Saturday Morning News and Views: Populist Uprising Edition

Good Morning Conflucians!!!

President Obama was in Ohio yesterday trying to impersonate a populist.

“I won’t stop fighting for you,” he thundered in a campaign-style speech in economically sagging northeastern Ohio, remarks that provided a likely preview of the themes in his first State of the Union speech next Wednesday.

Trying to shore up public support, Obama urged people to “stand by me, even during these tough times.”

Like you stood by us Mr. President? When did you fight for us anyway?

Obama acknowledged that the healthcare overhaul — suddenly in limbo on Capitol Hill — had run into a political “buzz saw.” He dismissed concerns that his lengthy focus on healthcare meant he had taken his eye off the economy, the country’s No. 1 problem.

“Let me dispel this notion that we were somehow focused on that (healthcare) and so as a consequence not focused on the economy. First of all, all I think about is how are we going to create jobs in this area,” Obama said in Elyria, Ohio.

The president’s switch to a more populist tone followed his own admission in an ABC News interview earlier this week that he had lost a direct connection with everyday Americans.

I’m not so sure he ever had a connection with “everyday Americans”–those gun-toting bitter knitters? And those uppity women who don’t know their place? No, I don’t think so.

If Mr. Obama wants to make a “direct connection” with “everyday Americans,” he is going to have to give them more than “just words.” He is going to have to pretty much do a complete about face and become as “transformational” as he pretended to be when he was campaigning. He is going to have to stop impersonating Herbert Hoover and start impersonating Franklin Roosevelt. I’m really not sure if he is capable of that, but if he manages to do it, I’ll be the first to cheer him on.

From the Toledo Blade:

A defiant President Obama assured Ohioans yesterday that he will continue to fight for health care, banking, and energy reform despite recent political setbacks that some argue have endangered his agenda.

He made the promises at Lorain County Community College even as Ohio announced its unemployment rate had hit 10.9 percent in December, up from 10.6 percent the month before. The national jobless rate is 10 percent.

“I did not run for President to turn away from these challenges,” he told a town-hall meeting of about 1,300 people.

“I didn’t run for President to kick them down the road. I ran for President to confront them once and for all. I ran for this office to rebuild our economy so it works not just for the fortunate few, but for everybody who’s willing to work hard in this country,” he said.

Uh huh. Talk is cheap, Mr. President. Now lets see some action.

Here’s the ugly truth about Ohio’s economic condition:

Obama White House Main Street Tour arrives in Ohio amid rises in unemployment, poverty rates

News released from Ohio’s Dept. of Job and Family Services Friday showed job losses in the services segment has not raised the state’s unemployment rate from 10.6 percent in November to 10.9 percent a month later, which when added to the loss of over 300,000 jobs during Ohio Gov. Ted Strickland’s first three years on the job, is just more salt in its already gaping wounds. Ohio’s jobless rate is worse than the national rate of 10 percent.

If you’re jobless in Ohio, you may be ripe to enter the growing ranks of Ohio’s poor, as U.S. Census Bureau statistics analyzed by the Brookings Institutiion showed this past Wednesday. In its report of the nation’s largest metropolitan areas, Midwestern cities and suburbs led the nation in increased poverty rates over the period between 2000 and 2008, driven by “troubles in the automobile manufacturing industry,” according to published reports on the study showing residents living below the poverty level – $21,834 for a family of four – rose 25 percent to about 12.5 million.

For Ohio, poverty in the state’s capital, Columbus, spiked past the major metros’ average to hit 20.1 percent. The 2008 poverty rate in Cleveland and suburbs is 30.5 and 9.1 percent, respectively; for Cincinnati, these figures are 25.1 and 9.1 percent; for Dayton, 29.2 and 9.5 percent; for Toledo, 24.7 and 8.9 percent; for Youngstown, 33.5 and 13.6 percent.

This blog post at The Atlantic quotes a lot more of Obama’s populist rhetoric from his tour of Ohio. I really can’t face repeating it here. To my skeptical ear it just sounds like bullsh*t. My advice to Mr. Obama is as follows: “action speaks louder than words.”

The big question following the massacre in Massachusetts is what will happen to the insurance company bailout bill? While the President was visiting Ohio, Sherrod Brown had a chance to discuss the issue with him. This is what Brown told Brian Beutler of TPMDC:

Sen. Sherrod Brown (D-OH) is engaged with House progressives, trying to tease out a solution to the health care reform impasse–but he says that at the highest levels of the Senate and the White House, there’s still no plan, and he doubts whether President Obama will insert himself forcefully into the process….

“I’ve talked to Reid, I’ve talked to Obama. Unclear yet what the strategy is, but clear interest, strong interest in getting as strong a bill as we can get.”

[….]

Brown says he is in regular contact with House progressives–he held three meetings just this week. But though he’ll be stepping up those meetings, they aren’t part of a broader Senate strategy, as Sen. Dick Durbin (D-IL) said this week.

Based on his conversations with House progressives, Brown says the mood right now is fairly dour.

“They’re very unhappy,” Brown admits. “Their viewpoint is it can’t be just the Senate version because, first of all, it’s not what they want in terms of the substance, and second it really writes them out of having any impact.”

Nevertheless, he doesn’t imagine the President will lay out a way forward in his State of the Union address next week, and he won’t push any buttons in the Senate.

“I doubt if he does, I don’t think he’ll do a procedural thing. I don’t think he will engage in process,” Brown said of State of the Union.

It doesn’t sound like Obama’s “populism” is going to be translated into action, does it? It sounds like he will continue to be utterly passive, waiting around for someone else to take care of all the problems he doesn’t know how to solve.

{{sigh….}}

TPMDC has been talking to Democrats in the House also. It seems they don’t trust the White House or the Senate on health care reform.

more than half of House Democrats don’t want to pass the Senate version of the bill with the promise that the bigger differences they’ve already been hammering out would be fixed with a second bill.

The bottom line is that many members feel betrayed by the White House and Senate and just don’t trust that a fix would pass. If their fears pan out, members would be left with a more conservative bill than they passed last fall, and none of the compromises they negotiated with union leaders on how to pay for health care.

Members feel President Obama showed deference to his old colleagues in the Senate from the beginning of the health care discussions and the House was rolled each step in the way.

“Everyone in the house feels like the White House bent over backwards to engage the Senate and they didn’t get anything for it anyway,” one leadership aide told TPMDC….

“They are frustrated the White House fell for all the talk in the Senate that they thought they could make [their bill] bipartisan,” the aide said. “Members don’t trust the Senate, they definitely don’t trust the White House to come back and fix any of this.”

And what about the President’s promises to rein in the banksters? The Boston Globe isn’t impressed.

President Barack Obama’s latest broadside against big banks may have more bark than bite.
Obama’s plan to limit banks’ size and risky trading has spooked investors, but analysts say it would have only marginal effect on institutions like JPMorgan Chase, Bank of America and Citigroup — and would be hard to enforce. And it’s not clear the rules would reduce taxpayers’ risk of having to bail out another big bank.

Of course no one really knows what the President’s “plan” is yet. Does he really have one?

The White House has yet to provide details of the plan outlined Thursday. But attention has centered on Obama’s effort to bar the biggest banks from doing what’s called proprietary trading. That’s when banks use their own money to make high-risk bets. If those bets go bad and a bank goes under, taxpayers could be on the hook.

[….]

The proposed overhaul marked Obama’s latest effort to more tightly police the nation’s largest banks. Last week, the president proposed a tax on banks to recoup billions in bailout money that was handed out at the height of the financial crisis in 2008.

The moves come as banks face increasingly hostile rhetoric from Obama. The president has called bankers “fat cats” and vowed to defeat the banking industry’s lobbying efforts against financial reforms.

Oooooooh! “Fat cats?” That’s telling ’em, Mr. President–NOT! Actually, it sounds like pretty weak tea to me….

Besides, Mr. Obama told his audience in Elyria, Ohio that he’s afraid that regulators might have gotten “too tough” on the banksters. WTF?!!!

“The banks feel as if regulators are looking over their shoulder, discouraging them from lending,” Obama told a town-hall style meeting during a trip to promote his jobs and healthcare policies.

Obama said it was not his intention to interfere with bank supervision. But he had told Treasury Secretary Timothy Geithner to make sure that the country has not “seen the pendulum swing too far”, with regulators now being too tough after being too slack in the past.

This guy may even be weaker than I thought originally. What a putz!

And then there’s this article posted at Zero Hedge yesterday. The author, Albert Edwards, is “a chief strategist for a major international bank,” according to Tyler Durden, proprietor of Zero Hedge.

The US and UK have seen a huge rise in inequality over the last two decades, as growth in national income has been diverted almost exclusively to the top income earners (see chart below). The middle classes have seen median real incomes stagnate over that period and, as a consequence, corporate margins and profits have boomed.

Some recent reading has got me thinking as to whether the US and UK central banks were actively complicit in an aggressive re-distributive policy benefiting the very rich. Indeed, it has been amazing how little political backlash there has been against the stagnation of ordinary people?s earnings in the US and UK. Did central banks, in creating housing bubbles, help distract middle class attention from this re-distributive policy by allowing them to keep consuming via equity extraction? The emergence of extreme inequality might never otherwise have been tolerated by the electorate (see chart below). And now the bubbles have burst, along with central banks? credibility, what now?

After reading Ben Bernanke?s speech, once again denying culpability for the bubble, I really didn?t know whether to laugh or cry (remember that Ben Bernanke, like Tim Geithner, was a key member of the Greenspan Fed). I feel like Peter Finch in the film Network, sticking my head out of the window and shouting “I’m as mad as hell and I’m not going to take it anymore!”

*****************************************************************************

In a sharp turn from all this populist rage, I want to mention some literary news that may have been drowned out by all the excitement of of the Massachusetts Massacre.

A great writer of detective fiction, Robert B. Parker, died this week. He brought Boston and Cambridge to life in his books about Spenser the hard boiled but sensitive detective who liked to cook and stayed true to one woman. Fittingly, Parker died at his desk, while working on his latest Spenser novel.

Another Boston writer, Dennis Lehane wrote about Parker:

Bob was as he wrote – not a passive-aggressive bone in his body, very witty, very smart, a little caustic, no patience for fools. I liked him immensely.

What’s lost in his massive success and prodigious output is how revolutionary those early Spenser books were. He lifted the genre out of the ham-fisted macho ’50s ethos it had been mostly mired in for two decades (Ross Macdonald and a few other notables notwithstanding, of course) and brought it into the ’70s, all sly and sexy and edgy-funny.

Another writer identified with the Boston area, Eric Segal, died this week too. I have never read Love Story, haven’t seen the movie either. I’m not that big on sentimentality, but I kind of picked up the story by osmosis. There’s even a connection to politics–remember when Gore was gored for saying he and his wife were the models for Segal’s novel of Harvard?

…”Love Story,” which gave us the pairing of two Ivy Leaguers, Oliver Barrett IV and Jenny Cavilleri (played by Ryan O’Neal and Ali MacGraw in the 1970 film), and has been the source of his lasting fame.

For generations of readers, that novel/film has been synonymous with two words: “romance” and “tragedy.” (I can well remember my own relatives sitting around the kitchen table, asking one another, “Have you read it yet?” and then sighing deeply and clutching their chests as they talked about it.)

January 19 was the anniversary of the death of Edgar Allen Poe. For 60 years now, a mysterious visitor has arrived at Poe’s grade on that day to leave roses and cognac by the writer’s headstone. This year, he or she didn’t show up, and no one knows why? Did the mysterious visitor die too?

Well, this post is getting really long. I’d better wrap it up. Add your own choice links in the comments.

HAVE A STUPENDOUS SATURDAY, CONFLUCIANS!!!!!!!