Krugman: Republican Lies

Krugman hits it out of the park yet again. Click here for his latest article in The New York Times, entitled "Wrath of the Conned," in which he explains that while the Democratic party is at least trying to live up to its ideals, the Republican party is living a lie:

Both parties make promises to their bases. But while the Democratic establishment more or less tries to make good on those promises, the Republican establishment has essentially been playing bait-and-switch for decades. And voters finally rebelled against the con.

And:

[The Republican] party has historically won elections by appealing to racial enmity and cultural anxiety, but its actual policy agenda is dedicated to serving the interests of the 1 percent, above all through tax cuts for the rich — which even Republican voters don’t support, while they truly loathe elite ideas like privatizing Social Security and Medicare.

And:

If there’s a puzzle here, it’s why this didn’t happen sooner. One possible explanation is the decadence of the G.O.P. establishment, which has become ingrown and lost touch. Apparatchiks who have spent their whole careers inside the bubble of right-wing think tanks and partisan media may suffer from the delusion that their ideology is actually popular with real people. And this has left them hapless in the face of a Trumpian challenge.

Probably more important, however, is the collision between demography and Obama derangement. The elite knows that the party must broaden its appeal as the electorate grows more diverse — in fact, that was the conclusion of the G.O.P.’s 2013 post-mortem. But the base, its hostility amped up to 11 after seven years of an African-American president (who the Republican establishment has done its best to demonize) is having none of it.

Digby's Comment On A Preposterous Politico Proposal

Click here for an article by Digby at Hullabaloo entitled "The Village lives. (And it's as silly as ever)."

Jim VandeHei of Politico (or as Charlie Pierce calls it, Tiger Beat on the Potomac) wrote a nonsensical piece calling for some ridiculous third-party coalition fronted by, as he suggested, Mark Zuckerberg and Michael Bloomberg. Digby joins in the general derision the article was accorded, and mocks VanderHei's comparison of the "War on Terror" with World Wars I and II, which pretends that "militant Islam" is an existential threat to Western civilization.

The article contains a striking graph, that unfortunately I was unable to reproduce here, entitled "Deaths from terrorism and gun homicide, 2001-2011." Since that black swan, 9/11, American deaths from terrorism have averaged something like 15 a year (my ballpark guess, not Digby's). American gun homicides, on the other hand, have run between 11,000 and 13,000 per year in that same period.

Clinton/Trump/Cruz - Handling A Financial Emergency

Click here for an article by Paul Krugman in The New York Times entitled "The 8 A.M. Call."

It's a warning about the possibility of global financial emergencies, and an analysis of how the three presidential front-runners -- Clinton, Trump, and Cruz -- would handle the 8 a.m. call predicting impending disaster when the markets open.

His conclusion is that Clinton is by far the best choice as a president who would be most likely to handle a financial crisis correctly (when of course there are no good options, only less-bad ones). Some quotes:

For make no mistake about it: The world economy is still a dangerous place. Financial reform has, I’d argue, made our system somewhat more robust than it was in 2008, but fumbling the response to a shock could still have disastrous consequences. So what do we know about the shocks we might face, and how the people who might be president would respond?

Right now there are two fairly obvious potential economic flash points: China and oil.

Many economists, myself included, have been pointing out for a while that China has a severely unbalanced economy, with too little consumer spending and unsustainable levels of investment. So far, unfortunately, China hasn’t made much progress in dealing with this fundamental imbalance; instead, it has papered over the problem with a huge expansion of credit. Now, with capital fleeing the country at the rate of a trillion dollars per year, it may well be headed for a bust. And China is a big enough player that a bust there could have major spillovers to the rest of the world.

Then there’s a potential oil crisis, very different from the ones we used to have: the problem now is a glut, not a shortage, with many producers having run up large debts they probably can’t repay. You could say that shale oil is the new subprime.

And:

Well, Mrs. Clinton isn’t just the most knowledgeable, well-informed candidate in this election, she's arguably the best-prepared candidate on matters economic ever to run for president. She could nonetheless mess up -- but ignorance won't be the reason.

On the other side, I doubt that anyone will be shocked if I say that Mr. Trump doesn’t know much about economic policy, or for that matter any kind of policy. He still seems to imagine, for example, that China is taking advantage of America by keeping its currency weak — which was true once upon a time, but bears no resemblance to current reality.

And:

Yet things could be worse. The Donald doesn’t know much, but Ted Cruz knows a lot that isn’t so. In a world in which gold bugs have been wrong every step of the way, repeatedly predicting runaway inflation that fails to materialize, he demands a gold standard to produce a “sound dollar.” He chose, as his senior economic adviser, Phil Gramm — an architect of financial deregulation who helped set the stage for the 2008 crisis, then dismissed warnings of recession when that crisis came, calling America a “nation of whiners.”

Mr. Cruz is, in other words, a man of firm economic convictions — convictions that are utterly divorced from reality and impervious to evidence, to a degree that’s unusual even among Republicans. A financial crisis with him in the White House could be, let's say, an interesting experience.

Nixon's War On Drugs: A Fraud

Click here for an article at CNN.com by Tom LoBianco entitled "Report: Aide says Nixon's war on drugs targeted blacks, hippies." Here's the money quote from top Nixon aide and domestic policy chief John Ehrlichman:

The Nixon campaign in 1968, and the Nixon White House after that, had two enemies: the antiwar left and black people. You understand what I'm saying? We knew we couldn't make it illegal to be either against the war or black, but by getting the public to associate the hippies with marijuana and blacks with heroin, and then criminalizing both heavily, we could disrupt those communities. We could arrest their leaders. raid their homes, break up their meetings, and vilify them night after night on the evening news. Did we know we were lying about the drugs? Of course we did.

"Why Do People Like President Obama?"

I'm reproducing here in full a reply on quora.com to the question: "Why do people like President Obama?" It's by Larry Hill, who says he is a retired engineer:

I'm a moderately liberal person and will be the first to admit how deeply distressed I have been by this President. Even in his seventh year, wizened and chastened by his unremitting Congress, Obama can't be trusted to do what I and most liberals would like to see him do.

On the other hand, I am convinced that in any situation requiring integrity and gravitas, this president will deeply examine issues and construct what he believes is the most right and the most correct response for America. Because he believes that once sworn in he's the president elected by the people, not by the party, and judges accordingly.

In the fall of 2008 I had listened to the investment siren song of the right's anti-Fed, anti-dollar, anti-debt, pro-resource investment philosophy and shunned all debt while holding strong on resource stocks. In six months we saw the spectacle of a Treasury secretary begging Congress to save the world, a presidency that floundered and collapsed in its waning days while credit freeze and market panic intensified. And spurning virtually the only investment - Treasuries - that would weather that storm, I watched three-quarters of my net worth and income evaporate even as I needed it desperately in retirement.

Obama's singular success at reviving the national economy to the point of almost universal optimism (among human beings, if not the political right), when March 2009 looked an awful lot like a replay of March, 1932, deserves our utmost respect. It took a half century for markets to recover their levels after 1929. It took Obama five years. Europe still hasn't figured out how to do it. (Nor has Kansas.)

Then in 2009, as my wife's job and all health insurance evaporated, we watched Congress tangle over a health plan that might make her insurable again with a cancer history - only to see the new President rebuffed at every turn, his every attempt at conciliation with the Right made a mockery and a fool's errand. The thing that eventually emerged from that made nobody happy, which probably means it was good law. That law got my wife insured.

In 2010, of course, the Right struck back [after sweeping Republican gains in Congress]. Public employment at all levels was cut wholesale and state economies deliberately sabotaged to try to force the country onto an austerity footing. Between 2011 and 2013 the red state austerity programs shaved between 1% and 2% off of GDP. Congressionally-mandated federal government austerity coupled with the government shutdown of 2013 nearly reversed the economy in the first two quarters of last year. But the oil collapse righted that ship.

Throughout this, the president took every penny at his disposal and every possible avenue to shore up what he could, to encourage infrastructure development and get money into the hands of people. Faced in 2013 and this year with ever more hostile REDMAP-generated right wing majorities, the austerity experiment is still running, and showing failure after failure, overseas and in various states. Kansas may never recover.

In 2011 Obama was excoriated for high energy costs throughout the country. Yet one constancy of his presidency has been support of energy development across the country - fracking, alternates and offshore development. Today, wholesale and retail energy costs have been cut in half - highly stimulative - and I am still waiting for that enthusiastic chorus of "Thanks, Barack!" from the right that he so richly deserves.

Do liberals hate fracking? You betcha. Poisons the Oglallah.

During the ACA fight and even this year, Obama has signaled his willingness to sign legislation trimming Social Security and Medicare. Nothing gives you quicker pariahhood in liberal circles.

Yes, he should have closed Guantanamo when he had the opportunity, before Congress changed in 2011. Since then, Congress has thrice-damned itself with its stranglehold on Cuba, our national embarrassment.

The 2011 National Defense authorization included draconian provisions to enable the midnight arrest and disappearance of people suspected of terror thought crime. Obama signed this, claiming he had no choice if he was to pay the military. Shame, shame on all.

The chaos triggered by the Bush invasion of Iraq reverberates ever more strongly across Africa and parts of Asia. Bush's failure to impede in any way Soviet adventurism in Georgia has led directly to the situation in Ukraine, and what happens there will determine the fate of the Baltics. But the fact is that Bush could not intervene, he had already squandered America's troops, money and influence in the Afghan and Iraqi morass. (Yes, Russia is technically not soviet, but Putin is.)

In contrast, Obama's presidency has dealt as well as any could with the toppling of regimes across Africa and Syria. At any number of points a misstep could have quickly exploded into all-out mobilization to fight wars of conquest and suppression in a dozen countries. OK, I'm not going to say reverence, but certainly awe that we are still able to buy milk and butter, and travel as freely as we wish. Under McCain/Palin today we would be drafting seventeen year olds for pending combat in Iran and Russia, in the developing global conflict and accompanying religious scourge. Cities across the globe would be smoking. Your city.

I suspect the fact that Europe, America and most of the globe are not involved in this conflict will come to be the definition of the Obama presidency. We have stood at the brink of the most perilous times since 1939, and have not stepped off. The world is remarkably peaceful. And for that, Obama deserves his Prize.

Yes, I want single-payer health care. It works fantastically well. Yes, I want a forceful stand on women's rights, particular those involving family planning: the less government, the better. No government is best.

Yes, I want food stamps expanded, not diminished. Recent studies show that strong welfare systems actually encourage the work ethic, not diminish as the right wing would have it. And local efforts to supply food to needy as SNAP money evaporates are woefully limited, and insufficient.

Yes, I want the twin voices of religion and money stilled in politics. Shut off the dark money flows, and tax religion like any other business if they insist in meddling with politics.

Yes, I want a tiny transaction tax to put a collar on high-frequency trading, which is killing markets worldwide. And, yes I want an end to HF front running of customer transactions at Schwab and other brokerages. Yes, jail sentences for the criminal activity at HSBC, Morgan et al.

And yes, I want a totally free Internet, not just in America but globally - because for some reason I still believe that the free exchange of ideas is what will save and extend humanity. Instead, you can't even say "global warming" in Florida - or discuss pollution in China.

But all in all, Obama is doing most often what is right, and sometimes good, and many times brilliant. He will be remembered as one of the truly outstanding presidents for what he fixed and what he avoided, with the opposition he faced doing it. And the calm moral courage he projects to the nation. He won't be remembered like the gilded propaganda icon of a Reagan, as reverenced in the breech by Republicans, but as a true transformative giant.

I wish he'd concentrate on some things the liberals might want.

[Update:] Since I wrote this a year ago, few things have changed. The economy is still performing very well and is at full employment, though some speed bumps remain as the Fed tries to normalize its books. Guantanamo is still open but maybe Obama will force a fait accompli on Congress. Congress is still obstreperous, and the Trump candidacy all but establishes the liberal claim that McConnell's opposition is born of pure racial hatred. We are still not in a ground war with anyone even as the true cost of Bush adventurism comes calling in cities around the world. The low price on hydrocarbons is reducing oil output. But since the effect is concentrated in one sector while the price benefits are widespread, the stimulus effect is being felt far and wide.Kansas since 2014 has billed itself as the proving ground of Republican governance and economic practice. It is failing badly in every important respect, and in its failure points out how effectively the Obama administration has handled the economy. Most damning is Kansas' willingness to harm its people while grunting and struggling to release the perfect Republican trickle.

Obama's Court nominee (Merrick Garland) seems to be the perfect centrist. Though Garland once wrote in dissent of a Roberts ruling while on the DC circuit, I worry about a tendency to support harsher prosecution. While at the same time the country is mulling John Ehrlichman's admission that the war on drugs and its harsh sentencing was a deliberate, cynical Nixonian attack on the growing power of blacks and liberals. How many lives destroyed? It is not clear where Garland would rule if presented with another Citizens United.

And as the summer election season approaches, Obama's favorable rating is as high as any president since the 1960's. At the same time, Bernie Sanders rides in on a progressive mount that appeals to half the Democrats, a majority of Independents and as many Republicans as favor Trump. I'm not certain how "liberal" Sanders is, but he comes trying to right many wrongs, including those many egregious things that Obama and Clinton are willing to let slide.

Wall Street Fines For 2008 Malfeasance - $40 Billion And Counting

Click here for an article by Matthew Goldstein in The New York Times entitled "Goldman to Pay Up to $5 Billion to Settle Claims of Faulty Mortgages."

The Wall Street firm [Goldman Sachs] said on Thursday it had agreed to a civil settlement of up to $5 billion with federal prosecutors and regulators to resolve claims stemming from the marketing and selling of faulty mortgage securities to investors.

But Goldman wasn't the biggest offender:

Bank of America in 2014 paid about $16.6 billion in a similar settlement with federal and state agencies, and JPMorgan Chase paid about $13 billion in 2013. In all, the banks have paid more than $40 billion in settlements to resolve claims investigated by the task force.

Why not criminal charges? A lot of people went to prison as a result of recent financial scandals. According to another New York Times article, by Jesse Eisinger, on April 20, 2014, states:

After the savings-and-loan scandals of the 1980s, 1,100 people were prosecuted, including top executives at many of the largest failed banks. In the ’90s and early aughts, when the bursting of the Nasdaq bubble revealed widespread corporate accounting scandals, top executives from WorldCom, Enron, Qwest and Tyco, among others, went to prison.

According to Charlie Pierce at Esquire, SPW (Senator Professor Warren) says the following:

"There's been a lot of revisionist history floating around lately that the Too Big to Fail banks weren't really responsible for the financial crisis. That talk isn't new. Wall Street lobbyists have tried to deflect blame for years. But the claim is absolutely untrue. There would have been no crisis without these giant banks. They encouraged reckless mortgage lending both by gobbling up an endless stream of mortgages to securitize and by funding the slimy subprime lenders who peddled their miserable products to millions of American families," Warren wrote. "The giant banks spread that risk throughout the financial system by misleading investors about the quality of the mortgages in the securities they were offering."