun  and posted at Alternet.  The author suggests Obama must aggressively counter these lies  in order to move America forward:

1.  Reactionary Narrative:Government is the problem. It is bad, even evil, and should be eliminated or privatized as much as possible.

     Progressive Narrative: Government is good and a major part of the solution to our economic and social problems — large, robust local, state and federal government services are critical to our individual and national well-being.

2. Reactionary Narrative: Quality health care is a commodity available to those who can afford it.

     Progressive Narrative: Quality health care is a basic human right.

3. Reactionary Narrative: Free market competition is the basis for our economic life — the benefits of the winners will trickle down to the losers.

    Progressive Narrative: The free market is a dangerous fiction (as is trickle-down economics) — not everything is a market commodity and even then those commodity markets have always been regulated. The question is how and for whom to regulate markets so as to create the most equitable distribution of wealth.

4. Reactionary Narrative: You counter terrorism by fighting land wars and overthrowing dictators (especially when oil is involved).

    Progressive Narrative: The Best Way to Fight Terrorism is through Cooperative International Police Action and Foreign Policy Changes – Not Land Wars.  

5. Reactionary Narrative:  Global warming and other environmental problems are either vastly exaggerated or don’t really exist — and if they do exist, the solution is market and technology based.

     Progressive Narrative: It’s the ecology stupid — global warming is the greatest threat to the survival of civilization. The solution to global warming and other major environmental crises is governments at all levels cooperating to change our economic and technological systems to better comport with the principles of ecology. 

 

(you know what to do)  

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Weekly Audit: Why Elizabeth Warren Should Head New Consumer Financial Protection Bureau

Bumped from the diaries with timestamp updated and fold added.

This piece makes good arguments for putting Warren in charge of the CFPB, against Tim Geithner's wishes. I would encourage you to sign this petition from Bold Progressives after signing. Usually petitions don't amount to much (a handful of signatures on a well-known or popular issue? Please), but in this case, they've already got 160k names for an obscure topic. Now that's democracy in action. - Nathan

by Zach Carter, Media Consortium blogger

With the Wall Street reform bill finally cleared through Congress, activists and intellectuals are pushing hard to make sure that this bill isn’t the last word Congress utters about Big Finance. We need deeper and more robust reforms, but it’s also critical to ensure that the new bill is implemented as effectively as possible. Part of that means appointing officials with a proven record as robust reformers—people like Elizabeth Warren.

Too-big-to-fail lives on

What more do we need to keep Big Finance from ravaging the middle class? As Stacy Mitchell notes for Yes! Magazine, the bill Congress just signed off on doesn’t really address the core problems posed by our out-of-control banking system. Too-big-to-fail is alive and well, and lawmakers must push to break up the megabanks during the next legislative cycle or risk another economic calamity. Mitchell writes:

“Since the collapse, giant banks have only grown bigger and more powerful, and less responsive to the needs of the real economy. While the financial reform bill includes several worthwhile measures, it will not set the industry right or entail a fundamental alteration of its scale and structure.”

There are still some great reforms in the current round of legislation, among them the creation of a strong new Consumer Financial Protection Bureau (CFPB) to write and enforce rules on mortgages, credit cards, overdraft fees and more. The first person to head this new regulatory body will be tremendously important to its future. They will set the tone for the bureau’s operations and establish a culture that will define it for years to come.

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Weekly Audit: Congress Must Get Tough On Wall Street

 

 

 

by Zach Carter, Media Consortium blogger

Congress returns from its April recess this week with financial reform at the top of its to-do list. With millions of Americans still bearing the brunt of the worst recession in 80 years, Congress needs to start protecting our economy from Wall Street excess, and repair the shredded social safety net that has allowed the Great Recession to exact a devastating human cost.

Big banks are an economic parasite

In an excellent multi-part interview with Paul Jay of The Real News, former bank regulator William Black explains how the financial industry has transformed itself into an economic parasite. Black explains that banks are supposed to serve as a sort of economic catalyst—financing productive businesses and fueling economic growth. This was largely how banks operated for several decades after the Great Depression, because regulations had ensured that banks had incentives to do useful things, and barred them from taking crazy risks.

The deregulatory movement of the past thirty years destroyed those incentives, allowing banks to book big profits by essentially devouring other parts of the economy. Instead of fueling productive growth, banks were actively assaulting the broader economy for profit. None of that subprime lending served any economic purpose. Neither do the absurd credit card fees banks charge, or the deceptive overdraft fees they continue to implement.

As Matt Taibbi explains in an interview with Amy Goodman and Juan Gonzales of Democracy Now!, banks didn’t just cannibalize consumers. They also went directly after local governments, bribing public officials to ink debt deals that worked wonderfully for the banks, and terribly for communities. In Jefferson County, Ala., J.P. Morgan Chase helped turn a $250 million sewer project into a $5 billion burden for taxpayers. The deal generated nothing of value for either citizens or the economy, but J.P. Morgan Chase was still able to line the pockets of its shareholders and executives. This kind of behavior was illegal, but the transactions involved were complex financial derivatives, which are not currently subject to regulation. To this day, nobody at J.P. Morgan Chase has been prosecuted for bribery or corruption.

Congress set to avoid tough regulations

There is a clear need for Congress to enact some firm restrictions against risky and predatory bank activities. But at the behest of Treasury Secretary Timothy Geithner, Congress is doing its best to avoid inserting any hard terms in legislative language, instead leaving the specifics to federal regulators to work out. As Tim Fernholz emphasizes for The American Prospect, this is an exercise in futility. Regulators already have the power to impose more stringent rules on nearly every arena of Wall Street business that matters (derivatives are a very noteworthy exception). If they wanted to fix things, they could do it without Congressional help. The trouble is, the financial sector has polluted most of the regulatory agencies, so that many regulators now act more like lobbyists for the banks they regulate, rather than law enforcers. Indeed, as I note for AlterNet, the top bank regulator in the U.S. spent over a decade lobbying for the nation’s largest banks before taking up his current job. If Congress doesn’t establish firm rules, regulators under future administrations would be free to simply undo any measures that the current agencies actually implement.

Megabanks equal mega risks

As Stacy Mitchell illustrates for Yes! Magazine, most of the problems in the financial sector are connected to the size of our banking behemoths. Big banks have enormous power—if they fail, the economy goes off a cliff. As a result, any responsible government wouldn’t allow any of our megabanks to actually fail. But knowing that the government will protect them from any true catastrophes, big banks take bigger risks—if the risk pays off, they get rich, if it backfires, taxpayers will suck it up. That puts the interests of big banks at odds with the public interest, and creates an economy where bankers don’t try to finance useful projects with a safe and steady return, but instead back crazy bets that just might pay off.

You can’t fix that problem with regulations or idle threats of taking down a big bank when it gets itself in trouble—the markets won’t believe it, and the banks will still take risks. The only solution, Mitchell notes, is to break up the banks into smaller institutions that can fail without wreaking havoc on the economy.

Economic inequality weakening the economy

All of this ties into rampant economic inequality in the United States. Since the 1970s, conservatives have waged a constant battle on the social safety net, shredding protections for ordinary people, while empowering corporate executives to take advantage of them. In an illuminating blog post for Mother Jones, Kevin Drum highlights the fact that average income has only rose from about $20 an hour in 1972 to $23 an hour today. This isn’t because workers were slacking off—productivity has increased at roughly five times that rate. In other words, nearly all of the economic gains since the Nixon era have accrued to the wealthy.

When people don’t have access to strong and improving income, they finance things with credit. But if wages never actually improve, that debt becomes a significant burden. When an entire society finds itself overly indebted, people stop buying things, and the economy tanks. The predation in the American financial sector makes this problem even worse.

But political theatrics are even trumping efforts to provide relief to those hit hardest by the recession. Sens. Jim Bunning (R-KY) and Tom Coburn (R-NE) have blocked the extension of unemployment benefits twice in the past month. As Kai Wright emphasizes for ColorLines, that recklessness puts up to 400,000 Americans at risk of losing their unemployment checks. That’s a human tragedy—hundreds of thousands of people will have no way to pay the bills. It’s also bad for business, since those people won’t have any money to buy things that businesses produce. It is, in short, short-sighted economic insanity.

The economy is supposed to work for everybody, not just the rich, not just bankers. For that to happen, politicians have to establish meaningful regulations to make sure finance works for the greater good– and safety nets to make sure that anyone who falls through the cracks doesn’t see her life prospects permanently diminished.

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.

On Matt Taibbi

I get the sense that Matt Taibbi is hitting his stride now, and is starting to become the major writer of the Obama era from the WTF side of the telling. I have been reading him for some time now, and he just keeps getting better and better. Going back to around the '04 campaign and forward, he seemed amused by the insane quality of American campaigning, and if you've read 'Spanking The Donkey' you know it falls into the Thompsonesque style of covering politics-- splat out insightful but not aspiring of actual policy influence. I don't know that Matt had done ludes or bennies while writing STP, but I wouldn't blame him if it was necessary.

So if you missed it, read Taibbi's latest, The president has packed his economic team with Wall Street insiders intent on turning the bailout into an all-out giveaway; and then you can read a post by Tim Fernholz over at TAPPED, The Errors of Matt Taibbi; and then, what is an eviscerating come back by Taibbi aimed toward Fernholz, On Obama's Sellout.  

Felix Salmon nails the back-and-forth drama:

Fernholz's game of gotcha comes up with precious little of real substance.

...it's worth cross-checking everything that Fernholz says against what Taibbi actually writes, because often Taibbi simply doesn't say what Fernholz implies that he says.

...Fernholz is basically saying that Taibbi is right, and that not only is he right but that he will now and henceforth utterly overshadow anyone else who's criticizing the Obama administration from the left. At the same time, however, despite Taibbi's astonishing ability to encapsulate and personify the entire group of people who criticize the administration, he's not even going to manage to "make a dent", because he's not going about his job in an evenhanded J-school manner.

Personally, I love it that Taibbi exists, and I'm impressed that his 6,500-word screed (into which a great deal of work clearly went) in fact has very little in the way of factual errors, let alone "lies". Yes, Taibbi is polemical and one-sided, and he exaggerates his thesis, and he's entertaining; I daresay he's learned a lot from watching Fox News. And no, I would never want to live in a world where everybody wrote like that. But Taibbi is one of a kind, and we can enjoy him and learn from him as such. He might not end up changing policy in Washington. But he's doing a much better job of making the policy debate relevant to Rolling Stone's readership than anything Tim Fernholz has ever done.

Taibbi concludes with the same take obvious take on Fernholz as what Salmon wrote:

...The Prospect writer argues that "the problems Taibbi tries to describe aren't some ridiculous cabal" but instead "come from group-think and structural influences." Correct me if I'm wrong, but this was exactly the point of the article.Then the basic disagreement that Fernholz has with Taibbi is stylistic, and that's all he's got. Whatever.

Taibbi is going to be very influential on our side. He certainly comes across to me, as someone that has been skeptical that Obama was ever any different than Clinton, as speaking the truth. I took a lot of shit from others in the progressive blogosphere during the '08 for not drinking Obama's hopeaid, and like Digby, I find it exciting to see a voice like Taibbi's emerge on our side with a big platform with a loudspeaker. In fact, its good to see that Markos is now calling idiocy. As Barry Ritholtz says in the comments on Taibbi that "he seems to capture the Zeitgeist of the moment perfectly... The best way to enjoy Taibbi is to think of it as the culmination of frustration by the public..." and since he alone seems to be occupying this massive space of un-done journalism, I'll reiterate the opening, in agreement with a comment from the Reuters link, that "Taibbi's highly entertaining abrasive style is much more policy minded than it seems. He is, for my money, already THE reporter of the Obama era."

I'll give one substantive example in all this back and forth from above to make the case, when Taibbi responds to this "irritating" passage of Fernholz:

"Neil Barofsky, the inspector general charged with overseeing TARP, estimates that the total cost of the Wall Street bailouts could eventually reach $23.7 trillion." It could, if every single loan guaranteed by the Federal government failed at once and all of the assets bought with those loans were destroyed -- and many of those loans are to homeowners, including low-income homeowners, through Fannie Mae and Freddie Mac, or to small businesses. Some of that money went to Chrysler and GM in what was primarily a job saving move. TARP's actual outlays are only $518 billion (still nothing to sneeze at), including foreclosure relief for homeowners. More money has been actually allocated so far on fiscal stimulus, including funds to reinforce the social safety net, than on the bank bailouts.
That:First of all, Barofsky did use that number, so let's get that out of the way -- there's no factual issue with the passage I wrote. The Prospect writer wants to take issue with Barofsky's number and imply that the use of it is misleading. Obviously Barofsky's number is a worst-case scenario. But let's cut the bullshit about the bailouts being intended to help ordinary homeowners and save auto workers. We could have paid off every subprime mortgage in America for about $1.4 trillion and instead shelled out at least ten times that to Wall Street, primarily to pay off derivative bets made by bankers on those assets.

The writer notes that the total TARP outlay was only $518 billion, and implies that this is the entire outlay for the bailouts when in fact the TARP is just one small slice of the bailout package -- most of the bailout monies went out through little-known Fed programs like the TALF, the TLGP, the TIP, the PPI, and the Maiden Lanes. The number my friend Nomi Prins is using now for the bailouts is about $14 trillion in total outlays, and just as Barofsky pointed out, that number could rise. But to imply that the bailout outlay is not only comparable to the $700 billion stimulus but smaller than it is totally disingenuous.

The bailouts have been a massive boon to Wall Street, not so much to the rest of us (again, see Nomi's report on that). Most of the bailouts came in the form of very cheap money lent out to the same banks that caused the crisis, who then took that money and lent it out at market rates, pocketing the difference.

That's where all these billions in bonuses for the major banks are coming from this year. It's almost impossible to not make mountains of money when your cost of capital is next to nothing because you're borrowing your money from the government basically for free. Moreover we issued government guarantees for all the least responsible banks in the country -- so while you and I have to keep our same old shitty credit scores, all the people who leveraged themselves to the hilt and bet the farm on subprime mortgages that we ended up bailing out now get squeaky clean, brand-new AAA credit ratings to borrow from. The cost of credit for them plummeted thanks to these guarantees, while we're paying the same old rates to borrow our money.

This, again, is perfectly in line with the basic premise of the article. Geithner and Ben Bernanke continued a bailout policy that rewarded the very people who were most responsible for the crisis. The rest of the population did not see those same benefits. We can argue about the motives behind Obama's bailout decision, but the numbers are not really a factual issue.

We should thank Tim Fernholz. I hope Taibbi keeps on getting irritated; I certainly have been for some time now and as it keeps getting worse, I enjoy reading it laid out in this sort of pissed-off truth-teller populist-progressive perspective.

We've got a bunch on nonsensical dolts on the right trying to tell the nation how Obama has messed up, while few have taken the time and research, like Taibbi is doing, to put together the populist anger against what is going on from a progressive perspective.

Update [2009-12-12 23:14:37 by Jerome Armstrong]:

I see that Charles Lemos has commented on Taibbi's article, and and writes that: "Robert Rubin wasn't CEO at Citibank when Citi went in all on CDOs, Charles Prince was. To blame Rubin for Prince's failings undermines much of his argument."

The nit-picking about whether Robert Rubin is the boogie-man cabal-leader is really not that interesting to me. Throw that part out imo. Because its really aside from the core of what is deserving in Taibbi's writing (Like what I blockquote above). Yea, Taibbi is compelled to personalize the story a bit too much, and he even admits to such a Rubin error in his response, but those are just personal facts misplaced, not substantive critiques of Taibbi's assult of our political class assumptions that led the bailout decision-making over the past 16 months. Speaking as someone within the Democratic ranks, I don't think a circular firing squad is helpful, but listen: Huge mistakes have been made with the ongoing (yes ongoing) financial giveaway.

And I agree with the second point too, made by Charles:

This is not to suggest that much of Taibbi is saying isn't true but his premise that Obama wasn't beholden to Wall Street prior to winning the nomination is simply not true. If Obama "sold out," it happened long before he was elected to the Senate. His record in the Senate was a centrist one. He voted for the Bush-Cheney Energy policy. Progressive Punch ranked him as the 25th most liberal Senator. Obama outbundled Clinton on Wall Street and that's quite an accomplishment considering that Clinton represented NY in the Senate. Taibbi is not one to let facts get in the way of a good expletive-laden rant.Anyone that looked at the amount of money Obama was pulling in from financial interests could tell this; and as Ben Smith notes, "...at the pivotal moment, Obama worked closely with Hank Paulson to support the bailout." Right, the argument that Obama was ever pure is untrue; but that just gets us back to square one again. Look at this bailout policy as its unfolded. A massively unfair burden of debt to the middle-class taxpayer; an extremely benevolent bonus to mega financial corporations; and a severely damaging hit to the Democratic Party's brand as being a party of the people and not the elite. It was done wrong, and it needs to be spelled out how it is being done wrong-- I don't give a damn how impolite either.

Update [2009-12-13 11:56:21 by Jerome Armstrong]: I have to just laugh at the irony of the arrows that are thrown my way whenever I point out something less-than-desirable regarding Obama. Throughout the '07 & '08 primary, while I was pointing out that Obama wasn't really that different than Clinton, it was about how wrong I was (too cynical to hope & believe); and now that it turns out, with nearly everyone seeing that's the case (especially in terms of Treasury & State), its about taking false umbrage that anyone would have expected Obama to govern any different. I'm consistently amazed at the mental gymnastics on display.

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Weekly Audit: Too Big to Fail is Just Too Big

by Zach Carter, Media Consortium Blogger

Last week, President Barack Obama released key legislation designed to fight the banking industry's too-big-to-fail problem. But Obama's plan doesn't actually address too-big-to-fail at all. It reinforces a broken system in which economically dangerous companies are bailed out whenever they drive themselves to the brink of failure.

If we want the economy to support all people, we have to break up the big banks and start treating the creation of good jobs as an economic priority on par with Wall Street rescues.

The editors of The Nation break the political debate over banking into three camps:


       
  • The first camp is composed of bank lobbyists, Republicans and conservative Democrats and wants to do nothing.

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  • Camp two, endorsed by the White House and influential Rep. Barney Frank (D-MA), would impose tougher regulations on too-big-to-fail banks to keep them from getting out of control.

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  • The third camp wants to go even further: If a bank is too-big-to-fail, it is also too-big-to-regulate. Companies that pose a danger to the economy have to be split up into smaller firms that cannot induce economic ruin.


The Nation editors rightly see the third strategy as the most sensible. While the "break-up-the-banks" policy is being portrayed as a left-wing pipe dream by cable news networks, the policy actually relies on an age-old observation of conservative economists. Regulators make mistakes, and they often get co-opted by the very industries they are supposed to be supervising.

The practical policy is to impose structural limits on what activities banks can participate in and how big they can get. Just look at the list of high-profile supporters: former Federal Reserve Chairman Paul Volcker, former Citigroup Chairman John Reed, Bank of England Governor Mervyn King. I don't remember seeing any of those guys at the Iraq War protests.

Many of the regulatory blind spots that brought down the economy were obvious to some policymakers for years. Back in 1994, Sen. Byron Dorgan (D-ND) wrote an article for The Washington Monthly warning that derivatives trading was putting the economy in grave danger. Commodities Futures Trading Commission Chair Brooksley Born tried to take action on these derivatives, but was overruled by other regulators, including then-Fed Chair Alan Greenspan, and then-Treasury Secretary Lawrence Summers, now the top economic adviser to President Obama. Summers and Greenspan even convinced Congress to pass a law banning the regulation of key derivatives, including credit default swaps, which ultimately brought down insurance giant AIG.

Fifteen years after Dorgan's article first ran, The Washington Monthly is featuring it again, along with a recent speech by Dorgan that details massive failures in Wall Street and Washington.

"We had regulators come to town in recent years and willfully boasted that they wanted to be blind as regulators," Dorgan says.

There are good elements of Obama's plan to deal with too-big-to-fail. It gives policymakers the option of putting a too-big-to-fail institution through a special bankruptcy process administered by the executive branch, thus avoiding the problems created in bankruptcy court when Lehman Brothers failed. But the bad part is really bad: Officials would also have the option to provide unlimited bailouts to Big Finance via loans, guarantees and even asset purchases.

As Mike Lillis notes for The Washington Independent, some responsible Democrats like Rep. Brad Sherman (D-CA) have been objecting to this aspect of the legislation for months. Sherman, in fact, calls it "TARP on steroids," noting that the bank bailout at least came with some meager oversight and a limit on the program's actual size.

The bank lobby is spending money like mad to maintain their stranglehold on the economy. Neither Congress or the administration will change course without intense public pressure. So it was very reassuring last week to see thousands of people protesting the annual meeting of top bank lobby group, the American Bankers Association. David Moberg chronicles the protest in a blog post for Working In These Times that covers speeches by both key union leaders and ordinary people facing foreclosure after watching their tax dollars go to the very bankers who wrecked the economy.

"There was broad agreement on anger at the banks for providing so little, if any, public benefit for the massive bail-out, and for so quickly returning to the greed and abuse that precipitated the crisis," Moberg writes.

Laura Flanders covers the protests for GRITtv, including video of protesters chanting "Bust up big banks!" In a roundtable discussion with Christina Clausen of the United Food & Commercial Workers Union, George Goehl of National People's Action and Rob Robertson of the Right To The City Alliance, Rolling Stone journalist Matt Taibbi explains the overriding impotence of the regulations Congress is about to approve. Regulators will not be able to crack down on abusive derivatives, a full 8,000 of 8,200 banks will be exempt from Consumer Financial Protection Agency oversight, while the same agencies that screwed up heading into this crisis will be charged with preventing the next one.

"They've had sweeping powers to do whatever they wanted," Taibbi says. "They've had this regulatory power all along."

What we need are good jobs, and lots of them. Obama's economic stimulus package has made tangible economic progress. It's saved hundreds of thousands of jobs, and is clearly responsible for the turnaround in gross domestic product (GDP) we saw in the third quarter. But a full 17% of the workforce remains unable to find full-time work, as Julianne Malveux explains for The Progressive.

When Wall Street crashed in 1929 and unleashed the Great Depression, the government eventually stepped in as an employer-of-last-resort. The Works Progress Administration (WPA) and Civilian Conservation Corps (CCC). built schools, parks, roads and bridges which still serve our communities today. Both the WPA and the CCC employed literally millions of people--in the 1930s. It's a model that could work very well today.

As the current recession makes clear, ending too-big-to-fail and guaranteeing a good job for everyone in our society who wants one are the two most critical structural reforms our economy needs. Don't let lawmakers forget it.

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.

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