The end of inflated pay cycle?

There is increasingly reason to believe that the outrageous pay on Wall Street may have peaked, just as it had before the Great Depression. (Note the similarity.) As was mentioned in another Times article today, Wall Street has not quite figured out there is a new share holder involved in the business these days. Now that the US government is involved due to irresponsible business practices, the government has every right to make such demands. Clearly Wall Street drove up comp plans, but will they now lead the way back down to reality?

But with tighter regulations on risk-taking and greater public scrutiny, the pay for top bankers could fall into line with pay for other professions, like doctors and lawyers.

Indeed, high pay on Wall Street is an episodic phenomenon. A recent paper by two economists studied pay in finance from 1909 to 2006, comparing the industry’s pay levels with the private sector as a whole, seeking to adjust for education, skills, age and gender of the workers.

In their National Bureau of Economic Research working paper, Thomas Philippon of New York University and Ariell Reshef of the University of Virginia found that the difference in pay between finance and the rest of industry was slight, if any, except in the late 1920s to 1930 and then again from the mid-1990s to 2006. In those boom years, compensation in finance was 30 percent to 50 percent higher than in the rest of industry.

The Wall Street pay differential with the rest of the economy, Mr. Philippon said on Wednesday, is falling and destined to erode further. “It will go back to something more normal,” he said. “The only reasonable number is zero or very close to zero.”

In executive pay, Wall Street set the tone for other industries, as the compensation of senior managers rose far faster than for most workers. In 2007, the total compensation of chief executives in large American corporations was 275 times that of the salary of the average worker, estimates the Economic Policy Institute in Washington. In the late 1970s, chief executive pay was 35 times that of the average American worker.

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AP alleges copyright infringement of Obama image

I'm sensitive to the notion of stealing and selling someone else's photo, but the original photo is quite unremarkable, in my view. The poster, is amazing. Then again, if it were my photo that was turned it art and made another guy a million bucks, I might be annoyed. This is a tough call. But a part of me feels as if AP is trying to suddenly get a piece of the action when they didn't care for an entire year. Read More......

Obama at prayer breakfast: "we have seen faith wielded as a tool to divide us from one another – as an excuse for prejudice and intolerance. "

Nice words, Mr. President.

Meet Rick Warren. You remember him. You invited him to speak at your inauguration. Warren uses his faith as a weapon against your fellow citizens who are gay. He practices prejudice and intolerance. Unfortunately, Mr. President, you've enabled Rick Warren. Please heed your own words. Don't do that anymore. Read More......

Not politics

Just some beautiful music by Matt Alber, who sounds an awful lot like Rufus Wainwright.

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Looks like Obama is starting to fight back

Earlier today, I wrote that we need to see more of the Obama from last fall. We're starting to see it. Today, he delivered a speech at the Department of Energy, which eviscerated the GOP's line of attack on his economic rescue package. Okay, he didn't exactly say "GOP" or "Republican." But, when Obama is talking about "worn out ideas" and the "the idea that tax cuts alone can solve all our problems," we all know who he is talking about. That's the language he used against McCain, Bush and the failed Republican policies of the past.


Here's the text. It sure sounds like he's had it with the GOP games. Good:

We can't delay and we can't go back to the same worn-out ideas that led us here in the first place. In the last few days, we've seen proposals arise from some in Congress that you may not have read but you'd be very familiar with because you've been hearing them for the last 10 years, maybe longer. They're rooted in the idea that tax cuts alone can solve all our problems; that government doesn't have a role to play; that half-measures and tinkering are somehow enough; that we can afford to ignore our most fundamental economic challenges -- the crushing cost of health care, the inadequate state of so many of our schools, our dangerous dependence on foreign oil.

So let me be clear: Those ideas have been tested, and they have failed. They've taken us from surpluses to an annual deficit of over a trillion dollars, and they've brought our economy to a halt. And that's precisely what the election we just had was all about. The American people have rendered their judgment. And now is the time to move forward, not back. Now is the time for action.

Just as past generations of Americans have done in trying times, we can and we must turn this moment of challenge into one of opportunity. The plan I've proposed has at its core a simple idea: Let's put Americans to work doing the work that America needs to be done.

The Republicans thought this was all fun and games. Well, now they may be back in the ring with the Barack Obama who whipped their butts in November. I hope so. Read More......

Senators less optimistic about reaching stimulus deal

This is quickly becoming an utter joke. It's not the way you run a Congress, and it's not how you lead a country. Our leadership has botched this bill from the beginning, by caving to the Republicans from day one and signaling that we were desperate for their support, and by failing to do any outreach whatsoever to Democratic allies, including the Netroots. Well, where are the Republican votes? I thought we didn't need Democrats any more since Obama has 13m names on an email list, and all the Republicans now love him since he was nice to them. Great. Where's the beef?

Oh, and for the folks out there who think this is all solved by asking you guys to call Congress and tell them simply to pass the stimulus bill, fine, here's your action alert:

Call Congress now! Tell them to pass the stimulus bill!

Wow, I didn't realize lobbying and passing legislation was so easy. No background info, and no strategy, necessary. All you have to do is call everyone in Congress, and magically a bill becomes a law. Well, I'm glad we all worked that one out. Now go along and call everyone with that uber-generic message. Then call me back when we win.

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The loneliest guys in town

My friend Jason Rosenbaum recently wrote the following on Huff Post:

Progressive bloggers need to stop complaining about the economic recovery package and start prodding their readers to make phone calls.... There's a lot of writing about the economic recovery plan on blogs like Daily Kos, OpenLeft, Americablog, Crooks and Liars, and Talking Points Memo, but something is absent. Not one post is asking readers to pick up the phone. Or write a letter. Or visit their Member of Congress. People definitely have something to complain about. But now that the Senate is debating, the time for complaining is over. It's time for action.

Well, I can't speak for the other guys, but I do know that here at AMERICAblog no one asked us to lift a finger to help on the stimulus package until yesterday. And even then, the request came from some outside groups - we've never been contacted once by anyone in the Obama administration or the Democratic Congress about the stimulus package generally, or about how we can help in particular.

What's odd is that neither the Hill nor the Obama campaign showed any reticence previously in asking for our help. Yet now, not a peep. It's not a small leap to infer that, for whatever reason, they don't want our help.

Now, you might say, John, don't wait to be asked, just do it! There's a problem there. You can't just go willy-nilly contacting members of Congress without any guidance as to who needs to be contacted, and who doesn't. Sometimes, you want hundreds of people calling Congressman X, while Congresswoman Y may need the softer touch of behind-the-scenes work by lobbyists and others (and it will only tick Y off if she gets lots of calls). Passing legislation is an art. It's not as simple as just picking up the phone. So, yes, Joe and I could have posted a "call Congress now!" action about the stimulus package weeks ago, but who would we have had you call? What would the message be? No one in the administration or Congress has bothered telling any of us anything about what's going on with this legislation - we get our updates from the AP. Perhaps we should call AP and ask them who we should lobby.

I've written about this before, the notion of political autarky - that the Dems are so good at what they do, they don't need our help. Well, God bless 'em, because if they're so good, why didn't we have this bill passed weeks ago, before Obama was sworn into office?

Until we get those answers and more, Joe and I will remain by the phone, like a pair of virtual Maytag repairmen, just waiting for that call.

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93 year old who froze to death leaves $500K to hospital

Maybe someone in Michigan can start looking into the irresponsible actions of Bay City Electric Light & Power that cut off this elderly man from having heat. Money was not the issue, obviously. How is it possible to treat an elderly person so cruelly and not even think that maybe, just maybe, they were incapable of addressing issues like this on their own? Is it asking too much for the power company to take his age into consideration? My friends and family in that age bracket would also struggle on their own and it's very likely they wouldn't even remember what to do 10 minutes after the visit. Even if they did remember, writing a check and sending it could be too much. Tell me we haven't become such an ignorant, mean place. CNN:

A 93-year-old World War II medic who froze to death last month in his Bay City, Michigan, home left his entire estate to a local hospital, an estate attorney told CNN Wednesday.

The attorney would not disclose the exact amount left behind by Martin Schur. But his nephew said his uncle indicated to family members two years ago that he had saved up more than a half-million dollars over the years. Schur and his wife, Marian, who died more than a year ago, did not have any children.

"I just know at one time he said he had over $600,000 in savings," said William Walworth. "That's what he told me and my brother, and he was proud that he was able to save and build his estate up to that."

Cathy Reder, an attorney negotiating on behalf of Bay Regional Medical Center and the Schur family, said she was filing paperwork in probate court Wednesday for the court to determine the validity of the will. A hearing has been set for March 17.

Reder would not specify the amount left to the hospital, other than to say it's more than $1.

"The will leaves everything to Bay Medical Center," she said.

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Harry Reid says Dems. have the votes to pass stimulus. Also acknowledges bipartisanship "isn't working"

First, the news that the Majority Leader says they've got the votes to bust a GOP filibuster of the economic rescue package:

Senate Majority Leader Harry Reid (D-Nev.) told reporters Thursday that he has enough votes to pass a more than $900 billion stimulus bill out of the Senate.

Reid said he believes at least two Republicans of "good will" would support the Democratic-crafted package.

"Do we have the votes? We believe we do," said Reid, who expects a final vote on the package will be held on Thursday.

Now, that sounds good. We'll see.

Then, an acknowledgment of what any sane observer already knows:

Frustrated Senate Democratic leaders dispensed with calls for bipartisanship on the stimulus package Thursday, with Senate Majority Leader Harry Reid saying that he won't let anyone "hold the president of the United States hostage."

President Barack Obama had once hoped to have the package pass with substantial Republican support. But Sen. Chuck Schumer (D-N.Y.) said that's now a “distant memory."

"So far," he said, bipartisanship "isn't working."

It's not working. The Republicans are only playing politics. They don't care about the policy. On the other hand, the Obama team thinks they can sell the stimulus because it's good policy and haven't been playing politics. The Obama team needs to get back to playing politics. Hard ball politics. Roll the Republicans. It's the only way. Read More......

Justice Ginsburg underwent surgery for pancreatic cancer today

Justice Ginsburg is an important voice for justice and equality and we're all wishing her well:

Supreme Court Justice Ruth Bader Ginsburg had surgery Thursday after being diagnosed with pancreatic cancer, the court said.

Ginsburg, 75, had the surgery at the Memorial Sloan-Kettering Cancer Center in New York. She will remain in the hospital for seven to 10 days, said her surgeon, Dr. Murray Brennan, according to a release issued by the court.

The court announcement said the cancer is apparently in the early stages.

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Republicans don't want Obama's Labor Secretary to work on key labor issue, but Bush's Labor Secretary (Mitch McConnell's wife) could fight it

Apparently, Republican Senators want to establish a new standard for the Secretary of Labor: Stay out of pro-worker legislation. Wonkette captures the situation perfectly in the post titled, "Labor Nomination Held Up Due To Nominee’s Support Of Labor."

Of course, there were no similar restrictions applied to Secretary of Labor for George Bush, Elaine Chao, who was the wife of GOP Senate Leader, Mitch McConnell, when she was working against the interests of working men and women. If the Republicans get their way, Hilda Solis would be prevented from working on pro-worker policy, particularly the Employee Free Choice Act:

Underscoring the bitter debate over a proposal to make it easier for workers to form unions, Republican senators are suggesting that President Obama's pick for Labor secretary must recuse herself from lobbying for the bill's passage.

A Senate committee will vote today whether to confirm Rep. Hilda L. Solis, a Democrat from El Monte.

In a written exchange with Solis, Republican senators indicated they are wary of her ties to a tax-exempt group dedicated to helping workers unionize.

That's beyond absurd. The Republicans, at the behest of their corporate masters, are apoplectic about the Employee Free Choice Act. They really, really don't want to give workers a chance to unionize. Preventing a cabinet secretary from working on an issue of direct concern to the cabinet secretary's domain is just unheard of. They wouldn't tell Geithner to stay out of issues involving the Federal Reserve, even though he ran the NY Fed. The Republicans have a special disdain for America's working men and women.

Now, this won't come as a surprise, but it's also pure hypocrisy. Elaine Chao used her bully pulpit to fight against the Employee Free Choice Act. She railed against the legislation in on the op-ed page of the Wall Street Journal on January 14, 2009, less than a month ago. But now, Republican think it's wrong for the new Labor Secretary in the new administration, which supports the Employee Free Choice Act, to speak out. Wow. They really have no scruples. None. Read More......

While Republicans fiddle, the American economy is burning down

While House Republicans are planning a Taliban-like insurgency (seriously, that's how Rep. Pete Sessions described it) and Senate Republicans continue their delusional and disturbing games (36 of the 41 them voted to remove all spending from the stimulus last night), the American people continue to suffer:

The number of U.S. workers filing new claims for jobless benefits hit a 26-year high last week, according to government data on Thursday that showed the economy remains on a deep downward track.

In addition, the number of people staying on the benefit rolls hit a record high in the week ended January 24, showing the weak labor market has yet to hit bottom.

It's all fun and games for the Republicans on Capitol Hill and their leader, Rush Limbaugh -- even as the economy continues to spiral down. Is there any possibility that political reporters will actually grasp that there are real world implications to what's not happening on Capitol Hill? Doesn't anyone at CNN look around and realize how many of their colleagues (i.e. Kelli Arena and Miles O'Brien) aren't there any more? Outside of the DC bubble, this economic crisis is real. Read More......

Rahm Emanuel vs. Tom Daschle

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Obama to cancel oil & gas leases near national parks

The Bush administration leased out land in the final days but fortunately there is going to be a review to see if this makes sense for everyone and not just the oil and gas industry. It's going to take years to undo the problems left by the Bush administration but it's encouraging to see that Obama is taking action on a number of fronts.

In its first action to overturn Bush administration policies on energy, the Obama administration on Wednesday said it will cancel oil drilling leases on more than 130,000 acres near two national parks and other protected areas in Utah.

"In the last weeks in office, the Bush administration rushed ahead to sell oil and gas leases near some of our nation's most precious landscapes in Utah," Interior Secretary Ken Salazar told reporters. "“We need to responsibly develop our oil and gas supplies to help us reduce our dependence on foreign oil, but we must do so in a thoughtful and balanced way that allows us to protect our signature landscapes and cultural resources."

"We will take time and a fresh look at these 77 parcels to see if they are appropriate for oil and gas development," he said, adding that the Bureau of Land Management will return the $6 million in bids from an auction last December.

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Flashback: It was the Republican's economic philosophy that caused the crisis. That's why McCain lost -- and Obama won.

As a follow up to the post below on Obama's op-ed, remember when Obama knew that the Republicans were playing political games and not talk about the economy? It wasn't all that long ago. Nothing has changed. The Republicans don't want to solve the economic crisis -- the very crisis they created.



We need to see more of that Barack Obama these days. He needs to ignore the pundits in DC who are obsessed with the distractions, not the critical policy designed to save the economy and create jobs. Talk to the American people. They're on Obama's side.

Let's not forget why Obama won. It was the economy. Look at this tracking poll from mid-September. September 15, 2008 was the day McCain said "the fundamentals of our economy are strong." Until the economic collapse, McCain was in the lead:



Americans elected Obama for his ideas on the economy. Now is the time to stop playing games with the Republicans. It's time to roll them. Read More......

The President pens an op-ed on the economic recovery package and "the old partisan gridlock" that's blocking it

Look what I found in my Washington Post this morning.

Barack Obama has an op-ed in today's Post, reminding people about the elections and the failed GOP strategy that caused the economic crisis. He starts by describing the crisis, which is apparently necessary because many in Congress and most of the pundits in DC don't really grasp the severity of the situation. This is one of those times when the public is way, way, way ahead of Washington in understanding the problem. That's because they're living it and the elites in DC aren't.

Obama then slashes through the Republican arguments (while never mentioning that they are, in fact, Republican arguments):

In recent days, there have been misguided criticisms of this plan that echo the failed theories that helped lead us into this crisis -- the notion that tax cuts alone will solve all our problems; that we can meet our enormous tests with half-steps and piecemeal measures; that we can ignore fundamental challenges such as energy independence and the high cost of health care and still expect our economy and our country to thrive.

I reject these theories, and so did the American people when they went to the polls in November and voted resoundingly for change. They know that we have tried it those ways for too long. And because we have, our health-care costs still rise faster than inflation. Our dependence on foreign oil still threatens our economy and our security. Our children still study in schools that put them at a disadvantage. We've seen the tragic consequences when our bridges crumble and our levees fail.

Every day, our economy gets sicker -- and the time for a remedy that puts Americans back to work, jump-starts our economy and invests in lasting growth is now.

In his conclusion, the President also explains the intolerance the American people have for the DC games. He's calling on members of Congress to do what's best for the country, not their narrow political interests. You'd like to think that could happen, but not with Mitch McConnell running the GOP show:

These are the actions Americans expect us to take without delay. They're patient enough to know that our economic recovery will be measured in years, not months. But they have no patience for the same old partisan gridlock that stands in the way of action while our economy continues to slide.

So we have a choice to make. We can once again let Washington's bad habits stand in the way of progress. Or we can pull together and say that in America, our destiny isn't written for us but by us. We can place good ideas ahead of old ideological battles, and a sense of purpose above the same narrow partisanship. We can act boldly to turn crisis into opportunity and, together, write the next great chapter in our history and meet the test of our time.

When Karl Rove pens an op-ed, the cable news talking heads blather about it all day. Let's see if they can grasp the import of what Obama wrote. It might be too intelligent and well-reasoned for them. Read More......

Thursday Morning Open Thread

Good morning.

Today will be another day of drama in the Senate on the economic recovery bill. The Republicans are having a field day. It's a game for them even as millions of Americans suffer. But, last month, someone in Obama's camped stated a goal of getting 80 votes in the Senate. That's ridiculous. The people who are suffering don't care if the bill passes with 51 votes or 98 votes. They want the economy to get better.

It's 14 degrees in DC. I'm getting ready to take Petey out. This morning, the National Prayer breakfast is being held at the Hilton around the corner. Obama and a bunch of dignitaries are all there. That means tons of Secret Service -- with their security dogs. Petey and I are going to walk by the Hilton because I want him to see that some dogs actually work for a living. Not that he'll care. Boomer never did.

Let's get it started...

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Donald Trump is a socialist

Maybe even a communist, actually. Why does Donald Trump hate America?

Trump spoke with CNN's Larry King about whether there should be executive pay limits, if there should be a stimulus plan and when there could be an end to the economic downturn. The following is an edited portion of the interview.

Larry King: Is Obama right or wrong to go after these executives with salary caps?

Donald Trump: Well, I think he's absolutely right. Billions of dollars is being given to banks and others. You know, once you start using taxpayer money, it's a whole new game. So I absolutely think he's right.

King: What about the whole concept of bailouts?

Trump: Well, it's a little bit different. A lot of people are not in favor of bailouts. You know, we talked about all the different things going on in this country. Let's face it, Larry, we are in a depression.

If they didn't do the bailout, you would be in depression No. 2 and maybe just as big as depression No. 1, so they really had to do something. The problem is they're giving millions and billions of dollars to banks and the banks aren't loaning it.

If you are a prime customer of a bank and if you need 10 cents, you can't get it. The banks are out of business. They're not loaning. Now, billions of dollars has been given. They're supposed to be loaning out that money and they're using it for other purposes, so it is a real mess.

King: If you were in the Senate, would you vote for the stimulus plan?

Trump: Well, I'd vote for a stimulus plan. I'm not sure that all of the things in there are appropriate. Some of the little toys that they have are not really appropriate, and they're a little surprising that they seem to want it, because the publicity on it has been terrible.

I would certainly vote for a stimulus, but I would really vote for banks having to loan out the money because they're not doing that.

Whatever you think about Trump, it's an interesting interview so click through and see the rest. Read More......

The younger generation doesn't get it

The baby boomers have done such a fantastic job with the global economy and have always thought about the broad population rather than enriching themselves. They're always so right when they blast those good-for-nothing youngsters in their 20s who only think of themselves. They're selfish little punks and we all know it. Can't they grow up and be more like the boomers who ushered in the Gordon Gekko era that has served us so well? The boomers have delivered so many greats including George Bush and Bill Clinton who never hesitated to think of others. This young fellow won't last very long at CNBC if he keeps this up.

Class war?

That's what lots of people are calling this move to limit executive compensation at companies that are on the Federal dole.

Oh, please! That's not class war, it's barely a class skirmish.

When it comes to the real class war, the stuff that matters, not just optics about CEO earnings, the rich are thrashing the rest of us, just like they always do.

It's class war when Washington passes a $700 billion TARP bailout for Wall Street with feverish haste, but struggles to pass an $800 to $900 billion stimulus package for everybody else.

Think about that for a second.

Bail out the banks, no problem! But give a helping hand to poor, working class, and middle class people? That we have to debate endlessly. Washington knows how to bail out the rich, but our incredibly popular President is having trouble bailing out the other 99% of the country.

That, my friends, is class war. And it's so institutionalized that we don't even realize it's going on. The establishment in this country is so tilted in favor of the folks at the top, that we scream "socialism" when executives at banks that have taken billions of dollars of bailout cash from the government because they ran their companies into the ground aren't allowed to earn more than $500,000 a year.

As far as I'm concerned, that's not a real victory for the proletariat, or the middle class, as everyone in this country likes to think of themselves. It's totally symbolic.

When you go below the symbolism and look at the substance—sure there are salary caps, because we already gave these banks hundreds of billions of dollars—it's pretty clear which side is winning this war.

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Zimbabwe now has over 65,000 cases of cholera

The African Union and neighboring countries - South Africa in particular - have failed the people of Zimbabwe miserably. From AFP:

The number of cholera cases recorded in Zimbabwe has risen past the 65,000 mark, with more than 3,300 deaths since the outbreak began, latest data from the World Health Organisation showed Wednesday.

Some 65,739 people have been infected by the disease since August 2008, and 3,323 among them have died, the WHO said in its latest daily update.

Some 1,038 new cases and 28 deaths have been added since the previous update on Tuesday.

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CNBC: salary caps for Wall Street are unfair because they tried

And how does that compare to the millions who have been downsized or will be downsized due to the credit crisis recession? CNBC is stoking the fire and trying their darnedest to scare people into the Democrats capping the salaries of everyone, but it's nothing more than a PR stunt and a lie. They keep flogging the angle of those few people on Wall Street who had nothing to do with the billions of lost revenue. There's no doubt people like that exist, but what about people in other businesses that have been fired because the company is trying to survive? When a company declares bankruptcy, do only the losers lose or does the entire company fail and end up with nothing? (Well, if you were part of the privileged crowd at Lehman, you shared $20 million.)

I've heard enough of these idiotic stories about the people who did nothing wrong and deserve their bonuses. There are enough people around the country and the world, for that matter, who are losing their jobs because of the assholes on Wall Street who gambled with the world economy. When I worked for a company that plowed through it's money until nothing was left, there wasn't much to pass around when they hit rock bottom. Why should Wall Street be treated differently? They didn't mind taking the upside of false profits, so live with the downside. Let's see a raising of hands for everyone who has paid back those bogus bonuses. Anyone? Hello? I didn't think so. Read More......