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Four ways to tell if President Obama was lip-syncing

By: Martin Berg Sunday January 27, 2013 3:20 pm

So it turns out that Beyonce’s ardent, flawless performance of the Star-Spangled Banner may have been lip-synced. The more important and far trickier question is whether President Obama’s impassioned promise to fight for the middle class and a just society is for real, or just more lip service.

The president pushed all the right buttons to our inspire our belief, crafting a theme of “We the people,” defending the importance of collective efforts and evoking battlefields in the people’s fight for justice, from March on Selma to Seneca Falls to the Stonewall bar. And he took the oath of office with his hand on Martin Luther KIng’s traveling bible, the one the civil rights leader carried with him and scribbled notes in as he led the movement.

Many people have invested their hopes and dreams in the president’s leadership and are willing to give him the benefit of the doubt on the tepid economic recovery and unkept promises. I thought it was a terrific speech but I’m less giddy about the speech and our prospects for the next four years.

One source of my skepticism is the president’s choice to replace Treasury Secretary Timothy Geithner, under whose leadership, blessed by the president, the too big to fail banks got bigger, no bankers were held accountable for the financial collapse, and the government’s efforts to clean up the foreclosure mess floundered. Geithner, meanwhile, ridiculed efforts by others on the Obama economic team who wanted to fight for a bigger stimulus that would have helped others who weren’t bankers.

To replace Geithner, the president chose his chief of staff Jacob Lew, who enjoyed a brief, highly paid stint at  too big to fail Citigroup from 2006 to 2009, as a manager in a unit that bet against the housing market in the run-up to the financial collapse. After Citigroup reaped its share of the taxpayer-funded bailout, the bank awarded Lew a $950,000 bonus. Before his service to Citigroup, he served as head of the Office of Management and Budget during the Clinton administration, which gave bank deregulation its final push into reality. Of his Citigroup gig, Robert Kuttner wrote, “It was mainly a chance for a skilled public manager to make himself some money until the Democrats returned to power.”

Especially troubling is the lack of expertise Lew demonstrated in comments during a 2010 Senate hearing, where he candidly acknowledged he was not particularly sophisticated in his financial understanding – but went on to downplay the role of deregulation in the financial meltdown.

“My sense, as someone who has generally been familiar with these trends is that the problems in the financial industry preceded deregulation; there was an increasing emphasis on highly abstract leveraged derivative products that got us to the point that in the period of time leading up to the financial crisis risks were taken, they weren’t fully embraced, they weren’t well understood,” Lew said. “I don’t personally know the extent to which deregulation drove it but I don’t believe that deregulation was the proximate cause. I would defer to others who are more expert about the industry to try and parse it better than that.”

But the even the grandaddy of financial deregulation himself, Alan Greenspan, has acknowledged what a fiasco it was. As the Consumer Education Foundation pointed out in its March 2009 report, co-authored with Essential Information, “financial deregulation led directly to the financial collapse” by allowing banks to concoct and sell complex investments based on worthless mortgages – without any government oversight or interference.

Regardless of his expertise or lack of it in high finance, Lew is a member in good standing of the elite financial industry – government corridors of power that have been peddling austerity – a particularly hostile landscape for the hopes and dreams of the middle class. Is this really the person Obama believes is best to lead the economic team that is supposed to protect the middle class? If Obama is serious about following through about his inaugural speech promises to protect and preserve economically vulnerable Americans, he’s going to need a much more ambitious  and specific agenda than he’s offered so far, and he’s going to need to abandon some major policies he’s been pursuing.  And he’s going to need a cabinet and a political team to flesh those policies out, sell them to the country and skillfully push them through Congress. Lew will have to reach way beyond his comfort zone, in which he has functioned as a quintessential insider and number-cruncher.

A great inaugural speech is not about to convince the vast corporate interests that have poisoned our politics to pack up and go home.

To truly protect the middle class, the president is going to have get outside the austerity bubble that Washington has built up around itself with the help of the media wise men and women who judge political courage and wisdom by how much our leaders are willing to slash from social programs.

The way to protect the middle class is straightforward – but demands a departure from the conventional thinking that rules Washington.

Economist Robert Pollin suggests two very specific –  and grand  – goals for Obama to shoot for. First, cut unemployment in half by the end of 2016, back to 3.9 percent, where it was in 2000, creating an additional 13 million jobs, through a combination of federal stimulus funding,and grabbing the excess funds that the Federal Reserve has shoveled to banks. While bankers have profited from the Fed’s generosity, they have not used those funds to spur the broader economy. Here’s an interview in which Pollin details his views.

The second is creating a real program to fight and reverse rising poverty in the U.S., reducing the number of people living in poverty from 15 to 11 million, again aiming to reduce the poverty to 2000 levels. Again, Pollin says the best way to do this is by focusing on resources on job creation.

Inside Washington’s austerity bubble, this idea of dramatically reducing unemployment or poverty is never discussed any more, amid assumptions that either people are poor because of their own failings or the government can’t afford to do anything about it.

But outside the bubble, economists like Pollin and others suggest another path, and if Obama is serious about the ideals he articulated in his speech, he’ll lead the fight to burst the austerity bubble, embracing this more activist path.

If he’s really intent on helping average Americans, there are two policies President Obama is pursuing that he should immediately discard, because they will hurt the middle class.

The first is the Trans-Pacific Partnership, the latest in a long line of so-called free trade agreements like the North American Free Trade Agreement, that have been sold to the public as boosts to the economy but have really crushed low and middle income jobs by increasing outsourcing and lowering wages. While the TPP talks exclude the public, corporate lobbyists have free access.

The president and his team should acknowledge the dangers to America of these phony free trade deals, and abandon the TPP and others like them.

The president should also drop the idea of “tweaking” Social Security by adopting “chained CPI,” which is a way of calculating the “cost of living” that would reduce future Social Security payments. The president has suggested that “chained CPI” could be part of fiscal grand bargain to reduce the deficit. While the president has touted the plan as a kind of a technical fix that would strengthen the program in the long run, Social Security watchdogs say chained CPI would result in substantial benefit reductions.

You’ll know the president is serious about keeping his promise to protect the middle class when you see him following through on this short list.

Martin Berg is editor of WheresOurMoney.org.

 

The Battle For Obama’s Soul

By: Martin Berg Thursday November 8, 2012 12:28 pm

We know which Barack Obama won reelection Tuesday night.

The question is: which one woke up and went to work Wednesday morning?

Was it the passive Obama who, after winning a stirring, historic victory in 2008, allowed the insurgent tea party to inaccurately redefine his affordable health care plan as a government takeover?

Was it the conciliatory Obama who chose not to use his considerable rhetorical skills to rally the country against intransigent Republicans and Wall Street CEOs who opposed even the most modest attempts to use government to rein in Wall Street excess?

Was it the detached Obama of the first presidential debate October 3 who bizarrely said that he and the Republican candidate Mitt Romney agreed in their approach to Social Security?

Or was it the other Obama, the one whose 2012 campaign struck early and often against Mitt Romney, branding him as an out of touch plutocrat, while defining the president as the staunch defender of the threatened middle class?

As Mark Weisbrot of the Center For Economic and Polcy Research points out, Obama and his team carefully shaped a populist message for the 2012 campaign that was much more specific than the 2008 message of hope and change, and it was tailored specifically to win blue-collar votes in the swing states that decided the election.

Will the president continue to embrace that message or abandon it now that he’s won the election?

Which is just another way of saying that the fight for President Obama’s soul continues.

The current battlefield is the drama over the $7 trillion fiscal cliff and the “grand bargain.” As portrayed in the media, if Congress and the president can’t come up with a combination of budget cuts and revenue to cut the budget, Congress has agreed to impose a set of draconian budget cuts.

At the heart of the dispute is the continuation of the Bush cuts and the payroll tax holiday, the extension of unemployment benefits, and a variety of defense and other cuts. Some congressional leaders from both parties are pushing for a “grand bargain” to avoid the cliff – and they want to include cuts to Social Security, Medicaid and Medicare.

President Obama may have wavered on protecting Social Security, but Harry Reid, the Democratic Senate majority leader and 28 other senators have not. They’ve signed a pledge to avoid cuts to Social Security as part of any deficit reduction package.

Which makes complete sense since Social Security doesn’t add a single dime to the deficit.

Have your senators signed the pledge? If they have, call them and thank them, and suggest they add Medicare and Medicaid. If they haven’t, urge them to sign. The more senators that sign the pledge, the better it will be for our president’s soul.

Martin Berg is the editor of WheresOurMoney.org.

 

 

 

Behind Romney’s battleship plan, an ill wind blows

By: Martin Berg Friday November 2, 2012 3:38 pm
Battleship Missouri goes to sea again.

Battleship Missouri goes to sea again.

If Mitt Romney’s high-finance cronies had more money invested in horses and bayonets, would the Republican presidential candidate be insisting that our national security depended on them?

As it is, Romney is championing a vast and costly expansion in the number of the Navy’s big battleships, from which one of his top foreign policy advisers could make a healthy profit.

That would be John Lehman, CEO of J.F. Lehman & Company, an investment firm that specializes in acquiring “middle market companies in the defense, aerospace and maritime industries and the technologies that originate from them.”

He’s also a former secretary of the Navy during the Reagan administration, a member of the 9/11 Commission and a stalwart Republican who also advised John McCain’s losing presidential bid. Lehman has been advocating for more big ships since his days in the Reagan administration – and as Wired magazine reported, he’s put himself in a good spot to profit from an increase in military shipbuilding. “He has profited hugely from the Navy’s slow growth in recent years — raising the prospect that he could make even more if Romney takes his advice on expanding the fleet.”

And now he’s being mentioned as a possible secretary of defense in a Romney administration.

But Lehman’s history makes him a particularly dubious character to place anywhere near taxpayers’ money, especially as Romney insists he will preside over a huge increase in spending on defense – including Lehman’s pet project to increase the number of battleships. (Under Obama, the Navy plans to build an additional 15 warships by 2019, bringing the fleet to 300, at a cost of between $17 and $22 billion a year. Under the more ambitious Romney/Lehman plan, the fleet would grow to more than 350 ships by 2022.)

During the Reagan administration, Lehman was an acknowledged master of the Washington insider political game. But his management style at Navy wasblamed for a massive corruption scandal involving military officials and big defense contractors.

Prosecutors dubbed their investigation, which began after Lehman returned to private life in 1987, “Operation Ill Wind.”  More than 50 government officials, corporate heads, consultants and military contractors were convicted.

But Knight-Ridder, citing a congressman and a former defense official, reported in 1988, “The autocratic management of former Navy secretary John F. Lehman Jr. created an environment ripe for the type of abuses uncovered by the Justice Department’s probe into Pentagon contract bribery.”

Lawrence Korb, an assistant secretary for defense at the beginning of the Reagan administration, said: “The Navy, when I was in the Defense Department looking at it from the inside, and when I was outside, was a bureaucracy run amok. It was making its own procurement rules in many cases which were different from the Defense Department.”

One of those who went to prison was a close associate of Lehman’s, Melvyn Paisley, who Lehman brought in as a top Navy Department official. Paisleypleaded guilty to accepting hundreds of thousands in bribes and served four years in prison and paid a $500,000 fine. Lehman was never charged with any wrongdoing, but according to media reports, he was suspected of improperly tipping off Paisley to the investigation.

How Ryan’s real math works

By: Martin Berg Thursday October 18, 2012 9:57 pm

OK, so Paul Ryan’s budget numbers don’t add up.

But there’s another critical bit of arithmetic that has been working just fine for him, though you won’t read anything about it in the lengthy New York Times magazine profile now available on the newspaper’s web site.

Ryan is portrayed as the Miller Lite-sipping, regular guy NFL-watching, ribs-chomping, charmingly wonky, politically courageous future of the Republican Party.

Give me a break.

What the New York Times did not find newsworthy or illuminating is Ryan’s own money trail.

When you pull back the curtain on the slickly constructed down-home image, a starkly different picture emerges. Ryan, it turns out, is a magnet for Wall Street and hedge fund campaign cash.

As Politico and the Wall Street Journal have reported, members of the financial and insurance industries have been Ryan’s key backers since he first?? ran for reelection?? in 2000. The country’s commercial banks’ PACs and employees spent nearly $60,000 on his campaign.  His top contributor that year was Bank One, which was later gobbled up by JP Morgan Chase.
In 2002, the National Association of Insurance and Financial Advisors contributed $10,000 to Ryan – the maximum allowed by law. He also formed his own PAC that year, with the help of supporters from Goldman-Sachs and the Securities Investment Association.

The bankers’ and hedge funds’ generosity has continued – among his top recent contributors is billionaire Chicago-based hedge fund operator Ken Griffin, of Citadel Investment Group, who gave Ryan $5,000. Griffin has also contributed $150,000 to Restore Our Future, a super PAC that supports Mitt Romney, and another $800,000 to the Karl Rove super PAC, American Crossroads.

Over the years, as Ryan rose to head the House Budget Committee, Politico reports that he became one of the top fundraisers in the House, and he has shared his largesse with other Republican candidates.

Another of Ryan’s top financial boosters is Paul Singer, who runs Eliot Financial hedge fund. Ryan paid Singer back when he was one of only 32 Republicans to vote for the auto bailout, a vote that angered Ryan’s fans in the Tea Party. But the bailout boosted Ally Financial; the financial arm of General Motors – in which Singer’s hedge fund had a major stake, the Nation reports.

Hedge funds, banks and insurance companies groups stand to profit handsomely from Ryan’s scheme to privatize Social Security as well as Ryan’s continuing austerity blitzkrieg and plan to strip government of its regulatory power.

Seen from the perspective of his successful fundraising, Ryan isn’t a politician courageously pursuing unpopular policies to dismantle the New Deal and subsequent social programs (like turning Medicare into a voucher program); Ryan is actually acting as a faithful servant of the Wall Street bankers and hedge-fund money men who insist that the federal government’s budget be balanced – as long as it doesn’t cost them anything.

Ryan is also serving his corporate masters when he spreads collective amnesia about the causes of the 2008 financial crisis, preaching the same gospel of deregulation that got the country into the mess we’re in. But Ryan wants you to believe he’s one of us because he digs ribs and roots for the Packers.

The man who would be vice president embodies a pretty twisted definition of political courage – protecting Wall Street while crushing the economic security of the little people.

 

Martin Berg is the editor of WheresOurMoney.org.

 

 

Night on Fantasy Island

By: Martin Berg Wednesday January 26, 2011 5:37 pm

As a snapshot of the wildly dysfunctional state of our political union, last night’s festivities were a smashing success. All sides were serving up plenty of mom, apple pie and platitudes while ignoring what’s actually left on plates of millions of Americans – nothing.

I did find at least something to agree with in what each of the speakers said. Who can quarrel with President Obama when he calls on us to “win the future?” And I want my government as lean and mean as Paul Ryan and the Republicans do, without any wasteful subsidies that boost corporate tycoons and their overseas expansion rather than creating decent-paying jobs here at home.

It’s true that the tea party’s spokeswoman, Rep. Michele Bachman of Minnesota, looked like aliens had captured her brain and were speaking through her. Maybe we would have been better off if the aliens had captured Obama and Ryan too. At least Bachman briefly took note of the high unemployment rate before she went off to into her own rhetorical fantasyland.

That’s more than you can say for President Obama, who was pitching us his hallucination that his new pals from the Chamber of Commerce are going to beat their corporate profits into ploughshares in partnership with government, in an effort to foster new technologies and growth that we all share. Forgive me if I can’t get too worked up about this. Didn’t we try this government-corporate partnership recently? Wasn’t that what the bailout was?

Back here on Planet Earth, that didn’t work out so well for a lot of us, though it does seem to have worked well for the president’s friends at General Electric and JPMorgan Chase.

Both Ryan and Bachman aren’t interested in any partnerships; they want to dismantle government altogether so GE, JPMorgan and the rest of the corporatariat can run the show without any interference at all. The only difference is that Bachman would like to do it faster, with less nice talk, than Ryan.
Neither the president, Ryan nor Bachman, could focus on reality long enough to mention the long, steep decline of the middle class or the on-going foreclosure crisis, or offer any specific ideas on addressing those very real issues.

Back here on Planet Earth, we’re going to have to harness all of our ingenuity; strength and diversity just to wrestle our political system back from these leaders and their corporate backers before they plunder what’s left of it.

Martin Berg is editor of WheresOurMoney.org.

King’s Longest March

By: Martin Berg Monday January 17, 2011 4:07 pm

Everybody wants to claim a piece of the spirit of Martin Luther King in support of his or her cause. A Pentagon official even had the nerve to say King, who championed nonviolence, would have supported U.S. wars in Afghanistan.

That’s an especially dubious assertion given that the civil rights leader became an increasingly vocal opponent of the Viet Nam war, in a move that cost him some support.

What would King make of the U.S. in 2011?

We don’t need to guess. We have the record of his words and deeds, especially in his final year.

As early as 1957, King was highlighting the disparities between rich and poor, In a speech celebrating the 25th anniversary of the Highlander Center, a grass-roots organizing center in Tennessee, he said: “I never intend to adjust myself to the tragic inequalities of an economic system which takes necessities from the masses to give luxuries to the classes.”

By 1963 King was moving his fight for strictly civil rights for minorities, like voting and equal access to public facilities, toward a broader struggle for economic rights for the disadvantaged and least powerful, recognizing that civil rights without economic rights couldn’t guarantee the opportunity and justice for all promised that was key to the great democratic experiment “What good is to it have the rights to be able to sit at a lunch counter,” he asked, “if you can’t afford a hamburger.”

He gave the “I have a dream” speech that galvanized a nation at a march on Washington that demanded both jobs and freedom.

But it was in the last year of his life that his focus on economic injustice became most acute and profound.

He put in motion an effort to organize poor people, not just to focus on their plight, but also to so they could fight for better jobs and decent housing for themselves.

King certainly would have celebrated the historic election of the nation’s first black president, and Obama began his presidency by evoking King’s spirit.

But the civil rights leader he would have recognized that that election was not a resting place amid the economic suffering of so many.

He would not have abided the bailouts and tax cuts that allowed bankers and the wealthiest to prosper while those without access to the backrooms of power suffer. He would not have abided the widening gulf between the wealthiest and the poorest Americans, knowing the dire consequences of that division, not just for the poor and the middle class but also for the whole country.

He also would not have been surprised how tough it is to fight the entrenched power of corporations brought back from the dead by compliant politicians.

“It’s much easier to integrate a lunch counter than it is to guarantee a livable income and a good solid job,” King said in April 1967 at Stanford University in a speech entitled `The Other America’ that rings as sadly true today as it did more than 40 years ago, with its rference to “work-starved men searching for jobs that don’t exist”.

“It’s much easier to guarantee the right to vote than it is to guarantee the right to live in sanitary, decent housing conditions,” King said at Stanford. “It is much easier to integrate a public park than it is to make genuine, quality, integrated education a reality. And so today we are struggling for something which says we demand genuine equality.”

Martin Berg is editor of WheresOurMoney.org.

Bailout Fuels Bitter Race to the Bottom

By: Martin Berg Tuesday December 14, 2010 5:52 pm

photo: Slaff via Flickr

Maybe I just missed Harley Davidson’s thank you note to me and other taxpayers for bailing them out during the height of the financial crisis.

Perhaps the iconic motorcycle maker  didn’t think it would have to send a thank you note.

After all, they had every reason to think that the Federal Reserve’s emergency, low interest, $2.3 billion loans in the wake of the financial crisis would remain their little secret.

But the financial reform legislation spoiled all that, forcing the Fed to disclose details of  trillions of dollars worth of confidential loans they made, which amounted to a giant subsidy because of the low interest charged.

Beneficiaries included not just the country’s largest banks and foreign banks, but corporate giants such as General Electric, Verizon, Toyota and Harley Davidson.

It turns out that these companies borrow millions every day to pay their expenses. When the credit market froze up in the meltdown, Harley Davidson and the others turned to the Fed, which stepped in with loans at low rates and no questions asked.

Maybe the thank you note is still on Harley Davidson’s to-do list.

The company has been awfully busy, what with opening a new plant – in India, closing plants in this country and bullying its remaining U.S. workers to give back wages and benefits or face more plant closures.

It’s not that the company is incapable of showing gratitude. In 2009, a year in which the company suffered steep sales declines and more than 2,000 workers had been laid off, they paid their CEO $6.3 million – including a $780,000 bonus. Since January, 2009, the company has laid off more than a fifth of its work force, and closed two factories. By the end of next year, another 1,400 to 1,600 face layoffs.

In 2009, the average Harley Davidson worker who still had a job  was paid $32,000.

After threatening to close its York, Pa. plant and move production to Shelbyville, Ky., the company and the workers reached an agreement to keep the plant open – with 600 fewer employees and wage concessions. But not before the Pennsylvania governor, Ed Rendell, offered $15 million in tax incentives to the company.

All the cuts are paying off – at least for the company’s shareholders. In July, the company reported a $71 million profit, more than triple what it earned a year ago.  . . .