Wall Street Reform (or lack thereof) Update

Obama takin on Wall Street?
Part 1:

Part 2:

Bill Moyers: Reason on Health Care Debate

Why We Shouldn't Fear the Public Option

People often forget, either due to distractions, blinding cynicism or a lack of education, how unique this country really is. The United States of America is a nation forged and grounded in a rich tradition of protest and persistent refusal to accept the status quo. In many ways this tradition has been in hibernation--recent decades will never be known as the years of particularly impressive citizen participation in government and policy. Indeed, the American people have become increasingly apathetic and stupid, but I believe that the spirit has remained alive--in fact, I predict that the drive to change our most negative aspects of society is building momentum; isn't it obvious?

Take the town halls on health care, for instance. Though CNN, FOX and MSNBC only cover the crazies, there is some remarkable dialogue going on--and not just by the supporters of health care. When it comes to the Public Option, there is a genuine philosophical debate to be had. Remember that the whole point of the American Revolution was to establish independence from an abusive and invasive government that taxed excessively and unfairly. We have come a long way since then, and have perhaps gone full-circle in many ways. I share many Libertarian concerns of the expansion of the U.S. government, excessive spending and the limitations placed upon civil liberties; not to mention our often tyrannical foreign policies. Indeed, the United States became the very empire its citizens died to defeat. People think I'm a big gov liberal, but the fact of the matter is that the federal government IS WAY TOO BIG! The War on Drugs is a fiscal and societal disaster, the Iraq and Afghanistan wars are squandering our treasure. The IRS ought to be torn down and replaced with a simpler tax code, and the Patriot Act ought to make every single American extremely wary of what leaders know about our personal lives. Not to mention the militarization of government that has seeped into the media and saturated our culture.

So when people say to me: "I just don't believe the federal government should expand! It's already too massive" I agree! The problem is that in this modern world, there are modern problems that require state intervention. Spying on Americans is not one of these exceptions. Drug abuse isn't either. Nor is Saddam Hussein or Ho Chi Minh! But to the people who believe the Public Option is some kind of government takeover and the onset of communism: should we not fight to end the excessive federal policies that actually hurt people? The War on Drugs fuels a culture of crime in the inner-cities. At least a million Iraqi citizens are dead because of the current conflict--not to mention the 4,339 dead American soldiers. But now you oppose a public health plan? A plan that will help your fellow citizens get the care they need? A report by the Institute of Medicine suggests that as many as 22,000 American citizens die annually due to the lack of an insurance policy--one that either could not be afforded or was cut by employers!

And let us not forget that the Public Option is an OPTION! While the true Left wing of this USA would really like a single-payer system, it is simply not going to happen with this legislation. Big Insurance is the most powerful lobby in Washington, and certainly has great influence on the bill--in other words, the argument that people will be forced to take the government plan is bullshit. The truth of the matter is that most people will keep their private plans; plans, by the way, made more consumer-friendly due to other reforms that will be in the final legislation (including the preexisting condition issue and the ability to choose your own doctors).

Though this is an expansion of government services, I want to tell you how the Public Plan is actually more economical and sustainable than the current system. You see, being private enterprise, Big Insurance seeks to charge as much as possible while providing as little as possible. I have no problem with capitalism (I am a Capitalist), but this is the reality of the basic operations of a firm. While this is perfectly acceptable in most sectors, health care is an entirely different beast. Since 2000, insurance premiums have nearly doubled! In 2007, the U.S. spent about $2.2 trillion on health care,* which comes out to approximately 16.2% of GDP--nearly twice the amount of the rest of the developed world! ** If you aren't worried yet, then you have read these numbers: by 2025, costs are expected to rise 25%; by 2082, 49% ! *** Oh, and did you realize that every GM vehicle is $1,525 more expensive because of employer-based health care coverage? Insurance is by far GM's biggest expenditure--even more than steel! ****

And the numbers go on and on. This is the financial argument, and it is all tied to the Big Insurance practice of driving up costs for higher profit margins, and making up for their clunky and inefficient administrative costs. Medicare costs are skyrocketing because they are subsidizing these inflating premiums, and this must be replaced. The Public Option must establish a much simpler and transparent system that injects competition into this stale and unsustainable market. It is fiscally sensical and it is moral.

But just any Public Option will not do. Next week I will tackle the question of "what must a Public Option look like in order to drive competition and cut costs?"

Absorb it, discuss it, and hopefully support it. Leave your comments below.

*Office of the Actuary, Centers for Medicare and Medicaid Services, National Health Expenditure Data for 2007. U.S. Department of Health and Human Services, available at: http://www.cms. hhs.gov/NationalHealthExpendData/02_NationalHealthAccountsHistorical.asp#TopOfPage

**Organisation for Economic Cooperation and Development. OECD Health Data 2008.

***P.R. Orszag, Growth in Health Care Costs: Statement Before the Committee on the Budget, United States Senate, (Washington, DC: Congressional Budget Office, Jan 31 2008), available at http://www.cbo.gov/doc.cfm?index=8948

****R. Wagoner, Testimony before the House Financial Services Committee, December 5, 2008.
http://thinkprogress.org/2008/12/05/gm-health-care-reform/

Important Vids: Obama and Economy

Sorry I've been away... this week has been hell. Please watch these videos on Obama and the economy... they are unique from all the other news I have seen, and frame all the goings on in a very interesting way.

Please share your thoughts. PS: None of these are actually as long as it says because there is a 3-4 commercial at the end of each. Enjoy.

Obama is a "liberal wolf in centrist clothing"?:







On ECONOMIC CRISIS:

A Huffington Post

Will The Madoff Debacle Finally End The "Who Could Have Known?" Era?

by Arianna Huffington

See if this sounds familiar:

An ambitious and risky undertaking carried out with hubris, and featuring the weeding out of anyone who raises alarm bells, little-to-no transparency, an oversight system in which no central authority is accountable, and the deliberate manufacturing of ambiguity and complexity so that if -- when -- it all falls to pieces, the excuse "who could have known?" can be used....

Is it Iraq? Fannie Mae? Citigroup? Bernie Madoff?

The correct answer is: all of the above.

When you look at the elements that were crucial to the creation of each of these debacles, it's amazing how much in common they all have. And not just in how they began but in how they ended: with those responsible being amazed at what happened, because...who could have known? Well, to paraphrase James Inhofe, I'm amazed at the amazement.

In fact, when historians look for a name that sums up the Bush II years, they could do worse than calling them The "Who Could Have Known?" Era.

Each of the disasters listed above was entirely predictable. And, indeed, was predicted. But those who rang the alarm bells were aggressively ignored, which is why it's important that we not let those responsible get away with the "Who Could Have Known?" excuse.

Let's start with Iraq -- specifically the reconstruction of Iraq. This weekend the New York Times got its hands on the unpublished 513-page federal history of the reconstruction. It's not pretty. As the Times puts it: it was "an effort crippled before the invasion by Pentagon planners who were hostile to the idea of rebuilding a foreign country, and then molded into a $100 billion failure by bureaucratic turf wars, spiraling violence and ignorance of the basic elements of Iraqi society and infrastructure." As a result, almost six years and $117 billion later, many essential services are only now reaching pre-war levels.

The report quotes Colin Powell on how the Pentagon, to cover up its failures, "kept inventing numbers of Iraqi security forces [that had reached readiness] -- the number would jump 20,000 a week! 'We now have 80,000, we now have 100,000, we now have 120,000.' "

Hmm, making up numbers to realize a short-term gain, but which end up making the inevitable long-term reckoning much worse? Sounds a lot like what was happening at Citigroup at around the same time.

In late 2002, Charles Prince was put in charge of the company's corporate and investment bank. The banking giant was already knee deep in toxic paper and aggressively looking the other way.

He was so successful at averting his eyes that when, five years later, as Wall Street began to feel the initial shocks of the mortgage meltdown, he was told that the bank owned $43 billion in mortgage-related assets -- it was the first he'd heard of it. Isn't that something he should have known? Or did he prefer not knowing?

Prince had plenty of help ignoring the obvious, particularly from Robert Rubin. According to a former Citigroup executive quoted in the long New York Times analysis of Citi's downfall, despite ascending to the top of the Citi food chain, Prince "didn't know a C.D.O. from a grocery list, so he looked for someone for advice and support. That person was Rubin."

When it all came tumbling down, both Rubin and Prince portrayed themselves as helpless victims of circumstance, because...Who Could Have Known?

"I've thought a lot about that," Rubin said when asked if he made mistakes at Citigroup. "I honestly don't know. In hindsight, there are a lot of things we'd do differently. But in the context of the facts as I knew them and my role, I'm inclined to think probably not."

What he means, of course, is the facts as he chose to know them.

Prince's head is even higher in the clouds: "Anything," he said, "based on human endeavor and certainly any business that involves risk-taking, you're going to have problems from time to time."

Sounds like he's reading from the same damage control playbook as former Fannie Mae CEO Franklin Raines. According to Raines, he can't be blamed for what happened at Fannie Mae because mortgage stuff is so, well, complicated. In fact, he can't even understand his own mortgage: "I know I can't and I've tried," Raines told a House committee last week. "To this day, I don't know what it said... It's impossible for the average person to understand" mortgage terms such as negative amortization. In other words, Who Could Have Known?

Committee chair Henry Waxman wasn't buying it: "These documents make clear that Fannie Mae and Freddie Mac knew what they were doing. Their own risk managers raised warning after warning about the dangers of investing heavily in the subprime and alternative mortgage markets."

Ignoring warning after warning is an essential element of the "Who Could Have Known?" excuse, as are rewriting history and shamelessly disregarding the foresight shown by those who sounded the alarm bells.

We're seeing the same ingredients in the Madoff affair. "We have worked with Madoff for nearly 20 years," said Jeffrey Tucker, a former federal regulator and the head of an investment firm facing losses of $7.5 billion. "We had no indication that we...were the victims of such a highly sophisticated, massive fraudulent scheme." It's a sentiment echoed by Arthur Levitt, the former chairman of the Securities and Exchange Commission: "I've known [Madoff] for nearly 35 years, and I'm absolutely astonished."

Who Could Have Known?

Well, Harry Markopoulos, for one. In 1999, after researching Madoff's methods, Markopolos wrote a letter to the SEC saying, "Madoff Securities is the world's largest Ponzi Scheme." He pursued his claims with the feds for the next nine years, with little result.

Jim Vos, another investment adviser who had examined Madoff's firm, says: "There's no smoking gun, but if you added it all up you wonder why people either did not get it or chose to ignore the red flags."

The answer comes from Vos's cohort Jake Walthour Jr., who told HuffPost blogger Vicky Ward: "In a bull market no one bothers to ask how the returns are met, they just like the returns."

Hasn't the "Who Could Have Known?" excuse been exposed as a sham enough times to render it obsolete?

Apparently not. Here come the Bush Legacy Project's revisionists expecting us to believe that everyone thought Saddam had WMD -- even though many were on record saying he didn't.

In the wake of 9/11, Condi Rice assured us nobody "could have predicted" that someone "would try to use an airplane as a missile." Except, of course, the government report that in 1999 said, "Suicide bomber(s) belonging to al Qaeda's Martyrdom Battalion could crash-land an aircraft packed with high explosives (C-4 and semtex) into the Pentagon, the headquarters of the Central Intelligence Agency (CIA), or the White House."

After Katrina, the White House read from the "Who Could Have Known?" hymnal: No one could have predicted that the storm would be a Category 5, and that this could result in the levees being breached. We now know, of course, that plenty of people knew that the levees could be breached and said so before the storm hit.

Then there is Alan Greenspan, who, looking back in October of this year on the makings of the financial crisis he helped create (I mean, that just happened to come out of nowhere) delivered this "Who Could Have Known?" classic: "If all those extraordinarily capable people were unable to foresee the development of this critical problem...we have to ask ourselves: Why is that? And the answer is that we're not smart enough as people. We just cannot see events that far in advance."

The only problem is, many people did see events that far in advance.

Unlike Greenspan, I don't believe the problem is that we are "not smart enough as people." As we've seen time after time, smart enough people are all too willing to ignore facts they don't like. Or, even worse, they construct oversight systems designed to be ineffective -- and unable to provide to those in power information they don't really want to know.

Much has been made of the smartness of Obama's new team. But I'm hoping that their defining characteristic won't be their IQs but their willingness to confront reality and take responsibility for their decisions.

It's time to say goodbye to the "Who Could Have Known?" era. It's time to know things again. And to know that you know them.

Obama Must Lead the Fight on Climate Change

I've noticed that there has been very little coverage of climate change on the SkyeWire, which is odd because it is certainly the most significant impending disaster that the world faces--and we are not doing enough to stop it. There is a lot of talk about governments, politics and social issues on here, but I want to bring to light the climate issue with a somewhat disheartening article from the Guardian, which showcases a very interesting study.

The survey, "supported by groups including the World Bank, the United Nations Environment Programme and the Pew Centre for Global Climate Change, questioned 1,000 senior figures across governments, pressure groups and companies in 115 countries over the last few weeks." The results conclude that climate experts have lost a significant amount of faith in the effectiveness of alternative energy sources against climate change.

One answer to this perplexing dilemma: "As the climate crisis deepens they could be becoming less optimistic that individual technologies may be able to solve the problem" (Eric Whan). 44% of respondents also agreed that the economic crisis will significantly set back efforts to act on climate change.

The world is in agreement that something must be done--for the lives of a billion hang in the balance--but in this time of confusion, Barack Obama must set an ambitious path towards completely sustainable society, while also addressing the drastic economic situation--in fact, he ought to set the framework for a plan that will help solve both.

We need his charisma and his wit to not only lead the United States, but to bring all powerful nations into the fold for the "green" economy of the future. I am talking about a Green Revolution led by the United States and executed by the global economy. Scientists are losing hope ... it may already be too late according to many ... but we must not wait for the final proof ... we must change the way we live now, so that we may live another day.

Yes we must. Yes we can.

The Military-Industrial Complex: It's Real

The "Military-Industrial Complex". It characterizes one of the most influential (and terrifying) undercurrents of power in the United States government, and conceptualizes the fusion of government and military business. The term, immortalized by President Eisenhower in his farewell address, refers to the dangerous relationship between government and "for-profit" business, which fuels "for-profit" conflicts and wars. And what a perfect example we have in front of us!

On the Iraq war, author and journalist Naomi Klein said on Democracy NOW:

And one of the things that I think is most important for progressives to challenge is the discourse that everything in Iraq is a disaster. I think we need to start asking and insisting, disaster for who [?], because not everybody is losing. It’s certainly a disaster for the Iraqi people. It’s certainly a disaster for US taxpayers. But what we have seen—and it’s extremely clear if we track the numbers—is that the worse things get in Iraq, the more privatized this war becomes, the more profitable this war becomes for companies like Lockheed Martin, Bechtel, and certainly Blackwater. There is a steady mission creep in Iraq, where the more countries pull out, the more contractors move in...

Do you know how many American troops are currently stationed in Iraq? Answer: 160,000

Do you know how many Blackwater-soldiers-for-hire (aka mercenaries...not all BW) there are in Iraq? Answer: 180,000 (highlight to see answer... so you can guess) ...source.

And guess how many Blackwater mercenaries have been prosecuted for crimes in Iraq? Answer: 0!

Moral implications aside (like how the war has cost probably over 1 million Iraqi lives), let's try to bring this back to the economy. Francis Ferguson, phD economist, explains his view:

As the US slides into recession, economists wonder why the massive government spending on Afghanistan and Iraq provides so little economic stimulus. World War Two brought an immediate end to the Great Depression, yet a current $600 billion dollar defense budget (not counting the wars in Iraq and Afghanistan) does little to stop the emerging recession. Part of the minimal effect results from the fact that we were already spending well over $300 billion on the military prior to 9/11, whereas the US defense budget was trivial prior to the beginning of World War II. The other reason for the minimal economic stimulus lies in the fact that so much of the expenditure goes to fund wages and corruption in Iraq and Afghanistan, and so much flows as excess profits to American corporations rather than into the pockets of American workers who would have a greater tendency to spend those earnings here. Finally, even the portion of war spending that does flow to American workers has, today, a very high probability of being used to buy imported consumer goods, providing stimulus, ironically, to our friends the Chinese—the very people who fund our wars (but that's another story).

So why do I bring this up today? Well it's still quite relevant, and I think people should be concerned about it and the effects upon the country and world. But the New York Times actually brought me back to this important issue in their 11/29 article entitled "One Man’s Military-Industrial-Media Complex"--which places special emphasis on the media's role is fueling the MIC. It's long, but important... please read. Thanks.

I believe in Barack Obama, and I hope you can too

Today I want to specifically speak to those voters who are undecided or who feel fearful of an Obama presidency.

First of all, I do not know what will happen if Barack Obama becomes the next President of the United States. I do not know what his agenda will become, and I cannot tell you how his administration will unfold. As I wait for the impending day of final decision, the anticipation is incredible--the butterflies are swarming. How will the next President be able to set a new course for America? Renew the economy. Improve our moral standing in the world. Ensure domestic and human rights. Civil Liberties and safety. Inspiration and hope. The American Dream.

The American people have a mountain to climb as we attempt to find our place in this 21st Century. We must come to accept the fact that we will not forever be the global superpower. Concessions will have to be made. The world is getting smaller, and we must adjust. How will will rally to convert our carbon-based economy into a renewable green one? How will we bring a hault to U.S. aggression in foreign lands? And how can we make these changes while still maintaining our strength as a nation?

It is clear to most that a new direction is necessary. I cannot promise that Barack Obama is the one, but I will attempt to put this into somewhat of a historical perspective. People keep saying that "this election is the most important election of any of our lives." Is this true? Perhaps it is. I tend to believe it is. The costs have never been higher. The economic crisis, the climate crisis, and the foreign policy crisis have come together to create a desperate climate. But as the great leaders of the past have told us time and time again during desperate times: fear not. And the man telling us to have courage happens to be a skinny black man named Barack Obama.

On November 4, 2008, the American people will make the decision, and will determine the next chapter in the Amercan Legacy. People will look back on that date as a turning point--for better or for worse. I ask you all to consider: who is the man most likely to take us safely into the future? What side of history will you be on when this is all over and done with? 

Americans are a conservative people, in general.  By this I do not characterize a political persuasion, but more of an unwillingness to change unless change is truly necessary.  92% of the American people believe the country is on the wrong track.  Ron Paul ran on the platform of the "anti-Empire" and sparked a Revolution.  People are angry and ashamed.  They know we have gone off-course.  We have the desire.  We have the drive.  The candidate we need may be in front of our very eyes.  

Now we must take the leap of faith. 

Closing the World Markets?!

Berlusconi Says Leaders May Close World's Markets (Update1)
By Steve Scherer

Oct. 10 (Bloomberg) -- Italian Prime Minister Silvio Berlusconi said political leaders are discussing the idea of closing the world's financial markets while they ``rewrite the rules of international finance.''

``The idea of suspending the markets for the time it takes to rewrite the rules is being discussed,'' Berlusconi said today after a Cabinet meeting in Naples, Italy. A solution to the financial crisis ``can't just be for one country, or even just for Europe, but global.''

The Dow Jones Industrial Average fell as much 8.1 percent in early trading and pared most of those losses after Berlusconi's remarks. The Dow was down 0.5 percent to 8540.52 at 10:10 in New York.

Group of Seven finance ministers and central bankers are meeting in Washington today, and will stay in town for the International Monetary Fund and World Bank meetings this weekend. European Union leaders may gather in Paris on Oct. 12, three days before a scheduled summit in Brussels, Berlusconi said today, while Group of Eight leaders may hold a meeting on the crisis ``in coming days,'' he said.

Berlusconi didn't give any details about what kind of rules leaders were looking to change, except to say that leaders are ``talking about a new Bretton Woods.''

The Bretton Woods Agreements were adopted to rebuild the international economic system after World War II in a hotel in Bretton Woods, New Hampshire. The aim of the agreements was to establish a monetary management system, initially by pegging currencies to gold. The IMF was set up later to help manage the international financial system.

To contact the reporter on this story: Steve Scherer in Rome at scherer@bloomberg.net

The Bailout Passed, but Check this Out!

Yes, the new bailout passed in the Senate, and tomorrow it goes to the House for a vote. My uncle brought my attention to this petition ... basically a bunch of the nation's leading economists came together to say that the bailout is a terrible idea: that is, it will disrupt the markets long term, it is unfair to the taxpayers, and it's really shady (they say ambiguous). Essentially what I said before (I think), but this time from experts!

But those in power will do what they want. If they want to go to war against a random country for trillions of dollars and hundreds of thousands of lives, they will. If they want to give $700 billion to their Wall Street friends and co-workers, they will. If those from within commit crimes, the investigations (if any) will be insufficient and false. This is the age-old story of government.

PS: Obama, McCain, and Biden all voted for the bailout ... I think we all know why.

PPS: Palin showed up to vote, but was told she couldn't.