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Wednesday News

Good Morning Conflucians!!

Barack Obama had an op-ed piece in yesterday’s WSJ. In it he says we need to balance regulation with businesses need to create jobs and, well, make lots of money. For example:

Sometimes, those rules have gotten out of balance, placing unreasonable burdens on business—burdens that have stifled innovation and have had a chilling effect on growth and jobs. At other times, we have failed to meet our basic responsibility to protect the public interest, leading to disastrous consequences. Such was the case in the run-up to the financial crisis from which we are still recovering. There, a lack of proper oversight and transparency nearly led to the collapse of the financial markets and a full-scale Depression.

Over the past two years, the goal of my administration has been to strike the right balance. And today, I am signing an executive order that makes clear that this is the operating principle of our government.

This order requires that federal agencies ensure that regulations protect our safety, health and environment while promoting economic growth. And it orders a government-wide review of the rules already on the books to remove outdated regulations that stifle job creation and make our economy less competitive. It’s a review that will help bring order to regulations that have become a patchwork of overlapping rules, the result of tinkering by administrations and legislators of both parties and the influence of special interests in Washington over decades.

Note that this move is right as Republican’s take over the House and have increased numbers in the Senate, with momentum at their back. So as we see and have seen before, Obama is moving to compromise and move to the right even before debate begins on the topic. That is of course not surprising to us as we’ve noticed his right leanings from before the primaries. This problem is also noticed at Salon:

But on the day before House Republicans are expected to vote to repeal the Affordable Care Act, primarily on the specious grounds that it is a “job-killing” regulatory Frankenstein, the White House’s decision to suddenly be concerned about the right balance between public safety and commerce is strange and discomfiting. The big battles of the next two years are going to be all about defending the regulatory achievements of the Obama administration — healthcare reform and bank reform — in addition to ensuring that the Environmental Protection Agency isn’t hamstrung by Republican opposition as it carries out its Supreme Court mandate to treat greenhouse gases as pollutants under the Clean Air Act.

The Salon article goes on to make the case that this is a terrible fumble by Obama:

The strategy is unfathomable, and the notion that we must now seek to strike the “proper” balance — as if the proponents of greater regulation had been carrying the day in recent years — is just plain nutty.

Here we go again. Why do they keep being deluded with example after example, with signal after signal, with appointment after appointment? Deluded that Obama is left leaning? That he’s even liberal? Other than a few speeches, just words, what in his past would lead them to think this? Haven’t they noticed who funded him, who basically created him? Why do we keep having these perfect examples, perfect demonstrations of who Obama really is only to have places like Salon or HuffPo or others gasp, act surprised, and shake their heads thinking he’s made a mistake or is getting bad advice.

No, it’s not a mistake. It’s not nutty. It’s not a fumble. This is who Obama is. It’s who he has always been. How many more examples do you people need? Have you bothered to read the health care bill or noticed who wrote it? Did you not notice the tax cut for the very wealthy. Did you not notice the lack of regulations or strings attached with the financial bailouts. This stuff has been from day 1 people.

In related news, we’re going to see a new tone as the Republicans make noises like they want to repeal the health insurance lobbies hard fought victory represented by the Obamacare bill:

Obama issued a statement late Tuesday said he is “willing and eager to work with both Democrats and Republicans to improve the Affordable Care Act. But we can’t go backward.”

Republicans largely ignored an attempt by Democrats to rename the “Repealing the Job-Killing Health Care Law Act” to temper the language following the Arizona shooting this month that killed six and injured 13, including Rep. Gabrielle Giffords (D-Ariz.).

But Republicans now mainly refer to the “job-destroying” health care law.

“Obviously there are strong feelings on both sides of the bill and we expect the debate to ensue along policy lines,” said Rep. Eric Cantor (R-Va.), the majority leader. “We are going to be about decency here and engage and promote an active debate on policy.”

Of course what they want to do is repeal any good parts of the bill. And there may even be a few good parts stuck in there against the wishes of the lobbyists who wrote most of the bill. Republicans don’t really have the numbers to do anything in this round of kabuki theater. So this show is about setting the stage for later “compromises” and possible defunding efforts. Which sadly Obama will likely to all to wiling to go along with.

Another front in the battle Republicans are waging against the working class should be of no surprise. Obama set up Elizabeth Warren in a pseudo position just for the purpose of giving the Republicans something to knock down. And that process looks to be starting soon:

The chairman of a financial services oversight panel sent a letter to Elizabeth Warren, head of the Consumer Financial Protection Bureau, saying he is skeptical of the new bureau’s very existence and demanded details about how it will operate.

Rep. Randy Neugebauer (R-Texas), who chairs an oversight panel of the Financial Services Committee, said in the letter sent Tuesday that he thinks Warren is “tasked with executing a fatally flawed plan.”

He then asked Warren to answer three pages worth of questions about the new bureau. Some of the queries are operational, including how Warren will staff and organize the agency. Others are more broad, inviting her to explain how Congress should best perform its oversight role, given the body is not funded through the traditional appropriations process.

Neugenbauer also wants details on meetings Warren has held with the Securities and Exchange Commission, the Federal Reserve, and other financial regulatory agencies.

“What policies are in place to avoid potential duplicative, conflicting or overlapping rulemaking that are currently underway, but will ultimately be under the regulatory authority of the CFPB?” he asked.

He concludes asking Warren to explain how she plans to “avoid the kind of over-regulation that might stifle innovation.”

And so it begins. The only hope we have of some sanity in consumer protection and financial regulations is about to be taken out. And it appears to have been planned this way from the beginning.

As mentioned last night, Joe Lieberman has announced he won’t run for a fifth term. Which means he’ll server two more years. Does that mean he’s planning on running for President? Does that mean he’ll join whoever the Republican party bosses select for their presidential candidate on the ticket as VP? Or maybe he’ll just head over to K-street and collect is rewards.

Also mentioned last night, Sargent Shriver died at age 95. And Don Kirshner died at age 77.

In strange political news, “Baby Doc” Duvalier decided to return to Haiti – never a good idea if you stole nearly 1B. And now he has been arrested and charged with corruption:

Jean-Claude “Baby Doc” Duvalier was charged with corruption and the theft of his country’s meagre funds last night after the former Haitian dictator was hauled before a judge in Port-au-Prince

Two days after his return to the country he left following a brutal 15-year rule, a noisy crowd of his supporters protested outside the state prosecutor’s office while he was questioned over accusations that he stole public funds and committed human rights abuses after taking over as president from his father in 1971.

“His fate is now in the hands of the investigating judge. We have brought charges against him,” said Port-au-Prince’s chief prosecutor, Aristidas Auguste.

He said his office had filed charges against Duvalier, 59, of corruption, theft, misappropriation of funds and other alleged crimes committed during his period in power.

What was he thinking?

After Goldman Sachs invested gobs of money in Facebook with the intent to offer investment opportunities here and abroad, they’ve decided not here. Mostly to skirt around some SEC requirements. You know, being the upstanding corporate citizens that they are:

There was another question about the planned Facebook stock offering that went beyond whether the social media leader is a good investment now or if it’s overpriced. A more serious issue was how investment banker Goldman Sachs was structuring a “private placement” deal to skirt U.S. securities law.

Now it seems Goldman Sachs has decided that “intense media attention” no longer made it worthwhile to go forward with offering a piece of Facebook in the U.S.

Does that mean the deal is over? Does it mean that Facebook will do a deal in the U.S. with proper financial disclosure?

Unfortunately, neither. Instead, the Wall Street Journal is reporting today that Facebook will go ahead with its private stock sale but exclude U.S. investors from the deal.

“In a statement provided to The Wall Street Journal, Goldman said the move came after officials at the New York securities firm ‘concluded the level of media attention might not be consistent with the proper completion of a U.S. private placement under U.S. law,’ ” Aaron Lucchetti reports for the Wall Street Journal.

Under the planned offering, only wealthy clients of the investment firm would have been allowed to purchase a piece of Facebook. The arrangement sounded fairly complex; but basically, the idea was to put all the Goldman investors into a single fund and then count that fund as “one” investor. Why? By doing so, they would get around required public financial disclosures for any company with 500 or more investors. (There was more money coming in from another investment firm in Russia.)

Money for nothing and the clicks are free. Yea, I just made that up. TM by DT. So we the taxpayers make all this possible because they have our money backing them up allowing them to make riskier deals, and the deals they make are not just risky, but they’re fashioned only around the wealthiest clients. And the funny part here, it looks like it’s going to make suckers and losers out of these wealthy clients because they may be making yet another bubble with what they’re doing, that will just pop down the road. Time will tell.

And speaking of Facebook, they were planning on opening up users phone numbers and addresses to third parties, but have backed down, for now, after some complaints:

Just before the weekend, Facebook announced that it had expanded the information users are able to share with external websites and applications, to include home addresses and mobile phone numbers.

This enables developers of e.g. an ecommerce site to more easily fetch the address and phone number of a potential customer to streamline the checkout process.

For the record: users needed to explicitly opt to share this data before any application or website could access it, and they were evidently not able to share their friends’ addresses or mobile phone numbers with applications.

Sure enough, the dialog box (see below) wasn’t super clear about that, so Facebook was unequivocally opening itself up for a new sh*tshorm to hit the deck.

This morning, Facebook announced that it has temporarily disabled the sharing feature, looking to relaunch it in the next few weeks after making some changes.

Facebook dubs these future changes ‘improvements’ repeatedly, but of course the company is responding to the wave of criticism it has received for quietly releasing the new sharing feature, on a Friday evening no less.

I suspect they’ll enable it. But perhaps just add a bit more complexity to the privacy settings systems so there is an additional way to opt out. If you can figure it out of course.

That’s a bit of what’s in the news this morning. Chime in with what you’re reading.

49 Responses

  1. Lieberman knows that without the RNC machine he can’t win. (Last time it took BOTH party machines to defeat the primary Democratic candidate – no motivation for it this time). It may be that we won’t have Joementum to kick around anymore in 2012. (at least not in an elected capacity)

  2. Obama on Reagan:

    I don’t want to present myself as some sort of singular figure. I think part of what’s different are the times. I do think that for example the 1980 was different. I think Ronald Reagan changed the trajectory of America in a way that Richard Nixon did not and in a way that Bill Clinton did not. He put us on a fundamentally different path because the country was ready for it. I think they felt like with all the excesses of the 1960s and 1970s and government had grown and grown but there wasn’t much sense of accountability in terms of how it was operating. I think people, he just tapped into what people were already feeling, which was we want clarity we want optimism, we want a return to that sense of dynamism and entrepreneurship that had been missing.

    Ronnie was real big on deregulation (“get government off our backs”) and guess who was reading Ronnie’s biography over Christmas vacation?

  3. Ezra Klein is a fucking idiot:

    I occasionally find it difficult to tell whether the Obama administration is doing something because it thinks it needs to be done, doing something because it thinks that it needs to preempt Congress from doing something worse, or both. A good example of this was the federal pay freeze: Did the White House think a federal pay freeze was a good substantive idea, a good political idea, or a good way to keep the Republicans from either cutting federal pay or freezing the number of workers who could be hired? I suspect it was a bit of two and a lot of three, but there’s no real way to know.

    I’m having a bit of the same feeling with the president’s splashy op-ed promising “a government-wide review of the rules already on the books to remove outdated regulations that stifle job creation and make our economy less competitive.” That could be the announcement of a major new initiative in the government to prune the out-of-date or overly costly regulations currently sitting on the books. Or it could be a way to preempt ideas like Mark Warner’s regulatory paygo scheme or the GOP’s plan to force a separate congressional vote “of any new federal regulation that has an annual cost to our economy of $100 million or more.”

    Did ANY “out-of-date or overly costly regulations” survive the Cheney administration?

    • haha this one is a no brainier for most of us, wasn’t it just last week that the Obama team shared their 2012 goal,

      Obama’s 2012 Fundraising Goal Pegged At $1 Billion

      • That’s a lot of quid — gonna buy a whole lotta quo if he’s re-elected!

      • Yea, that’s why he invited Goldman to the White House to meet Hu this week too. After insulting them publicly just for PR purposes, he is working hard to help them with their obscene profits so they’ll funnel money his way for 2012. Same old, same old.

        • Yup. It would be illegal for BO to accept campaign donations from China. But if say China and Goldman S*cks & cronies were to strike up some sort of favorable trade deal, and China hands over money to Goldman et al and they in turn make hefty contributions to BO’s campaign, why, all that would be perfectly acceptable and aboveboard.
          I’m sure such a trade deal would NEVER be unfavorable to America’s interests, oh no, China will happily fork over more money for a deal that benefits the USA rather than China. Yup.

          Hey, anyone want to buy this fine bridge in Brooklyn? It’s a real steal!

  4. And speaking of Facebook, they were planning on opening up users phone numbers and addresses to third parties, but have backed down, for now …

    Maybe if someone dumped this information on Wikileaks, the fawning -over -Assange people would start being just a tad more sceptical of his enterprise?

    • And speaking of sceptical, I recently watched a HBO documentary featuring Helen Thomas (2008, pre Obama). Everything she said is worth quoting, but for now just this:

      9/11 has been used as a fearcard [raçecard anyone?] to really almost atrophy us.

      The press went silent, when they should have been really questioning. They were so afraid to be called unAmerican, unpatriotic, [raçist!] they really lost their one weapon, which was scepticism.

      Which also goes to, no not answer your many questions Dandy, but explain why you have to even pose them!

      Should I chose to have a Tag Line it would be I Blame The Media! If they had done their effing job, Hillary Clinton would now be halfway through her first, out of two, terms as POTUS!

      End of rant. For now! 👿

      • Oh, and one more thing: While Helen Thomas never was Beauty Queen “material”, when younger she had the most adorable smile. And laughter. In my view she’s still beautiful! 🙂

        • Sadly, she is a bigot.

        • Helen Thomas: Thrown to the wolves

          The perception became everything; the context nothing.
          She was forced into retirement and thrown to the wolves in a media culture that relishes stories of personal destruction and misfortune. It’s the old ‘the media builds you up before they tear you down’ routine.
          It was Joachim Prinz of the American Jewish Congress who made a speech that influenced a younger Helen Thomas. He said, “When I was the rabbi of the Jewish community in Berlin under the Hitler regime, I learned many things. The most important thing that I learned under those tragic circumstances was that bigotry and hatred are not the most urgent problem. The most urgent, the most disgraceful, the most shameful and the most tragic problem is silence.”

          Helen says her whole career has been about combating the sin of silence.
          But, to this day, there has been almost no compassion, empathy or respect shown for one of our great journalists, Helen Thomas, who has been presumed guilty and sentenced to oblivion with barely a word spoken in her defense.

          • That is a view from Al Jazeera. Here’s a view from the Guardian. Helen Thomas: good riddance to a garden-variety antisemite. I used to like Helen too. Who knew.

          • Come on 3W, you’re better than that! Al Jazeera didn’t write that article, Danny Schechter did. I don’t care who printed it, I thought it was a good read. Did you even care to read it before dismissing it?

            And if linking to Al Jazeera is off limits I hope the moderators will let me know.

          • I read the piece. And I read Al Jazeera and Haaretz all the time. I’m a liberal after all. I still don’t like anti semitic rhetoric, and I don’t care if it comes from J Street. 🙂

        • yup, she most certainly is.

  5. So Mary and WMCB have been asked off the site. I assume Afrocity, Regency and ElderJ are also not welcome. Just trying to get a sense of the scope in the clean up operation.

  6. Barack Obama had an op-ed piece in yesterday’s WSJ. In it he says we need to balance regulation with businesses need to create jobs and, well, make lots of money.

    When some guy named barry decide to get in the dem pres primary most of us said: “who is this guy?”

    A profile in the nyts or wapo, I forget which, helpful mentioned one of the first people barry called before he decided to get in the primary was steve wynn. steve wynn? How does a community organizer still paying off his student loans even know somebody like steve wynn?

    steve wynn:
    As of 2009, Wynn is the 468th richest man in the world (down from 277th) with a net worth of $1.5 billion (down from $3.9 billion). He made his debut in the Forbes 400 at #377 with a net worth of $650 million in September 2003, but was reported to be worth $1.1 billion only six months later in Forbes’ list of world billionaires published in March 2004.

    In April 2010, Wynn caused a stir when he chided the government on CNBC and said he was considering moving the company’s global headquarters from Las Vegas to Macau. A few weeks later, amidst criticism from his rivals, he clarified that he meant a greater allocation of time spent in Macau because of the substantially higher profits made there.

    • I read that Elizabeth Warren will likely be muffled by this latest move from the White House. Will try and find the link. Less regulation, smaller government, fewer federal and state jobs, more financial excess, risk and moral hazard.

      • I think it was RD who predicted that Warren would be “airlocked” — so that seems about right.
        She’s our nominal but powerless “middle-class advocate.”

        • Thought the story was in Naked Capitalism, but can’t seem to find it again. Between Bernanke and this new WH economic team, Warren is definitely going to be airlocked. So much for checks and balances. Meredith Whitney is another one who’s being muffled by the financial press lately.

          • Yep. I think this was all a set up. Here’s the general rule, if it looks like Obama’s finally doing something reasonable or getting a reasonable person, look harder, it’s likely rigged.

          • LOL. Good rule.

            Corollary: If Obama is doing something that seems to make no sense at all, looking at it from the point of view of “How does this affect 2012?” will reveal the reasoning behind it.

  7. Call me cynical, but why does it strike me that these executive summits with China are only going to bring more $$ into the pockets of Goldman Sachs and their buddies? It looks like we should start brushing up on our Chinese. So far, I’ve only got, “Egg roll please.”

    Ballmer, Blankfein Invited by Obama to Hu Discussion on Business in China

    Chief executive officers from Microsoft Corp. and Goldman Sachs Group Inc. will be among the corporate leaders the Obama administration is bringing together today for a meeting with Chinese President Hu Jintao aimed at expanding U.S. business interests in China.

    People in the U.S. welcome us,” Lu said in an interview. “We’re solving their employment problems.”

    Increasing cooperation with China on clean energy “will dramatically expand high quality jobs, living standards, and our economy in the United States,” said Jon Huntsman, the U.S. ambassador to China. “So as long as we continue to produce cutting-edge technology and maintain our competitive advantage in management, services and education, the China market will loom very large.”

    China had a $252 billion trade surplus with the U.S. in the first 11 months of 2010, according to Commerce Department data. The U.S. exported $100 billion worth of goods and services to China last year. Treasury Secretary Timothy Geithner said last week that with the current rate of growth in U.S. exports there, China will become the biggest American trading partner in about a decade.


    • Here’s another interesting thing I’ve been reading about China lately. President Hu may not really have that much power, not like their leaders of the past. Maybe the decentralization is good…too soon to tell. The Chinese military unveiled (leaked) the story last week about their new stealth jet fighter, and apparently Hu may not have even known about it. The other big contentious issue of course in foreign exchange. The US and the EU and most countries in the world would economically benefit from a stronger yuan…meaning everyone’s exports become a bit more competitive and they import less from China. China’s powerful manufacturing industries put pressure on the Politburo to keep the yuan weak. On the other hand, China’s Central Bank and the nation’s financial industry have lately been battling big domestic inflationary pressures…a stronger yuan would help that fight. So you have the nation’s manufacturers and financial industry at odds with one another, and Hu and his Central Planning Committee trying to balance these pressures. Hu is scheduled to be replaced next year.

      Bottom line from the US point of view, the yuan has to be allowed to appreciate. Our Treasury and Geithner have been wimpy negotiators in this regard. Bernanke and the Fed may have been more effective with their massive monetary easing which has led to (whether intentioned or not) large capital inflows into China and contributed to their current inflation problems. Stronger yuan would tame that inflation. But wait, there is another big wrinkle. A stronger yuan would devalue China’s current 2.5 trillion in loans to the US…from China’s perspective at least. So they are trying to carefully diversify out of the dollar by investing in euros and yen, which has the effect of bailing out European and Japanese financial systems while making those export economies less competitive.

      China loans money to the rest of the world so they will buy lower priced Chinese made goods. This economic imbalance has to change.

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