Wednesday, December 31, 2008

HAPPY NEW YEAR - What's Bogus 2008

"Year-end Whoppers"

This is just the Summary from their full article

We've often said that the spin never stops in Washington. And the weeks since Nov. 4 offer further evidence of that.

Consider some of the bogus claims we've debunked just since Election Day:
  • It's not true that unionized auto workers at Detroit's Big Three make more than $70 an hour, as claimed by some opponents of federal aid.

  • And no, 3 million workers won't be tossed out of work if aid is not forthcoming, as claimed by those favoring a taxpayer bailout.

  • President-elect Obama never promised to seek a ban on all semi-automatic weapons, as claimed by some fearful gun owners.

  • And no, Obama did not propose a Gestapo-like civilian security force as claimed by a Republican member of Congress from Georgia and any number of overwrought bloggers.

  • Democrats in Congress are not discussing any plan to confiscate the assets in 401(k) retirement accounts, another falsehood spread about by chain e-mails and Internet postings.

  • House Speaker Nancy Pelosi did not demand a 757-size personal jet, a false claim resurrected when Democrats criticized Big Three executives for flying to D.C. on their own private jets to beg for aid.

  • And Pelosi's husband doesn't own a $17 million stake in a food company that she may (or may not) have tried to help with an exemption from a new minimum wage law.

For details, plus bonus features including video of misleading TV spots by the United Auto Workers and by auto dealers, please read on to the Analysis section.

Watch our "Ask FactCheck" space for new items in the next few days. We'll post the truth about a claim that the Environmental Protection Agency is planning to levy a tax on farmers' cows and hogs. And we'll give you the real story behind a widely circulating (and false) claim that the murder rate in counties that voted for Obama is six times higher than in counties that supported McCain.

And if history is any guide, we'll have much more to debunk in the New Year, too.

Wednesday, December 17, 2008

POLITICS - Good Ole' Republican Welfare for the Rich

"Executive Pay Limits May Prove Toothless" by Amit R. Paley, Washington Post

Page 1 of 2:

Loophole in Bailout Provision Leaves Enforcement in Doubt

Congress wanted to guarantee that the $700 billion financial bailout would limit the eye-popping pay of Wall Street executives, so lawmakers included a mechanism for reviewing executive compensation and penalizing firms that break the rules.

But at the last minute, the Bush administration insisted on a one-sentence change to the provision, congressional aides said. The change stipulated that the penalty would apply only to firms that received bailout funds by selling troubled assets to the government in an auction, which was the way the Treasury Department had said it planned to use the money.

Now, however, the small change looks more like a giant loophole, according to lawmakers and legal experts. In a reversal, the Bush administration has not used auctions for any of the $335 billion committed so far from the rescue package, nor does it plan to use them in the future. Lawmakers and legal experts say the change has effectively repealed the only enforcement mechanism in the law dealing with lavish pay for top executives.

"The flimsy executive-compensation restrictions in the original bill are now all but gone," said Sen. Charles E. Grassley (Iowa), ranking Republican on of the Senate Finance Committee.

The modification reflects how the rapidly shifting nature of the crisis and the government's response to it have led to unexpected results that are just now beginning to be understood. The Government Accountability Office, the investigative arm of Congress, issued a critical report this month about the financial industry rescue package that said it was unclear how the Treasury would determine whether banks were following the executive-compensation rules.

Michele A. Davis, spokeswoman for the Treasury, said the agency is working to develop a policy for how it will enforce the executive-compensation rules. She would not say when the guidance would be issued or what penalties it might impose. But she said the companies promised to follow the rules in contracts with the department.

The final legislation contained unprecedented restrictions on executive compensation for firms accepting money from the bailout fund. The rules limited incentives that encourage top executives to take excessive risks, provided for the recovery of bonuses based on earnings that never materialize and prohibited "golden parachute" severance pay. But several analysts said that perhaps the most effective provision was the ban on companies deducting more than $500,000 a year from their taxable income for compensation paid to their top five executives.

That tax provision, which amended the Internal Revenue Code, was the only part of the law that contained an explicit enforcement mechanism. The provision means the IRS must review the pay of those executives as part of its normal review of tax filings. If a company does not comply, the IRS can impose a tax penalty. The law did not create an enforcement mechanism for reviewing the other restrictions on executive pay.

If a firm violates the executive-compensation limits, department officials said, the Treasury could seek damages, go to court to force compliance, or even rescind the contracts and recover the bailout money. "We therefore have all the remedies available to us for a breach of contract," Davis wrote in an e-mail.

Legal experts said those efforts could be complicated if the Treasury outlines the penalties after companies have received bailout money. David M. Lynn, former chief counsel of the Securities and Exchange Commission's division of corporation finance, said courts have sometimes placed limits on the government's ability to impose penalties if there was no fair warning.

Hay, come on people. Those "poor" CEOs may have to give up a mistress or two AND their Ferrari if their "compensation" is cut.

Thursday, December 04, 2008

POLITICS - Changes On the Way

Denise McCluggage (1927)
Change is the only constant. Hanging on is the only sin.

Richard Hooker (1554–1600)
Change is not made without inconvenience, even from worse to better.

The following are only excerpts from these articles, there's more.

"Obama Teams Are Scrutinizing Federal Agencies" by Shailagh Murray and Carol D. Leonnig, Washington Post

Wearing yellow badges and traveling in groups of 10 or more, agency review teams for President-elect Barack Obama have swarmed into dozens of government offices, from the Pentagon to the National Council on Disability.

With pointed questions and clear ground rules, they are dissecting agency initiatives, poring over budgets and unearthing documents that may prove crucial as a new Democratic president assumes control. Their job is to minimize the natural tension between incoming and outgoing administrations, but their work also is creating anxiety among some Bush administration officials as the teams rigorously examine programs and policies.

Lisa Brown, who served as counsel to Vice President Al Gore and is helping manage the reviews, said typical questions include: "Which is the division that has really run amok? Or that has run out of money? If someone is confirmed, what's going to be on their desk from Day One? What are the main things that need to happen, vis-a-vis Obama's priorities?"

Every presidential changeover includes some type of review of the federal landscape, but some have succeeded more than others, experts say. Obama's teams -- 135 people divided into 10 groups, along with a list of other advisers -- started earlier than most, gearing up months before Election Day with preliminary planning, and will work until mid-December preparing reports to guide the White House, Cabinet members and other senior officials.


"Gates: Military looking at quicker Iraq withdrawal" by Lolita C. Baldor, Boston Globe

Defense Secretary Robert Gates signaled a willingness yesterday to forge ahead with two key priorities for the incoming Obama administration: accelerating the US withdrawal from Iraq and shutting down the Guantanamo Bay detention center.

As the only Republican Cabinet member asked to stay on by President-elect Barack Obama, Gates told reporters that military commanders are looking at ways to more quickly pull troops out of Iraq in light of the 16-month timetable that was a centerpiece of the Democrat's campaign.

He also said it will be a high priority to work with the new Congress on legislation that will enable the United States to close the detention center at the US naval base in Cuba, where about 250 terrorism suspects are still being held.

In a blunt and occasionally personal briefing, Gates acknowledged his unique position in the new Democratic administration.

"I guess I would say that I was engaged in my own form of strategic deterrence," said Gates, who for two years has talked of his desire to return home to Washington state. "It was my hope that if I made enough noise about how much I did not want to stay here and how much I wanted to go back to the Northwest that I wouldn't have to worry about the question ever being asked."


"Generals to urge quick action on torture by Obama" by Randall Mikkelsen, Reuters

Barack Obama should act from the moment of his inauguration to restore a U.S. image battered by allegations of torturing terrorism suspects, said a group of retired military leaders planning to press their case with the president-elect's transition team on Wednesday.

"We need to remove the stain, and the stain is on us, as well as on our reputation overseas," said retired Vice Adm. Lee Gunn, former Navy inspector general.

Gunn and about a dozen other retired generals and admirals, who are scheduled to meet Obama's team in Washington, said they plan to offer a list of anti-torture principles, including some that could be implemented immediately.

They include making the Army Field Manual the single standard for all U.S. interrogators. The manual requires humane treatment and forbids practices such as waterboarding -- a form of simulated drowning widely condemned as torture.

Other immediate steps Obama could take are revoking presidential orders allowing the CIA to use harsh treatment, giving the International Red Cross access to all prisoners held by intelligence agencies and declaring a moratorium on taking prisoners to a third country for harsh interrogations.

Wednesday, December 03, 2008

ECONOMY - The Keystone Cops

Should the recession persist for another five months, consistent with Fed and private forecasts, it would become the longest since the Great Depression.

At 12 months, the current contraction is already the longest since the 16-month slump that ended in November 1982, and exceeds the postwar average of 10 months.

The contraction is the second under President George W. Bush’s watch, making him the first U.S. leader since Richard Nixon to preside over two recessions.

"AP IMPACT: They warned us, but US eased loan rules" by Matt Apuzzo, AP

The Bush administration backed off proposed crackdowns on no-money-down, interest-only mortgages years before the economy collapsed, buckling to pressure from some of the same banks that have now failed. It ignored remarkably prescient warnings that foretold the financial meltdown, according to an Associated Press review of regulatory documents.

"Expect fallout, expect foreclosures, expect horror stories," California mortgage lender Paris Welch wrote to U.S. regulators in January 2006, about one year before the housing implosion cost her a job.

Bowing to aggressive lobbying — along with assurances from banks that the troubled mortgages were OK — regulators delayed action for nearly one year. By the time new rules were released late in 2006, the toughest of the proposed provisions were gone and the meltdown was under way.

"These mortgages have been considered more safe and sound for portfolio lenders than many fixed rate mortgages," David Schneider, home loan president of Washington Mutual, told federal regulators in early 2006. Two years later, WaMu became the largest bank failure in U.S. history.
The administration's blind eye to the impending crisis is emblematic of a philosophy that trusted market forces and discounted the need for government intervention in the economy. Its belief ironically has ushered in the most massive government intervention since the 1930s.

"We're going to be feeling the effects of the regulators' failure to address these mortgages for the next several years," said Kevin Stein of the California Reinvestment Coalition, who warned regulators to tighten lending rules before it was too late.

Many of the banks that fought to undermine the proposals by some regulators are now either out of business or accepting billions in federal aid to recover from a mortgage crisis they insisted would never come. Many executives remain in high-paying jobs, even after their assurances were proved false.

In 2005, faced with ominous signs the housing market was in jeopardy, bank regulators proposed new guidelines for banks writing risky loans. Today, in the midst of the worst housing recession in a generation, the proposal reads like a list of what-ifs:

  • Regulators told bankers exotic mortgages were often inappropriate for buyers with bad credit.

  • Banks would have been required to increase efforts to verify that buyers actually had jobs and could afford houses.

  • Regulators proposed a cap on risky mortgages so a string of defaults wouldn't be crippling.

  • Banks that bundled and sold mortgages were told to be sure investors knew exactly what they were buying.

  • Regulators urged banks to help buyers make responsible decisions and clearly advise them that interest rates might skyrocket and huge payments might be due sooner than expected.

Those proposals all were stripped from the final rules. None required congressional approval or the president's signature.

"In hindsight, it was spot on," said Jeffrey Brown, a former top official at the Office of Comptroller of the Currency, one of the first agencies to raise concerns about risky lending.

Federal regulators were especially concerned about mortgages known as "option ARMs," which allow borrowers to make payments so low that mortgage debt actually increases every month. But banking executives accused the government of overreacting.

Bankers said such loans might be risky when approved with no money down or without ensuring buyers have jobs but such risk could be managed without government intervention.

"An open market will mean that different institutions will develop different methodologies for achieving this goal," Joseph Polizzotto, counsel to now-bankrupt Lehman Brothers, told U.S. regulators in a March 2006.

Countrywide Financial Corp., at the time the nation's largest mortgage lender, agreed. The proposal "appears excessive and will inhibit future innovation in the marketplace," said Mary Jane Seebach, managing director of public affairs.

One of the most contested rules said that before banks purchase mortgages from brokers, they should verify the process to ensure buyers could afford their homes. Some bankers now blame much of the housing crisis on brokers who wrote fraudulent, predatory loans. But in 2006, banks said they shouldn't have to double-check the brokers.

"It is not our role to be the regulator for the third-party lenders," wrote Ruthann Melbourne, chief risk officer of IndyMac Bank.

California-based IndyMac also criticized regulators for not recognizing the track record of interest-only loans and option ARMs, which accounted for 70 percent of IndyMac's 2005 mortgage portfolio. This summer, the government seized IndyMac and will pay an estimated $9 billion to ensure customers don't lose their deposits.

Last week, Downey Savings joined the growing list of failed banks. The problem: About 52 percent of its mortgage portfolio was tied up in risky option ARMs, which in 2006 Downey insisted were safe — maybe even safer than traditional 30-year mortgages.

"To conclude that 'nontraditional' equates to higher risk does not appropriately balance risk and compensating factors of these products," said Lillian Gavin, the bank's chief credit officer.

At least some regulators didn't buy it. The comptroller of the currency, John C. Dugan, was among the first to sound the alarm in mid-2005. Speaking to a consumer advocacy group, Dugan painted a troublesome picture of option-ARM lending. Many buyers, particularly those with bad credit, would soon be unable to afford their payments, he said. And if housing prices declined, homeowners wouldn't even be able to sell their way out of the mess.

It sounded simple, but "people kind of looked at us regulators as old-fashioned," said Brown, the agency's former deputy comptroller.

Diane Casey-Landry, of the American Bankers Association, said the industry feared a two-tiered system in which banks had to follow rules that mortgage brokers did not. She said opposition was based on the banks' best information.

"You're looking at a decline in real estate values that was never contemplated," she said.

Some saw problems coming. Community groups and even some in the mortgage business, like Welch, warned regulators not to ease their rules.

"We expect to see a huge increase in defaults, delinquencies and foreclosures as a result of the over selling of these products," Stein, the associate director of the California Reinvestment Coalition, wrote to regulators in 2006. The group advocates on housing and banking issues for low-income and minority residents.

The government's banking agencies spent nearly a year debating the rules, which required unanimous agreement among the OCC, Federal Deposit Insurance Corp., Federal Reserve, and the Office of Thrift Supervision — agencies that sometimes don't agree.

The Fed, for instance, was reluctant under Alan Greenspan to heavily regulate lending. Similarly, the Office of Thrift Supervision, an arm of the Treasury Department that regulated many in the subprime mortgage market, worried that restricting certain mortgages would hurt banks and consumers.

Grovetta Gardineer, OTS managing director for corporate and international activities, said the 2005 proposal "attempted to send an alarm bell that these products are bad." After hearing from banks, she said, regulators were persuaded that the loans themselves were not problematic as long as banks managed the risk. She disputes the notion that the rules were weakened.

Marc Savitt, president of the National Association of Mortgage Brokers, said regulators were afraid of stopping a good thing.

"If it seems to be working, if it's not broken don't fix it, if everybody's making money, then the good times are rolling and nobody wants to be the one guy to put the brakes on," he said.

In the past year, with Congress scrambling to stanch the bleeding in the financial industry, regulators have tightened rules on risky mortgages.

Congress is considering further tightening, including some of the same proposals abandoned years ago.


"U.S. Recession Started in 2007, Longest Since 1980s" by Timothy R. Homan and Steve Matthews, Bloomberg

The U.S. economy entered a recession a year ago this month, the panel that dates American business cycles said today, making this contraction already the longest since 1982.

The declaration was made by a committee of the National Bureau of Economic Research, a private, nonprofit group of economists based in Cambridge, Massachusetts. The last time the U.S. was in a recession was from March through November 2001, according to NBER.

Federal Reserve Chairman Ben S. Bernanke today said the economy “will probably remain weak for a time” and the Fed may use unconventional methods, such as buying Treasury securities, to spur growth. Should the recession persist for another five months, consistent with Fed and private forecasts, it would become the longest since the Great Depression.

“It is clearly not going to end in a few months,” Jeffrey Frankel, a member of the NBER committee and a professor at Harvard University, said in an interview. “We would be lucky to get done with it in the middle of next year.”

Separate reports today showed the recession has deepened. U.S. manufacturing contracted in November at the fastest rate in 26 years, according to the Institute for Supply Management, based in Tempe, Arizona. The Commerce Department said construction spending fell more than forecast in October as a slump in homebuilding spread to non-residential projects.

Stocks Slump

Stocks worldwide tumbled and yields on U.S. Treasury securities fell to the lowest ever on concern a lack of financing will stunt consumer and business spending.

The NBER designation means the U.S. was the first country to have slipped into a contraction. While definitions differ, the economies of both the euro area and Japan fell into a slump in the second quarter of this year, making it the first simultaneous recession in the three regions in the postwar era.

The loss of 1.2 million jobs so far this year was the biggest factor in determining the starting point of the U.S. recession, the NBER said. By that measure, the contraction probably deepened last month.

Payroll employment probably fell by 325,000 in November, the most since the last recession, according to the median forecast of economists surveyed by Bloomberg News ahead of a Labor Department report due Dec. 5. The jobless rate is projected to increase to 6.8 percent, the highest level since 1993.

Payrolls Drop

U.S. employers cut 240,000 jobs in October, a 10th consecutive decline. The unemployment rate rose to 6.5 percent, the highest level in 14 years, according to Labor Department statistics.

At 12 months, the current contraction is already the longest since the 16-month slump that ended in November 1982, and exceeds the postwar average of 10 months.

The contraction is the second under President George W. Bush’s watch, making him the first U.S. leader since Richard Nixon to preside over two recessions.

“The most important things we can do for the economy right now are to return the financial and credit markets to normal, and to continue to make progress in housing, and that’s where we’ll continue to focus,” White House Deputy Press Secretary Tony Fratto, said in an e-mailed statement. “Addressing these areas will do the most right now to return the economy to growth and job creation.”

Summers, More Action

Lawrence Summers, President-elect Barack Obama’s pick for White House economic adviser, said the economy is getting worse and requires more legislative action.

“Recent economic evidence suggests that the pace of this downturn is accelerating,” Summers said in a statement. He said Obama wants to enact a recovery package “soon after taking office.”

The likely length of this downturn may cast doubt on economists’ view that the business cycle was moderating in recent decades.

“Everyone had thought long, deep recessions were a thing of the past,” Frankel said. “There was a lot of talk of the new economy.”

Although a recession is conventionally defined as two quarters of successive contraction in gross domestic product, the private committee doesn’t require supporting GDP data to make a recession call. Its members focus on month-to-month changes in the economy.

The NBER committee defines a recession as a “significant” decrease in activity over a sustained period of time. The decline would be visible in gross domestic product, payrolls, industrial production, sales and incomes.

Getting Worse

The U.S. economy shrank at a 0.5 percent pace in the third quarter after expanding 2.8 percent in the previous three months. Economists at Goldman Sachs Group Inc. and Morgan Stanley in New York are among those projecting the economy will contract at a 5 percent pace this quarter.
Members of the committee are Frankel; Stanford University professor Robert Hall; Martin Feldstein of Harvard University; Northwestern University economics professor Robert Gordon; NBER president James Poterba; David Romer of the University of California at Berkeley; and Conference Board economist Victor Zarnowitz.

Do you hear the GOP mantra in the background? NO Regulation, No Regulation, No Regulation. We feel your pain.

Wednesday, November 26, 2008

ON THE LITE SIDE - Cartoons du Jour 11/17/2008

Before the memory fades, let us recall those special moments of the Republican culture wars with its greatest warriors. These pieces all done for "You Don't Know Me: A Guide to Republican Family Values," by Win McCormack, published this year by Tin House Publishing.

Bill O'Reilly given to the harassment of a young producer
(He called a loofa a falafel, which even in the shower tastes better)

In the early 1990s, Bob Barr was photographed at a fundraising
event licking whipped cream off of a woman

Larry Craig, after an encounter, presumably after praying, would say,
"You don't know me"

Neil Bush, younger brother of President Bush,
admitted to engaging in romps with women in Asia

Newt Gingrich, big-time Clinton accuser,
was really a small-time Clinton imitator

Rudy Giuliani announced his divorce at a press conference
That's how his wife found out about it

Arnold Schwarzenegger tried the Method
on women on the sets of his movies

IRAQ - The Revolving Door of Influence

"Drill, Garner, Drill" by Anthony Fenton, MotherJones


In the history of the Iraq War, one name is perhaps synonymous with the collapse of the Bush administration's hopes for a post-Saddam world: Retired Lt. General Jay M. Garner. It was Garner who served as the first post-war administrator for Iraq, running the country during the fateful two months immediately following the invasion before being replaced by L. Paul Bremer III.

However, Garner's frustrating tenure in Iraq wasn't entirely wasted. This year, he and a small group of former US military leaders, officials, and lobbyists have quietly used their deep connections in Kurdistan to help Canadian companies access some of the region's richest oil fields.

Though Garner's involvement in these deals has, so far, remained under the US media's radar, the situation presents an embarrassment for the Bush administration. US policy holds that foreign companies should not jump into the Iraqi oil business until after Iraqis figure out how to apportion their petroleum between various regions and the central government. In fact, last year, an American company named Hunt Oil triggered a controversy when it signed a deal to produce oil in the area of Dahuk in Kurdistan. Hunt Oil's CEO is a friend of President Bush and a former member of his Foreign Intelligence Advisory Board; congressional investigators discovered that even though the State Department eventually condemned the contract, the administration had long known about the deal and elected not to intervene. Garner has so far evaded a similar outcry because he's acting on behalf of companies in Canada.

But Garner's deal-making is not without risks. In the spring of 2007, Iraq's cabinet began working on an oil law to govern the country's oil reserves, which are the third largest in the world. Ever since then, however, Iraq's Sunni, Shiite, and Kurdish factions have been locked in a contentious struggle over the proposal. According to several observers, including a State Department official familiar with the matter, Garner's efforts to help his Canadian employers preempt the oil law have undermined the already fragile possibility of a cohesive Iraq—which was, of course, what Garner was originally sent to Iraq in 2003 to achieve. Referring to Garner and his colleagues, the official says, "It's unfortunate that they are working for a company that is just adding fuel to the fire in disagreements between Baghdad and Erbil, but there's not much we can do about it."

So Garner screws up Iraq in the first place, now uses his influence for profit and the potential of screwing Iraq again. Now you know why Greed is one of the 7 Deadly Sins.

ECONOMY - Dirty Jobs

"What About the Dirty Jobs?" by Chris Lehmann, MotherJones


Why green-collar gurus should stop condescending to the brown-collar crowd.

You don't have to look far in the canon of the sustainability movement to get a sense of where labor fits into its world-transforming vision. In his enormously influential 1993 tract, The Ecology of Commerce, Paul Hawken hymns a new economic order where "certain industrial skills will become less valuable," to be replaced by "biological knowledge and understanding" that "will provide the means to integrate human needs with the carrying capacity of natural systems."

So, for example, farewell miners: "While coal mines will be shuttered, removing the last insult from the lives of men and women who have long suffered for the Industrial Age, opportunities in solar hydrogen will expand." We will, Hawken continues in an air of distinct managerial chagrin, "no doubt try to protect the livelihoods of coal miners, much as the Luddites were legitimately concerned about the destiny of hand loom operators." But we all know how that story turned out. When the civilizing mission of the postindustrial age beckons, well, then it's time to put away your childish things—or your drills and pickaxes, as the case may be. As Hawken puts things, in high-visionary style: We must not hold up "the critical process of economic evolution in order to continue outmoded forms of production," but rather "recycle lost livelihoods into the jobs of the future."

Surprised to find such patrician talk in one of the founding manifestos of today's sustainability movement? You shouldn't be. The idea of sustainability, as envisioned by Hawken and other lead theorists, was to reconcile modern business civilization with the urgent mandates of preserving the earth's household. It is, in other words, management theory, with its eye firmly fixed on maximizing production efficiencies—and its accounting hand eager to put the messier business of displacing workers, shuttering industries, and increasing the cost of living of the less well off far on the margins of that "framework of a broader perspective."

And make no mistake, with Congress now beginning the slow, grinding work of drafting legislation to enact cap-and-trade mitigations of greenhouse emissions, the workers caught in the unfashionable brown precincts of industry will bear disproportionate costs. A 2004 study conducted by the University of California-Berkeley noted that measures to curtail greenhouse emissions by 20 percent by 2020 would entail fearsome losses for the old polluting industries: 23,900 jobs in coal mining, 61,400 jobs in oil and gas drilling, 6,300 jobs at oil refineries, and more than 60,000 jobs at electric and natural gas utilities.

The standard sustainabilist rejoinder to such grim accounting is that other economic sectors in a greener economy will flourish. And there is some truth to this—though it's not the first time that American workers have heard such sunny rhetoric. After NAFTA, too, workers were assured they would be retrained to be credentialed members of the brave new information order. Then, too, their livelihoods were not so much "recycled" as kicked to the curb.

Much more in the full article.

POLITICS - The Administration of Lies and Deceit

"Bush Labor Department misled Congress in effort to privatize jobs" by John Byrne, RawStory

President George W. Bush's Labor Department misled Congress in an effort to prove outsourcing jobs to private companies was more efficient than assigning the jobs to government employees, according to a Government Accountability Office report released Monday.

The report (pdf here) found that the Department used fictional projected numbers to improve "savings reports" -- even when real numbers were already available. And when the government did find private firms to take a government job, that employee generally was either reassigned to another task with the same title or promoted.

The effort was called "competitive sourcing," aimed to increase government efficiency by having federal and private organizations compete for providing services. While part of a federal government approach since 1955, the Bush Administration has made the approach a key element of the President's Management Agenda under the Office of Management and Budget.

An investigation revealed, however, that the Labor Department -- under direction from Bush budget officials -- deliberately withheld information about true costs.

According to the report, the Department of Labor "excluded a number of substantial costs in its reports to Congress -- such as the costs for precompetition planning, certain transition costs and staff time and post competition review activities -- thereby understanding the full costs of this contracting approach."

The report noted that this approach was consistent with "guidance" given by the Administration's Office of Management and Budget.

In addition, the report found the Department's "savings reports" were "not reliable: a sample of three reports contained inaccuracies, and others used projections when actual numbers were available, which sometimes resulted in overstated savings."

Most workers were also demoralized as the government tried to find private firms to take over their jobs, the probe found.

Bush Labor Secretary Elaine Chao began having workers compete for their jobs in 2004. Few employees have lost their jobs. But when the government found a private company to take over their position, 84 percent were reassigned to different positions with the same title or were promoted.

Since implementation, 22 employees were laid off or demoted, all of them African American.

The senator who commissioned the report, Iowa's Tom Harkin, along with the House committee that oversees the Labor Department, David Obey, said in a letter Monday that the report proved "the negative impact the Bush Administration's failed policies have had" on the Department.

"Under the direction of this White House, the Department of Labor has increasingly attempted to move work performed by Federal employees to private contractors" and, in so doing, hurt workers' morale and "grossly overstated savings," they wrote. "We look forward to working with the Obama Administration to strengthen the Department of Labor as it undertakes the critical missions of making sure our workplaces are safe; protecting employee pensions, health benefits and rights; and providing workers with the skills they need to compete successfully in the 21st century economy."

Then again, the GOP generally does not know how to survive on telling the truth.

POLITICS - And While the American Economy Burns....

From Harry Hope, alt.politics.usa

The problem, and it’s becoming serious, is that no one is prepared to orchestrate a comprehensive program to stabilize the financial system, put a floor under housing prices and keep the economy from sinking into a long, punishing recession.

Bush could and should do it—he is still president, and avoiding economic collapse is part of the job description.

But he won’t.

It’s ironic that after being so aggressive and proactive in other areas, the Decider is so indecisive and passive about the economy.

He has limited his role to signing off on whatever Paulson says is necessary—most recently, $20 billion in cash and $306 billion in guarantees for Citigroup, which Bush apparently approved during his flight home from Peru.

In part, Bush’s inaction stems from ideology.

If the free market is always right, then it ought to correct itself and get back on course.

All the government really needs to do is take care of a few emergencies such as Bear Stearns, Freddie Mac, Fannie Mae, IndyMac, AIG, Wachovia, Citigroup ... and, of course, whatever comes next.

Not the auto companies, however:

In Bushworld, the firms that created the toxic mortgage-backed securities that threaten to bring down the global financial system are somehow morally superior to the companies that created the Mustang, the Malibu and the minivan.

I don’t think ideology explains it all, though.

Even if he wanted to make a real run at righting the economy, at this point Bush has neither the energy nor the credibility to make it happen.

Frankly, he comes off as less a lame duck than a cooked goose.

That leaves the other president, who has plenty of energy and credibility—but no authority.

Bush said he called Obama to inform him of the Citigroup bailout, but informing isn’t the same as consulting.

Obama said his new economic team will be monitoring the situation and giving him daily reports on where things stand.

He could save them the trouble and just watch CNBC or Bloomberg all day.

Obama said he believes a huge economic stimulus is needed “right away.”

But he knows that won’t happen—it’s unlikely that anything big enough could get through the outgoing Congress, and in any event a big stimulus is not something that Bush is willing to support.

Obama said that “we cannot hesitate and we cannot delay,” but he knows full well that hesitation and delay are all but inevitable.

And he knows full well that by the time he gets the power to shape events, the economic situation might be much worse than it is now.

James Baker, the former secretary of state and current Republican eminence grise, made an amazing suggestion on “Meet the Press”
Sunday—that Bush and Obama develop and announce a joint economic rescue program.

It was a stunning acknowledgment of how weak the Bush presidency has become and how dangerous it would be to spend the next two months meandering from crisis to crisis.

But that’s the road we’re on.

When I get frustrated with Paulson’s zigzags and reversals, with his overnight decisions to buy huge companies or write hundred-billion-dollar checks, I remind myself that he doesn’t really have a president to work for.

The poor man may stumble here and there, but he’s dancing as fast as he can.

Tuesday, November 25, 2008

HOMETOWN NEWS - San Diego 11/2008

"Libraries Saved But Tensions Between Mayor and Council Remain" by DAVID WASHBURN, Voice of San Diego

The San Diego City Council on Monday saved a number of libraries and recreation centers, and two fire crews, from the budget ax, but in the process added what could be another $10 million to an already gaping budget deficit projected for next year.

Council, by a 6-1 margin, approved $37.3 million of the $43 million in cuts Mayor Jerry Sanders proposed to close an historic mid-year budget gap -- but would not go along with Sanders' most unpopular proposals, which included shuttering seven libraries and nine recreation centers, and cutting two fire crews from the Fire-Rescue Department's daily rotation.

The vote was undoubtedly cheered by thousands of San Diegans who rely on the libraries and recreation centers in their daily lives, as well as the estimated 30 to 40 city employees who now won't lose their jobs in January. However, it was harshly criticized by Sanders because it relied largely upon one-time savings, and at best put off further drastic cuts by six months.

"Libraries are an essential service to the community," said Councilman Kevin Faulconer to applause in City Council Chambers.

Faulconer's sentiment was echoed by most of his colleagues. "It's really hard to sit and look at people and say we are going to shut down things you hold near and dear," said Councilwoman Donna Frye. "We can at least postpone it for the present time."

The lone no vote came from Councilman Jim Madaffer, who said he could not be party to "kicking the can down the road" on difficult decisions.

Not long after the vote, a visibly angry Sanders emerged from his office with several of his aides and a poster-board chart depicting a 2010 budget deficit growing from $44 million to $54 million because of council's action. The difference between the cuts Sanders sought and those council authorized amounted to $5.7 million of the $43-million mid-year budget deficit. On an annual basis, the difference grows to $10 million, according to the Mayor's Office.

"There will be no magic the next time around," Sanders said during the impromptu news conference. "I had thought that they would quit fooling themselves, and make the tough decisions so the new council wouldn't have to do that."

Sanders could veto council's resolution, but won't. He said it would serve only as a symbolic action because the 6-1 council majority would easily override the veto.

Sanders' angry response somewhat belies the fact that council went along with most of what he proposed including the halving of the number of recruits in they city's police and fire academies as well as scores of layoffs. Council also agreed to eliminate more than 100 beach fire rings, which are popular among residents and tourists.

Councilman Tony Young, who proposed Monday's the motion, characterized some of the mayor's budget-cut proposals as "unimaginative," and said that he his colleagues are willing to make difficult cuts, but are not willing to act hastily on proposals that are not backed up by sound analysis.

"To make a decision to shut down whole libraries and recreation centers based on just two weeks of discussion -- the public deserves more than that," Young said.

In making its decision, council largely followed recommendations by Independent Budget Analyst Andrea Tevlin. Specifically, Tevlin recommended that the libraries and recreation centers stay open until a comprehensive plan encompassing all of the facilities managed by those departments is brought to council.

And as per Tevlin's recommendation, the $5.7-million will come almost entirely from one-time withdrawals from the city's library reserve and hotel room-tax funds, according to the Mayor's Office.

Council also directed Sanders to save money through a mandatory furlough of city employees and user fee increases that could be instituted in the current fiscal year. Administration officials have said that both would be difficult to accomplish in short order.

Keeping the libraries and recreation centers open will cost $1.7 million and $800,000, respectively, according to the Mayor's Office. Keeping the fire crews operating will cost $1.6 million. Additionally, council refused to transfer to the general fund a total $1.5 million in infrastructure funds maintained by individual council offices, and left $68,000 in the budget to keep open rest rooms in Mission Bay Park that Sanders wanted closed.

The infrastructure funds consist of money individual council members can use on small infrastructure projects -- like replacing stop signs -- in their districts. Monday, Sanders referred to those funds as "slush funds," and chided council members for not giving them up. The motion by Young stated that each council office "will use their funds as they direct to address the budget deficit." Several council members did not return calls last night from a reporter seeking further explanation.

Monday's vote brought at least to a temporary pause a period of intense turmoil over the budget that began in early October when the administration first became aware that the rapidly deteriorating economy was causing an enormous deficit. Sanders presented his package of cuts after asking every department head to slash 10 percent from their budgets.

Council held two hours-long public hearings this month, during which dozens of residents voiced their opposition to Sanders' proposal. And in recent weeks residents have circulated petitions and held protests in front of popular libraries and recreation centers.

The age-old issue. Where to get the money, whose piece-of-the-pie goes to someone else?


"Case-Shiller: Prices Slide to May 2003 Levels" by KELLY BENNETT, Voice of San Diego


Home prices in San Diego County continued to fall in September, reaching a point last seen in May 2003, according to the most recent Standard & Poor's/Case-Shiller index released this morning.

The price for a home fell by 26.3 percent compared to the same month a year earlier, and dropped by 34.4 percent from the market peak in November 2005.

The Case-Shiller index assigned a value of 100 to home prices in the year 2000 and has tracked the market's ascent and descent in relation to that value ever since. By November 2005, the index reached a peak of 250.34, meaning homes measured in the index had appreciated in value by 150 percent in just less than six years.

Now, the index has fallen to 164.12 -- that's a 34 percent drop from the peak, but prices are still about 64 percent higher than they were at the start of the decade.

ECONOMY - On Foreclousres, Prince William County, Va

The Foreclosure Epidemic

POLITICS - Can Obama Learn From Other's Mistakes?

This is just a small excerpt from a long commentary in The Washington Independent, but has a point.

"Obama and Congress: Up Close and Personal"

The last time a sitting senator moved straight into the White House, familiarity with Congress bred only contempt. John F. Kennedy championed a slew of new programs, but with only a few exceptions the president could not get them enacted. The principal objectives of Kennedy’s domestic agenda — federal aid to education, a tax cut, and civil rights legislation — stalled on Capitol Hill.

The New York Times political reporter, Tom Wicker, described Kennedy’s inability to manage the Congress as one of the “great ironies of American politics. He wondered why “JFK, the immensely popular president, could not reach his legislative goals.” The stubborn opposition surprised Kennedy himself. “When I was a congressman,” the thwarted president mused, “I never realized how important Congress was. Now I do.”

Americans might hope that Obama learns that lesson sooner and better than his role model.

ECONOMY - America's Piggy-Bank Raid

"The Fed’s Secret $893 Billion Loan Portfolio" by Ben Protess, ProPublica

President Barack Obama's pick for Treasury secretary, Timothy F. Geithner (pictured left, with Fed Chairman Ben Bernanke), is said to be a leading architect of the Fed's massive lending program. (Reuters file photo/Lucas Jackson)And you thought the Treasury Department’s $700 billion bailout was massive and secretive.

In fact, the Federal Reserve is lending significantly more – $893 billion to a wide range of institutions — in a plan receiving even less public scrutiny, the Washington Post reports.

A leading mastermind behind the lending: Timothy F. Geithner, president of the Federal Reserve Bank of New York and Barack Obama's pick for Treasury secretary.

The Fed’s decision to withhold the names of companies receiving loans, among other key information, has caused a stir. Bloomberg News recently sued the Federal Reserve, seeking to learn what the central bank is accepting as collateral for the loans.

And at a hearing last week, Rep. Spencer Bachus (R-AL) asked Fed Chairman Ben Bernanke: "When do you anticipate letting the public know" what collateral you're taking? His answer: Not any time soon. Bernanke argued that disclosure would be counterproductive. He said that naming the banks and collateral involved would create a "stigma" that would discourage further lending.

So the Fed has kept the details of its activities quiet and at the discretion of its five governors, as well as top officials of the 12 regional Fed banks, according to the Post.

The Fed, meanwhile, continues to dole out funds for a variety of purposes. The Post explains:

As of last week, the Fed's loans included $507 billion to banks, $50 billion to investment firms, $70 billion for money market mutual funds and $266 billion to companies that use a form of short-term debt called commercial paper. It is considering a new program that would make billions more available to prop up consumer lending: auto loans, credit cards and the like.

The Fed’s lending last week was 1,900 times the weekly average for the three years before the current credit crisis, according to a Bloomberg News report. In total, the government is prepared to lend more than $7.4 trillion, or half the value of everything produced in the nation last year, Bloomberg reported. A full breakdown of the $7.4 trillion is listed in a post on

Some of the Fed’s deals could be increasingly risky, the Washington Post explained:

The Fed has increased the size of its balance sheet and replaced the ultra-safe U.S. government bonds it normally keeps on its books with loans to banks and others.

A year ago, the central bank had assets of $868 billion, of which about 90 percent was in Treasuries. Last week, it had assets of $2.2 trillion on its books, of which 22 percent was in Treasuries. Much of the remainder represents the new lending to banks and other financial institutions.

Perhaps riskiest of all is the Fed’s decision to accept troubled asset-backed securities as collateral – the same sort of assets targeted by the original design for the Troubled Asset Relief Program. Treasury Secretary Hank Paulson abandoned the plan to purchase the assets, but the Fed’s decision means that banks can still use them to obtain a loan, the Post reports. It’s a strategy that one economist dubs "TARP light."

HEALTHCARE - My Take, Universal Healthcare

This is my personal take on a good, ethical, healthcare plan. And this would take two things to implement.

1) I prefer the Single Payer healthcare proposed by some in our congress such as United States National Health Insurance Act United States National Health Insurance Act, and use by other nations in the world.

As I view what would be needed, here are my requests:

  • The government pays the difference between what a citizen can afford to pay out of their income (aka Means Tested)

  • The plan uses private Healthcare Providers (NOT government run)

  • The customer (American citizens) chooses what Healthcare Provider they want

  • The government ONLY provides strict standards Healthcare Providers must meet to be eligible to participate, AND would NOT include a fixed dollar celling

  • One standard must be NO Pre-existing Exclusions in a Healthcare Provider's plan

  • Another standard must be, ALL government approved drug must be covered AND the citizen's personal doctor make the decision on what drugs the patient needs

2) Note that for this to work we would need a firm definition of Means Tested than we have now.

At present the government tends to have a one-shoe-fits-all policies when it comes to Means Testing. This is the wrong idea.

Means Testing should be geared to what is the costs (including healthcare) for a citizen to live in their area. The "area" should be a state controlled, a Cost of Living data collected by each state (many do so now) and compared to Federal Government statistics. I envision that such a plan give each state the choice to use their state legislative districts OR U.S. House districts as the definition of "area" from which Cost of Living data be tracked.

Once we have a realistic Cost of Living for states, then the Means Testing healthcare become a simple formula:

Means = Income - Cost_of_Living + 5% (the 5% is fluctuation padding)

Therefore if the citizen Income = Means or Means+, government pays nothing to the Healthcare Provider.

Citizen Income less than Means, government pays the percent difference, up to and including the full amount, to the Healthcare Provider.

In other words:

If the Cost of Living where you live is $25,000/yr (including healthcare coverage) and your income is $35,000/yr, government does not pay for healthcare.

If the Cost of Living where you live is $25,000/yr (including healthcare coverage) and your income is $15,000/yr, which is 60% of Cost of Living, the government pays the difference of 45% of your healthcare coverage (40% + 5% padding) per year.

Of course, citizens with no income, government pays 100% of their healthcare.

NOTE: This method of Means Testing can be used in other issues than healthcare.

Now, would my idea work?

Of course I have no idea. I'm just an ordinary citizen who watches what is going on with healthcare in our nation and the, in my view, unethical way we approach the issue. A citizen of the United States of America should NOT have there health put at risk by their ability to pay (aka money).

What is the cost containment in this type of plan? Everyone gets healthcare but the government ONLY pays for those who cannot afford to pay.

Other references:

HEALTHCARE - More on the Ripoff of American Healthcare

"Studies Say Private Medicare Plans Have Added Costs, for Little Gain" by ROBERT PEAR, New York Times

Private health insurance plans, which serve nearly a fourth of all Medicare beneficiaries, have increased the cost and complexity of the program without any evidence of improving care, researchers say in studies to be published Monday.

The studies, questioning the value of some private plans for Medicare beneficiaries and taxpayers, were issued as President-elect Barack Obama and Congressional Democrats take aim at the plans and consider cutting the payments they receive.

Enrollment in private Medicare plans has nearly doubled in five years, to 10.1 million.

In one study, Marsha Gold, a senior fellow at Mathematica Policy Research, says that private Medicare Advantage plans “are now widely available nationwide,” even in rural areas, as Congress intended when it revamped the program in 2003.

But the study, to be published in the journal Health Affairs, says that 48 percent of the additional enrollment comes from a type of plan that mimics traditional Medicare and generally does little to coordinate care. Enrollment in these “private fee-for-service plans” has shot up to 2.3 million, from 26,000 in December 2003.

In a separate article, two analysts from the Medicare Payment Advisory Commission, Carlos Zarabozo and Scott Harrison, said that growth in private plans had driven up costs because the government pays them 13 percent more on average than what it would spend for the same beneficiaries in traditional Medicare.

The commission, an independent federal panel that advises Congress, has expressed concern about the disparity for years.

“The higher payment rates have financed what is essentially a Medicare benefit expansion for Medicare Advantage enrollees, without producing any overall savings for the Medicare program, and with increased costs borne by all beneficiaries and taxpayers,” Mr. Zarabozo and Mr. Harrison write.

The annual open enrollment period began on Nov. 15. Beneficiaries can sign up for private plans offered by companies like UnitedHealth and Humana and by many Blue Cross and Blue Shield companies.

Under the formula adopted in the 1980s, Medicare paid private plans 95 percent of the projected cost for each beneficiary in traditional Medicare, on the theory that the private plans would save money by coordinating care and being more efficient.

The private plans, which frequently offer additional benefits like vision and dental care, have proved popular. Over the years, Congress has increased payments to private plans, as an incentive to enter more markets.

Beneficiaries choose from an average of 35 private Medicare Advantage plans in each county, Mr. Zarabozo and Mr. Harrison report. But they say, “Payment increases have been so large that plans no longer need to be efficient to offer extra benefits.”

Payments to health maintenance organizations are, on average, 12 percent higher than what the government would spend for beneficiaries in traditional Medicare, they write, while payments to private fee-for-service plans were 17 percent higher.

Insurance company executives and Bush administration officials defend the role of private plans.

“Medicare Advantage plans are offering an average of over $1,100 in additional annual value to enrollees in terms of cost savings and added benefits,” said Kerry N. Weems, the acting administrator of the Centers for Medicare and Medicaid Services.

Karen M. Ignagni, president of America’s Health Insurance Plans, a trade group, said two types of plans — H.M.O.’s and preferred provider organizations — had produced tangible benefits by coordinating care. As a result, she said, disease is detected earlier and people have fewer visits to hospital emergency rooms.

But, Ms. Gold said, “these are not the types of plans that have been growing most rapidly.” Instead, the private fee-for-service plans are growing fastest, and they, she said, “are not set up to coordinate care.”

The Medicare Payment Advisory Commission has said the payments to private plans should gradually be reduced to the level of traditional Medicare.

In a campaign statement, Mr. Obama declared, “We need to eliminate the excessive subsidies to Medicare Advantage plans and pay them the same amount it would cost to treat the same patients under regular Medicare.” In a debate on Oct. 15, Mr. Obama described the subsidies as “just a giveaway” to private insurers.

Similar views have been expressed by former Senator Tom Daschle of South Dakota, who is Mr. Obama’s choice for secretary of health and human services. “Medicare’s solvency is now threatened by overpayments to private insurers,” Mr. Daschle said in a book published this year.

And another GOP lie bites the dust. They are fools if they expected the private Healthcare Industry to actually save money. They are pofit diven to make ever more money, not provide savings to customers.

Monday, November 24, 2008

POLITICS - The Facts Mame, Nothing But the Facts

More from, questions posted by readers

"Q: Are congressional Democrats talking about confiscating IRA and 401(k) investment accounts?"

My mother has recently brought up a rumor that Nancy Pelosi and Harry Reid endorse a plan for the government to take people's 401Ks to make up tax dollars. Is this true and where did my mother get the information? (she can't tell me).

A: No. There's no plan to seize these accounts. One House witness at a committee hearing proposed to allow some people to trade their old accounts for a new type that would be less risky.

We've had many queries about this doozy. They all lead back to a Nov. 4 report posted by the Carolina Journal, a publication of the conservative John Locke Foundation of Raleigh, N.C. Its headline proclaimed, "Dems Target Private Retirement Accounts: Democratic leaders in the U.S. House discuss confiscating 401(k)s, IRAs." The report is wrong. There's been no such discussion.

What has been discussed is changing 401(k) and Individual Retirement Accounts in the future by limiting the deductibility of donations, and offering as an alternative a $600 tax credit and a new type of account with an annual return guaranteed by the government. That's a controversial idea to be sure, but it's a far cry from proposing that the government seize retirement assets that investors have already salted away in 401(k)s or IRAs. Nobody we know of is proposing anything like that.

The Carolina Journal report claims that Democrats on the House Education and Labor Committee held hearings Oct. 7 on "proposals to confiscate workers’ personal retirement accounts." The report describes in particular the testimony of Teresa Ghilarducci, a professor at the New School for Social Research in New York City. We've reviewed Ghilarducci's written testimony and a video recording of the entire hearing, both of which are posted on the committee's official Web site and are available to anybody who cares to read or listen. Contrary to the Carolina Journal report, nobody at the hearing talked about confiscating or seizing accounts. We also contacted Ghilarducci independently and asked if she's expressed support for confiscation. She told us in an e-mail message that she hasn't:

Teresa Ghilarducci, Nov. 18: It is utterly ridiculous [to suppose] that I advocate seizing 401k assets.

Ghilarducci was one of six witnesses at the Oct. 7 hearing, convened by chairman George Miller of California, a Democrat, to examine the impact of the financial crisis and stock market meltdown on workers' retirement accounts. Ghilarducci has long proposed limiting tax deductions for money put into 401(k) and similar retirement accounts and setting up a new type of account instead. Ghilarducci touts the idea in a book published earlier this year and in an opinion article published in the New York Times on Sept. 26. A spokesman for Rep. Miller has been quoted as calling her idea "intriguing" and "part of the discussion," but so far nobody in Congress has adopted it in the form of proposed legislation.

What she proposes is strong medicine and has been sharply criticized by conservative commentators including Rush Limbaugh and the editorial page of The Wall Street Journal. She would force all workers to save 5 percent of their annual income in a new type of retirement vehicle, which she calls a Guaranteed Retirement Account. These savings could not be controlled by workers like IRAs and 401(k) assets, but would instead be deposited with the government. Workers could not touch the money until retirement, she says, and even then the savings could not be drawn out any way workers might desire, but would be converted to an annuity – a guaranteed stream of income for life. Ghilarducci argues that these new accounts would avoid stock market risks; the government would guarantee that the savings earn a 3 percent annual return on top of inflation. The government would also pay each worker $600 a year in the form of a tax credit, which would help workers who now earn too little to take advantage of a tax deduction because they owe little or no federal income tax anyway.

At the Oct. 7 hearing, Ghilarducci further proposed that Congress address the recent stock market drop by allowing workers to trade their existing 401(k) or IRA accounts for her proposed Guaranteed Retirement Accounts. (Her words can be heard starting at 33 minutes and 23 seconds into the video of the hearing.)

Ghilarducci, Oct. 7: I propose ... that the Congress allow workers to swap out their 401k assets, perhaps at August levels, for a Guaranteed Retirement Account. Just a one-time swap, trading your 401(k) for a Guaranteed Retirement Account that will be composed of the equivalent of government bonds that pay a 3 percent real return.

Note that she used the word "allow." This proposed swap would be voluntary, the opposite of a seizure or confiscation. And many might find such a trade attractive. Note also that she said "perhaps at August levels," suggesting that Congress might replenish the value of beaten-down stocks in IRAs and 401(k) accounts before making the swap. That would be quite a generous offer; the Dow Jones Industrial Average dropped nearly 17 percent between August 1 and the day of the hearing. Far from proposing to "confiscate" accounts, she proposed to restore their value. Congress has not acted on her suggestions.

Standing By a Falsehood

We contacted the John Locke Foundation to ask about the basis for the "confiscation" claim. We wondered if the Carolina Journal's reporter knew something about the plan that we didn't. Spokesman Jon Ham said: "[W]e, as the saying goes, 'stand by our story.'

"Ham argued that holders of 401(k) accounts and IRAs would feel "coercion" to convert those accounts into Ghilarducci's proposed GRAs. He said: "Even though transferring of a 401(k) to a GRA would be 'voluntary' under Ghilarducci’s proposal, the loss of the 401(k)s tax advantage makes it coercive, with the intent of forcing individuals to transfer their accounts to a GRA. ... Absent the loss of the tax advantage, we would not have described the Ghilarducci plan as 'confiscation.'

"But Ham's argument won't wash. Even if there were coercion to convert an IRA or 401(k) account to a GRA account, it would be a rather serious exaggeration to describe it as "confiscation." The old account owners would still own them, in a new type of account. And anyway, Ham is simply wrong to claim that there would be any coercion.

What Ghilarducci proposes is to pay for her proposed $600 tax credit by taking away the deductibility of money put into an IRA or 401(k) over $5,000 per individual, per year. (IRAs for those under age 50 would actually not be affected, since the current limit for them is $5,000 anyway.) This would certainly reduce the incentive for upper-income workers to put more than $5,000 into such accounts in future years, but it would in no way reduce the tax advantage of keeping money already in those accounts. All interest, dividends and capital gains realized inside those accounts would continue to go untaxed until the account holder withdraws the money. Ghilarducci told us:

Ghilarducci: If people put money into 401(k)s they could keep it there, and taxes would continue to be deferred until withdrawn. It is unthinkable that Congress would take a tax break away for activities already undertaken.So much for "confiscation." We don't endorse or oppose Ghilarducci's ideas. But it's simply a fact that neither she nor anybody we're aware of is proposing a government seizure of retirement accounts.-Brooks Jackson

Correction, Nov. 18: We originally referred incorrectly to the John Locke Institute. The correct name is the John Locke Foundation.

NOTE: This would be a voluntary program.

"Q: Is Obama planning a Gestapo-like "civilian national security force?"

A: This false claim is a badly distorted version of Obama's call for doubling the Peace Corps, creating volunteer networks and increasing the size of the Foreign Service.

This question stems from an interview that Republican Rep. Broun of Georgia gave to The Associated Press Nov. 10. The story carried a headline, "Georgia congressman warns of Obama dictatorship." It said that Broun "fears that President-elect Obama will establish a Gestapo-like security force to impose a Marxist or fascist dictatorship." And it quoted him this way:

Rep. Paul Broun, Nov. 10: It may sound a bit crazy and off base, but the thing is, he's [Obama's] the one who proposed this national security force. ... That's exactly what Hitler did in Nazi Germany and it's exactly what the Soviet Union did.

Similar claims have been circulating in right-leaning blogs and conservative Web sites ever since July, when Obama made a single reference to a "civilian national security force" in a campaign speech in Colorado. Obama's detractors make much of his expansive (and exaggerated) description of such a force as being "just as powerful, just as strong, just as well-funded" as the U.S. military. They also ignore the context.

Obama was not talking about a "security force" with guns or police powers. He was talking specifically about expanding AmeriCorps and the Peace Corps and the USA Freedom Corps, which is the volunteer initiative launched by the Bush administration after the attacks of 9/11, and about increasing the number of trained Foreign Service officers who populate U.S. embassies overseas.

Here is the relevant portion of what Obama actually said, with the sentences quoted selectively by Broun and others in bold.

Obama, July 2, Colorado Springs, CO: [As] president I will expand AmeriCorps to 250,000 slots [from 75,000] and make that increased service a vehicle to meet national goals, like providing health care and education, saving our planet and restoring our standing in the world, so that citizens see their effort connected to a common purpose.

People of all ages, stations and skills will be asked to serve. Because when it comes to the challenges we face, the American people are not the problem – they are the answer. So we are going to send more college graduates to teach and mentor our young people. We'll call on Americans to join an energy corps, to conduct renewable energy and environmental clean-up projects in their neighborhoods all across the country.

We will enlist our veterans to find jobs and support for other vets, and to be there for our military families. And we're going to grow our Foreign Service, open consulates that have been shuttered and double the size of the Peace Corps by 2011 to renew our diplomacy. We cannot continue to rely only on our military in order to achieve the national security objectives that we've set.

We've got to have a civilian national security force that's just as powerful, just as strong, just as well-funded. We need to use technology to connect people to service. We'll expand USA Freedom Corps to create online networks where American can browse opportunities to volunteer. You'll be able to search by category, time commitment and skill sets. You'll be able to rate service opportunities, build service networks, and create your own service pages to track your hours and activities.

This will empower more Americans to craft their own service agenda and make their own change from the bottom up.

Does that sound like a force that could kick down your door in the middle of the night and haul you off to a Gulag or concentration camp? You decide.

POLITICS - New American Face for the World Stage?

"Obama poised to rebrand America, experts say" by Kristi Keck, CNN

President-elect Barack Obama is poised to restore the United States' image in the international community, but experts say the president-elect must show the world that his actions will live up to his rhetoric.

Receiving a warm welcome is not the same as maintaining one, and Obama has a lot of work to do to improve the U.S. brand.

America's image has declined in nearly every region of the world in recent years, but Obama's victory "enables the United States to start again with a clean slate," according to John Quelch, the senior associate dean at Harvard Business School.

"Americans can actually go to dinner parties and cocktail receptions around the world today and not have to apologize for the United States the way they have had to do the last several years," he said. "The election has made life a little bit easier for Americans living and traveling abroad to hold their head up high again."

The United States' tarnished reputation has been fueled by a combination of factors, including opposition to U.S. policies like the war Iraq and alleged torture and abuse of prisoners, the perception of hypocrisy, unilateralism, and the perceived war on Islam, according to a congressional report released in June.

Obama represents a "clean break" from the past, and his election is the first big step toward change, said Dick Martin, author of "Rebuilding Brand America."

"Changing America's standing in the world was going to be the work of a generation, and it would have to start with some kind of grand gesture that demonstrated that things were changing. His election in itself is that kind of grand gesture," he said.

Throughout the election season, Obama was largely well received across the globe.

More than 200,000 people came to watch his speech in Berlin, Germany, in July, according to police estimates -- and it wasn't because they'd read his book or memorized his policies.

"It was because they all felt that he was the incarnation of change and they admired him. They had an emotional connection," Martin said.

When Americans voted for Obama on November 4, citizens around the world celebrated his resounding win. People in cities and villages danced and cheered in the streets, and Kenya declared the day after the election a national holiday.

In China -- where the media is state-run and domestic stories are almost always the top stories -- newspaper headlines read "First Black President of the United States."

When President Bush was elected for his second term, the cover on the U.K.'s Daily Mirror read, "How can 59,054,087 people be so dumb?" The day after Obama's victory, the paper's cover read, "GOBAMA!"

While the reaction around the world was mostly positive, some areas have been more hesitant to embrace Obama. The day after the election, IslamOnline published an article titled, "Pakistanis Skeptical About Obama."

In the months before the election, a survey by the Pew Research Center suggested little enthusiasm for Obama or Sen. John McCain in the Middle East, especially in Muslim nations.

But in general, people across the world have reacted with joy to Obama's election because they are looking forward to the end of the unpopular presidency of Bush, said Robin Oakley, CNN's European political editor based in London.

"The arrival of Obama, as an African-American president, gives people a reason -- an excuse even -- to start loving America again," Oakley said.

But with expectations so high, experts say Obama will have to work to capitalize on the opportunity before him.

"Obama needs to show that he is prepared to listen to America's allies, to consult with them genuinely on issues like Afghanistan and climate change, to open up to new thinking about Iran and Cuba, to re-shape the world's economic institutions," Oakley said.

The biggest thing Obama could do to reshape U.S. foreign policy would be to capture Osama bin Laden, Quelch said.

"For eight years he dodged George Bush and I think President-elect [Obama] has been pretty strong in terms of indicating his determination to secure bin Laden," he said.

If that were to occur, Quelch said, "the U.S. could then in a sense close that chapter in its history and perhaps reopen dialogue with many parts of the Arab world that the relentless pursuit of al Qaeda and the Iraq war have closed off in the last few years."

Obama must also bring a greater level of professionalism to the selection of the ambassadors he appoints, Quelch said.

"I think previous administrations have not served U.S. overseas interests and image that well by in some cases appointing cronies who haven't even set foot in the country to which they were appointed before they were named as ambassadors," he said.

Martin said that most importantly, Obama must listen to what the international community wants if he wants to restore America's reputation.

"The number one thing the people hold against us is that we don't appear to take their interests into account," he said.

Closing Guantanamo, adhering to the Geneva Conventions and eliminating torture are key issues for people around the world because they are the symbols of American unilateralism, Martin said.

Martin also suggested that Obama take a page out of President Eisenhower's playbook and give the rest of the world an opportunity to experience American culture through an agency like the now-defunct United States Information Agency.

In addition to exposing the rest of the world to U.S. culture, Obama should also make sure young Americans are citizens of the world. Martin recommends education reform, with an emphasis on world history and language classes.

"They think we are clueless, they absolutely think we are clueless, and in many cases we are," pointing to a 2002 National Geographic study indicating that nearly a third of young Americans could not locate the Pacific Ocean.

Alessio Vinci, CNN's Rome bureau chief, said that if the president-elect wants to change the world's view of the United States, "Obama has to be Obama."

"Obama's support in Europe is pretty much based on the fact that most people on this side of the Atlantic are fed up with the Bush administration, not with America as a nation," he said.

OH, please let it come true.

Wednesday, November 19, 2008

ON THE LITE SIDE - Women Can Park

POLITICS - A Postmortem Commentary, the GOP

"The craziest party that could ever be" by Alex Nursall, The Varsity

Hatred and childish name-calling is killing the GOP

There’s been much speculation about what lost the election for the Republicans (answer: plenty), but in a word, the most significant factor was hate. Hate for the opposition. Hate for people who are different. A hate that will eventually destroy the party if they don’t make some serious changes.

It goes without saying that smear tactics, though petty, will happen in any election. But the Republicans’ campaign against Obama seemed extra vindictive. From the claims that he was in cahoots with Bill Ayers to the rumours that he was a raging socialist, the McCain campaign (especially Sarah Palin, who seemed to know more about political gossip than any of the issues) pointed fingers in an attempt to ruin the Democrats’ credibility. Instead, such accusations slowly ate away at their own.

Hate is killing the GOP. The intolerant attitudes espoused by the party and its supporters drive many away. Whether it’s Proposition 8, the racist remarks made by participants at Republican rallies, or a continued reliance on fear-mongering, the party’s ideas are outdated—a diversifying country will not elect a group that seems bent on removing rights from a majority of them.

In the past, the Republicans have relied on winning over Evangelical Christians. But this time a fair number of Evangelical youth voted Democrat, and even Gordon College—an Evangelical College near Boston—stood behind Obama. The Republicans are losing their base, and if the trend continues, they’ll be nothing more than a party of fanatics, clutching at their guns and religious texts, weeping bitter tears for an America that never existed in the first place.

The party, in avoiding accusations of “elitism,” has been accused of anti-intellectualism, further alienating those who might have stood with them. Although they may have solid support among white voters in Appalachia, this won’t win them the country. Exploiting people’s fear of the unknown and inflating the threat posed by anti-freedom terrorists is ignorant and pointless, and reflects badly on those perpetuating these ideas.

Part of the GOP’s problem is those representing them in the media. From Ann Coulter to Rush Limbaugh to the cast of Fox News, conservative pundits draw from rumours, broad extrapolations (Obama is friends with Ayers!), to flat out lies (he will make us USSA!). Between screaming and name-calling, they are no better than playground bullies, and the public is beginning to notice.

American society is moving away from its conservative values. The Republican Party needs to align itself closer to the center in order to regain political ground. A platform of hate makes the respected politician seem more like the crazy guy on the corner, screaming about the invisible threat that’s always out to get him. And no one wants him in the White House.

Hatred is all the GOP can fall back on.

In their subservience to Big Money, worship of greed, and Corporations before the man-on-the-street, they cannot come up with justifications for their policies. AND THEY KNOW IT, hence the hate and name-calling. That's all they have left.

POLITICS - From the GOP's Own

"Hagel, Unrestrained, Lashes Into Bush, Rush And The GOP" by Sam Stein, Huffington Post

Two months before he leaves office, Sen. Chuck Hagel is increasingly unrestrained by political niceties.

Appearing at a forum at the Johns Hopkins School of Advances International Studies, the outgoing Nebraska Republican leveled harsh criticism at his own party, the lack of intellectual curiosity among some of his colleagues, the Bush administration's handling of nearly every aspect of governance and -- perhaps most bitingly -- the conservative radio voices that often dictate the GOP agenda.

"We are educated by the great entertainers like Rush Limbaugh," said Hagel, sarcastically referencing the talk radio host who once called him "Senator Betrayus." "You know, I wish Rush Limbaugh and others like that would run for office. They have so much to contribute and so much leadership and they have an answer for everything. And they would be elected overwhelmingly," he offered. "[The truth is] they try to rip everyone down and make fools of everybody but they don't have any answers."

It wasn't all an exercise in unloading pent-up frustrations. Hagel offered praise for Robert Gates -- creating the impression that he would like the current Pentagon chief to remain at the post once President-elect Barack Obama takes office. He also deflected questions about whether he would serve in the Obama administration or what he thought of the possibility of Hillary Clinton at Secretary of State. Moreover, Hagel offered what amounted to an hour-long plea for the next administration and Congress to reconfigure the way it works together and within the international framework when it comes to foreign affairs.

"Eighty-seven percent of the American people said America is going in the wrong direction," said Hagel. "You don't need to know another number about anything, and so the election was pretty predictable: the American people don't like what is going on... they want us to start doing what leaders are expected to do, address the problems, find some consensus to governing. Get along. There will be disagreements, sure... but in the end we can't hold ourselves captives to this raw, partisan, political paralysis."

But the truly memorable bits came when -- unrestrained by formalities -- he deployed a sharp tongue while riffing on the GOP. Reflecting on the Bush administration, Hagel, one of the earliest critics of the Iraq war, held back few punches.

"Yes, there have been some differences and some pretty significant ones in [the Republican Party]. But when you ask the question: 'Has [our approach] worked? I don't think many people will say it has worked," he said, adding later: "God knows I would never question the quality of our elected officials, that's why I'm so popular with many of them."

The main thrust of his critiques was aimed not at any individual specifically, but at a closed-off mindset that he believed had taken hold of Republican politics and, consequently, the GOP's approach to foreign policy. "Engagement is not appeasement," he said. "Diplomacy is not retreat. Somehow too many in this town and in this country have disconnected all of that."

Later in the question-and-answer session, he offered an example to illustrate this quip, gently mocking those officials and voters who, for one reason or another, had problems with things from France or people who were Muslim.

"There is always going to be a certain know-nothing element to democracy," said Hagel. "That is their choice. But in a world that is so vitally interconnected, it does help if you try to understand the other side... Ask them: 'What is it that scares you about the French so much?'"

There were, additionally, some compliments to spare. Hagel, on several occasions, lauded the work and approach of Gates, who he said had taken the right ethos to the job at Defense. Finally, he offered a sincerely funny line about Warren Buffet, the heralded financier, Oracle from Omaha and (seemingly) one individual to have weathered the current financial market meltdown.

There is news today that [Obama] is in serious negotiations with Warren Buffet for Buffet to buy the entire United States government," Hagel joked in the opening of his speech. "I applaud that. I am seeking the job of buffet's driver. He is the only one who has money. Obviously we think highly of warren and we take great pride that he is a cornhusker."

Tuesday, November 18, 2008

ECONOMY - Thank You Republicans... NOT!

"‘Tis the Season for Mass Layoffs" by Mary Kane, Washington Independent 11/17/2008

Well, this is no way to start a Monday: First, Citigroup announces it plans to cut 53,000 jobs, the Wall Street Journal says.

Then, economist Rebecca Wilder at News N Economics chimes in with her prediction of more “mass layoffs” set to explode in the current recession.

From Wilder:

Anectodal evidence suggests that layoffs into 2009 will be big (mass in scale), broad-based (across all industries), and thus add up quickly. And with credit markets on red alert week after week, there doesn’t seem to be anywhere for the labor market to go but down even further.

This is going to be a very difficult time for unemployed workers, and according to the Herald Tribune (the global edition of the NY Times), the U.S. welfare infrastructure is not equipped to handle the oncoming severe contraction in the labor force. I hope that I am wrong, but after the very dismal October labor report, it seems that things have worsened substantially for the labor market.

In case you may have missed it, Wilder provides a handy list of major layoffs announced just since Nov. 12:

Fidelity Will Eliminate 1,700 More Jobs in Early 2009
Sun to Cut up to 6,000 Workers Amid Financial Crisis
Credit Suisse Said to Plan Job Cuts, a Fund Unit Sale
Nokia Lowers Market Growth Outlook as Spending
“On Nov. 4, Nokia said it may cut as many as about 600 jobs in marketing and research to improve efficiency.”

RBS May Eliminate Up to 3,000 Jobs in Securities Unit
QVC Cuts 5.8 Percent of U.S. Jobs in Cost-Cutting Bid
“QVC Inc., the home-shopping channel controlled by cable billionaire John Malone, said it will eliminate 700 jobs, or about 5.8 percent of its U.S. workforce, as part of a cost-cutting drive.”

BT to Cut 10,000 Jobs; Second-Quarter Profit Falls
“Most of the 10,000 cuts [6% of its labor force], out of a workforce of 160,000, will be “indirect labor” such as agency workers, contractors, subcontractors and offshore employees, the company said in a statement today.”

Chrysler in Crisis, Needs U.S. Aid, Nardelli Says
“Chrysler has announced the elimination of 35,000 jobs since February 2007, including plans to trim as many as 5,000 salaried positions by the end of this year.”

Citigroup to cut 10 percent of jobs: source

Hope the rest of the week turns out better than what we’ve got going so far.

Yap, all under the "business savvy" stewardship of the GOP.

POLITICS - Another Right-Wing Fairy Tale Bites the Dust

"Denver think tank refutes Reagan’s ‘government is problem’ meme" by Wendy Norris, Colorado Independent

That sound you hear isn’t the economy trickling down but what may prove to be the slow drip-drip-drip of a public repudiation of a long-held conservative political belief that “government is not the solution to our problems; government is the problem.”

Popularized by President Ronald Reagan in his first inaugural address, the phrase set the stage for a dissembling of a wide range of federal safety net programs and corporate regulations that amplified the savings and loan crisis in the mid-1980s and the 1987 stock market crash.

Flash forward to September 2008. Under Reagan acolyte President George W. Bush, the nation experiences an historic Wall Street meltdown, employment crash, skyrocketing national debt and housing crisis precipitated by the same “trickle-down” economic theories and tax cuts for the super wealthy that are leaving millions of Americans in serious financial straits with underfunded public programs ill-prepared for the onslaught of those seeking assistance.

Last week, the Colorado Fiscal Policy Institute revisited its May 2008 report on federal community investment projects in light of current economic conditions:

Not too long ago, when collectively facing monumental challenges like the Great Depression or millions of veterans returning home from World War II, the federal government led the effort to solve problems that the private sector and the free market were either unwilling or unable to fix themselves.

Likewise, this paper validates the view that increasing public investments during difficult economic times, as opposed to decreasing such investments, is an effective strategy for economic progress. Bold public investments propel broader economic growth.

While the last 30 years has seen large-scale erosion in the trust and connectivity that people feel towards government, evidence suggests that change is indeed coming. In the 2008 elections, exit polling showed there was virtually no ideological shift in the electorate, compared to most recent elections. However, for the first time since exit polling began in 1994, a slim majority of voters — 51 percent — want government to do more to solve problems.

That’s exactly what we believe government can and should do.

The shift in public perception toward the “common good” and government’s unique role in equalizing opportunity among the citizenry is encouraging in light of the many challenges ahead. It also serves as a signal that the electorate may indeed be rejecting the faux bootstrapping conservative economic principles that reward those who got us into this mess while middle- and working-class families get the bum’s rush from their banks, creditors and financial service regulators.