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Economy

Big Bank Lobby Claims To Be ‘Strong And Consistent Advocate’ For Reg Reform Effort It Entirely Opposes

By Pat Garofalo on Dec 1, 2009 at 5:16 pm

AP06042104617Tomorrow, the House Financial Services committee is expected to pass the final facets of its regulatory reform effort, which would move a final package to the House floor for a vote as soon as mid-December. Not ready to go quietly into the night, the Financial Services Roundtable (FSR) — one of the main lobbying arms for the country’s biggest banks, including Citigroup, JP Morgan, and Bank of America — fired off a letter to committee members, pressing them to vote no on the bill.

In the letter, the FSR claims to be “a strong, and consistent, advocate for financial regulatory reform,” and emphasizes that reform “must happen sooner rather than later.” However, it then spends the bulk of the letter criticizing nearly every meaningful portion of the House legislation, claiming that it will destroy jobs and negatively impact the economy:

Several amendments designed to ensure financial stability will have negative consequences for the economy. The heightened capital standards for large financial institutions, combined with the cost of pre-funding a systemic risk reserve, will reduce lending and other activities by large financial companies. The provisions designed to prevent financial institutions from becoming “too-big-to-fail” will, at a minimum, increase the cost of funding for such companies, and may accelerate the failure of a troubled institution. The new powers for regulators to break up large firms create a disincentive for positive growth and job creation.

The only committee actions which the FSR voiced support for are a weakening of risk reduction provisions and a change to accounting standards so obviously advantageous to only big banks that even the Chamber of Commerce couldn’t support it. Remember, this is the same organization whose Senior Vice President for Government Affairs announced on C-Span that “we’re not for any regulation.”

Like other sectors, the financial services industry is counting on the jobs argument to resonate in an era of double digit unemployment. But the proposed measures are meant to safeguard the financial system against another crash, the last of which caused massive job loss to which we’re still struggling to respond. With its letter, the FSR is paying lip service to the obvious need for reform, while advocating permanently enshrining “too big to fail” and the sort of lax capital standards that led to some investment banks leveraging themselves at 40-1.

In terms of potential for job loss, it seems to me that the status quo is far more problematic, but you can bet that these same arguments will migrate with the bill over to the Senate.

Yglesias

Does Ben Nelson Know What “War Bonds” Are?

By Matthew Yglesias on Dec 1, 2009 at 4:46 pm

180px-FourFavorites1101

Riddle of the day is inspired by Senator Ben Nelson’s take on financing the Afghanistan War through a war tax:

In lieu of a “war tax” to pay for a troop increase in Afghanistan, Democratic Sen. Ben Nelson (NE) is proposing war bonds.

“We didn’t have a war tax in the second World War,” Nelson said, and instead the government sold Americans bonds. “People invested in their country, in that fashion [and] made a lot of sense back then. I don’t know why it might not make sense today, certainly in lieu of jumping to tax.”

One thing NBC’s Ken Strickland might have wanted to note while “reporting” this story is that what Nelson is saying here is false. During World War II taxes went up substantially. Here’s OMB’s figures on taxes as a percent of GDP for the years 1933-1953:

taxes

The larger issue here, though, is that we have to wonder does Ben Nelson understand that war bonds are just bonds? Calling a bond a “war bond” is a marketing gimmick, not an actual method of financing a war. Is Nelson saying that if Obama relabels a few hundred dollars worth of deficit spending as “war bonds” that he’ll stop complaining about?

Politics

Rick Warren wonders why there’s so much fuss over the rights of gays.

By Amanda Terkel on Dec 1, 2009 at 4:44 pm

In recent days, Pastor Rick Warren has come under fire for refusing to condemn an Anti-Homosexuality Bill in Uganda that would make some homosexual acts punishable by death. “[I]t is not my personal calling as a pastor in America to comment or interfere in the political process of other nations,” said Warren. On his Twitter feed, Warren is now trying to change the subject, claiming that “no one” cared when 146,000 Christians died last year (so why should he now care about gay men and women in Africa?):

Rick Warren's Tweet

The Ugandan legislation — supported by a pastor whom Warren has welcomed into his church — would mandate that any person “convicted of gay sex is liable to life imprisonment.” If that person is HIV positive or has sex with a minor or a person with a disability, he or she would be guilty of “aggravated homosexuality” and face the death penalty. The bill also proposes up to three years of imprisonment for anyone who “fails to report within 24 hours the identities of everyone they know who is lesbian, gay, bisexual, or transgender, or who supports human rights for people who are.” (HT: TP Reader Roger)

Featured

Chuck Feney says: “And, why does Rick think because you’re in one group that you’re not in the other group, too?”

Security

Mitchell: Settlement Freeze ‘A Means To An End’

By Matt Duss on Dec 1, 2009 at 4:30 pm

mitchell obamaMiddle East Progress has just posted an interview with Sen. George Mitchell, the Obama administration’s Special Envoy for Middle East Peace, in which Mitchell discusses the current state of the peace process and the details of the Netanyahu government’s announcement of a partial settlement freeze.

Mitchell also responded to some criticisms of the administration’s approach to restarting Palestinian-Israeli negotiations:

Q: Critics have said that the administration’s singular focus on a settlement freeze harmed chances of negotiations and put President Abbas out on a limb from which he could not climb off. What was the rationale for this strategy and why has the administration continued to focus on a settlement freeze?

A: A freeze on settlement activity is an Israeli obligation under the Roadmap, and the United States — as well as the Quartet — has long called on all parties to uphold their obligations. We suggested all parties — Israel, the Palestinians and Arab states — take steps to improve the atmosphere for negotiations. These steps can be a valuable contribution to achieving our goal of successful negotiations that result in a two-state solution. They are, however, a means to an end, not an end in and of themselves. We have never viewed these steps as pre-conditions to the resumption of negotiations.

As to skepticism over President Obama’s ability to bring the parties to the table for productive negotiations, Mitchell said “There can be no absolute guarantee in advance of negotiations as to what will occur during the course of those negotiations. We must continue to urge, to encourage, and to persuade the leaders on both sides that compromises — difficult though they may be — are in the long-term interests of their people.”

The alternative is to accept endless conflict, never-ending disagreement, and the absence of opportunity for all the people of the region. Of course, not everyone gets everything they want in a negotiation, and there must be a willingness on everyone’s part to give more than they want to give and to accept less than they want to receive. With time, with patience, and with courageous leadership, however, such compromises can be reached for one overriding reason: It is in the best interest of the region’s people—Israelis, Palestinians, and other Arabs. The next generation should not have to live through what the present leadership has endured, and we are determined that peace can be achieved.

The President and the Secretary of State have been clear about our commitment both to Israel’s security and to the two-state solution based on the establishment of an independent and viable Palestinian state with contiguous territory. This commitment is unwavering and in the national security interests of the United States.

Read the whole interview here.

Alyssa

An Exceedingly Dorky Question

By Alyssa Rosenberg on Dec 1, 2009 at 4:11 pm

Would y’all be interested in some Star Wars extended universe blogging?  I’m thinking about diving into the books about the Yuuzhan Vong wars, but I’m not sure if you guys would be interested–or even tolerant.  I’d try to to be too nerdy: I’m interested in wading in to the novels as a way of thinking about extended universes with multiple creators more generally.  If that sounds like Dullsville, I’ll keep it to myself.  If not, let me know.

Culture

The Unpredictability of Quarterbacks

By Matthew Yglesias on Dec 1, 2009 at 3:57 pm

200px-Vince-Young

Ta-Nehisi Coates did a post yesterday where he says “I thought Vince Young was done. While we’re at it, I thought Brett Favre was done too–but for other reasons.” Then today he writes:

In keeping with our discussion of Vince yesterday, it’s really amazing to see the career Drew Brees is putting together. I don’t know if people thought Brees was “done,” but there was definitely some talk of him being a bust when the Chargers drafted Phillip Rivers. It looks like Rivers is doing just fine, but again, I think this serves as an admonishment to people (like me) who think they can prognosticate. It’s a complicated game. We just don’t know what’s going to happen.

I think the lesson here is that people just tend to overrate the extent to which variation in the success of an NFL passing game is driven by variation in the skill of the quarterback. I think you can especially see this with Favre, who appears to be putting together the best season of his career at age 40. Common sense says that he can’t be actually reaching the peak of his abilities as an athlete at this age. Fans who (like me) watch the games but don’t have experience playing football have a very hard time distinguishing slightly below average offensive line play from exceptional offensive line play, but obviously that makes a huge difference. What we see are quarterbacks throwing passes and running backs carrying the ball. But there’s no real reason to assume that their skills are really what’s making the difference between great offenses and bad offenses.

Politics

Grassley: ‘I’ve lived off the public tit’ as a congressman.

By Ben Armbruster on Dec 1, 2009 at 3:55 pm

On C-SPAN’s Washington Journal this morning, Sen. Chuck Grassley (R-IA) was asked if he thought the health care reform bill before the Senate amounted to socialism. “No,” Grassley said, but he then attacked the public option aspect of the bill, calling it “socialism.” Later in the program, a caller argued that as a public official, Grassley has been, in some ways, living off the government. After Grassley noted that he was a farmer for 50 years, the caller asked if he had ever received government subsidies. “Yes I participate in the farm program,” Grassley replied. The Iowa senator continually interrupted the caller but eventually acknowledged that he has been receiving substantial government assistance:

GRASSLEY: For the first 16 years I made $3,000 every other year as a state legislator. Now do you expect me to live on $3,000 every other year? No I was a factory worker for 10 years and I was a farmer for that period of time and I farm with my son now. So if you’re trying to make a case that I’ve lived off the public tit all these years, I think you’re saying correctly in the years I’ve been in the Congress but not the years before I came to Congress.

Watch it:

Security

Colbert Nails Nuclear Logic

By Max Bergmann on Dec 1, 2009 at 3:49 pm

Last night on the Colbert Report, host Stephen Colbert — in his “35,000″-part series “Better Know A Lobby” — interviewed Joe Cirincione the President of the Ploughshares Fund (“the fighting non-fighters!”), which is devoted to reducing the threat from nuclear weapons. In the segment, Colbert and Cirncione agreed that the U.S. should reduce its nuclear arsenal. Cirincione noted that the world possesses enough nuclear weapons to destroy the planet several thousand times. Colbert jokingly responded that we need enough nuclear weapons to destroy the planet at least once. In doing so, Colbert nailed the insane logic of those opposing reductions in US nuclear arsenals, by pointing out that possessing such a capability is akin to threatening to commit suicide:

COLBERT: Let’s get it down to only being able to destroy the world once, anything above that you’re being greedy. [...]

CIRINCIONE: We don’t even need that. […] Why would you want to have an arsenal that could destroy the planet?

COLBERT: In case somebody else wants to destroy it first. Like maybe somebody we don’t know has developed a bomb that can destroy the world and we say don’t do that or else we’ll do it. See.

CIRINCIONE: That is the logic of the Cold War and it was an insane logic.

COLBERT: It is not an insane logic. Let’s say you want to kill me. You have a gun. I have a gun. Now I could point my gun at you – that’s mutually assured destruction. Okay, now you point your gun at me and I point my gun at my own head. I take away your motivation to kill me.

Colbert also gives one of the best impressions of a nuclear explosion ever — until Cirincione made it “ugly.” Watch it:

Climate Progress

“Phil Jones has today announced that he will stand aside as Director of the Climatic Research Unit until the completion of an independent Review”

By Joe Romm on Dec 1, 2009 at 3:38 pm

Professor Phil Jones has today announced that he will stand aside as Director of the Climatic Research Unit until the completion of an independent Review resulting from allegations following the hacking and publication of emails from the Unit.

[mugshot]That is from the University of East Anglia’s new release today.  This shouldn’t be a surprise to anyone, particularly once UEA and CRU made the mistaken decision not to send Jones out to talk to the media in the past week.

Jones isn’t Tiger Woods, and the scandal called ClimateGate isn’t a personal matter (and yes, I think Woods is making a serious mistake, too).  Jones and UEA should have jumped at the chance to talk to the status quo media about a subject it is too-rarely interested in — climate science.

The AP at least got the headline right:

UK climate scientist to temporarily step down

No, he hasn’t quit or been fired, at least not yet.

The UEA news release continues

Read more

Yglesias

How About “Stop 10 Percent Unemployment Ben?”

By Matthew Yglesias on Dec 1, 2009 at 3:13 pm

250px-Ben_Bernanke_official_portrait 1

The Progressive Change Campaign Committee is trying to do an action labeled “Stop Bailout Ben” around Ben Bernanke’s upcoming confirmation vote. Unfortunately, they’re organizing around what really amounts to a side issue—the lack of full transparency and accountability about the ultimate recipients of funds from some of the Fed’s credit easing programs. If people want to give Bernanke a hard time about this, then fine, but it makes much more sense to give him a hard time about his apparent contentedness with a monetary policy that is going to fall far short of the Fed’s legal mandate to maximize employment.

Some observers think that there’s nothing more Bernanke can do to fight unemployment, which I don’t think is correct, but even if it is correct (or even if it’s merely a correct description of Bernanke’s beliefs) then like Ryan Avent I’d like to see Bernanke made to spell this out:

I don’t need to see Mr Bernanke’s head on a pike, but I would very much like to know what the justification is for actively fighting dormant inflation while unemployment continues to rise. And if the Fed would answer that it believes it is powerless to do anything more, then there is no reason Mr Bernanke couldn’t call on the government to help it achieve more through fiscal policy, promising that he would not use monetary policy to offset fiscal stimulus. Given the disinflationary pressure in the economy, Mr Bernanke would be doing a poor job as Fed chairman if he failed to say as much.

Right now the economy is stuck on a high-unemployment trajectory and a political deadlock. There are two ways I can see out of that deadlock. One would be the for Fed to change its approach (attempt to alter expectations of growth and inflation, try to get banks to reduce excess reserves, etc.) and the other would be for George W. Bush’s top economic adviser and designated Federal Reserve Chairman to say he’s done all he can and advises more aggressive congressional action. Past Fed Chairmen have not hesitated to comment on fiscal policy, so nothing is stopping Bernanke from doing the same.

If the confirmation hearings turn into a series of skirmishes about transparency, you’ll just get answers about independence and it’ll be a wasted opportunity. Tough questions about the state of the labor market, by contrast, could really accomplish something.

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