Point – Counterpoint on Getting Away With It

Paul Krugman and Robin Wells have written a review of three recently released books (four if you count Mann and Ornstein’s book, It’s Even Worse Than It Looks, which I have read and highly recommend).  The title of the piece, Getting Away With It, focuses primarily on Noam Scheiber’s book The Escape Artists: How Obama’s Team Fumbled the Recovery on the Obama administration’s capture by the financial elite in the immediate aftermath of the financial collapse of 2008.

I haven’t read the books they reviewed yet but my Audible credits are coming around tomorrow.  However, I do have some differences of opinion on some of their interpretations.  Maybe this has something to do with the fact that Krugman and Wells live in Princeton and don’t visit the central PA too often so they’re not exposed to how the Tea Party contingent really lives.  Even I don’t know that mysterious tribe all that well but I’ve had to sit at holiday dinners with them so I have a bit more of a clue.

First, there is criticism of Cory Booker and Bill Clinton’s defense of Mitt Romney’s role in Bain capital.  Krugman and Wells think this has something to do with Clinton and Booker’s sympathy with the finance industry.  I’m not so sure.  Instead, I’m reminded of something James Carville said recently:

In focus groups of Pennsylvania and Ohio voters, the Democracy Corps found an American public that is struggling to pay for everyday items and racking up student debt. Regardless of their education or economic status, these folks haven’t seen signs of an economy recovery – and don’t expect to see one anytime soon.

“These voters are not convinced that we are headed in the right direction.  They are living in a new economy – and there is no conceivable recovery in the year ahead that will change the view of the new state of the country.”

Even so, write the authors, these voters don’t know all that much about Mitt Romney. And, what they do know about him isn’t all that positive.

“Respondents immediately volunteer that Romney is rich, out of touch, and in the pocket for Wall Street and big finance. ”

The voters in these focus groups sound a lot like the Wal-Mart mom’s we listened to last week: they know that three years may not be enough for Obama to have fixed the economy, but they don’t know what he’ll do to make it better.

That means, say Carville/Greenberg, Obama shouldn’t try and beat Romney on the “are you better off than you were four years ago” argument. Instead, they should try to beat him at the “how are you going to make things better over the next four years.”

“It is elites who are creating a conventional wisdom that an incumbent president must run on his economic performance – and therefore must convince voters that things are moving in the right direction.  They are wrong, and that will fail.  The voters are very sophisticated about the character of the economy; they know who is mainly responsible for what went wrong and they are hungry to hear the president talk about the future. ”

It is true that voters and campaigns are more complex than they are often portrayed in the media. That said, elections are also pretty simple. Voters are either happy with the status quo or they aren’t. When they aren’t happy with what’s happening to them now, they look to their other options.

So, if voters already know what Romney is and who is responsible for the mess we’re in, then clubbing them over the head with Romney’s history with Bain Capital, or his adolescent insensitivities or his absent minded treatment of the family dog or Anne Romney’s horses and houses, is a wasted effort.  What voters want to know is what Obama is going to do about the lousy economy and the more the Democrats keep harping on Romney’s business and family, the more angry they’re going to get that Obama is evading the question.  So, Ok, Romney was a businessman and he was very good at his job.  Let’s move along now because the election is getting closer and the Democrats have yet to seal the deal.  How is Obama going to fix things?  What is his vision of America?  Where are we going?  If he can’t give a convincing answer by November, he’s out of there.  (But why wait?  Why not replace him now?  But I digress)

The middle section where Krugman and Wells detail how Geithner ran the show for the banksters and Obama tried to negotiate with a party that doesn’t believe in negotiations has been done before in Ron Suskind’s book, Confidence Men.  I don’t think there’s anything new here except that Krugman and Wells confirm what all of us have been thinking.  Obama as a politician sucks.  He squandered his Democratic majorities and his famed “judgement” lead him to appoint political asskissers like Larry Summers and finance industry mole Tim Geithner.  Their opening critique of Thomas Frank’s book Pity the Billionaire: The Hard-Times Swindle and the Unlikely Comeback of the Right sums up why this was a very bad combination:

Frank focuses on what is, as he says, “something unique in the history of American social movements: a mass conversion to free-market theory as a response to hard times.” It is indeed remarkable. After all, for three decades before the financial crisis American politics and policy had been increasingly dominated by laissez-faire ideology, by the belief that markets—and financial markets in particular—should be allowed to run free. Then came the inevitable crash. But far from demanding a return to stronger regulation, much of the American electorate turned to the view that the crisis was caused by too much government intervention, and rallied around politicians aiming to dive even deeper into the policies that led to crisis in the first place.

How did this happen? Frank’s answer is that it was the bailouts that did it. By doing things Geithner’s way—by bailing out the bankers without strings or blame—the Obama administration left an understandably angry American public with the correct sense that someone was getting away with something. And the right proved adept at exploiting that sense. The famous February 2009 rant by CNBC’s Rick Santelli that started the Tea Party movement was a denunciation of TARP, the big bank bailout passed in the waning days of the Bush administration (although a plurality of voters believe that it was passed under Obama). True, Santelli focused all his ire on a tiny piece of TARP, the planned aid for troubled homeowners (aid that mostly never materialized), not the much bigger aid for banks. But at least he was blaming someone, which the Obama administration was refusing to do.

And by the time Obama began, tentatively, to suggest that some bankers might have misbehaved a bit, it was too late. The entire Republican Party and much of the electorate had settled into a narrative in which the financial crisis of 2008—a crisis that followed fourteen years of hard-right Republican congressional dominance and eight years in which hard-line conservatives controlled all three branches of government—was caused by…too much government intervention to help the poor and, especially, the nonwhite. As Frank writes:

“Back to the usual, all-purpose culprit: government…. The feds forced banks to hand out special loans to minority borrowers…and…the entire financial crisis was a consequence of government interference.”

Moving along to Thomas Edsall’s book, The Age of Austerity: How Scarcity Will Remake American Politics, they get only part of the mental picture of the Republican party voter.  There is a dominant narrative of scarcity, which is ridiculous because there’s plenty to go around if the wealthy would just get off their massive piles of ill gotten booty.  Edsall says the Republican party voter is also scared of losing dominance:

So where does the embittered politics come from? Edsall himself supplies much of the answer. Namely, what he portrays is a Republican Party that has been radicalized not by a struggle over resources—tax rates on the wealthy are lower than they have been in generations—but by fear of losing its political grip as the nation changes. The most striking part of The Age of Austerity, at least as we read it, was the chapter misleadingly titled “The Economics of Immigration.” The chapter doesn’t actually say much about the economics of immigration; what it does, instead, is document the extent to which immigrants and their children are, literally, changing the face of the American electorate.

As Edsall concedes, this changing face of the electorate has had the effect of radicalizing the GOP. “For whites with a conservative bent,” he writes—and isn’t that the very definition of the Republican base?—

the shift to a majority-minority nation [i.e., a nation in which minorities will make up the majority] will strengthen the already widely held view that programs benefiting the poor are transferring their taxpayer dollars to minority recipients, from first whites to blacks and now to “browns.”And that’s the message of Rick Santelli’s rant, right there.

Now, the GOP could in principle have responded to these changes by trying to redefine itself away from being the party of white people. Instead, Edsall writes, the response has been to “gamble that the GOP can continue to win as a white party despite the growing strength of the minority vote.” And that means a strategy of radical, no-holds-barred confrontation over everything from immigration policy to taxes and, of course, economic stimulus, some part of which would be paid to minorities.

Ok, this is where I think it would help for Krugman and Wells to visit Central PA.  I don’t doubt that the Republican voters in the South (and Arizona) are very concerned with brown people.  It is an irrational fear with some historical roots in segregation in that part of the country.  But the irrational Republican leaning voters that *I* have to put up with aren’t bothered by immigration or african Americans.  Noooo, they’ve got their knickers in a twist over the degradation of the culture from loose women and gay people.  They’re concerned that the Christians are losing their edge and immigrants are probably a lot more religious than the young’uns who believe in evolution that they pick up in those satanic public schools.

I appreciate Robin Wells’ perspective on the south and racial tensions that linger and I’m not denying that this is what is motivating nuts in Alabama to turn school kids into the INS.  But it’s not the South everywhere and the operatives in the Republican party are very good at picking at the fears of an older generation that sees itself besieged.  It watches way too much Fox News than is good for it and is scared to death of death. They’re consumed with stories of pedophiles, violence, rape, murder, burgled houses.  They’ve lost the ability to connect cause with effect.  The world is mysterious and chaotic.  The Republican party is worried about losing its numbers because these older, easy to manipulate voters are dying off and the new American voters that are rising to replace them are Internet babies who aren’t particularly religious, are open to gays getting married, like their contraceptives, thank you very much, and are pretty comfortable with diversity.  If it were only white people, they’d still have time, but it’s all this modernity that’s creeping in with the information superhighway that is dooming the Republican party.

It’s not that the Republican party is becoming a refuge of white voters. The problem is that the Republican party becoming the party of the id.  Every phobia, prejudice or dark archetype that lurks in the human soul is being given permission to run free without any inhibitions.

The guy I wrote about the other day, Bryan Fischer, even admits that this is part of the plan.  He is going to make it safe to discriminate against gay people.

Democrats are missing the point here.  It’s not just race, and by the way, it is perfectly reasonable to disapprove of Obama’s performance without being a racist or harboring racist tendencies.  Krugman knows that the Republican party is insane but he doesn’t realize that the way they’re doing it is by giving their voters permission to act like barbarians and making it feel like civilization.  There is no one responsible in the Republican party who is calling a halt to the bad behavior.  So long as that continues, the party will continue to devolve into a mob of human animals all seeking their own power.  They’ve only got a small window of opportunity to kill the New Deal so the operatives have to amp up the crazy now.

If there were a God, now would be a good time to ask for his or her intervention.

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.

What’s Missing from the Credit Card “Reform” Bill

If they had known Obama was coming, they would have laughed even harder

Today President Obama signed the so-called “credit card reform bill” into law along with his usual prissy lecture about how Americans have to learn how to behave themselves.

“We’re not going to give people a free pass, and we expect consumers to live within their means and pay what they owe, but we also expect financial institutions to act with the same sense of responsibility that the American people aspire to in their own lives,” Obama said at a signing ceremony in the Rose Garden.

I think he had his fingers crossed behind his back when he mumbled the part about financial institutions behaving responsibly. Anyway here’s what the bill is supposed to do (if banksters were nice, supportive people who wouldn’t take advantage of every possible loophole).

stop arbitrary interest rate increases and “universal default” on existing balances. In universal default, a lender can change a cardholder’s account to costly “default” terms from normal terms when the lender learns the cardholder missed a payment on an account with another lender, even if the cardholder has not defaulted with the first lender

stop card issuers from raising rates for a cardholder in the first year after an account is opened, and require that promotional rates must last at least six months

stop issuers from charging fees for spending beyond their limits, unless the cardholder chooses to allow the issuer to process the excess spending, and restrict any “over-limit” fees

require penalty fees to be reasonable and proportional to the cardholder’s omission or violation

require that cardholders be told how long it would take, and the interest cost involved, in paying off a card balance if they make only the minimum monthly payments

require that cardholders must get 45 days’ notice of interest rate, fee and finance charge increases

Except…if you are more than a month behind on your bill, all bets are off, and your rates can go sky high.

What’s missing from this bill (and what makes it pretty much a toothless sham) is limits on credit card interest rates. There is still no limit on the amount of interest a company can charge you. Usury is still legal. Bernie Sanders tried to save the day, but no dice. The banksters win again.

Before the Senate voted Tuesday, it considered several amendments, not all of which pertained to credit cards. An amendment by Sen. Bernie Sanders, I-Vt., that would have capped credit card interest rates at 15 percent failed.

So there is still no limit on how high interest rates can go. Right now, if you make a late payment, your rates can be jacked up to 40%! If that isn’t criminal, I don’t know what is. With the new law, the companies will have to give you 45 days’ warning before they raise your interest rate sky high.

The other important catch is that banks have plenty of time to raise your rates as much as they want before the bill goes into effect. And banks are already threatening to start charging fees and limit credit.

Critics say help for Americans battling back abusive credit card practices may arrive too late. The Senate bill would take effect in nine months, enabling credit card issuers to jack up interest rates and fees for millions of cardholders ahead of the new regulations.

In fact, an estimated 10 million people holding cards from the eight largest issuers have already seen interest rate hikes of as much as 10 percentage points, according to the Center for Responsible Lending. The issuers—Citigroup, Bank of America, Capital One, HSBC, Discover, American Express, JPMorgan Chase and Wells Fargo—sent out rate increase notices after the Federal Reserve Board in December approved new rules restricting how credit card companies do business. Those rules become effective July 1, 2010.

Predictably, the whiny banksters are having tantrums over this bill, which really isn’t going to help consumers that much anyway. In fact the banksters are saying it will end up costing us all more in the long run.

Banks have repeatedly warned higher interest rates are likely to result because it will be more difficult to set rates based on the risk that customers pose. The higher rates mean less credit available for consumers, they say.

The industry is already experiencing heavy losses from the 90 million households that carry cards. The losses are expected to worsen as the year goes on.

“A lot of consumers have a false sense of security they’re going to get relief,” said Curtis Arnold, founder of CardRatings.com in Little Rock, Arkansas. “The average rate now is 13.8 percent, and I could see it going north of 15 percent by early next year.”

Issuers can try to make up lost revenue from customers who are new or have good credit — about one-third of U.S. cardholders generally pay their bills on time.

Let us never forget that Senator Barack Obama voted against setting a cap on credit card interest rates at 30%. Did anyone really think he would stand up to the banksters this time? By the way, Senator Hillary Clinton voted for that cap on interest rates back in 2005.

I’ll bet you’re wondering if there is any good news about this credit card “reform” bill. Well if you you like guns, there is. Bernie Sanders’ amendment went down in flames, but the amendment to allow people to carry concealed weapons in our national parks made the cut! Ain’t that great?