Archive for the ‘Congress’ Category
Insurance Companies: Should you trust them to do the right thing?
If you think that the insurance industry can be trusted to police itself without a public option and new federal regulations, just check out the clip below. It would be nice to believe that this is just an isolated incident, but we have all heard too many stories about companies cutting coverage when coverage cuts into their profits.
(Photo: Donald Stout/The Times-Picayune)
Senator Mary Landrieu, Democrat of Louisiana, doesn’t believe that we need a public option to help hold insurance companies in check. Here is her web site: Senator Mary Landrieu. Please send her a message.
Obama Falls into the Few Bad Apples Trap
First, a brief reminder of how the Bush administration handled the crime of torture. Let’s call it “the few bad apples excuse.”
Yesterday, Wednesday, April 13, 2009 was a sad day for the Obama administration. The President decided to reverse his administration’s pledge to release photographs of acts of torture committed by Americans, photos that could be used as further evidence of how widespread state sanctioned torture had been under Bush. But it was not his decision to hold back the photos that was patently reprehensible. Obama argued that the release of the photographs could endanger our troops in Iraq and Afghanistan, and whether one agrees with this assessment or not, it has to be taken seriously. What is not acceptable, and what is not worthy of this president, is to suggest that those who committed these acts were only a small number of individuals. Once again this places the onus on those who actually carried out the acts as opposed to the leaders who ordered and sanctioned them. In other words, Obama used a version of the “bad apples excuse” to support his decision, which is just what the Bush administration did when the photos of Abu Ghraib first appeared
The New York Times reported on the president’s press conference announcing his decision in an article, “Obama Moves to Bar Release of Detainee Abuse Photos.” Two excerpts:
“The publication of these photos would not add any additional benefit to our understanding of what was carried out in the past by a small number of individuals,” Mr. Obama told reporters on the South Lawn. “In fact, the most direct consequence of releasing them, I believe, would be to further inflame anti-American opinion and to put our troops in greater danger.” (emphasis added)
The article then went on to quote a spokesman from the A.C.L.U.
Anthony D. Romero, executive director of the A.C.L.U., said the decision to fight the release of the photos was a mistake. He said officials had described them as “worse than Abu Ghraib” and said their volume, more than 2,000 images, showed that “it is no longer tenable to blame abuse on a few bad apples. These were policies set at the highest level.”
….
It’s not clear what Obama’s tactics are here. He is well aware of the previous administration’s culpability. Perhaps he has decided that keeping his hands clean and letting Congress handle the torture investigation is the path of least resistance, one that will allow him to pursue more important matters. But this maneuver doesn’t require him to assert the few bad apples excuse. The question is why he decided to make this specious argument. And he made it on the very same day that he said the following during commencement at Arizona State.
“In recent years, in many ways, we’ve become enamored with our own success, lulled into complacency by our own achievements,” he said, citing the economic crisis. “We started taking shortcuts. We started living on credit, instead of building up savings. We saw businesses focus more on rebranding and repackaging than innovating and developing new ideas that improve our lives.” New York Times, May 13, 2009, “Work Is Never Done, Obama Tells Class”
Read these words and think about Obama’s actions yesterday. Read these words and think about some of the “shortcuts” that he has been taking. (See Andrew Sullivan’s article, “The Fierce Urgency Of Whenever,” on Obama’s backsliding on the treatment of gays.) Read these words and think about the Obama brand. And ask, who is Barack Obama really speaking about when he speaks about repackaging? Rhetorical flourishes are not going to provide him with cover if there is too great a disjunction between his words, his other words, and his deeds.
Yes, Obama cannot be expected to remake the U.S. in a 100 days. The question is whether there is a misguided expediency at work, one in which the shortest path is assumed to be established lines in the sand.
We cannot let this slogan become merely a slogan. As per Obama’s request, we will remind him, hound him, when his rudder may need some work.
AIG: What It Really Means
At today’s Congressional Hearing:
“We are meeting today at a high point of public anger,” said Mr. Liddy, a former chief executive of Allstate who was installed as A.I.G.’s chief when the Federal Reserve announced its rescue package. “I share that anger. As a businessman of some 37 years, I have seen the good side of capitalism. Over the last few months, in reviewing how A.I.G. had been run in prior years, I have also seen evidence of its bad side.” NY Times, March 18, 2009.
I watched a good portion of Edward M. Liddy’s testimony before Congress today. I hadn’t planned to. I got caught up. Liddy took on the job of CEO at A.I.G. for 1 dollar a year. He appears to be a man sincerely dedicated to the service of his country. However, while by no means clueless about the possible reaction of the American people to the AIG bonuses, he did not realize that his arguments amounted to telling the American people that we had been blackmailed. If he hadn’t agreed to pay the executives of the compromised division their bonuses, they would have walked, AIG would have tanked, and our economy would have headed into a death spiral. Or so he claimed. Liddy needed to retain these folks. And he could only do so by paying out millions. (Yes, he made it clear time and again that there were contracts that had to be honored, but as congressmen pointed out, the company could have chosen not to pay and accepted the possibility of being sued.)
“Of the 418 employees who received bonuses, 298 got more than $100,000, according to the New York attorney general, Andrew M. Cuomo. The highest bonus was $6.4 million, and 6 other employees received more than $4 million. Fifteen other people received bonuses of more than $2 million and 51 received $1 million to $2 million.” NY Times, March 18, 2009
The danger to the nation due to a complete financial collapse is far greater than the danger of terrorism. And this is just what Liddy was claiming might happen if these executives walked and AIG tanked. So we have people dying in the fight against terrorism, but we have others insisting on the entire amounts of their bonuses in order to cooperate and prevent financial ruin. As patriotic Americans (that is, those who are Americans), they should have offered to work for a small portion of what they were being paid, especially the top earning executives.
Each contract with each employee had its own unique structure, reported Liddy. They simply couldn’t hold back the funds. However, today he reported that he has asked the executives to return 50% of the money. They don’t have to, but as good Americans they might. (Why didn’t he ask this of them last week? or a month ago? or ask for more?) Think about this, as you think about all those who are on the street without jobs, including Wall Street people. Think about the sense of entitlement that these AIG executives have. Think about why so many of us didn’t see this sense of entitlement as dangerous to the well-being of our nation until very recently.
The American people have been sold a bill of goods for almost two generations now, and it goes something like this: if we take advantage of the magic of the market, if we just look out for number 1, the free market will reward us as a nation. Yes, there are folks in the military who sacrifice, and there are those who volunteer for civilian service, but at the end of the day we serve our country and communities best by seeking our own fortunes.
I am putting this too starkly you say? Perhaps. But it became the mantra of Wall Street. And as they once said about GM, what’s good for Wall Street is good for America. Just watch those 401k’s grow, and never take any money out of them. The market always makes a profit in the long run. (Of course what they forget to tell you is that the long run can be very long indeed.)
The party’s almost over, as so many have declared. The party, however, is not just about living the high life in good financial times. The party is about having a set of beliefs that comfort and aid us in getting on in the world. And one set of these beliefs has involved the goodness of capitalism and the free market. We have spoken about them as if they are gods. They are not. Capitalism can be an exceedingly productive economic system, but only when operating under proper guidance and regulation. There are no free lunches and there are no entirely free markets. Believing so is exceedingly dangerous, especially when this ideology replaces our common sense about the sacrifices and labors required to build and maintain communities and a nation.
Are You Smarter than Congress?
[See "Update" from February 15th below.]
Quickly, which of these pictures doesn’t belong with the others? If you selected #3, the Guggenheim Museum, consider yourself smarter than most members of Congress. Seems that Congress can’t tell the difference between a casino, a golf course, and a museum.
The Senate pulled the plug on 50 million dollars for the National Endowment for the Arts that was originally in the stimulus bill, a pittance really, given the size of the stimulus package. But it then added insult to injury by attaching an amendment prohibiting the use of stimulus funds for, “any casino or other gambling establishment, aquarium, zoo, golf course, swimming pool, stadium, community park, museum, theater, arts center, or highway-beautification project.” And even Senator Schumer signed off on this one. (He claimed that it was an error. Hmmm. This is the guy who recently brought us “Annie Oakley” Gillibrand as the junior Senator from NY. ) New York Magazine, 2/12/09.
It appears that Congress, unlike the president, is willing to accept the notion that the arts are just another form of recreation or entertainment. The arts do entertain, and good entertainment is to be prized, but this is not all that they do. The Germans have a term for what that arts can help accomplish: Bildung. The word is not easily translated, and there has been much debate about how it should be understood. But what can be said here (this is a blog, after all, not a treatise) is that Bildung suggests (personal or social) growth through education, experience, and creative endeavors. Golf, for example, for all of its virtues as a sport, or casinos, for all of their character producing vices, will not generate Bildung. But spending time with (great) works of art may, if one is open to them. To put the matter succinctly, art is an individual and social good; it is educational in ways that casinos and golf courses are not.
I support the stimulus package. (As a matter of fact, I would argue that it’s too small.) I understand that there was a need to get the stimulus package through asap. I understand that the Republicans remain caught in a time warp. With tax cuts as their only mantra and the market still a god, they deserve John Boehner’s bombasts and Eric Cantor’s cant. But come on, did no Democrats read this amendment? First, the Democrats should have defended the money for the arts because of the unique role that they play in society. (Let’s not, for example, forget the role of artists in the WPA during the great depression.) Second, in practical terms, there is billions in this bill for people in all sorts of industries, but not a penny for artists, who also need jobs, and the non-profits that help support so many of them. Let us also not forget that the performing arts are economic engines in many communities, and yet we invest relatively little in them as a society. We expect them to live off private charity or outrageously priced tickets. The result: too many poor and middle class folks are cut off from the performing arts. (Are you listening Schumer?)
And yes, the package is also unfair to those who work in zoos and aquariums, typically non-profits, whose budgets surely will be cut in these hard times. While it’s not clear that zoos generate Bildung, although they might, they are certainly educational and serve the common good. (And they too employ people.) Obviously Congress can’t tell the difference between this, a non-profit educational institution,
and this,
Qualcomm Stadium (The name says it all)
UPDATE, February 15, 2009. “Saving Federal Arts Funds: Selling Culture as an Economic Force.” The New York Times reports that the 50 million for the arts was salvaged in the final bill. In addition, the offending language comparing museums to casinos was removed. Democrats, all is forgiven. Republicans, you are still in the dog house. Here is an excerpt from the Times column.
As the details of the final bill were being hammered out, tens of thousands of arts advocates around the country were calling and e-mailing legislators. Arts groups also organized an advertising blitz arguing that culture contributes 6 million jobs and $30 billion in tax revenue and $166 billion in annual economic impact.
The tide turned. In addition to preserving the $50 million allocation, the final bill eliminated part of the Senate amendment that would have excluded museums, theaters and arts centers from any recovery money.
“It’s a huge victory for the arts in America,” said Robert L. Lynch, the president of Americans for the Arts, a lobbying group. “It’s a signal that maybe there is after all more understanding of the value of creativity in the 21st-century economy.”
That Senate amendment, proposed by Tom Coburn, Republican of Oklahoma, had grouped museums, theaters and arts centers with implied frivolities like casinos and golf courses.
With all Due Respect: Is David Vitter the Dumbest Member of Congress?
Thursday, February 12, 2009 was President Lincoln’s 200 birthday. You might recall that in Lincoln’s second inaugural he spoke the words, “With malice toward none, with charity for all…” Now charity is not exactly empathy, but they are in the same family of sentiments.
Enter David Vitter. Lincoln’s 200th birthday found Vitter at a Chinese restaurant in D.C. equating Obama’s call for empathy for the downtrodden with “dictatorship,” producing one of the great non sequiturs of the last couple of decades. This is how the story was reported in Mother Jones (which, given Vitter’s record, I am inclined to trust).
Republican Louisiana Sen. David Vitter made a trip to DC’s Chinatown on Thursday to nibble on kung pao chicken and rally the conservative troops. Addressing the DC lawyers chapter of the conservative legal group, the Federalist Society, Vitter got right down to red meat. After quoting comments from President Obama suggesting that he’d like his judicial nominees to be able to empathize with the downtrodden, Vitter declared that demanding empathy in a judge was something you’d expect in a “dictatorship.” How empathy equates with repressive rule, Vitter didn’t really explain, except to say that it had little to do with ensuring checks and balances on an imperial government.
You might think that a senator would have remembered some of Lincoln’s most important words on this day. But not Dave. Next time a judge is empathetic or shows some mercy, just remember that for Dave we are one step closer to a dictatorship.
But perhaps this is not just about Dave. Are the Republicans losing it? I mean, they made Eric Cantor House whip, a man who is certainly in over his head and seems not to worry about prevaricating.
Iraq: It was Never the Right Choice (and We Told You So)
McCain and Co. will tell you that the problem with the war in Iraq has been in its execution. The war was not the problem, just bad management. Yet, contra McCain, others insist that had we known then, what we know now, we would not have gone to war. But the fact is that many of us did know, or at least knew enough, and were angry and demoralized because there was nothing we could do to stop the war. Through poor judgment or political calculation (or both), our representatives in the House and Senate voted to authorize Bush’s war on October 11, 2002. Just five five months later, on March 18, 2003, the war began. And now, five years later, in some sort of bizarre parody of Churchill, we have McCain calling for victory and promising never to surrender. (Never surrender to what or to whom?)
At the time I wrote many drafts of op-ed pieces that I never bothered to polish or edit for publication. Quite frankly, I thought that they would do little, and just gave up on them. A correct assessment at the time. However, I now offer one from October 1st, 2002, exactly as it was written. Why? Because as many of us as possible now need to say, in as many ways as possible, “we told you so.” And that in this election, we are going use our own good judgment, and elect leaders who will end a war that should never have begun.
A word about the context for the piece: I was suspicious at the time about whether WMD’s existed. I certainly didn’t think that Iraq had nuclear weapons. But I wanted to see if I could frame (in relatively few words) obvious problems with a war scenario, even assuming the existence of WMD’s. The conceit of the piece was that by appealing to the self-interest of Republicans, we might be able to stop the war. (I hear you laughing and snickering). But as I note at the end, there were reasons to believe that it wouldn’t work, then or now.
“Daddy, what’s a Republican?”
October 1, 2002
We are all familiar with the Nasdaq Bubble of the 1990s, from which we learned how momentum has its own, well, momentum, until it all comes to a grinding halt. Yet the White House appears not to have learned this lesson. As the administration joyfully trades in patriotic slogans, and relishes the short term political gain that carrying the flag yields, another sort of bubble has arisen, a War Bubble. And just like those poor Wall Street traders who believed their own stories about the value of their shares, politicians caught within this new bubble do not realize that they are overvaluing a stock, Bush’s stock with the American people. These politicians are called Republicans, and they are on the verge of making one of the greatest miscalculations in American political history.
Generals, as the story goes, are often caught fighting the last war. In this case we have politicians who are managing not only to fight the last war, but who are confusing the seemingly uncomplicated aftermath of that war with the war to come. Mr. Bush and company believe that we can take out Iraq without much difficulty, just like the last time. They tell us that American casualties will be low, and shortly after the invasion a new day will dawn for Iraq. And when this day dawns the President will be the man of the hour. He will be the leader who finally got the job done. He will have finished off the worst tyrant since Hitler. His poll numbers will rise into the stratosphere and, unlike his dad’s, remain there for the next presidential election. And his coattails will be long indeed. But this outcome is a fantasy. Here is the reality, or at least something that more nearly approximates it.
Just as Bush’s team says, our military will make short work of Saddam’s forces. Within a week or two we will have secured most of the important military objectives, although not before Saddam has gassed and killed many of those who have opposed him (for example, the Kurds), turned weapons of mass destruction over to terrorist groups that will use them at their leisure, and blown up a number of oil fields. Our early military successes, however, will not end the war. Even after Hussein is killed or has fled, some Iraqi patriots will resist, and they will do so in major urban areas. There will be difficult urban warfare. Our soldiers will die and we will be tempted to level areas in some of Iraq’s major cities in order to get the job done. Civilians will die. Children will die. The puppet government that we install will be resented by large number of Iraqis and by Muslims throughout the world. There will be no shortage of volunteers for terrorist organizations, and for the foreseeable future they will have little need to recruit. The land that we now know as Iraq will be unstable for years to come. We will either have to remain in force or watch the region disintegrate. The whole business will clearly be expensive in both material and human terms.
President Bush and his team have sold and will continue to sell the war on Iraq by playing on the vulnerabilities that Americans have felt since that horrific day in September. The rhetoric has been carefully constructed to conflate and confuse. Fear has done its job. Fear is leading to war fever and to war. But some day soon Hussein will be gone. What then happens when the terrorists strike America and this strike turns out to be worse than the last one? Or maybe there won’t be a big strike, only a series of smaller strikes reminding us with each death and injury just how vulnerable we are. (Perhaps we will even discover that the weapons being used against us were made available to terrorists after we attacked Iraq.) We are being promised a safer America after this war, but it will not feel safer. And even if Americans are currently saying that they do not believe that getting rid of Saddam will end terrorism, in their heart of hearts they are expecting that the effort will lead to a big pay off in terms of safety. This is, after all, how the war is being sold. They will be disappointed.
But not only will America not feel like a safer place after the war, it will feel like a much poorer one. Everyone knows that our economy has been on the skids. The collective wisdom appears to be that we cannot expect the Stock Market to rise significantly anytime in the near future. To this fragile economy a war in Iraq will add a nice piece of change, starting at around forty or fifty billion, to our budget deficit. And don’t expect much help from overseas in paying the tab. The arms that Mr. Bush twists to obtain support for his war will not extend themselves to dole out cold cash. It also appears that Afghanistan may end up costing more than we now expect, as will the campaign against terrorism. Yet in spite of their expense, all of these wars will not stimulate the economy in the manner of World War II. They simply aren’t big enough. But they certainly will be big enough to place an additional drag on the economy. For example, a war with Iraq will cause risk premiums to rise, which may push up interest rates. To take a specific industry, the increase in oil prices, along with a decline in air travel, might help to bury a number of already shaky airlines. (For a discussion of the war’s impact on the economy see, “Stiglitz: War Won’t Boost U.S. Economy,” a September 25, 2002 filing by Reuters in the New York Times. Joe Stiglitz is a Nobel-winning economist.) Further, we cannot depend on the consumer to bail the economy out, because consumer confidence will not readily recover in the age of Al Qaeda, higher oil prices, and continuing unrest in the Mid-East and around the world. It’s reasonable to presume that the economy will stagnate if not weaken for the foreseeable future. Add to this our continuing sense of vulnerability in spite of winning a war with Iraq, and there is little doubt that Bush will be looking mighty ineffective, inept, and weak before the next presidential election. There will be no coattails in 2004. There probably won’t even be a coat.
No series of arguments against the impending attack on Iraq has worked with the administration. Fear and dogmatism hold sway. So here is my extravagant hope. Bald self-interest will move the Republicans, because they will realize that if they don’t get off the hobbyhorse of war, they will lose and lose big in elections to come. But I’m certainly not counting on it. Bubbles are mighty powerful. Just look at your 401K.
Poster from February 2003 (added for May 2008 posting)
