Democracy is Nothing Short of Tyranny

Opening my paper this morning was no simple task, as I am still recovering from saluting Lex and killing my liver in solidarity with my brothers and sisters in Wisconsin. Fortunately, the Register Guard apparently has a policy whereby anyone who can string 1000 words together gets to be published in the paper. Nothing helps this cynic's headache like a batshit editorial in the local paper.

Thank Jeebus for Laura Cooper.

Eugene income tax for schools is both unfair and unwise

It starts out promising:

It’s a lesson we all supposedly learned as children: The end can’t justify the means.

I'm not sure if this something we all supposedly learned as children. Don't eat the paste. Play nice with others. Always put your name at the top of the paper because your teacher can't know who wrote it if there's no name at the top of the page. These are the things I learned as a child. I'm not sure if I missed the day my class tackled complex philosophical arguments and came to definite conclusions on them, but then I was sick a lot, so it's completely possible.

But accepting the premise, what does this have to do with anything?

School funding is a noble and necessary end; however, the means chosen for this mission by the Eugene City Council in its income tax proposal are nothing short of tyranny as our forefathers understood, and for that reason the proposal must be defeated.

Tyranny! Nothing short of tyranny!! The kind of tyranny our forefathers faced!!! Do you think she wanted to go with Founding Fathers, but backed off because she realized that no, nothing she is about to write about has anything to do with the founding of this country? I don't know, but "forefathers" it is.

What tyranny do we Eugeneians face Laura Cooper?

As is predictable, proponents provide nothing beyond the same old arguments about taxes “boosting” the local economy without bothering to evaluate the very real impact of additional taxes on an already struggling economy — completely discounting or ignoring the impact on already overburdened local taxpayers.

Okay, but what about the tyranny? You promised me tyranny, dammit.

Nobody disputes the value of a high-quality education. The problem is that few supporters of this proposal can argue much past “it’s for the children” and focus on the horrendous details of the actual proposal.

Ok, horrendous details. Let's have 'em. And I'm still waiting on that tyranny.

Nothing in the proponents’ arguments addresses the prospect of an offset of collected taxes against equalization revenues from the state, addresses the authority of one government jurisdiction to levy taxes for another, or explains how this could possibly be a “temporary” measure when the structural problem that has caused it to occur remains unsolved.

No details. No tyranny.

In Oregon, schools are funded locally through property taxes, but Measure 5, approved by the voters in 1990, placed strict limits on those taxes. Instead, this proposal is a blatant attempt by the city of Eugene to evade Measure 5 and constitutes double taxation on Eugene residents who have already funded schools through their state income taxes.

Double taxation! Heavens. But wait. I fund schools through my local property tax and through my state income taxes?! Holy fuck, I'm already being double taxed. This would be triple taxation! Or quadruple, if you want to throw the feds in the mix. And I do!

Under Oregon’s Constitution, the state Legislature is tasked with funding schools using state taxes. Why not hold our Legislature accountable? Instead, the city simply wants Eugene voters to pay twice — even though the funds raised could well be deducted by the state Legislature in its own equalization distributions (resulting in no net benefit at all).

Given that Measures 66 and 67 were proposed last year as the solution to the very same underfunding problem, what assurances can voters be given that the current proposal will in fact be the real and final solution? Unfortunately, none — precisely because this “solution” is not even within the jurisdiction of its proponents.

This doesn't make a lot of sense. And by that I mean it's not very well written. I get that Cooper doesn't like the tax, but by this point I feel a bit Milhouse over here. When are they going to get to the fireworks factory?

Oh wait, here we go.

Nor is that simply a technical problem. Instead, the jurisdictional issue strikes at the very heart of fairness and accountability, and demonstrates that the proposal is blatantly unconstitutional and irresponsible. This proposal is a fundamental mismatch between taxing authority and spending goals, and the consequence is a basic lack of both due process and equal protection.

I should mention here that Laura Cooper is an attorney, so when she says something is "blatantly unconstitutional" I have every reason to believe that she knows what she's talking about. And while blatantly unconstitutional is not exactly tyranny, I've perked back up. Due process, equal protection. Those are concepts I know. Let's do this thing.

Here’s why: The jurisdiction of the city of Eugene extends only to the contiguous city limits, and thus the tax would affect all people who reside within those city limits and file state tax returns. By contrast, school district boundaries extend well beyond those city limits. What that means is that families that reside within the boundaries of the school district but outside the city limits would be exempted from paying the proposed tax because the city cannot exercise its jurisdiction over them.

Ummm...is that really what "due process" and "equal protection" mean? Some people wouldn't have to pay taxes that they don't get to vote on, but they get the benefits? I'm not sure those words mean what she thinks they mean.

Thus, River Road-area neighbors who live on either side of city boundaries and send children to the very same schools will be treated completely differently with respect to this tax, simply by virtue of their residences being on opposite sides of the city limits.

The class of persons paying the tax bears no rational relationship to the class of persons benefiting from it.

In addition to being blatantly unfair, the proposal is also unwise.

We've walked back "nothing short of tyranny" and "blatantly unconstitutional" to "unfair" and "unwise." Yes, Johnny, there are times when I feel as if I have been cheated. This happens to be one of them.

Laura gives us some more nattering, but to be honest, I've lost interest now that I've realized that there will be no tyranny forthcoming. Read if you must, I only post it to be fair.

School district governing bodies are neither accountable to nor legally subordinated in any way to the city of Eugene, or vice versa. The city cannot dictate to the schools, or vice versa, and thus there is no procedure whereby the city can adequately oversee or monitor accountability for the funds it raises for the schools: it lacks basic authority to acquire information to enable it to determine the appropriate level or use of the taxes it seeks to impose.

As a practical matter, then, the Eugene City Council can provide no assurances that this new funding stream will correct or even address any of the underlying problems for which it is being proposed. In short, it cannot enforceably condition the funds on anything. For example, it cannot address the systemic problems creating the shortfall: It cannot require the school district to cut administrative overhead or renegotiate pension deals with the dollars that it directs toward the schools. Funding with no accountability is a direct ticket to waste, fraud and abuse.

She does finish nice though.

Means matter. What’s next? If the city’s power to levy taxes can be used to fund anything the City Council desires, what is to stop it from collecting taxes for world peace? This proposal must be defeated.

Exactly. If the City Council can propose a 1% income tax with the funds directed to schools, put it on the ballot, and have a majority of citizens vote to pay higher taxes, then where does the madness end?

It ends in tyranny, that's where it ends.

Because Bad Ideas Never Die: Gangster Polticians Edition

Oh, hey! TABOR is back!

The Dems at the statehouse want to do something about this budget crisis we're having in Oregon. Well, not so much the current crisis, but future ones. To do this, they want to end the "kicker" and direct those dollars to a Rainy Day Fund, which is eminently sensible. There's a certain logic to saying "Maybe when we have billions in deficits, we shouldn't be sending tax rebates to people because three guys missed their guess on how much revenue we'd have."

This being Oregon, nothing sensible is allowed to happen. Not only do we have plenty of Republicans who still can't give up the "it's the people's money!They know best what to do with it" bullshit that drives so much of the debate, but we've also managed to pass a law that requires 2/3 of the Legislature to change tax law.

So, in order to enact sensible tax reform, the Dems have to give the Republicans something. What could that something be? Oh, how 'bout that little Measure that we all worked our asses off to kill a few years back?

But in an attempt to build political consensus, the proposed constitutional revision, which would have to go before voters, would offer more.

GOP lawmakers and business interests showed a liking for [the idea] because it proposes to place a threshold on government spending by tying spending increases to population growth and inflation, thereby seeking to prevent state government spending from mushrooming in times of economic boom.

Steve Buckstein of the libertarian Cascade Policy Institute said the spending cap intrigued him because “taxpayers have very few ways of regulating the growth of government.”

Now, I seem to recall being assured that if Measure 48 passed, that would be the end of Oregon as we know it. I guess not. Or maybe so.

Hot Stove

Who cares if old J.B.
Is monarch of the sea?
I'm not afraid if his Free Trade scoops all my biz from me.
I seek a greater fame,
And get there all the same.
I knock creation to all tarnation at the Glorious National Game!

The invisible hand of whatever

I doubt that anyone who reads this blog is a big fan of the "Market." Or at least the notion that the Market makes everything better. Still, on a micro level, supply and demand work pretty well. At least for determining what an item is worth. Let's say I "own" a house and I want to sell it. I put it out for bid, and people looking to buy a house tell me what they'd be willing to pay for it. Whatever the highest bid comes in at is what my house is worth at that moment. I've simplified, hopefully not to the point of uselessness.

There are times, of course, when a value needs to be put on my house without the mechanics of the market involved, say for tax purposes. In order to determine the value here, a neutral party, most often from the government, estimates what my house might be worth these days and taxes me accordingly. Now, you could easily argue - and people on the right especially often do - that the government is not neutral, because they have an incentive of over-value my house in order to collect more taxes. We all know that if there is one thing the government loves, it is collecting taxes.

Now the last person who should be relied on to fairly value my house is me, right? Especially in any meaningful way. For tax purposes, I am going to value my house at $4. If I want to borrow money based on the value of my house, then its worth at least $400,000. Right? We all know this.

So someone, anyone, please for God's sake explain the new mark-to-market rules to me. How in the fuck can it make sense to let banks, not the market, not the government, but banks themselves declare what their mortgage holdings are worth? Am I understanding right that banks are saying, jeebus, no one on the market wants to buy our house for anything more than pennies. And then they say, jeebus the government is saying our house is only worth pennies. But the banks want their house to be worth more. They need to their house to be worth more so that no one thinks they're poor and have no assests, so they are going to be allowed to say that their house is worth whatever they think it is worth? And then borrow money based on that value?

This seems like perhaps the dumbest idea ever. And I don't want to go too far down this road, because I am not a trained economist in any way, but isn't this solution (again) designed to get banks lending money to each other? So if one bank tells another bank that it has holdings worth, say, ten million bars of gold-pressed latinum, it can borrow from the other bank one hundred million bars of gold-pressed latinum. And in turn that bank can borrow even more latinum from the first bank! Yeh! Because what we have here is a liquidity crisis, not an exploision of a debt-based housing bubble, a lack of middle-class jobs, stagnant wages, an over-supply of housing (in some areas), individual debt such that it makes semse to lend money to nobody. Those are problems we don't have. Nope, all we have is a crisis of confidence. If banks are not forced (BY THE GOVERMENT!!!!!) to tell people what their actual assests are worth, but are, rather, allowed to make up whatever they want, then we will all be able to see that Bank of America and CitiGroup actually have lots and lots of money and we can all quit worrying and start borrowing and buying each others houses at wildly inflated prices again.

Seriously, someone tell me where I have gone wrong, because I am starting to sound like someone who raves about these things. I feel like I am one step away from advocating a return to the gold standard here and this not a place I want to be.

You see the twist is that no one even knows any more, man

In short, it was an offer that no capitalist speculator could ever refuse.

Which reminds one of the scene from the film, The Godfather, in which the corrupt politician woke up with a bloody dead horse's head in his bed. It's a scene once again played with gamblers, corruption and politicians. Except this time there's a twist: It's the taxpayer that will wake up with the dead horse's head.

- Dr. Jack Rasmus, Professor of Political Economy

Author: Epic Recession and Global Financial Crisis, forthcoming Palgrave/Pluto Press, 2009

Which reminds me of the scene from the film, Red Dawn, where the father is standing behind the fence in the concentration camp and he screams "Avenge me, boys! Avenge me!" Except the twist this time is that it is the American taxpayer standing behind the fence and we're shouting "Screw the capitalist pigs! Screw 'em even if it means the complete disintegration and destruction of our society! A new world will rise from the ashes of the old!"

Which reminds me of a song I once sang.

Which reminds me of that scene on the show, The Simpsons, where Homer is at the Hullabalooza and there are two slackers watching him catch a cannonball in his stomach and one of them says "Oh, that's cool" in that way that slackers have and the other one asks, "Are you being sarcastic, dude?" And then the first one says "I don't even know anymore, man." Except this time it is everyone who reads this blog who doesn't know what the hell to think about the bailout because on the one hand screw the fucking capitalist dogs, but on the other hand it would be really nice not to have our nice little lives destroyed by a depression.

I don't understand what was so great about it

LGM is running a series of posts comparing Brad Delong's optimism about the Geithner plan with Krugman's pessimism. LGM doesn't add a lot, so this is merely a hat tip.

I find myself in the Krugman camp, mostly due to the influence of Dean Baker. I believe that housing prices in the US were wildly overinflated and that many millions of people will continue to struggle to pay their mortgages and then won't when they lose their jobs. Loans will not be paid back. Toxic assets are not currently undervalued (I didn't realize people we arguing this! I am slightly horrified. I guess I need to follow more links.) The way out of this recession is not through reinflating housing prices. God no.

As I always say though, happy to be shown I am wrong.

One thing that makes me think Delong is deluded (Chris Matthews ha!) is his belief that the hedge fund managers who are planning to buy the assets and manage them to eventually recover their value are supposedly not going to fuck it up because they have $30 billion of their own scratch in the game. Somehow this incentivizes them to not fuck it up.

Q: Why is the government making hedge and pension fund managers kick in $30 billion?

A: So that they have skin in the game, and so do not take excessive risks with the taxpayers' money because their own money is on the line as well.

Q: Why then should hedge and pension fund managers agree to run this?

A: Because they stand to make a fortune when markets recover or when the acquired toxic assets are held to maturity: they make the full equity returns on their $30 billion invested--which is leveraged up to $1 trillion with government money.

Q: Why isn't this just a massive giveaway to yet another set of financiers?

A: The private managers put in $30 billion and the government puts in $970 billion. If we were investing in a normal hedge fund, we would have to pay the managers 2% of the capital and 20% of the profits every year. In this case, the private managers' returns can be thought of as (a) a share of the portfolio's total return proportional to their 3% contribution, plus (b) a "management incentive fee" of (i) 0% of the capital value and (ii) between 0% (if the portfolio returns 3% per year) and 9% (if the portfolio returns 10% per year)--much less than hedge-fund managers typically charge. the Treasury is only paying 0% of the capital value and 17% of the profits every year.

Q: Why do we think that the government will get value from its hiring these hedge and pension fund managers to operate this program?

A: They do get 17% of the equity return. 17% of the return on equity on a $1 trillion portfolio that is leveraged 5-1 is incentive.

Oh, is that how it works? If they didn't stand to make so many billions they just wouldn't really put the ol' brain power to it, but with billions in profit on the line, they will really get the juices flowing for us? I mean wtf? And aren't these the same McGenuises that just screwed the pooch? Were they just not trying before? Isn't it traditional that when the US gets in financial trouble it "hires" the best and the brightest for $1 a year? [How 'bout we call them dollar-a-year men? Brilliant!] See, the thinking here is that people don't need the incentive of billions in profits derived from government-backed leverage in order to save the American economy. If the American economy is saved, they will make money along with everyone else. If it is not, then no one is making money. It is already in their interest to help save the economy.

For all of these reasons, this plan looks exactly like a big gamble using leveged government dollars wherein the only people who will end up making any money will be the Wall Street finaciers who just happen to have one of their own in a position of power.

And I am off my rocker here, but why the fuck is Krugman not part of this administration? Let's offer him billions to help us out here.

The man has three houses to pay for

I was writing a post last night wherein I discussed wingnut attempts to pin the AIG debacle on Obama, even though their boy Bush was the one who gave AIG the $85 billion. Some very, very fine weed and a shiny box with moving pictures distracted me. One thing I commented on was the undercurrent of argument that the people who were getting the bonuses were just poor, hard-working slobs who had nothing to do with the crisis, and Obama was terrorizing them and making them fear for their jobs. It was the bit I didn't think anyone would buy, as I have often been accused of "reading too much into things." In my own, completely unnecessary, defense, I give you the Washington Post.

I understand Obama's railing against the bonuses -- but I think he may be making a mistake, both short-term and long-term.
...
Well, because in the short run, hammering the AIG employees to give back their bonuses risks costing the government more than honoring the contracts would. The worst malefactors at AIG are gone. The new top management isn't taking bonuses. Those in the bonus pool are making sums that for most of us would be astronomical but that are significantly less than what they used to make. Driving away the very people who understand how to fix this complicated mess may make everyone else feel better, but it isn't particularly cost-effective.

Yes, it really would be a tragedy if these hard-working Joes, the backbone of American industry, were driven away while their industry was collapsing and thousands of qualified people, who have not been part of destroying a financial giant, were looking for work.

Jesus Christ driving a turnip truck.

It gets worse, though. While Joe Sweat-Argyle needs his promised bonus, Joe Lunchbox at UAW can go take a leap. Yes, he has been forced to renegotiate a contract, but that's a future contract you see, so it's cool. He's already been paid for what he has done, if he doesn't like the new contract, he doesn't have to show up to work. It's just that simple.

There you have it, the nation's liberal media at work.

h/t: LGM

Bob Schieffer is crap

I was reminded why I don't watch the Sunday shows when I caught the lest few minutes of Face the Nation wherein Bob Schieffer called for both Democrats and Republicans to put aside partisan political games. I am tempted to imply that Schieffer is suffering from some age-related mental deficiency, but that would be wrong. His mental deficiencies probably have nothing to do with his age. He suffers from the affliction so many of our mediacrats suffer from, the stupid, stupid, stupid belief that being "neutral" equals being "fair" and this means that we call on both parties to put aside the petty games, even is only one party is currently participating in petty childishness.

In the entire stimulus debate, has any Republican said anything that even remotely sounds like they have the slightest interest in what might be good for the economy or the country? I mean if any of these fuckers actually believes that the solution to this crisis is reduced spending and more tax cuts, then Bob Schieffer et al in our so-called free press need to have the cajones to call these people out on it. They've had their time, it proved an abject failure.

The original stimulus bill was probably too small to do what is necessary. It was larded up with a bunch of tax breaks for the Chamber. For fuck sake, in a time when the vast majority of economists and financial people are saying that we need massive government spending in order to avoid another great depression, we are going to make sure that the government does not collect $350 billion dollars that it would collect after eight years of a tax-cutting orgy. We are cutting motherfucking taxes. I struggle to comprehend it.

Then we get the Republicans demanding more tax cuts or they won't vote for the bill. They get their motherfucking tax cuts. They refuse to vote for the bill. They lie about programs. They exaggerate. They make breath-taking leaps of logic (like ACORN is getting $10 billion in aid because there is $10 billion for community programs and ACORN is a community program) that should get them banned from ever being quoted again in anything other than a monologue. They get Dems to slash very necessary spending and dd more very harmful tax cuts and then still don't vote for the bill. These people are playing political games and do not care about the county. This is apparent to anyone paying the least bit of attention.

Unfortunately, those we pay to pay attention for us are more concerned about being "neutral" than they are about telling the nation what is happening. This is why I don't watch this shit.

Krugman as Dean Baker

Interesting to see the times moving the Nobel Laureate into a left-er and left-er, snarkier and sardonic-er posture a la unconditional endorsee Dean Baker.

As the Obama administration apparently prepares to launch Hankie Pankie II — buying troubled assets from banks at prices higher than they will fetch on the open market — it occurred to me that an updated version of an old Communist-era joke may be appropriate: under Bush, financial policy consisted of Wall Street types cutting sweet deals, at taxpayer expense, for Wall Street types. Under Obama, it’s precisely the reverse.

Update: Maybe I was too cryptic. The original joke was, “Capitalism is the exploitation of man by man. Socialism is the reverse.”

The meme that they deserve

Via dave, if this is the zombie frame that a kleptocratic GOP wants to keep running with for the forseeable future...

Bush’s grand achievement on the domestic side was the most recent turn of a triple play of tax cuts — John F. Kennedy’s, Ronald Reagan’s and his own — all of which prove the incredible economic wisdom of allowing people to keep more of the money they make [emphasis added]. It is unfortunately a lesson that is as quickly unlearned as it is productive when relearned. We are watching its unlearning now.

... then I says, "Let's talk about it, shall we?"





You were saying?

Terra incognito

To second dave's sense of wonder, "wow" describes a lot of things I'm seeing right now. Honestly, I'm lacking any sort of historical reference to which I can grab and gain some sort of insight into what might happen. A black man is the odds-on favorite to be president of the United States. An economic catastrophe makes it likely that we will see a fundamental reordering of the premises of the financial world (although like dave, I'm not ready to call it the "end of capitalism"). And most worrying to me, a segment of the population - as a consequence of the two previous points, a decades long diet of eliminationist rhetoric, and candidates for high office willing to light a match - seems on the verge of a very ugly explosion. What does this all mean? Hell if I know, but I have a sense of unease unlike anything before.

Wow

Krugman won the Nobel in economics. I thought these things only went to Joes that spouted off about the wonderousness of the market.

Reminds me that with this economic crisis, I've been beginning to feel like a whole of of shit is possible now. There was a big editorial in the RG yesterday about how leaders around the world are declaring the end of laissez-faire capitalism and the free market. I'm not quite there yet. The Dow rallies for a week and makes it back to 10K and a whole lot of people will be assuring us that this was temporary and we should all trust in the power of those markets.

And I also understand that it in no way serves Barack's interests to start talking about the end of capitalism, but couldn't we get one of those dog whistles I hear so much about?

I'll Nationalize Your Banks, Mister

On my way home from work, I was listening to the NPR. I know, I know, it's Friday and I should have been rocking out to Loverboy, but I had been working all day and hadn't caught up on the news. Thought maybe I might hear some news on that Palin and the Troopergate.

Instead, I got a story on Paulson from the G8 Conference. Apparently, the US government will be handing large sums of money to banks so they can give it to other people. In exchange, we get an undefined "equity stake" in those banks. Fortunately, all signs are that the government will remain pretty hands off when it comes to control of that money. Whew! Almost had some European-style socialism there.

Fortunately, host Robert Siegel wasn't going to let this situation go with out some harding hitting questions to the reporter bring us the right-wing talking points story. Like, "why give money directly to the banks, instead of to people to pay off their mortgages to these banks?" Question is legit, the complete lack of follow up is not. The reporter let us know that giving to the banks was a much more efficient way to get liquidity in the market. You see, banks can lend out $10 for every dollar they get from the government.

Now, if you're me, it might strike you that banks giving out ten times the loans than they had capital to cover is what got us in this mess in the first place. I know it's way more complicated than that, but boiled way down (until it tastes like mud), the problem we are having is that banks and other financial institutions lent money to people who couldn't pay it back. Enough of those people don't pay back, say 11%, and you can't cover your obligations.

Siegel does not follow up along these lines. Instead, he asks "How close is this to nationalization?" And I'm like "How close is this to nationalization?" It's the fucking opposite of nationalization. This is not the state seizing control of private corporations in the interests of the people. This is the state giving itself to private corporations in the interest of the corporations.

Then Siegel suggests that we haven't seen anything like this since Jackson. Oh yes. This is exactly like the US Bank. The government being responsible for the direction of capital growth in this country through control of the vast portion of capital in the country, and the government tuning over large chunks of the people's capital to privately held banks. Practically the same thing.

Sweet jeebus. This is about as far way from Sweden as you can get. All those earning more than $250,000 can calm the fuck down. We're not seizing your wealth. We're giving you ours.

It's at moments like this that I regret being in the liberal elite.

The Following Makes Perfect Sense to Some People

I want to get this right, so help me out when I go astray.

The fundamentals of the economy are strong. Although there does seem to be a credit crunch on. But this is largely a crisis of confidence. Brought about, in part, because Wall Street is terrified of an Obama presidency. Things would get better if people had more confidence in the economy. So it is important not to blow things out of proportion. But it is also important that we give Wall Street $700 billion now. Immediately. At least, according to the Bush administration. Which has had a hand in guiding the economy for the last eight years, based on the same principles that have largely governed American economic policy for the last 28 years. But this administration and these policies are not responsible for the current crisis, which again, is largely a crisis based on the fear of an Obama presidency. And, possibly, because of the last remnants of the old economy. Almost certainly because some people had false expectations of home ownership. And banks were forced to give home loans to blacks. We do know that the best way to avert a crisis is to not support Obama, which will make Wall Street feel better. In the end, vote McCain and avert economic crisis.

Does that about sum it up?

Bailout/Election/Labor Redux

Krugman:

There seem to be two prevailing narratives about the bailout plan(s). Both have elements of truth, but are fundamentally wrong.
One narrative is that of the Wise Men and the Destructive Yahoos. According to this narrative, men who Understand What Needs to be Done put together a plan to save the world, but they did a bad job of communicating, and a mob of ignorant people stands in their way.
The other narrative is that of the Evil Plotters and the Righteous Uprising. According to this narrative, the same people who sold us the Iraq war have tried to bully Congress into adopting a plan that is, in essence, a cynical ripoff - a scheme to transfer vast wealth to the rich and cripple the next administration.

What we have here seems like a crisis of legitimacy. In terms of the bailout, one's perception seems to be largely based on whether or not one believes that there is an impending financial collapse awaiting us if we do not act now. I think we have heard compelling arguments from every side of the debate. Certainly I'm not usually one to question Peter DeFazio and Donna Edwards when they get together, let alone Dean Baker, but neither am I likely to expand beyond reason the idea that this is really a timely moment to tip our hand and start spreading the "new New Deal" rhetoric around before we have the 2009 majorities (please! - ed. ) Not only am I unsure about the immediacy of the crisis, anyway - I'm also unsure as to the extent to which Dems would do well to try and pass an expansive, leftward-leaning bill.

At the moment, whole swaths of this country aren't sure if they trust the pragmatism of party leadership in every branch of government. Neither do they implictly trust the principles of Right- and Left-leaning stalwarts who objected to the bill. Meanwhile, the mainstream media and Wall Street speak with one voice (shucks, I'm shocked- ed.), telling us, oh shite, the End is Near. 'Seems like people are either a) having a hard time trusting any of these groups, or b) feeling there's no way any "special interest" would possibly succumb to elevating "the public good" over its own agenda.

So we turn our attention to November - wondering, how will the bailout play out for Senator, President, County Commissioner, and the whole merry band? I am unsure whether my attention to the election stems from the fact that I think I understand that context better than that of finance capital, or whether I think that the election outcome is one that us "people" (union people, for example) have a better chance of influencing.

The fun thing about ballot initiatives is that they allow for the public to enter into dimly ideological debates about public/private, market/state-type questions under the pretense that the partisan interests of Dem and GOP "politicians" are not central to the framing of this issues. Oregon's public employee unions come to the fore of per-bi-ennial (not a word?) "Vote No" campaigns. But they do so not as self-identifying unions, but as members of the public: citizens, servants, Oregonians. Labor is usually "victorious" in striking down what are increasingly called "Conservative Populist" initiatives. One could even contend that they have inured their unions, and by extension, the image of the public sector, to Oregon voters.

American Federation of Teachers President Randi Weingarten:

We have often been called a "special interest." I will never apologize for that because our special interests' are the students we teach, the patients we care for and all the people we serve.

But one could contend other sorts of things, too. My point is merely to say, even if we grant labor a certain legitimacy within Democratic politics, and even if it attains a quasi-autonomous political identity in initiative states, it can't be a good thing to say that labor's primary interface with the broader public is through electoral politics via television ads, primary season news coverage or the occasional newspaper editorial. If I include get out the vote operations and person-to-person, more "organizing"-ish encounters... then are we pleased with labor's popularity or legitimacy within the society?

God knows nobody seemed to be asking our opinion of the bailout. God Bless the four serious magazines and 2.5 think-tanks that help keep some of our ideas alive in DC, but jeez louise. Is it enough to be seen as a relatively enlightened special interest among special interests? Is there a way around it?

The movement for the Employee Free Choice Act reflects a conversation about democracy within the labor movement that dares to question the NLRB - "Labor's Magna Carta," - and, at its better moments, relegates collective bargaining to a lesser status as just one among many forms in labor's repertory of political acts. The movement to pass the Employee Free Choice Act - over the ideological hysterics of the national Chamber of Commerce, and past the menacing and righteously-outraged Republicans with their "small business" and "secret ballot" fetishes - will necessitate the reassertion of workplace democracy as a popular (hegemonic?) idea. Since its heyday in the middle of the last century, workplace democracy has been steadily, deliberately eroded in form and content. During that same time, electoral politics has suffered low turnout, voter fraud, impeachment and "stolen elections," but it remains the most trusted, most exploited venue in which Americans do democracy.

The Employee Free Choice Act will have to (at least implicitly) critique the sanctity of the secret ballot as a venue for democratic decision-making. Ironically the road to this act of iconoclasm (not a word?) goes straight through Washington, D.C., and by extension, straight through electoral politics. Is that paradox "the point"? I hope not. I'd like to know what you all think of this weird conjuncture in political economy/elections/labor politics, and whether you, like me, dare to think that a small piece of labor legislation, EFCA, might contain within it the seeds for labor's first big, 21st Century "moment"?

Bailout and Election Roundtable, Open Thread

Okay, it's the largest single-day points drop EVUH. Who are you reading for the lowdown? You know my oracles at this point, but here's three of their most recent entries below. The conjuncture of the financial crisis; the flaccid popular approval for any branch of government; the presidential race in its home stretch, and the cultural politics of the form and content of debating "the economic" in 2008 all combine to make this moment in politics seem the most historic in recent history.

1. Ezra says it's possible that the next bailout could be a 'Left' bailout, if the Dems're prepared to shitcan "bipartisanship" and go it alone.
2. Krugman congratulates himself (fair enough), reminds us how our govt is "bananas."
3. The American Scene, much to its credit, shows itself and by extension its "Grand, New" vision for conservatism, to be analogous neither with the "Wall Street" nor "populist" branches of the Grand Old Party.
   

I have heard strong arguments - mostly from Left and Center-Left - on both sides of the failed bill. I am not sure just how possible Ezra Klein's proposed all-Dem bill will turn out to be, but, with Krugman, I think the need to do something - something soon - helps put in context the toothlessness of the Frank-Dodd plan. Democrats need a new frame for the bill just as much as they need new language. Obama's unwillingness to address the issue in a full-frontal fashion on Friday night is plenty understandable, but it resulted in a "missed opportunity" for a "teachable moment" with the country on this issue. That may or may not be justified, and I'd love to know what you readers think on that issue. The argument exists that we should save Stimulus Package 2 and tougher re-regulation of the markets for January, when we'll have stronger majorities in both houses, and, one would assume, President Obama.

More immediately, Obama's inability to steer the domestic policy conversation resulted in forty minutes of conversation about earmarks Friday night. Let's be honest, Hillary or Edwards would've sliced McCain's face off (figuratively) if they had a half-hour to debate the economy with the Maverick. For whatever reason, BHO has proven weirdly incapable on this score. It doesn't make me doubt his progressive bona fides, his sympathy with (the absurdly over-evoked) "Main Street," and it doesn't keep me from supporting his candidacy enthusiastically - but it exasperates me to no bleeping end.

What's in Your Wallet?

Sept. 25 (Bloomberg) -- JPMorgan Chase & Co., the third- biggest U.S. bank by assets, agreed to pay $1.9 billion for the deposits of Washington Mutual Inc. after the thrift was seized by regulators in the biggest bank failure in U.S. history.

The U.S. government closed Seattle-based Washington Mutual amid customer withdrawals of $16.7 billion since Sept. 15, the Office of Thrift Supervision said in a statement. WaMu had ``insufficient liquidity'' and was in an ``unsound'' condition, the OTS said.

(via Atrios:Eated and Pooped)

Seriously, WAMU was so reckless,... How reckless were they?

so reckless, they gave me a credit card....

I wonder if I still have to make my monthly payment? If they have been seized by the FED, don't I own a share?, and can't I work out some sort of payment plan???

Moms and Dads

Back in the primary season, and especially when the manly manliness of Fred Thompson was going to save us all from the likes of girly-man Rudy Giuliani, the Render unto Caesar Jeebus lover Mike Huckabee, and the immigrant loving Johnny McCain, there was a favorite theory amongst wingnuts that the Democrat party is the "Mommy" (or "Nanny") party and the Republican party is the "Daddy" party. (I invoke my Goldbergian privilege of not linking to anything because I am too busy to look it up).

You see the Democrats are the Mommy party because they want you to wear your bike helmet and think that things should have warning labels and that you should be able to sue companies. They care about things like health care and education and helping the little guy. They are concerned about things like sexism, racism, and (oh sweet jesus!) the gays. They think we can fix our energy problems through passive means like conservation and solar energy. Worst of all, they think you solve problems by talking about them. The Democrats are going to lick their hand, knock down your cowlick, and give you kiss on the cheek when they drop you off for school--right in front of the guys.

Daddies understand above all else that this is a dangerous dangerous world and Muslim terrorists must be killed before they kill us. Daddies will protect you when necessary. They will patrol the border of the lawn, keeping out unwanted strangers. They know that you must learn and grow on your own; sure you'll make mistakes, but you'll learn from them. Tough times will make you strong. Energy policy works best when it is also a half-veiled euphemism for sex. That's just nature right there. Common sense is more important than book learning. Dad may not give you a lot of hugs, but maybe if you win the big game, he'll loan you the down payment on a beat up Mustang and you can drive yourself to school, like a man.

That's the theory. If I can take the analogy a step further...

The Daddy party is calling us in the middle of the night. Drunk. He bet all the house money on a pony named Free Market and he needs us to come give his bookie large sums of cash or the whole family is fucked. Fortunately, he is pro-actively telling us we can go fuck ourselves if we think that this means that he has to stop betting the ponies. In fact, he's we need to give him the college savings because he needs to keep playing. The only way to win.

Ah Daddies, why do we love you so?

Please, God, Don't Let Them Be Right

I'm not going to pretend like I understand the current economic crisis in detail. I "understand" it as far as "banks were allowed to over-leverage, which they did to buy mortgages that were based on trumped up financial data to provide loans to people who couldn't afford them. When those loans went bad, all the over-leveraging is cascading to take down the entire financial sector." [For Godssake correct me if I am wrong].

I think I understand that this is exactly what free-market capitalism looks like and regulation of capitalism is designed to smooth out these "bumps." What is not supposed to happen in a free market situation is that government is not supposed to step in to smooth out only the bottom bumps, as that doesn't really work.

What I don't know is if this bailout will be better or worse for my beloved "working folk." Most "lefties" seem to be of the opinion that shit is going to roll down hill no matter what, so limiting the amount might be a good idea.

I find myself agreeing with Brad at Sadly No! among others. I'm not quite willing to go so far as to pledge to not vote for Dems if they fuck this up, but if the Bush administration is able to demand extraordinary powers and an extraordinary amount of money and we manage to get nothing out of the deal, then, really, what the fuck will be the point. If Reaganomics and conservativism in general can do this badly and we'll give them $700 billion with no strings attached, if they can actually say we have to give them $700 billion with no strings in order to get Wall Street to take the deal and we give in, then fuck it.

There might be a total of one million people in this country who would think that this is a good idea and they all vote Republican. What can possibly be the benefit of giving in here? If they give in, we might have to admit that our party is just as bought and sold as the other guys.

Prove Me Wrong...Good On You!

'Gotta hand it to Chris Dodd....'even Doug Henwood (sur le LBO listserve) gave the plan a "looks not too bad."

Between this and the FISA filibuster, if Dodd actually passes this thing as is - which I will believe only when I hold a copy of the bill in my shaky, shocked hands - I'm gonna send him a twelve of pabsts and mebbe even one or two of my rare-er seven-inches.

(ex post facto editorial addition: Krugman concurs, calculated risk hails it as a positive step and reports that CNBC reports Paulson has agreed to the bit about government taking equity in the bailed out banks.)