Stiglitz calls out US 'capitalism'

Absolutely. I couldn't agree any more with his latest criticism. In a previous time, the Wall Street types would have lost everything instead of getting personal bailouts, also known as banker bonuses. What kind of system rewards the failures who create economic meltdowns? CNBC:

"An awful lot of people are not managing their own money," Stiglitz said. "In old-style 19th Century capitalism, I owned my company, I made a mistake, I bore the consequences."

"Today, (at) most of the big companies you have managers who, when things go well, walk off with a lot of money. When things go bad the shareholders bear the costs," he said.

Even worse, those giving the money to the companies are entities like pension funds that are managing money on behalf of other people, so there are "layers and layers of agency costs," Stiglitz said.

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Feinstein says forget climate change, and go really slow on health care reform, and maybe even shrink the size of the bill

How about puppies? Legislation about puppies shouldn't be too controversial. Then we can move on to kittens if the fall elections aren't too bad. What? Too bold? Okay, kittens are for the second term. Read More......

Coakley Consequences in Cali

California officials and political soothsayers have been warning that a Martha Coakley loss in Massachusetts could have wide-ranging "ripple effects" for elections on the west coast.

For [Senator] Boxer, a favorite Republican target, a GOP win in Massachusetts would be a particularly dark sign representing "not just the canary in the coal mine," said Wade Randlett, a leading Silicon Valley fundraiser for Obama. "It's the flock of dead ravens landing on the lawn."

And this from San Francisco Mayor Gavin Newsom:

We better get our act together - and quickly. Voters are so angry. They don't feel that we're paying attention to their needs, in terms of their jobs.

Today, with the votes counted, San Francisco Chronicle's Carla Marinucci gave her take on how Republicans running against Boxer, including former Rep. Tom Campbell, former Hewlett Packard CEO Carly Fiorina, and Assemblyman Chuck DeVore, are reacting to the news: "Their message: it's on."

She notes that Campbell was first out the box saying he was ready to take Boxer on and address "the suicidal direction Congress and the President are taking our economy."

And, finally, Sherry Greenberg, writing for the California Majority Report provided this analysis on Senator Feinstein, before the winner was announced:

Additionally, if Scott Brown defeats Coakley, I suspect that the resulting change in the Senate may cause a certain Senator from California to give much more serious consideration to a gubernatorial run. Senator Feinstein may have been loathe to leave a Senate where Democrats hold, even if tenuously, a filibuster-proof majority and where she enjoys significant power and responsibility. However, the loss of Kennedy's seat and the resulting Senate gridlock might well tip the balance in Feinstein's deliberations regarding a 2010 gubernatorial run. Why would Feinstein want to stay in the, likely, more toxic environment of the Senate and forgo her last chance to fulfill her dream of being California's first female governor? Will Feinstein really want to cede that distinction to Meg Whitman?

However it turns out, the MA loss will have an enormous impact on the 2010 cycle. Whether it's a game changer election-wise remains to be seen Read More......

Krugman: I’m pretty close to giving up on Mr. Obama

This is interesting because, in the last month or two, it seems that Obama somehow wooed Paul Krugman, a longtime critic of the administration, onto the reservation. Krugman ended up a big Obama defender on health care reform when many of us were less impressed. It appears Krugman is now off again.

Krugman had this to say about the news that the President is urging the Congress to pass a pared down version of the health care bill:

In short, “Run away, run away”!

Maybe House Democrats can pull this out, even with a gaping hole in White House leadership. Barney Frank seems to have thought better of his initial defeatism. But I have to say, I’m pretty close to giving up on Mr. Obama, who seems determined to confirm every doubt I and others ever had about whether he was ready to fight for what his supporters believed in.

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WH communications director doesn't deny Obama pushing for pared down HCR bill

In response to the article linked in this post, saying that the President is now pushing for a pared down health care bill that drops many of the current provisions included in the House and Senate bills, the White House put out this statement late this afternoon. From the White House Web site:

On Next Steps for Health Reform
Posted by Dan Pfeiffer on January 20, 2010 at 05:46 PM EST

Right now there are a lot of discussions going on about the best path forward. But let's be clear that the President's preference is to pass a bill that meets the principles he laid out months ago: more stability and security for those who have insurance, affordable coverage options for those who don’t, and lower costs for families, businesses, and governments.

Obama's "preference" is for the "principles."

The Senate bill is over 2,000 pages long. Giving us three principles - that the President "prefers," rather than actually wants - does not answer the question as to what President Obama does and doesn't want to see in the final bill. Why can't he just take a position, explain it, defend it, and then fight for it? Read More......

AP: Obama urges pared-back health care bill

UPDATE: The White House has issued a clarification that the President "prefers" the "principles" he laid out months ago. Which doesn't really tell us much of anything.

I worry that this will come across as weakness in the face of adversity.

From AP:

Chastened by the Democratic Senate loss in the state of Massachusetts, President Barack Obama and congressional allies signaled Wednesday they will try to scale back his sweeping health care overhaul in an effort to at least keep parts of it alive.

A simpler, less ambitious bill emerged as an alternative only hours after the loss of the party's crucial 60th Senate seat forced the Democrats to slow their all-out drive to pass Obama's top domestic priority and reconsider all options.

The 60-vote Senate Democratic majority is needed to overcome Republican procedural obstacles aimed at defeating the legislation.

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House Liberals To Pelosi: 'We cannot support the Senate bill. Period.'

This is what happens when you don't involve people in the process.

Progressive Dems were ignored throughout the entire health care reform process, and now have no vested interest in seeing the bill pass. If anything, they have an interest in seeing it fail, so that the administration, and their own congressional leadership, learns that they matter and must be consulted, and their views included, in future legislation.

In fact, this is the House's version of the campaign Joe and I launched, Don't Ask Don't Give. Our campaign is focused on the Democrats' gay rights promises, but it could be about anything, or any Democrat. The basic point is: Don't come asking for favors after you tell us we don't matter.

From Greg Sargent at Plum Line:

In a private meeting in the Capitol just now, a dozen or more House liberals bluntly told Nancy Pelosi that there was no chance that they would vote to pass the Senate bill in its current form — making it all but certain that House Dems won’t opt for this approach, a top House liberal tells me.

“We cannot support the Senate bill — period,” is the message that liberals delivered to the Speaker, Dem Rep Raul Grijalva told me in an interview just now.

Some had hoped Pelosi would push liberals to get in line behind this approach, in hopes of expediting reform, but that didn’t appear to happen in this meeting. Pelosi mostly listened, Grijalva said, adding: “We didn’t get any declarative statement from her.”

I suspect you're seeing a little "Don't Ask Don't Give" from Pelosi, directed at the White House, as well. If the President wants House liberals to get on board, he can come and convince them himself. Read More......

A really scary letter from a Democratic Hill staffer

As an aside, I posted a poll at the top of the next column to the right, asking why you think Coakley lost. Please take a second and vote (multiple answers are allowed). Thanks, JOHN

Here's an excerpt:

A wave election hit us in 2008 where we not only had overwhelming majorities of 59 seats in the Senate (once Republicans finally got around to letting us seat Franken) and 257 seats in the House (returning us to the same power level as when we ruled the House with inpugnity in 1992-3) but, most importantly, a President who was explicitly elected on an agenda of "change." It was a once-in-a-lifetime opportunity to wrench the wheel away from the abyss and really deliver on our promises. It was disheartening when it seemed that Reid was allowing McConnell's disingenuous narrative of "it's always taken 60 votes to get anything done" to take hold, but we were later even saved from that when Specter switched. But it seems we've spent the entire year moving our own goalposts farther away. Things have gotten so bad that in roaming the halls today it feels exactly as if we lost the Majority last night.

The worst is that I can't help but feel like the main emotion people in the caucus are feeling is relief at this turn of events. Now they have a ready excuse for not getting anything done. While I always thought we had the better ideas but the weaker messaging, it feels like somewhere along the line Members internalized a belief that we actually have weaker ideas. They're afraid to actually implement them and face the judgement of the voters. That's the scariest dynamic and what makes me think this will all come crashing down around us in November.

I believe President Clinton provided some crucial insight when he said, "people would rather be with someone who is strong and wrong than weak and right." It's not that people are uninterested in who's right or wrong, it's that people will only follow leaders who seem to actually believe in what they are doing. Democrats have missed this essential fact.

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Dem. Senate Leaders say they can't pass legislation with 59 votes: 'It is mathematically impossible'

Greg Sargent has the new post-Massachusetts election talking points from the Senate Democrats:

The talking points direct people to make the case that now that Dems have lost their supermajority, Republicans have a newfound responsibility to help govern, rather than obstruct. The talking points contain this line:

“It is mathematically impossible for Democrats to pass legislation on our own.”

Can you imagine Republicans in the majority — who, by the way, never had as many votes as Dems do now — ever saying such a thing?

No, I can't imagine Republicans ever saying such a thing. They'd shout from the rooftops that Democrats were obstructing progress and endangering the nation. The traditional media would join that chorus -- and the Democrats would cave. Mitch McConnell has really done a number on the Democratic psyche.

NOTE FROM JOHN: Not to mention, George Bush never had more than 55 GOP votes in the Senate and he got most of what he wanted. And let's be honest, the Dems weren't terribly effective with 60 votes either. Read More......

FOX News has nearly every GOP presidential candidate in 2012 on its payroll

As John Amato notes, it's creepy. Read More......

Arbiter in chief

Alain Sanders in the Star-Ledger:

First came the Pelosi [health care] Plan, an amalgam of the Miller Plan, the Rangel Plan and the Waxman Plan. And that was just in the House.

Then in the Senate came the Reid Plan, an agglomeration of the Dodd Plan, Harkin Plan and Baucus Plan, as amended by the Landrieu Plan, Lieberman Plan, Nelson Plan and a proliferation of others.

Now Democrats in Congress are scrambling to put together a Final Compromise Plan that can get enough votes to pass both houses.

Nowhere along the way did we see anything discernable as the Obama Plan....

This arbitrative approach will have set an unfortunate precedent. The expectation of a dispassionate Obama presidency will send an all-clear signal to the members of Congress. It will embolden the Democratic barons, embitter the party’s rank-and-file and energize the Republican opposition. It will do nothing to bring the nation’s politics closer to Obama’s grand vision of bipartisanship. It will, in fact, encourage quite the opposite: divisive political entrepreneurship.

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Varying analyses of the post-Coakley world

Katrina Vanden Heuvel at the Nation:

Massachusetts offers another lesson: Obama's decision to demobilize his base in 2009 in favor of an insider approach to governing was a big mistake. I'm not a political strategist, but I don't know how you win elections by failing to rouse people who've worked hardest at the grassroots to get you elected? It is time to re-mobilize the base.
And here's a no-brainer: Isn't it time to give up on that faith in genteel post-partisanship when the GOP knifes you at every turn? Nice isn't going create more jobs or get health care reform....

Get tough, get bold, kiss "post-partisanship" goodbye and fight hard for jobs and a just economy of shared prosperity.

Chris Bowers at Open Left:

In order to pass legislation that will start to make the situation in the country better, and thus make themselves more popular, Democrats are going to have to get rid of the filibuster. With the 60-vote Senate, there was never much of a chance to pass the legislation necessary to start the country in the right direction. Now, there is even less of a chance--virtually none, really.

All Democratic leaders are going to have to ask themselves a question: do they want to make the country better, or are concerns over obscure arguments about the need for a "deliberative body" more important to them? Would they rather be able to govern for the next three years, or are they afraid of a few news cycles where Republicans accuse them of not being bipartisan enough?

Greg Sargent, Plum Line:

The predicament her loss has created for Dems is yet another reminder of the folly of the Dem decision to delay reform last summer in hopes of winning over a few GOPers — and, by extension, of the folly of their broader, ongoing quest for empty “bipartisan” support for the health care plan.

Paul Waldman at the American Prospect disagrees:

Or think about it this way. Let's say we count how many people each senator represents (I'm using 2009 census data and counting each individual as one-half a constituent for each of his or her two senators). Before today, Democratic senators supporting health-care reform represented a total of 196 million Americans (or 64 percent), while Republican senators opposing reform represented a total of 110 million Americans (or 36 percent). If Brown wins, Democratic senators supporting reform will represent 193 million Americans (63 percent), while Republicans opposing reform will represent 113 million (37 percent). It would be hard to argue that that small change means Democrats no longer have a right to enact their agenda.

Various Dems weigh in:

"The alarm clock has gone off," said Rep. Richard Neal (D-Mass.), a senior member of the Ways & Means Committee, who called for a sharper and more confident leftward tack.

"We fell into the trap of post-partisanship," he said. "I'm all in favor of being post-partisan as long as the other party is post-partisan."

The danger for the party now, said veteran Democratic strategist Bob Shrum, is that centrist Democrats might imperil the party's agenda over health care in an attempt at political self-preservation.

"If they walk away, they will jeopardize themselves to a much greater extent than the jeopardy they face if they stand together, get health care done, and move on to jobs."

The Nation's John Nichols:

The party must open an internal (and to some extent external) discussion about their circumstance going into a critical election year.

In particular, they must recognize that they have mismanaged the health-care debate – confusing Americans, offering less than anyone bargained for and spending too much time trying to satisfy the demands of big insurance firms and the pharmaceutical industry. They also must recognize that they have spent too little time focused on jobs and holding Wall Street and the big banks to account.

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Jobs, Jobs, Jobs is a bit of a pickle

Brian Beutler reports that Democrats are going to focus on "jobs, jobs, jobs" in order to woo back voters. The only problem is that the first "jobs" bill, the stimulus package, is popularly considered a bust, even though it's been very successful at saving and creating jobs.

Democrats didn't defend the stimulus going in - remember how it almost lost because everyone just assumed it would pass - and they didn't defend it from withering GOP attacks after it passed until it was too late. Now, the conventional wisdom in the public is that the stimulus bill was a massive pork boondoggle that didn't create one job, even though it actually created a ton. Of course, it didn't create enough jobs, but Stiglitz and Krugman warned about that at the time the bill was passed - the bill wasn't big enough, and even then 40% of it was inexplicably devoted to useless tax cuts.

The question now is, how do Democrats focus on jobs in a way that provides results this year (aka pre the 2010 elections) when to do so means passing a second massive stimulus package - something the Democrats are loath to do, and the public is loath to accept, because Democrats didn't defend it the first time? Even worse, as Krugman noted the other day, because the first bill was too weak, its effect wasn't great enough, and people now mistakenly think that stimulus bills don't work at all.

There's been a lot of screwing up since day one last January. And every screw up has larger ramifications that come together and cause larger problems later on. The mistakes of the first stimulus package and its aftermath are now impacting our ability to show real jobs growth before November, and thus impacting our electoral prospects as well. It's all tied together.

UPDATE: One more thought. The first stimulus worked, but Democrats didn't effectively sell it before, or defend it after, the fact. So they got creamed at the ballot box for not focusing on "jobs," among other things. What's to say that a second stimulus/jobs bill won't suffer the same fate? Doing more of the same is not a recipe for success. The problem wasn't that they didn't focus on jobs, it's that they accepted half a loaf (not nearly a large enough stimulus bill), and refused to defend it after the fact. Read More......

Barney Frank: Health care bill is dead, start again from scratch

Wow. I'm not sure what to make of this. Though it clearly sounds like House progressives aren't willing to simply pass the Senate bill and be done with it.

Rep. Barney Frank (D-MA) said any hope for a compromise between House and Senate health care reform legislation is dead following his state's election of a GOP senator last night.

"I think the measure that would have passed, that is, some compromise between the House and Senate bill, which I would have voted for, although there were some aspects of both bills I would have liked to see change, I think that's dead," Frank said in an interview Wednesday morning on Sirius-XM Radio. "It is certainly the case that the bill that would have passed, a compromise between the House and Senate bills, isn't going to pass, in my judgment, and certainly shouldn't."

.... Meanwhile, Frank said health care legislation should go back to square one, and that prospect offers hope of finding a bipartisan solution.

"We are back to where we were maybe even years ago. That is, there is now no bill that I believe can pass or should pass," he said. But, he added, Dems may find a newly willing ally in Sen. Olympia Snowe (R-ME), the only Senate GOPer to vote in favor of any health care legislation. "Sen. Snowe may be willing to work now with her Democratic colleagues, and maybe 3, 4, 5, 6 other Republicans would be, to try and put something together. If that's not the case, and Sen. Snowe and others aren't for some fairly significant changes, then we'll go into the election with the health care status quo."

Great, back to President Snowe again. There is another option. We get rid of the filibuster once and for all, and pass this sucker. I've been very tepid on the notion of getting rid of the filibuster, but at this point, the GOP has made clear that they plan on filibustering everything - and the Democrats intend on letting them - and that is not the way it was intended to be used. At the very least, perhaps there is a way to water down the filibuster, significantly, so that it can't be used endlessly. I remember reading that such an option was being discussed pre-Coakley. Read More......

Sen. Ensign (R-NV) under investigation by FBI over fallout from his affair with a staffer

A GOP sex and money scandal involving Senator John Ensign is now the subject of a criminal investigation:

The Justice Department has begun a preliminary investigation into actions by Sen. John Ensign (R-Nev.), who arranged to provide money and career assistance to the husband of his mistress, sources familiar with the case said Tuesday.

The tentative investigation is being run jointly by the Justice Department, the FBI's Washington Field Office and the U.S. attorney's office in the District, one federal law enforcement official said.

Ensign acknowledged last year that he had an extramarital relationship with former staffer Cynthia Hampton and that his parents paid nearly $100,000 to Hampton and her husband, Doug, as a gift. Doug Hampton has also told reporters that Ensign knowingly ignored ethics restrictions by helping him get a lobbying job and access to federal officials, according to news reports.

There's probably some secret Senate rule that would allow Ensign to keep filibustering even if he's in jail. Read More......

PPP analysis: 'This was a repudiation of Barack Obama.'

On January 9th, Public Policy Polling released a poll showing Scott Brown with a one-point lead in the Massachusetts Senate race. That set off alarms bells for me -- and should have for every Democratic leader. I wrote a post about that poll here, noting that I have great respect for PPP. The firm was the only pollster to nail the results in the Maine marriage referendum. And, PPP got it right again in Massachusetts. Its last poll showed the race at 51% - 46%. So, I think we all need to pay attention to what Tom Jensen found from his Mass. polling:

Here are my biggest takeaways from tonight's results:

-This was a repudiation of Barack Obama. Certainly Martha Coakley was a bad candidate and ran a terrible campaign but that doesn't change the fact that we found Obama's approval rating at only 44% with the electorate for today's contest, a huge drop from the 62% of the vote he won in the state in 2008. Brown won over 20% of the vote from people who cast ballots for Obama in 2008, and we found that most of those Brown/Obama voters were folks who no longer approve of the job the President is doing. And in one of the bluest states in the country barely 40% of voters expressed support for the Democratic health care bill.

-Republicans win when they nominate mainstream candidates. Among voters who thought that Scott Brown was either a liberal or a moderate, he won 79-18. Among voters who thought that he was a conservative Coakley won 63-32. There are certain places where the GOP can get away with running far right candidates but they aren't the places where they're going to need to win to get the House back this fall and the White House back in 2012. Brown didn't come across as an ideological extremist and that helped him win over a lot of people who never would have voted for John McCain or George W. Bush- and sure won't vote for Sarah Palin.

-Voters hate both parties right now and that's to the GOP's advantage. One of the most remarkable things about Brown's victory is that it comes even though only 22% of voters in the state have a favorable opinion of Congressional Republicans, with 63% viewing them unfavorably. He was able to overcome that because almost 20% of voters held a negative opinion of both Congressional Democrats and Congressional Republicans. And with those folks Brown had a 72-24 advantage over Coakley, reflecting the reality that in a time when voters are disgusted with all politicians they'll vote for the one that's out of power.

Now, Jensen and PPP aren't part of the DC-insider crowd, which means the professional Democrats will probably ignore him. But, they do so at their own peril. Read More......

Wednesday Morning Open Thread

Good morning.

What a difference a year makes, huh? Read More......

Credit Suisse cuts bonuses for senior staff

Somehow, I think they're still going to be OK. They're also listening to the world around them.

The 400 most senior bankers at Credit Suisse in London will be forced to take a cut to their annual bonuses to help protect the rest of the bank's staff from Alistair's Darling's 50% one-off bonus tax.

The London-based managing directors were told by their Swiss-based employers today that they would take a 30% cut, in the first example of an international bank discriminating against its London-based staff in handling the bonus tax. There had been expectations that banks would try to avoid such a move either by picking up the bill or spreading out the tax among staff around the world.

Credit Suisse also intends to reduce its entire bonus pool by 5% to help ensure that its profitability is not hindered by the tax that Darling imposed last month on bonuses worth more than £25,000.

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Insider help with Google attacks?

This could get especially ugly if there is any truth to this.

The sources, who are familiar with the situation, told Reuters that the attack, which targeted people who have access to specific parts of Google networks, may have been facilitated by people working in Google China's office.

"We're not commenting on rumor and speculation. This is an ongoing investigation, and we simply cannot comment on the details," a Google spokeswoman said.

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Wesley Clark is considering a run for the House

Huh. Well that's welcome news. I hope he bought a new cell phone :-) Read More......

'My Papa epitomizes the Haitian character; he is the ultimate survivor.'

While we get very caught up in politics here, we haven't forgetten about what's happening in Haiti. Tens of thousands of people have died. The carnage is almost incomprehensible.

Over the weekend, Marjorie Valbrun, a colleague with whom I've been doing some work of late, wrote an op-ed about her homeland of Haiti and her dad who hadn't been heard from since the earthquake. It's a very compelling piece:

My sisters worry that he has nothing to eat. That roaming bandits will hurt him. That he'll try to go back into our partially collapsed house to retrieve some prized possession and get hurt or trapped in an aftershock.

"Oh, please," I respond. "You know how Papa is. He probably rounded up a few stray chickens roaming the streets and organized a backyard barbecue for the neighborhood."

Even that idea might be too small-time for him. Knowing my father, he probably appointed himself the block captain and is overseeing makeshift relief operations or has made his way to the base where U.S. Marines are camped out to ask if they need his help.

My Papa epitomizes the Haitian character; he is the ultimate survivor.

Today, Marjorie told me that one of her cousins got to Haiti, found his mother and also talked to her father. So, he is, fortunately, a survivor, like Haiti:

I don't know how they -- we -- do this but I've seen it through hurricanes, floods, mudslides, over and over again. No doubt Tuesday's earthquake will test this genetic fortitude and break down huge chunks of that strong wall of resilience, but I know that eventually, Haitians will pick themselves up and go on, as they have time and time again. They have no choice.

But, we have a choice to help them. And, it seems like the American people -- and the U.S. government rose to the occasion. Read More......