not the affair, it’s the political posturing….

Posted on Wednesday 17 June 2009

Senator John Ensign [R-NV] quotes are coming fast and furious [Nope – that’s his wife, Darlene]:
    Washington Post, 1999: Christian politicians and evangelical leaders commonly follow an unspoken rule not to meet behind closed doors with women staff members or travel alone with them. The Rev. Billy Graham, for example, has famously refused to be alone in a room with any woman except his wife since he married her in the 1940s. Rep. Steve Largent [R-OK], a Christian conservative, insists a male staff member is present whenever he meets with a woman, his spokesman said. John Ensign, who is running for senate in Nevada will not be alone in a car with a woman.
    Las Vegas Sun, 1998: I came to that conclusion recently, and frankly it’s because of what he put his whole Cabinet through and what he has put the country through,” Ensign said Thursday, becoming the first member of the Nevada delegation to call for Clinton to quit. “He has no credibility left.”

    U.S. Senate: “Sadly, the effort to redefine marriage against the wishes of a majority of the people is, with help from activist judges, succeeding,” Ensign said. “In order to defend the institution of marriage, uphold the rights of individual states, and maintain the will of the people, I believe we are compelled to amend our country’s constitution.” “The effort to pass a constitutional amendment reaffirming marriage as being between a man and a woman only is being undertaken strictly as a defense of marriage against the attempt to redefine it and, in the process, weaken it,” Ensign said. “Marriage is an extremely important institution in this country and protecting it is, in my mind, worth the extraordinary step of amending our constitution.”

    on Larry Craig’s story: "There’s too many people that paint with a broad brush that we’re all corrupt, we’re all amoral. … And having these kinds of things happen, whether it’s a Republican or Democratic senator — we certainly have had plenty of Democratic scandals in the past — we need people who are in office who will hold themselves to a little higher standard."
    U.S. Senate: “I believe that marriage should be defined as that between one man and one woman. You want to do what is ideal for children and all of the studies show that the ideal for children is to be in a household with a father and a mother.”
“… all of the studies show that the ideal for children is to be in a household with a father and a mother.” however, while Senator John Ensign had his affair, he and his wife were separated. The point isn’t that the guy had an affair. That’s his business. The point is that the political posturing about marriage, gay marriage, etc. is simply that – political posturing…

UPDATE:
Statement for couple regarding Ensign affair
By The Associated Press
Statement by Daniel Albregts, attorney for Doug and Cindy Hampton, regarding Sen. John Ensign’s extramarital affair:

Doug and Cindy Hampton can confirm that they are the individuals referenced by Sen. Ensign during his press conference. It is unfortunate the senator chose to air this very personal matter, especially after the Hamptons did everything possible to keep this matter private. It is equally unfortunate that he did so without concern for the effect such an announcement would have on the Hampton family. In time the Hamptons will be ready and willing to tell their side of the story. Until then, please respect their privacy.
Mickey @ 1:08 PM

“shiny objects”…

Posted on Wednesday 17 June 2009

The blogosphere has created a term [or at least that’s where I heard it first] – "shiny object." It means to dangle something in front of people to attract their attention and divert it from the real issue [which they wish to keep hidden]. So, Cheney’s defense of Torture is designed to draw our attention to a debate about its efficacy and away from its true purpose [to get the prisoners to legitimize our war by connecting Iraq to al Qaeda]. Or, the War on Terror is a generalization created to draw our attention away from the true reason for invading Iraq [getting direct access to Middle Eastern Oil]. Or the Republican cries about Socialism and Communism being a method to have us look away from the reason for all the big spending right now [the debacle of deregulation that destroyed our economy].

But the biggest "shiny object" right now are the endless ways that President Obama is being attacked personally. Limbaugh facetiously refers to him as "the Messiah." Besides being accused of being a closet Communist, he’s accused of being a secret Moslem, a weak-kneed apologist, an abortionist, and then there are the more embedded and disguised comments that suggest he’s either a black racist or a dumb black guy. Such things all fall under the heading – ad hominem attacks. It’s an essential logical fallacy known since the time of the ancient Greeks to attack "the man," not what he says. Why are they doing that kind of attacking, trying to create a "shiny object?" Because Barack Obama is a fundamentally decent guy who is trying to do the right things – that’s why.

Which brings me to Leon Panetta’s comment about Cheney, "It’s almost, a little bit, gallows politics. When you read behind it, it’s almost as if he’s wishing that this country would be attacked again, in order to make his point. I think that’s dangerous politics." This is not an ad hominem attack. He’s talking about what Cheney says, and then in his interpretation he says, "behind it, it’s almost as if he’s wishing that this country would be attacked again"… That’s exactly what seems to be behind Cheney’s words [and, as I mentioned in my last post, it wouldn’t prove his point]. And "Sen. John McCain, R-Ariz., told Fox News on Monday that Panetta should apologize and retract his statement, which he called ‘really out of bounds’." Well, it isn’t out of bounds, it’s "inside the line" – an "ace." The threat of attack [always a possibility these days] has been Cheney’s shiniest object of all."

And speaking of Cheney and "shiny objects" [from two years ago]:

There is a race currently underway between different flanks of the administration to determine the future course of US-Iran policy.

On one flank are the diplomats, and on the other is Vice President Cheney’s team and acolytes – who populate quite a wide swath throughout the American national security bureaucracy.

The Pentagon and the intelligence establishment are providing support to add muscle and nuance to the diplomatic effort led by Condi Rice, her deputy John Negroponte, Under Secretary of State R. Nicholas Burns, and Legal Adviser John Bellinger. The support that Director of National Intelligence Mike McConnell, Secretary of Defense Robert Gates, and CIA Director Michael Hayden are providing Rice’s efforts are a complete, 180 degree contrast to the dysfunction that characterized relations between these institutions before the recent reshuffle of top personnel.

However, the Department of Defense and national intelligence sector are also preparing for hot conflict. They believe that they need to in order to convince Iran’s various power centers that the military option does exist.

But this is worrisome. The person in the Bush administration who most wants a hot conflict with Iran is Vice President Cheney. The person in Iran who most wants a conflict is Iranian President Mahmoud Ahmadinejad. Iran’s Revolutionary Guard Quds Force would be big winners in a conflict as well — as the political support that both have inside Iran has been flagging.

Multiple sources have reported that a senior aide on Vice President Cheney’s national security team has been meeting with policy hands of the American Enterprise Institute, one other think tank, and more than one national security consulting house and explicitly stating that Vice President Cheney does not support President Bush’s tack towards Condoleezza Rice’s diplomatic efforts and fears that the President is taking diplomacy with Iran too seriously.

This White House official has stated to several Washington insiders that Cheney is planning to deploy an "end run strategy" around the President if he and his team lose the policy argument.

The thinking on Cheney’s team is to collude with Israel, nudging Israel at some key moment in the ongoing standoff between Iran’s nuclear activities and international frustration over this to mount a small-scale conventional strike against Natanz using cruise missiles [i.e., not ballistic missiles].>

This strategy would sidestep controversies over bomber aircraft and overflight rights over other Middle East nations and could be expected to trigger a sufficient Iranian counter-strike against US forces in the Gulf – which just became significantly larger – as to compel Bush to forgo the diplomatic track that the administration realists are advocating and engage in another war.

There are many other components of the complex game plan that this Cheney official has been kicking around Washington. The official has offered this commentary to senior staff at AEI and in lunch and dinner gatherings which were to be considered strictly off-the-record, but there can be little doubt that the official actually hopes that hawkish conservatives and neoconservatives share this information and then rally to this point of view. This official is beating the brush and doing what Joshua Muravchik has previously suggested – which is to help establish the policy and political pathway to bombing Iran.

The zinger of this information is the admission by this Cheney aide that Cheney himself is frustrated with President Bush and believes, much like Richard Perle, that Bush is making a disastrous mistake by aligning himself with the policy course that Condoleezza Rice, Bob Gates, Michael Hayden and McConnell have sculpted.

According to this official, Cheney believes that Bush can not be counted on to make the "right decision" when it comes to dealing with Iran and thus Cheney believes that he must tie the President’s hands…
Why was Cheney so hot to bomb Iran? What was the "shiny object" for him? [to get their oil fields, to divert attention from Iraq, as a reason to stay in Iraq, Cheney’s a sadist, Cheney’s a paranoid person,  to appease the Zionists, avoid Israel’s having to deal with the Palestinians]. So many answers…
Mickey @ 12:33 PM

tortured logic….

Posted on Wednesday 17 June 2009


CIA Fights Full Release Of Detainee Report
White House Urged to Maintain Secrecy

By R. Jeffrey Smith and Joby Warrick
Washington Post
June 17, 2009

… After the report was issued, then-CIA director George J. Tenet demanded that the Justice Department and the White House reaffirm their support for the agency’s harsh interrogation methods, even when used in combination, telling others at the time that "no papers, no opinions, no program." At a White House meeting in mid-2004, he resisted pressures to reinstate the program immediately, before receiving new legal authorization, according to a source familiar with the episode.

The Justice Department subsequently sent interim supporting opinions to the CIA, allowing its resumption after Tenet’s departure, and went on to complete three lengthy reports in 2005 that affirmed in detail the legality of the interrogation techniques with some new safeguards that the CIA had begun to implement in 2003…
This report came out in May 2004. Tenet resigned in early June 2004, presumably related to his refusal to go forward with the program after the Report was published. Good for him. And recall that this report was released just a few months after the pictures from Abu Ghraib became public, about the time that Jim Comey’s fought off Gonzales and Card in Ashcroft’s hospital room, after Jack Goldsmith had repudiated the Bybee/Yoo Memos Patrick Fitzgerald had been appointed Special Prosecutor in the C.I.A. leak case. With all of this going on, they still tried to keep up the Torture Program, using new Memos written by Steven Bradbury – appointed when Jack Goldsmith resigned. In spite of all those things, the Administration pressed ahead, and Dick Cheney’s still at it…
June 16, 2009

… Panetta said of Cheney’s remarks: "It’s almost, a little bit, gallows politics. When you read behind it, it’s almost as if he’s wishing that this country would be attacked again, in order to make his point. I think that’s dangerous politics."

Sen. John McCain, R-Ariz., told Fox News on Monday that Panetta should apologize and retract his statement, which he called "really out of bounds." Cheney’s own response was more tepid. "I hope my old friend Leon was misquoted. The important thing is whether the Obama administration will continue the policies that have kept us safe for the last eight years," he said in a statement issued Monday.

Cheney has said in several interviews that he thinks Obama is making the U.S. less safe. He has been critical of Obama for ordering the closure of the detention facility at Guantanamo Bay, halting enhanced interrogations of suspected terrorists and reversing other Bush administration initiatives he says helped to prevent attacks on the United States.
Cheney’s logic is hard to follow. How does torturing captives in Gitmo or an overseas prison prevent attacks on the United States?  al Qaeda’s essential weapons are suicide bombers. How does our torturing prisoners prevent that? It makes no sense. If al Qaeda attacks us tomorrow, does Cheney propose it’s because Gitmo is closing? That just doesn’t follow. Even if we were attacked again, it wouldn’t make Cheney’s point.
Mickey @ 7:18 AM

remember…

Posted on Tuesday 16 June 2009

Remember them? They’re the ones that Dick Cheney and John Bolton kept wanting us to bomb…
Mickey @ 4:22 PM

What happened in the DoJ after the Iraq Invasion?

Posted on Tuesday 16 June 2009

We all recall the mass resignations at the DoJ during the U.S. Attorney firings scandal in early 2007. And we’re vaguely aware that there were threats of a massive walk-out in March 2004 when Jim Comey refused to sign the N.S.A. Domestic Spying renewal [the Ashcroft hospital room incident]. But I’m not sure we remember the wave of resignations that followed our invasion of Iraq. We invaded Iraq on March 20, 2003.  Scattered throughout the following summer, there was a dramatic exodus from the upper echelons of the Justice Department – some pretty big names:
Deputy Attorney General Is Latest to Leave the Justice Dept.
New York Times
By ERIC LICHTBLAU
August 12, 2003

The Justice Department faces potential tumult in the months ahead with the departures of a cadre of senior aides to Attorney General John Ashcroft who have made up his brain trust and a bulwark against his critics. The latest resignation came today with the announcement from Deputy Attorney General Larry Thompson that he would leave at the end of the month. Mr. Ashcroft said he was losing ”my partner.”

Mr. Thompson, the nation’s highest-ranking black law enforcement official, has led efforts to intensify prosecutions of white-collar criminals after the scandals surrounding Enron and other corporations. Occasionally mentioned as a possible Supreme Court nominee, he will be joining the Brookings Institution, officials said.

Mr. Thompson’s departure was not altogether unexpected, and officials emphasized that the decisions by him and at least six other senior Justice Department aides to move on this summer did not reflect any substantive disagreements, but rather a desire to pursue other career paths. Some of the departures were simply a reflection of professional burn-out caused by the demands of the Sept. 11, 2001, terrorist attacks and the aftermath, several officials said…

Since June, Mr. Ashcroft has also lost Viet Dinh, who was credited with shaping the antiterrorism legislation known as the USA Patriot Act and returned to teaching at Georgetown Law School; Michael Chertoff, who headed the Justice Department’s antiterrorism operation and became a federal judge; Adam Ciongoli, who was Mr. Ashcroft’s counselor and moved to AOL Time Warner; and several other senior officials…

Ashcroft’s DoJ was a who’s who of the American Conservative Legal minds. But in the summer of 2003, many of them quit. At the time, none of us knew that the Department of Justice had played such a key role in the lead-up to that invasion. I, for one, didn’t think to wonder if those resignations had something to do with the war directly and things happening at the DoJ. that had to do with the war. We didn’t yet kinow about the N.S.A. Domestic Spying or the Torture Program. Valerie Plame had just been "outed," but the story of how and why wasn’t yet in the public eye.  But given what we know now, I’m curious. Could it have had to do with the Jay Bybee and John Yoo Torture Memos? or the N.S.A. Unwarranted Domestic Spying Program? or the absence of W.M.D.’s? or Joseph Wilson’s allegations? or something even else we don’t yet know?

Jay Bybee was confirmed for his judgeship a week before the invasion. John Yoo wanted the job, but was blocked by A.G. John Ashcroft, so he returned to teaching sometime after Bybee left. Their replacement, Jack Goldsmith, wasn’t appointed until October 2003. Larry Thompson, Deputy Attorney General, left at the end of August 2003 and wasn’t replaced by Jim Comey until December 2003. Comey’s now famous confrontation in the hospital room of John Ashcroft occurred in March 2004. The Torture issue first came to public attention in April 2004 with the exposure of the Abu Ghraib photographs..

Other Important DoJ Resignations


Jay Bybee Assistant Attorney General – O.L.C. February 2001 March 13, 2003
John Yoo Deputy Assistant Attorney General – O.L.C February 2001 March+, 2003
Ted Olson Solicitor General February 2001 July 10, 2004
Jack Goldsmith Assistant Attorney General – O.L.C October 2003 July 2004
George Tenet Director of the C.I.A. June 11, 1997 July 11, 2004
John Ashcroft  Attorney General February 2, 2001 February 3, 2005
Jim Comey  Deputy Attorney General December 11, 2003 April 20, 2005

Viet Dinh and Michael Chertoff were former aids to Ken Starr, and were the authors of the hastily written Patriot Act [under which the secret N.S.A. Domestic Spying commenced], aided by Adam Ciongoli. Viet Dinh had been an important liason with the O.L.C. while John Yoo and Jay Bybee were writing their Memorandia. Larry Thompson was a strong fighter of white collar crime [Enron], but he was also involved in formulating counter-terrorism policy after 9/11.

John Yoo OLCMemorandia


September 25, 2001 Memorandum  Constitutionality of Amending Foreign Intelligence Surveillance Act to Change ‘Purpose’ Standard for Searches Repudiated
October 23, 2001 Memorandum Authority for Use of Military Force to Combat Terrorist Activities Within the United States – Repudiated
November 6, 2001 Legality of the Use of Military Commissions to Try Terrorists  
November 15, 2001 Memorandum Authority of the President to Suspend Certain Provisions of the ABM Treaty Repudiated
December 28, 2001 Memorandum Possible Habeas Jurisdiction Over Aliens Held in Guantanamo Bay  
January 22, 2002 Memorandum Application of Treaties and Laws to al Qaeda and Taliban Detainees Repudiated
February 7, 2002 Memorandum Status of Taliban Forces Under Article 4 of the Third Geneva Convention of 1949  
February 8, 2002 Memorandum  Classified Matter -prepared in response to a request for OLC views regarding the legality of certain hypothetical activities Repudiated
February 26, 2002 Memorandum Potential Legal Constraints Applicable to Interrogations of Persons Captured by U.S. Armed Forces in Afghanistan  
March 13, 2002 Memorandum The President’s Power as Commander in Chief to transfer captured terrorists to the control and custody of foreign nations Repudiated
April 8, 2002 Memorandum Swift Justice Authorization Act Repudiated
June 8, 2002 Memorandum Determination of Enemy Belligerency and Military Detention  
June 27, 2002 Memorandum Applicability of 18 U.S.C. 4001(a) to Military Detention of United States Citizen Repudiated
August 1, 2002 Memorandum Standards of Conduct for Interrogation Under 18 U.S.C. 2340-2340A Repudiated
October 11, 2002 Memorandum concerning the legality of certain communications intelligence activities  
March 14, 2003 Memorandum Military Interrogation of Alien Unlawful Combatants Held Outside the United States Repudiated

I just don’t believe this:
Mr. Thompson’s departure was not altogether unexpected, and officials emphasized that the decisions by him and at least six other senior Justice Department aides to move on this summer did not reflect any substantive disagreements, but rather a desire to pursue other career paths. Some of the departures were simply a reflection of professional burn-out caused by the demands of the Sept. 11, 2001, terrorist attacks and the aftermath, several officials said…
These were the Conservative Republican’s Best and Brightest – potential Supreme Court Nominees, future Attorney Generals. They all left at a nuclear moment, and except for Chertoff, they moved out of the public domain. What happened in the DoJ right the Iraq Invasion? Did the absence of WMD’s hit them all at once, and they saw the writing on the wall? They had been part of a failed policy, a scam. I suppose that’s possible – but I’m guessing that it was something a lot more complicated than that. Whatever it was, my surfing hasn’t turned up much of note…
Mickey @ 12:57 PM

America’s Economist…

Posted on Monday 15 June 2009


Stay the Course
New York Times
By PAUL KRUGMAN
June 14, 2009

The debate over economic policy has taken a predictable yet ominous turn: the crisis seems to be easing, and a chorus of critics is already demanding that the Federal Reserve and the Obama administration abandon their rescue efforts. For those who know their history, it’s déjà vu all over again — literally.

For this is the third time in history that a major economy has found itself in a liquidity trap, a situation in which interest-rate cuts, the conventional way to perk up the economy, have reached their limit. When this happens, unconventional measures are the only way to fight recession. Yet such unconventional measures make the conventionally minded uncomfortable, and they keep pushing for a return to normalcy. In previous liquidity-trap episodes, policy makers gave in to these pressures far too soon, plunging the economy back into crisis. And if the critics have their way, we’ll do the same thing this time.

The first example of policy in a liquidity trap comes from the 1930s. The U.S. economy grew rapidly from 1933 to 1937, helped along by New Deal policies. America, however, remained well short of full employment. Yet policy makers stopped worrying about depression and started worrying about inflation. The Federal Reserve tightened monetary policy, while F.D.R. tried to balance the federal budget. Sure enough, the economy slumped again, and full recovery had to wait for World War II.

The second example is Japan in the 1990s. After slumping early in the decade, Japan experienced a partial recovery, with the economy growing almost 3 percent in 1996. Policy makers responded by shifting their focus to the budget deficit, raising taxes and cutting spending. Japan proceeded to slide back into recession.

And here we go again…

First of all, while stock markets have been celebrating the economy’s “green shoots,” the fact is that unemployment is very high and still rising. That is, we’re not even experiencing the kind of growth that led to the big mistakes of 1937 and 1997. It’s way too soon to declare victory.

What about the claim that the Fed is risking inflation? It isn’t. Mr. Laffer seems panicked by a rapid rise in the monetary base, the sum of currency in circulation and the reserves of banks. But a rising monetary base isn’t inflationary when you’re in a liquidity trap. America’s monetary base doubled between 1929 and 1939; prices fell 19 percent. Japan’s monetary base rose 85 percent between 1997 and 2003; deflation continued apace.

Well then, what about all that government borrowing? All it’s doing is offsetting a plunge in private borrowing — total borrowing is down, not up. Indeed, if the government weren’t running a big deficit right now, the economy would probably be well on its way to a full-fledged depression.

Oh, and investors’ growing confidence that we’ll manage to avoid a full-fledged depression — not the pressure of government borrowing — explains the recent rise in long-term interest rates. These rates, by the way, are still low by historical standards. They’re just not as low as they were at the peak of the panic, earlier this year.

To sum up: A few months ago the U.S. economy was in danger of falling into depression. Aggressive monetary policy and deficit spending have, for the time being, averted that danger…. And suddenly critics are demanding that we call the whole thing off, and revert to business as usual. Those demands should be ignored. It’s much too soon to give up on policies that have, at most, pulled us a few inches back from the edge of the abyss.
In my last post, I’m a bit down on Krugman for thinking about "recovery" when I want him to talk about "restructuring," but here, he’s reminding us why he’s America’s Economist and this year’s Nobel Prize winner. His warning is sound and meant to neutralize the silly criticisms from the conservatives who are going to complain no matter what. We’ve dodged a bullt, but the war still rages around us. And when Gethner, Summers, and Obama come out with their economic reform package, the very fools who caused this mess are going to howl at the top of their lungs. In fact, as far as the economy goes, ignoring all Republican comments for the next several years seems like a good idea. The best defense? A good offence. They are like the patient who improves rapidly on medication, but then says, "See. I didn’t need it. I was getting better anyway." So they don’t take the whole course of medicine as prescribed, and relapse.
Mickey @ 9:44 PM

gro’ no mo’…

Posted on Monday 15 June 2009

    Paul Krugman on the State of the Recession
    the left coaster
    by Mary
    June 15, 2009

    Will Hutton of The Guardian has an interesting interview with Dr. Krugman about the current state of the global economy and his fear that the world could face stagnation. One thing that comes back to me again and again when reading Krugman’s analysis, is how we are truly in unchartered waters and there are still some enormously challenging times ahead.

    The crisis can be boiled down to too much debt, the liquidity trap and no foreseeable way out of the hole we are in.

    PK: The thing about Japan, as with all of these cases, is how much people claim to know what happened, without having any evidence. What we do know is that recessions normally end everywhere because the monetary authority cuts interest rates a lot, and that gets things moving. And what we know in Japan was that eventually they cut their interest rates to zero and that wasn’t enough. And, so far, although we made the cuts faster than they did and cut them all the way to zero, it isn’t enough. We’ve hit that lower bound the same as they did. Now, everything after that is more or less speculation.

    …In their case, the problems had a lot to do with demography. That made them a natural capital exporter, from older savers, and also made it harder for them to have enough demand. They also had one hell of a bubble in the 1980s and the wreckage left behind by that bubble – in their case a highly leveraged corporate sector – was and is a drag on the economy.

    The size of the shock to our systems is going to be much bigger than what happened to Japan in the 1990s. They never had a freefall in their economy – a period when GDP declined by 3%, 4%. It is by no means clear that the underlying differences in the structure of the situation are significant. What we do know is that the zero bound is real. We know that there are situations in which ordinary monetary policy loses all traction. And we know that we’re in one now.

    WH: So your point is that the crisis in Japan was about excess debt, excess leverage and lack of demand – reinforced by the fallout from the asset bubble collapsing. They didn’t have credit contraction on anything like our scale, but even so, zero interest rates were just unable to turn the economy around.

    PK: That’s right, that’s right. …I hope I’m wrong but the question you always have to ask is: where do we think that this recovery’s going to come from? It’s not an easy story to tell.

    Having read Dr. Krugman’s The Return of Depression Economics and the Crisis of 2008, I found myself wondering how he feels having spent decades researching and studying these financial anomolies only to find himself now being asked to help the world find what will be the magic bullet that will help pull us out of these economic doldrums.
In dead seriousness, I say, "Who says we’re going to recover?" and, "Who says that  recovery [in the way the term is being used] is a good idea?" I don’t think it’s time to "re-" anything. It’s time to look at things in a different way, to go somewhere we’ve never been rather than to go back to some place. We are running out of space, and stuff, and air. It’s time to change…
Mickey @ 6:53 PM

a free-market economy with hall monitors…

Posted on Monday 15 June 2009


A New Financial Foundation
Washington Post

By Timothy Geithner and Lawrence Summers
June 15, 2009

Over the past two years, we have faced the most severe financial crisis since the Great Depression. The financial system failed to perform its function as a reducer and distributor of risk. Instead, it magnified risks, precipitating an economic contraction that has hurt families and businesses around the world… This current financial crisis had many causes. It had its roots in the global imbalance in saving and consumption, in the widespread use of poorly understood financial instruments, in shortsightedness and excessive leverage at financial institutions. But it was also the product of basic failures in financial supervision and regulation.

Our framework for financial regulation is riddled with gaps, weaknesses and jurisdictional overlaps, and suffers from an outdated conception of financial risk. In recent years, the pace of innovation in the financial sector has outstripped the pace of regulatory modernization, leaving entire markets and market participants largely unregulated. That is why, this week – at the president’s direction, and after months of consultation with Congress, regulators, business and consumer groups, academics and experts – the administration will put forward a plan to modernize financial regulation and supervision… In developing its proposals, the administration has focused on five key problems in our existing regulatory regime — problems that, we believe, played a direct role in producing or magnifying the current crisis.
While I think I might have conceptualized the problem in this way as an old outdated system in need of modernization, the truth is that the system was manipulated by a series of shortsighted changes that were motivated by the financial greed of many under the guise of "a free market economy." The system didn’t break. It was broken by people for personal gain.
First, existing regulation focuses on the safety and soundness of individual institutions but not the stability of the system as a whole. As a result, institutions were not required to maintain sufficient capital or liquidity to keep them safe in times of system-wide stress. In a world in which the troubles of a few large firms can put the entire system at risk, that approach is insufficient. The administration’s proposal will address that problem by raising capital and liquidity requirements for all institutions, with more stringent requirements for the largest and most interconnected firms. In addition, all large, interconnected firms whose failure could threaten the stability of the system will be subject to consolidated supervision by the Federal Reserve, and we will establish a council of regulators with broader coordinating responsibility across the financial system.
After the Great Depression, Congress passed the Glass-Steagall Act introducing the separation of bank types according to their business [commercial and investment banking], prohibiting large mergers, and initiated the Federal Deposit Insurance Corporation for insuring bank deposits. While it was a crisis-driven maneuver, it turned out to be a wise move. It protected our savings from speculators. Our Capital stayed safe drawing interest from the that paid by borrowers. Investment Institutions were clearly identified and closely watched. Beginning with the Reagan Presidency, the Glass-Steagall Act was slowly dismantled creating the huge financial institutions that ultimately speculated us into last year’s system collapse.

Geitner’s solution diverges from F.D.R.’s. Rather than blocking the formation the huge financial institutions [Capitopolises], he’s proposing that we identify them and watch over what they’re doing. This proposal recognizes the advantages of having such institutions in a global and national economy, but aims directly at the dangers – like the ones that brought us down this time.

This is a "gift" to the Conservatives. They’re going to look this "gift horse in the mouth," but to hell with them. This is not Socialism, this is sensible thinking. It’s the only solution to the down-side of a free-market economy – a free-market economy with "hall monitors."
Second, the structure of the financial system has shifted, with dramatic growth in financial activity outside the traditional banking system, such as in the market for asset-backed securities. In theory, securitization should serve to reduce credit risk by spreading it more widely. But by breaking the direct link between borrowers and lenders, securitization led to an erosion of lending standards, resulting in a market failure that fed the housing boom and deepened the housing bust. The administration’s plan will impose robust reporting requirements on the issuers of asset-backed securities; reduce investors’ and regulators’ reliance on credit-rating agencies; and, perhaps most significant, require the originator, sponsor or broker of a securitization to retain a financial interest in its performance. The plan also calls for harmonizing the regulation of futures and securities, and for more robust safeguards of payment and settlement systems and strong oversight of "over the counter" derivatives. All derivatives contracts will be subject to regulation, all derivatives dealers subject to supervision, and regulators will be empowered to enforce rules against manipulation and abuse.
There’s little to say about this principle. It’s essential in all dimensions. Risk is not something to be bought or sold. The real commodity is credit. This principle is well thought out and well presented. Kudus to Geitner, Summers, and their "handlers."
Third, our current regulatory regime does not offer adequate protections to consumers and investors. Weak consumer protections against subprime mortgage lending bear significant responsibility for the financial crisis. The crisis, in turn, revealed the inadequacy of consumer protections across a wide range of financial products – from credit cards to annuities. Building on the recent measures taken to fight predatory lending and unfair practices in the credit card industry, the administration will offer a stronger framework for consumer and investor protection across the board.
Consumers and Investors need to be protected from predatory lending as they say, sure enough. But Consumers and Investors also need to be protected from themselves. Human greed is kind of like sex. Abstinence hasn’t worked in the past and it won’t work in the future.
Fourth, the federal government does not have the tools it needs to contain and manage financial crises. Relying on the Federal Reserve’s lending authority to avert the disorderly failure of nonbank financial firms, while essential in this crisis, is not an appropriate or effective solution in the long term. To address this problem, we will establish a resolution mechanism that allows for the orderly resolution of any financial holding company whose failure might threaten the stability of the financial system. This authority will be available only in extraordinary circumstances, but it will help ensure that the government is no longer forced to choose between bailouts and financial collapse.
No more Alan Greenspan, Ayn Rand-esque fiscal gyrations. It was something of a "Wild West" way of running the show based on a thesis of endless growth. Instead of juggling things to keep them in the road, they are proposing that we use the techniques of preventive medicine – early detection and prompt intervention. More excellent thinking. I can’t wait for the moping tanning salon addict [John Boehner] to say, "Oh, my god!"
Fifth, and finally, we live in a globalized world, and the actions we take here at home – no matter how smart and sound – will have little effect if we fail to raise international standards along with our own. We will lead the effort to improve regulation and supervision around the world. The discussion here presents only a brief preview of the administration’s forthcoming proposals. Some people will say that this is not the time to debate the future of financial regulation, that this debate should wait until the crisis is fully behind us. Such critics misunderstand the nature of the challenges we face. Like all financial crises, the current crisis is a crisis of confidence and trust. Reassuring the American people that our financial system will be better controlled is critical to our economic recovery.
Obviously, the devil is in the details, but these principles are sound and well targeted toward the causes of the problems. Rather than coopt F.D.R.’s plan from 80 years ago, they’ve tailored this one to the modern world. In spite of their concessions to the Conservative side, we’re sure to hear cosmic moans about Big Government and Socialism. We can’t really blame them. It’s just their nature.
By restoring the public’s trust in our financial system, the administration’s reforms will allow the financial system to play its most important function: transforming the earnings and savings of workers into the loans that help families buy homes and cars, help parents send kids to college, and help entrepreneurs build their businesses. Now is the time to act.

Timothy Geithner is secretary of the Treasury. Lawrence Summers is director of the National Economic Council.
I haven’t been in love with either Geitner or Summers [both sound kind of boring when they talk]. But this op-ed moves them up more than a couple of notches because it’s clear, simple, and very right-thinking. Everyone is worried that the Obama Administration isn’t "progressive" enough. I don’t care about that. I want them to be "sensible" enough. These are the most sensible of principles. I give this op-ed an A. I’ve been worried that they wouldn’t take on the whole task for fear of the political consequences. Instead, they seem to be bravely going where no one has gone before [aka the right direction]…
Mickey @ 4:09 PM

cross fingers, salt over shoulder, prayer, incense burning…

Posted on Sunday 14 June 2009


Israeli Premier Backs State for Palestinians, With Caveats
New York Times
By ISABEL KERSHNER
June 14, 2009

The prime minister of Israel, Benjamin Netanyahu, on Sunday endorsed for the first time the principle of a Palestinian state alongside Israel, but on condition that the state was demilitarized and that the Palestinians recognized Israel as the state of the Jewish people. In a much-anticipated speech meant in part as an answer to President Obama’s address in Cairo on June 4, Mr. Netanyahu reversed his longstanding opposition to Palestinian statehood, a move seen as a concession to American pressure.

But he firmly rejected American demands for a complete freeze on Israeli settlements in the West Bank, the subject of a rare public dispute between Israel and its most important ally on an issue seen as critical to peace negotiations. And even his assent on Palestinian statehood, given the caveats, was immediately rejected as a nonstarter by Palestinians.

In a half-hour speech broadcast live in Israel, Mr. Netanyahu, the leader of the conservative Likud Party, laid out what he called his “vision of peace”: “In this small land of ours, two peoples live freely, side-by-side, in amity and mutual respect. Each will have its own flag, its own national anthem, its own government. Neither will threaten the security or survival of the other.” But Mr. Netanyahu insisted on “ironclad” guarantees from the United States and the international community for Palestinian demilitarization and recognition of Israel’s Jewish character.

Given those conditions, Mr. Netanyahu said, “We will be ready in a future peace agreement to reach a solution where a demilitarized Palestinian state exists alongside the Jewish state.” He also said that no new settlements would be created and no more land would be expropriated for expansion, but that “normal life” must be allowed to continue in the settlements, a term he has used to mean that limited building should be allowed to continue within existing settlements to accommodate “natural growth”…
We can ask for no more. When the bickering settles, we’ll find out if he’s coming to the table in earnest, or  just posturing. I’d bet on the former. This is the potential end of the beginning, but not yet the beginning of the end. All parties will now start jockeying around as per usual, and the key is probably Obama’s positioning [as if he didn’t have a few other things on his plate]. Cross fingers, salt over shoulder, prayer, incense burning…
Mickey @ 11:50 PM

divine right

Posted on Sunday 14 June 2009

As a follower of emptywheel‘s comments, I’ve usually skipped over her co-writer, bmaz. But this is a fine piece, to be read in full. I’m not sure about my thoughts about Jose Padilla himself. The case was so badly handled that his original "crime" kind of got lost in the shuffle. But there’s little question that John Yoo’s memos had an adverse effect on Padilla’s fate, and his due process rights as an American citizen and a human being. I’ve extracted the part about Yoo’s claim of immunity to look at more closely:
Court Allows Padilla Suit Against Yoo To Proceed
emptywheel.firedoglake.com
By bmaz
June 14, 2009

There was a significant new opinion released in the NDCA late Friday in the case of Jose Padilla v. John Yoo. The decision is devastating to Yoo and to the thought by the Obama Administration that the American legal system is going to blithely allow them to simply "move forward" and leave behind, and out of sight, the malevolence, malfeasance and depravity of senior Bush/Cheney legal officials in relation to their torture regime…

Yoo might be having a bad day when a Federal judge starts his analysis of your immunity claim by citing Alexander Hamilton from the Federalist Papers. And that is exactly what Judge Jeffrey S. White of NDCA District Court has done:
    [War] will compel nations the most attached to liberty to resort for repose and security to institutions which have a tendency to destroy their civil and political rights. To be more safe, they at length become willing to run the risk of being less free. [The Federalist No. 8, at 44 (Alexander Hamilton) (E.H. Scott ed., 1898).]
In the third and last major section of the opinion (starting on page 29), Judge White specifically dissects Yoo’s bleating qualified immunity assertion.
    Yoo also argues that he is entitled to qualified immunity on all claims. The doctrine of qualified immunity protects government officials “from liability for civil damages insofar as their conduct does not violate any clearly established statutory or constitutional rights of which a reasonable person would have known.” Harlow v. Fitzgerald, 457 U.S. 800, 818 [1982]. “Qualified immunity balances two important interests – the need to hold public officials accountable when they exercise power irresponsibly and the need to shield officials from harassment, distraction, and liability when they perform their duties reasonably.” Pearson v. Callahan, 129 S. Ct. 808, 815 [2009].
The last part – "when they perform their duties reasonably" – is the key here. As you might guess, Mr. Padilla does not think that John Yoo performed his duties reasonably [neither do I]. This has always been the threshold that the blithering idiot main stream media keeps spewing cannot be reached. Guess what, Judge White is a little more sanguine and thinks reasonable people could find that John Yoo was unreasonable. The court described the standard applicable to consideration:
    A court should then address the question “whether, under that clearly established law, a reasonable [official] could have believed the conduct was lawful.” Id. This inquiry must be undertaken in the light of the specific context of the case. Saucier, 533 U.S. at 194. In deciding whether the plaintiff’s rights were clearly established, “[t]he proper inquiry focuses on whether ‘it would be clear to a reasonable officer that his conduct was unlawful in the situation he confronted’ … or whether the state of the law [at the time] gave ‘fair warning’ to the officials that their conduct was unconstitutional.” Clement v. Gomez, 298 F.3d 898, 906 (9th Cir. 2002) (quoting Saucier, 533 U.S. at 202).
At this point, it should be noted that the court here is not finding that Yoo’s conduct violated Padilla’s rights as alleged in the amended complaint, only that Padilla has stated a sufficient cause of action that may be responded to and on which the case may proceed forward with discovery and determination on the merits. But the words and discussion in the decision leave little doubt that the court believes there are solid cognizable claims against Yoo:
    Indeed the “requisite causal connection can be established not only by some kind of direct personal participation in the deprivation, but also by setting in motion a series of acts by others which the actor knows or reasonably should know would cause others to inflict the constitutional injury.” Johnson, 588 F.2d at 743-44; see also Kwai, 373 F.3d at 966 (same). Like any other government official, government lawyers are responsible for the foreseeable consequences of their conduct.
There you have it, governmental lawyers like Yoo, Bradbury, and Gonzales can be held liable for the foreseeable consequences of unprofessional work. This language must be doubly disturbing to Yoo et. al coming right before the imminent release of the reportedly scathing OPR Report…

All in all, it is a fantastic decision, once again the Federal judges in the 9th Circuit and NDCA come riding to rescue of the United States Constitution when our Federal government and legislature will not. It is a reminder of the simple beauty of the balance and separation of powers the Framers left us, and the importance that each branch passionately protect all citizens’ rights. Maybe someday Barack Obama will get his finger out of the political winds and stop protecting and excusing the gross malfeasance of the authoritarian state and protect the Constitution instead. Hope springs eternal.
It really is a fantastic decision. "Indeed the ‘requisite causal connection can be established not only by some kind of direct personal participation in the deprivation, but also by setting in motion a series of acts by others which the actor knows or reasonably should know would cause others to inflict the constitutional injury.’ Like any other government official, government lawyers are responsible for the foreseeable consequences of their conduct."

Here, the judge is breaking the mystical "immunity" that the Bush Administration saw as flowing from the Supreme Commander bathing his lackeys and comrades in arms in the freedom to do his bidding  with no personal accountability. It breaks the absurd cycle between Yoo and Bush/Cheney. John Yoo declares that the President is Supreme in all things. The President’s Supreme-ness makes Yoo immune by proxy. The judge calls "bullshit!" John Yoo is responsible for what he said. If he wasn’t accountable, he shouldn’t have been in a position to make decisions.

 

Chink number one in the myth of the Divine Right of Presidents and their Courtiers…
Mickey @ 11:37 PM