"Professional suicide" to join a rock band?

Atrios observes that it is a somewhat harsh commentary, on someone who forgoes the usual NYC career path to become a rock star, to suggest that they've committed professional suicide:

I don't claim to know just how well a band like Titus Andronicus does financially, but even this old man knows of them and, well, oh jeebus just fuck you New York Times for being stupid and focusing too much on attention on the plight of the not quite rich enough.

I remember that when I graduated with a degree in engineering, everyone was being told that the smart career move was into accountancy. Five or six years later the dot-com boom was starting, and an engineering degree and some programing experience was in rather higher demand.

While it might be somewhat hard for a NYT reporter to admit it. An English major graduating before the fiscal crisis could probably expect a career as a rock musician to offer better job security than one in magazine or newspaper publishing.

Best career advice I ever got was this:

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Two more Michigan Emergency Managers coming—one in Flint, the state’s fourth largest metropolitan area

We wrote about the Michigan GOP governor's use of the Emergency Manager laws here. It's basically the power to place "financially troubled" cities, towns, and public entities (like school boards) under the control of a governor-controlled czar with full power to:

(1) kill any contract the town entered into AND (2) dismiss elected officials AND (3) "disincorporate" the town itself. Oh, and the emergency manager can be a corporation.

That power has already been used against the town of Benton Harbor and others. Now it looks like the old GM factory city of Flint is next (my emphasis; h/t Emptywheel and Eclectablog):

Flint could become the first city to get taken over by the state since Gov. Rick Snyder approved sweeping new powers for appointed Emergency Managers.

On Friday Flint Mayor Dayne Walling announced that the [Michigan] Treasury Dept. has initiated an official review of the city’s finances.

Under Public Act 4 — the Emergency Manager law — financial review is the first step in a process that can confer new powers to elected officials or transfer all decision-making power to an Emergency Manager who reports only to the Treasury Dept. and the governor.

Benton Harbor, Pontiac, Ecorse and the Detroit Public Schools are now being run by Emergency Managers.

Flint is the seventh largest city in Michigan, and Genesee county (don't you love those midwestern Indian names?) is the state's fourth largest metropolitan area, with a population of almost 500,000.

The Highland Park School District is also on that path:

Gov. Rick Snyder is to appoint a team to conduct a "financial management review" of Highland Park Schools, moving the troubled district closer to appointment of an emergency manager.

Superintendent of Public Instruction Mike Flanagan sent a letter to Snyder this month asking him to order the review after Flanagan's preliminary study determined the district had the state's worst deficit and most drastic enrollment drop. ... Under a controversial new law, the manager would control the district's finances and operations and have the power to amend union contracts.

Board Secretary Robert Davis said the board and Superintendent Edith Hightower are following the state's directions to reduce its deficit. "I don't think an emergency manager will be necessary," Davis said. ... Davis said the drop was mainly due to the 2009 closure of the Career Academy, an alternative high school [and] said the board is consolidating and privatizing services to eliminate the deficit in three to four years.

Highland Park is a small town bordered by Detroit and Hamtramck (another great name); its population is nearly 95% African-American.

Of course, you can't appoint Emergency Managers without an emergency, even if you have to create it yourself:

One of Governor Rick Snyder's top priorities this fall is phasing out the personal property tax.

Summer Minnick with the Michigan Municipal League doesn't disagree with that part of the plan so much. Minnick says administrating the tax is complicated and costs local governments quite a bit of money to assess. The problem is, it also generates about $1.2 billion annually with around $800 million of that money going to those same local governments.

"It is a critical component of a municipality's budget," said Minnick. "In many cases it can be 20 to 50 percent of the city's entire taxable value so it's something we're very concerned with."

Mmm, more Emergency Managers in their future.

Remind me again — why does anyone vote for a Republican these days? They give the GOP a knife to stick in someone else's back, and it just ends up in their own. Sad, really.

GP Read the rest of this post...

President again includes Democrats in his congress-bashing, no mention of Republicans

An email went out to Obama supporters yesterday about "jobs." The email bashed congress, all of congress, and didn't mention once the word "Republican." This sentence particularly stood out to me:

It's been a long time since Congress was focused on what the American people need them to be focused on.

So now Democrats' in Congress share the blame that the government hasn't been focused on jobs? When, in all fairness, it was the President who switched tunes to the deficit reduction a year and a half ago.   And it's partly the President's fault that unemployment is so bad right now, because he refused to heed the advice of Krugman, Stiglitz and others when crafting the original stimulus bill.  They predicted all of this, and they were right.

This email from the President is a great way to help Democrats lose the Senate next year, something that they're already on the road to doing.  Democrats need to stand up to the President, publicly, and tell him to cut the crap - he's been doing this from the very beginning.  Otherwise, they deserve whatever they get.

From: Barack Obama
Date: Wed, Aug 31, 2011
Subject: Frustrated
To: xxxxxxxxx>

xxxxx --

Today I asked for a joint session of Congress where I will lay out a clear plan to get Americans back to work. Next week, I will deliver the details of the plan and call on lawmakers to pass it.

Whether they will do the job they were elected to do is ultimately up to them.

But both you and I can pressure them to do the right thing. We can send the message that the American people are playing by the rules and meeting their responsibilities -- and it's time for our leaders in Congress to meet theirs.

And we must hold them accountable if they don't.

So I'm asking you to stand with me in calling on Congress to step up and take action on jobs:

http://my.barackobama.com/Time-To-Act

No matter how things go in the weeks and months ahead, this will be an important challenge for our organization.

It's been a long time since Congress was focused on what the American people need them to be focused on.

I know that you're frustrated by that. I am, too.

That's why I'm putting forward a set of bipartisan proposals to help grow the economy and create jobs -- that means strengthening our small businesses, giving needed breaks to middle-class families, while taking responsible steps to bring down our deficit.

I'm asking lawmakers to look past short-term politics and take action on that plan. But we've got to do this together.

I will deliver this message to Congress next week, but I'm asking you to stand alongside me today:

http://my.barackobama.com/Time-To-Act

More to come,

Barack

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Still legal to film cops in Massachusetts

If there is one thing that really makes me angry, it is abusing your authority in order to bully people. In recent months a string of cases has been brought against people videoing cops while they perform their official duties.

In the Tiawanda Moore case I blogged about earlier, who was charged with "eavesdropping" after recording officers trying to convince her to drop a sexual harassment complaint, the jury saw through the bogus charges and acquitted her.

Last Friday, the US Court of Appeals ruled that the public has a right to videotape cops in public provided they do not interfere or obstruct.  The ruling is online.

What I would like to know is why prosecutors are so keen to bring cases against members of the public, taping cops who they believe in good faith to be abusing their office, and so reluctant to bring cases against Breitbart for his covert taping and selective editing smear machine. Any ideas? Read the rest of this post...

Progressive groups push administration to issue executive order on federal contractor politicking

Politico:

Public interest groups are growing increasingly frustrated with the Obama administration’s indecision regarding a draft executive order that, as conceived, would force government contractors to reveal new details about their politicking.

“If he doesn’t have the guts to do it this year, I don’t see why he’s going to have the guts to do it next year. It’s got to be in the next few weeks,” said Craig Holman, Public Citizen’s government affairs lobbyist.

“Given the enormous stakes, the more information the better on the way the decisions being made by the supercommittee are being influenced,” said Fred Wertheimer of campaign finance reform group Democracy 21.

Added Meredith McGehee, the nonpartisan Campaign Legal Center’s policy director: “It’s been a deafening silence from the administration. I’ve been pretty mystified by the whole experience. Time for a decision.”

Not that mystifying. Just par for the course. Though I will say that having progressive non-profits talk about the President not "having the guts" to do something is relatively new, and noteworthy. The Netroots have talked about the "guts" problem for years, but awareness of the President's "leadership gap" has, as predicted, grown far beyond the "Internet left fringe."  It's becoming a problem, and it should have been addressed years ago.  Being right is no solace if it means we lose the House, Senate and presidency next year. Read the rest of this post...

Obama undercuts EPA, refuses to raise ozone standards

Just a couple of sentences from this long, winding he said–she said article tells the whole tale.

First, what he did, our Democratic president (from USA Today):

President Obama decided Friday morning not to raise ozone standards for air pollution favored by environmentalists but decried by business groups and Republicans.

In his decision, relayed to Environmental Protection Agency Administrator Lisa Jackson, Obama cited the need to remove uncertainty for businesses that would be affected. ... "Ultimately, I did not support asking state and local governments to begin implementing a new standard that will soon be reconsidered." ... [This EPA-proposed regulation] topped the list of proposed regulations that could cost more than $1 billion demanded recently by House Speaker John Boehner.

Big Oil says, Thanks (and, er, Jobs):

"The president's decision is good news for the economy and Americans looking for work," said Jack Gerard, president of the American Petroleum Institute.

Boehner's office says, Thanks (and also, We're just getting started):

"We're glad that the White House responded to the speaker's letter and recognized the job-killing impact of this particular regulation," said Boehner spokesman Michael Steel. "But it is only the tip of the iceberg[.]

Conservationists say, You're selling out:

"The Obama administration is caving to big polluters at the expense of protecting the air we breathe," said Gene Karpinski, president of the League of Conservation Voters. "This is a huge win for corporate polluters and huge loss for public health."

There's even something in the article about how the EPA scientists all say the current standard (75 ppb) is too high, and how they recommend a lower one (60–70 ppb), and how the courts even said the current standard had to be reduced. So many opinions for one article.

And separately, the Center for American Progress disputes the economic analysis of Big Oil.

It's just all so confusing — who you gonna believe? Mr. You Better Hope I Change, or that nagging hacking cough you just can't lose?

Hey, here's a nice bipartisan idea: Boehner-Obama in 2012. Looks like money in the bank to me (or something).

GP


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The Republican assault on voting rights

Ari Berman has an explosive article in Rolling Stone on the national assault by the Republican Party on voting rights that is going on around the country. Berman documents a number of schemes intended to make it harder for people of color, young people, and the elderly from being able to vote. Not coincidentally, these are all demographics which typically vote for Democrats.

As the nation gears up for the 2012 presidential election, Republican officials have launched an unprecedented, centrally coordinated campaign to suppress the elements of the Democratic vote that elected Barack Obama in 2008. Just as Dixiecrats once used poll taxes and literacy tests to bar black Southerners from voting, a new crop of GOP governors and state legislators has passed a series of seemingly disconnected measures that could prevent millions of students, minorities, immigrants, ex-convicts and the elderly from casting ballots. "What has happened this year is the most significant setback to voting rights in this country in a century," says Judith Browne-Dianis, who monitors barriers to voting as co-director of the Advancement Project, a civil rights organization based in Washington, D.C.

Republicans have long tried to drive Democratic voters away from the polls. "I don't want everybody to vote," the influential conservative activist Paul Weyrich told a gathering of evangelical leaders in 1980. "As a matter of fact, our leverage in the elections quite candidly goes up as the voting populace goes down." But since the 2010 election, thanks to a conservative advocacy group founded by Weyrich, the GOP's effort to disrupt voting rights has been more widespread and effective than ever. In a systematic campaign orchestrated by the American Legislative Exchange Council – and funded in part by David and Charles Koch, the billionaire brothers who bankrolled the Tea Party – 38 states introduced legislation this year designed to impede voters at every step of the electoral process.

Berman's piece also conclusively rebuts the GOP red herring of voter fraud, an important point given that's a major excuse by Republicans who want to make it harder for Americans to cast their votes. Read the rest of this post...

Perry's role in the Texas execution machine

Jason Linkins has a long piece on the execution of Cameron Todd Willingham.

In brief, Perry's role was to abdicate his duty to review evidence that might have saved the life of an innocent man and then used his office to railroad the commission of inquiry set up to review the doubt as to his guilt.

The last Texas governor with a peculiar fascination for executions went on to cause a quarter million deaths in Iraq. Do we really need another one? Particularly one who began his campaign by accusing the Chairman of the Federal Reserve of 'treason' and threatening him with violence? Read the rest of this post...

Key warning sign of global financial stress now above extreme levels seen at height of Lehman crisis in 2008

Warning bells from Europe? From the UK Telegraph (h/t Cate Long):

A key warning signal of global financial stress has shot above the extreme levels seen at the height of the Lehman crisis in 2008.

Central banks and official bodies have parked record sums of dollars at the US Federal Reserve for safe-keeping, indicating a clear loss of trust in commercial banks.

Data from the St Louis Fed shows that reserve funds from "official foreign accounts" have doubled since the start of the year, with a dramatic surge since the end of July when the eurozone debt crisis spread to Italy and Spain.

"This shows a pervasive loss of confidence in the European banking system," said Simon Ward from Henderson Global Investors. "Central banks are worried about the security of their deposits so they are placing the money with the Fed."

One indicator does not a crisis make. Still, that graph is rather striking.

GP Read the rest of this post...

US economy adds zero jobs in August, UE stays at 9.1%

Neither the White House, nor the Congress, seems to understand how bad things are out there.  The President hasn't changed course on his deficit cutting mania, Democrats in Congress are still happily on board the presidential Titanic, and the Republicans are doing what they always do - torpedoing Democratic re-election chances, with the help of the Democrats themselves.

A lot of people are asking what to do?  The only thing that works with these folks is to threaten their re-elect.  And they know you won't do it, so they're happy to sign on to Republican economic policies that they know are going to cause a lot more of you, your family, and your friends to lose their jobs.  So, you either stand up now and tell them you're not going to vote for them if they don't change course, and you hope they get the message in time, or you own the fact that you're voting to re-elect politicians who are quite literally, and quite intentionally, making your personal financial situation far more precarious you, and that of your family and your friends. Read the rest of this post...

Obama admin. to sue big banks for mortgage securities fraud

The New York Times is reporting that the Federal Housing Finance Agency (FHFA), the agency which oversees Fannie Mae and Freddie Mac, is planning on suing twelve major banks today or Tuesday, accusing the banks of "misrepresenting the quality of mortgage securities they assembled and sold at the height of the housing bubble."

The suits will argue the banks, which assembled the mortgages and marketed them as securities to investors, failed to perform the due diligence required under securities law and missed evidence that borrowers’ incomes were inflated or falsified. When many borrowers were unable to pay their mortgages, the securities backed by the mortgages quickly lost value.

Fannie and Freddie lost more than $30 billion, in part as a result of the deals, losses that were borne mostly by taxpayers.

Until the suit is filed, we won't know exactly how much money FHFA is seeking to get from the banks. This move is similar to other efforts to put losses back onto the banks, thereby reducing the liabilities incurred by Fannie and Freddie. FHFA administrator Ed DeMarco, a holdover from the Bush administration, has pursued this strategy for a while now. The statute of limitations on filing this sort of securitization lawsuit expires this coming Wednesday, so there's some sense that this is happening now to get any action in under the wire.

The banks and their surrogates are trotting out the idea that Fannie and Freddie are sophisticated investors, who should have been able to tell that things Standard & Poors rated as AAA were not in fact anywhere near AAA quality investments. I'm not clear how well the, "They should have known we were peddling junk, and were just paying ratings agencies to say it wasn't junk" defense will play out in court. The problems with securitization go far beyond what the Times describes -- many of these securities were put together while the underlying loans were already delinquent, in foreclosure, in bankruptcy or already owned by the banks.

Hopefully FHFA comes out with big numbers in their lawsuit that adequately reflect the scale of the securities fraud committed by these banks and seek restoration, as well as punishment, for this fraud.

Update:
More from David Dayen:

this is the nightmare scenario for the banks. FHFA is joining a slew of other private investors seeking to force repurchases on these mortgage backed securities which they clearly screwed up during the bubble years. Bank of America tried to settle a bunch of these cases, but thanks to Eric Schneiderman, some investors not in on the settlement and even a group of homeowners, that MBS settlement looks in tatters. A federal judge yesterday questioned the rush to settlement. Bank of America, by the way, would face the biggest dollar value in an FHFA suit because they sold the most MBS to Fannie and Freddie. The Fed has been asking BofA for contingency plans; that doesn’t happen with healthy firms.

Years after the financial crisis crested, the banks are suffering with the exact same liabilities that threaten their very existence. So the next time someone talks your ear off about how TARP worked and we had to make the banks healthy for the good of the economy, tell them this story and ask them if you think banks with enormous mortgage liabilities and vulnerabilities on fraud are healthy. A major problem with the economy is that we have these zombie banks which, despite extraordinary government support, cannot escape the tremendous losses from their housing bubble schemes.

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Bachmann again talks up drilling for oil in Everglades

Putting aside the significant potential for damage to the Everglades, do people like Bachmann ever think about the money the Everglades generates today for tourism? One oil spill and it's gone. It's the same with other delicate environments where extremists like her want to drill. The US gets a lot more out of not drilling than it could ever get from drilling and then dealing with a spill. Read the rest of this post...

Stiglitz on pharmaceutical prices; and the four major causes of the worsening of the national debt

In this latest installment of Chris' and my interview with Nobel economist Joe Stiglitz this past Sunday, August 28, 2011 in Paris, Stiglitz talks about the four major causes of the deficit.

STIGLITZ: I try to remind people that just ten years ago we had a very large surplus, 2% of GDP, so big that Greenspan said that if we didn't do something about the surplus, we would entirely pay down the national debt, and it would be difficult for him to conduct monetary policy. An important reminder of why we should be skeptical of the Federal Reserve -- that it is a political institution, not just an economic institution. It has a political agenda, or it had in the past.

Four things brought us from where we were then, huge surpluses, to where we are now. And those things were:

First, the tax cut for the rich that we couldn't afford.

Two very expensive wars.... The budgetary cost so far have been around $2 trillion, but we were, in our book, underestimate the future cost, almost one out of 2 people coming back form Iraq and Afghanistan are disabled. And we've estimated that the cost of paying for health and disability for these may be approaching $1 trillion. So this is not even reflected in the official account, these are our estimates, corroborated by others, of what these future costs are likely to be.

The third is, a very good thing that we did, which was to provide prescription benefits under Medicare for the aged. But we made again a mistake, Bush made a mistake, and that was to say that even though the government is the largest buyer of prescription drugs, it could not negotiate with the drug companies, and that led to those high costs that you were referring to, estimated by some people over a period of ten years, about a trillion dollars extra given to the drug companies. That's another major source of our deficit.

The banks were very good at making political investments, and the same thing was true of the drug industry. They've been very hard pressed to come up with new drugs, but the money they're spending in Washington is yielding high dividends, and this is an example of those high dividends.

The final cause of the change of our framework from the surplus that we had ten years ago, just ten years ago, to where we are today, is the economic downturn. And that's why the most important thing for dealing with the deficit is putting America back to work. And that's where a stimulus package is absolutely essential. Proposals for more austerity cutbacks are going to make that even worse, and prospects of a real significant reduction in the deficit not very good.

Previous interview snipets:

* Stiglitz: Probabilities of a double dip recession "certainly have increased significantly" (3:17 long)

* Stiglitz: Obama administration and the Fed have demonstrated an "inability to make economic judgements." (1:09 long)

* Stiglitz: "The Fed is very good at creating problems, not so good at resolving them.... QE3 won’t help" (6:46 long)

* Stiglitz: "The only thing that can be done (to help the economy in the near term) is fiscal stimulus, spending more money." (1:01 long)

* Stiglitz: We are bearing the consequences of Obama/Congress not pushing state/local aid in 1st stimulus. (2:05)

* Stiglitz on Dodd-Frank: "We are once again at risk of a freezing of the credit system" (4:04) Read the rest of this post...