In 1,200 Word Profile on Eric Cantor, WaPo Neglects to Mention His Bet against the US

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So the WaPo did a 1200-word profile on Eric Cantor’s central role in debt ceiling negotiations. And somehow they never get around to mentioning that Cantor has a bet placed against US Treasuries.

Eric Cantor, the Republican Whip in the House of Representatives, bought up to $15,000 in shares of ProShares Trust Ultrashort 20+ Year Treasury ETF last December, according to his 2009 financial disclosure statement. The exchange-traded fund takes a short position in long-dated government bonds. In effect, it is a bet against U.S. government bonds—and perhaps on inflation in the future.

You’d think that’d be the sort of thing worth mentioning.

David Plouffe: ALSO Wrong on Consumer Confidence

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enjoy consumer confidence

enjoy consumer confidence by Shira Golding,

Greg Sargent has a post arguing that complaints about David Plouffe’s comments about unemployment are being distorted.

It seems Plouffe was actually asked a question about whether and how the unemployment rate would impact the Presidential race. He replied by claiming that the number itself wouldn’t impact people’s votes. In other words, Plouffe himself didn’t initially establish the political context. Plouffe then launched into a discussion about how the anemic recovery is experienced by people on a personal level. It was in that context that Plouffe reiterated that people won’t vote based on the numer alone.

You can accuse Plouffe of being wrong in claiming that people won’t vote based on the percentage of unemployed — I tend to think it may loom in people’s minds. You can argue that it was a misstep in that the quote does sound tone-deaf when reproduced without the surrounding context, and it’s understandable why people would see it as insensitive when viewed without that context.

But as Dave Weigel notes, the quote in isolation is widely being distorted in the media as a sign that Obama’s advisers have their heads in the sand about the economy.

Except that the transcript Sargent includes actually proves that Plouffe does have his head in the sand about the economy. After explaining that people don’t think of the economy in terms of unemployment numbers or GDP (I agree), he claims that people are actually feeling better about the economy.

The average American does not view the economy through the prism of GDP or unemployment rates or even monthly jobs numbers.

In fact, those terms very rarely pass their lips. So it’s a very one-dimensional view. They view the economy through their own personal prism. You see, people’s — people’s attitude towards their own personal financial situation has actually improved over time. You know, they’re still concerned about the long-term economic future of the country, but it’s things like “My sister was unemployed for six months and was living in my basement and now she has a job.”

There’s a — a “help wanted” sign. You know, the local diner was a little busier this week. Home Depot was a little busier. These are the ways people talk about the economy. [my emphasis]

Problem is, there’s a way to measure people’s attitude about their own personal situation, and it is not improving. Two key measures of consumer confidence, at least, show people’s attitude about their own personal situation has declined in the last month.

The consumer-sentiment gauge fell to 71.5 at the end of June from 74.3 in May. A preliminary June reading had pegged sentiment at 71.8.

The sentiment reading, which covers how consumers view their personal finances as well as business and buying conditions, averaged about 87 in the year before the start of the most recent recession.

[snip]

Earlier this week, a separate report showed that consumer confidence fell in June to the worst level in eight months on concerns about employment and income.

The Conference Board’s consumer-confidence index fell to 58.5 for the month from an upwardly revised 61.7 in May. Generally, when the economy is growing at a good clip, confidence readings are at 90 and above.

Now, consumer confidence may well turn around, and it has been going up with small hints of a turnaround. But it is not up right now–the Conference Board survey is worse than it has been for months.

Look, I’m not trying to make it easy for Mitt Romney to attack Barack Obama. But at every turn, the Administration does seem deaf to the complaints of ordinary people. Mitt’s no more in touch with those complaints, I’m sure. But that doesn’t mean Obama and his aides don’t have to start listening to the pain of real people.

Obama’s Plan to Address 9.2% Unemployment: Send More Jobs Overseas

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At today’s press conference responding to the lousy jobs report, Obama offered a few suggestions for how to create jobs: patent reform, infrastructure investment, confidence fairies and … “free trade.”

But as the Economic Policy Institute has shown, these trade deals would actually cost jobs, particularly in the manufacturing sector, which has finally begun to turn around. Colombia wouldn’t even be required to end its tolerance for the murder of labor organizers, as was originally going to be required. Not only that, but Republicans (the ones who actually want these trade deals) are now balking on funding Trade Adjustment Assistance as part of the deal, so workers whose jobs get sent to Korea can get training that will help them find a new one.

In short, Obama’s “solution” to the jobs crisis is–at least as Republicans envision it–a way to send jobs to a country where workers get killed for standing up to their employers without, at the same time, trying to help Americans adjust to losing their jobs.

Somehow, suggesting we address the jobs crisis by sending them overseas doesn’t make me believe in the confidence fairy.

Who Knew Firing Public Workers Increases Unemployment?

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photo: inoneear via Flickr

BLS:

Total nonfarm payroll employment was essentially unchanged in June (+18,000). Following gains averaging 215,000 per month from February through April, employment has been essentially flat for the past 2 months. Employment in most major private-sector industries changed little in June, while government employment continued to trend down.

[snip]

Employment in government continued to trend down over the month (-39,000). Federal employment declined by 14,000 in June. Employment in both state government and local government continued to trend down over the month and has been falling since the second half of 2008.

Meanwhile, wages declined.

In June, average hourly earnings for all employees on private nonfarm payrolls decreased by 1 cent to $22.99. Over the past 12 months, average hourly earnings have increased by 1.9 percent. In June, average hourly earnings of private-sector production and nonsupervisory employees declined by 1 cent to $19.41.

And DC’s solution is going to be to fight about corporate jet tax breaks for another week while cutting more government jobs.

David Plouffe’s “Same Old War Horses”

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Scarecrow, Digby, and Jon Walker rightly took David Plouffe’s promises that a 9% unemployment rate won’t hurt Obama’s reelection chances to task.

But I’m at least as appalled by this part of Plouffe’s statement:

The White House’s top political adviser, downplaying the significance of the unemployment rate in the 2012 election, said the Republican candidates are offering the same policies that caused the economic crisis and targeted one potential opponent — Mitt Romney.

“So all of them are basically just bringing out the same old war horses,” senior adviser David Plouffe said yesterday at a Bloomberg Breakfast in Washington. “Let Wall Street kind of run amok, cut taxes for the wealthy, starve investment in things like education, research and development.”

Let Wall Street run amok. Check.

Cut taxes for the wealthy. Check.

And while Obama hasn’t as obviously starved investment in education and R&D (indeed, the stimulus he doesn’t like to talk about increased investments in both), by insisting on deficit reduction at the same time as states have had (or pretended they had to) cut education and R&D to balance their budgets, he has allowed such cuts to happen on his watch.

It troubles me a bit that David Plouffe doesn’t even see the irony of his statement.  Sure, the Republicans will be running on all those things. But so will, to a large extent, Obama.

DSK Case Collapse: Lawyers, Phone Calls & Money the Shit Hits The Fan

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It is not often you see the total implosion of a major criminal case in quite such a spectacular fashion as we have witnessed with the Dominique Strauss-Kahn (DSK) case in the last 24 plus hours. As I said Thursday night when the news first broke of the evidentiary infirmities in relation to the putative victim were first made public in the New York Times; there is simply no way for the prosecution to recover, the criminal case is dead toast.

Today, the letter from the Manhattan DA’s Office to DSK’s attorneys detailing the Brady material disclosures gutting their victim’s credibility was made public. It is, to say the least, shocking. But what has transpired since then has been nothing short of stunning.

As expected, DSK had his release conditions modified to OR (own recognizance) and all restrictions, save for not leaving the United States, removed. If you do not think that is a crystal clear sign of just how much trouble the prosecution is in, then you do not know criminal trial law.

But the process of dismissing the case cannot take too long, DSK’s attorneys simply will not sanction that and, trust me, they have already mapped out an attack strategy should they need it. My guess is there will be a blitzkrieg should there not be a dismissal by next Wednesday. and if they did not have enough ammunition as of last night, the clincher was revealed late Friday night.

Once again, the breaking story comes from the New York Times:

Twenty-eight hours after a housekeeper at the Sofitel New York said she was sexually assaulted by Dominique Strauss-Kahn, she spoke by phone to a boyfriend in an immigration jail in Arizona.

Investigators with the Manhattan district attorney’s office learned the call had been recorded and had it translated from a “unique dialect of Fulani,” a language from the woman’s native country, Guinea, according to a well-placed law enforcement official.

When the conversation was translated — a job completed only this Wednesday — investigators were alarmed: “She says words to the effect of, ‘Don’t worry, this guy has a lot of money. I know what I’m doing,’ ” the official said.

It was another ground-shifting revelation in a continuing series of troubling statements, fabrications and associations that unraveled the case and upended prosecutors’ view of the woman. Once, in the hours after she said she was attacked on May 14, she’d been a “very pious, devout Muslim woman, shattered by this experience,” the official said — a seemingly ideal witness.

Little by little, her credibility as a witness crumbled — she had lied about her immigration, about being gang raped in Guinea, about her experiences in her homeland and about her finances, according to two law enforcement officials. She had been linked to people suspected of crimes. She changed her account of what she did immediately after the encounter with Mr. Strauss-Kahn. Sit-downs with prosecutors became tense, even angry. Initially composed, she later collapsed in tears and got down on the floor during questioning. She became unavailable to investigators from the district attorney’s office for days at a time.

Now the phone call raised yet another problem: it seemed as if she hoped to profit from whatever occurred in Suite 2806.

Game. Set. Match. There is so, so, much more of course (really, read the whole sordid set of facts) that absolutely guts any possibility of proceeding with the woman as a criminal victim against DSK but, Read more →

Will Cyrus Vance Turn His Head & Walk Away From DSK?

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You get abruptly educated, and extremely jaded, as an attorney traversing the halls of justice in the criminal defense bar, especially on sex cases, but the much ballyhooed, and with special glee on the left, case against Dominique Strauss-Kahn (DSK) has, from the get go, never set right with me. Turns out that may have been well justified, as the New York Times relates in a startling report tonight:

The sexual assault case against Dominique Strauss-Kahn is on the verge of collapse as investigators have uncovered major holes in the credibility of the housekeeper who charged that he attacked her in his Manhattan hotel suite in May, according to two well-placed law enforcement officials.

Although forensic tests found unambiguous evidence of a sexual encounter between Mr. Strauss-Kahn, a French politician, and the woman, prosecutors do not believe much of what the accuser has told them about the circumstances or about herself.

Since her initial allegation on May 14, the accuser has repeatedly lied, one of the law enforcement officials said.

Well hello there Clarice, that would seem to be a bit of a problem now wouldn’t it? Say what you will, this is a dead nuts killer set of events for the prosecution, and it was apparently still the least brutal limited hangout they could manage. Ouch. I would read this to say the state has completely lost any and all confidence in their complaining witness – the “victim” – because this type of release simply does not get made without that, whether it is a stated part of the release or not.

Rest assured, if this is being run by the NYT, it was almost certainly a sanctioned release. The key here is this seems to be actually evidentiary realizations the cops and prosecutors came to realize on their own, either independent of, or with little prompting from, DSK’s defense team. Hard to tell yet, but one thing is sure, the state does not seem to take issue with the gaping infirmities. That tells you about all Read more →

Betting for the Little People: Timmeh Geithner Departure Watch

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Apparently, Timmeh Geithner has told Obama that he may leave after a budget deal, citing family considerations.

I’d be singing “ding dong the wicked witch” if I didn’t know that his replacement will almost certainly be even worse.

But while we wait on his departure, I thought I’d offer the following two betting pools:

1) What bank do you think Timmeh will revolving door into?

2) Which will have a new head first, Treasury, or the Consumer Financial Protection Board?

FWIW, my guesses are:

1) JPMorgan Chase–and I sort of worry that Obama is planning a 1-to-1 swap like he pulled off with David Petraeus and Leon Panetta. After all, like CIA and DOD, JPMC and Treasury have effectively merged of late.

2) Of course, Treasury will have a new head first. In fact, I’d be shocked if Obama didn’t use a Timmeh departure as an excuse to put the CFPB on ice.

Of course, the only solution to all this is to appoint Liz Warren as Treasury Secretary. And also, to teach pigs to fly.

 

The Fed Gives JP Morgan Chase Another Multi-Billion Dollar Bailout

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Remember that swipe fee measure that passed the Senate twice? It lowered the amount credit card companies can charge merchants to $.12 a transaction. It was a stunning victory that retailers (which admittedly includes WalMart but also includes your locally owned business struggling to stay in business) won that battle twice.

Well, lucky for the banksters, they had one more ace in their pocket: The Federal Reserve, which just cut the baby in half and set transaction fees at $.21 plus some anti-fraud amounts.

The Federal Reserve is set to limit the fees that banks charge retailers for swiping debit cards to 21 cents, a higher cap than initially proposed.

Banks succeeded in convincing the Fed that its initial proposal of 12 cents was too low after a six-month lobbying blitz. They currently charge an average of 44 cents per swipe.

The Fed will formally adopt the rule Wednesday, which was required under the financial regulatory law enacted last year. The rule takes effect Oct 1, later than expected.

In addition to the 21-cent cap, the rule will also allow banks to charge a fraction more to cover the costs of fraud prevention.

Good thing the Fed is purportedly insulated from politics. Because otherwise that 6 month lobbying campaign would be responsible for the Fed caving where even our craven Congress did not.

Defending the Corporate “Freedom to Relocate”

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I wasn’t entirely fair when I quipped on Twitter that, if Obama asserts that “as a general proposition, companies need to have the freedom to relocate,” then shouldn’t people, too, be able to flout laws–like mortgage contract laws or immigration laws–to assert their “freedom to relocate.” Obama does say that Boeing has to follow the law.

Nevertheless, Obama does seem to suggest that Boeing’s choice to relocate a plant in South Carolina–allegedly in retaliation for past strikes in Washington State–is a good thing, because “jobs are being created here in the United States.”

With that stance in mind, I’m particularly interested in Obama’s assertion that, “the airplane industry is an area where we still have a huge advantage, I want to make sure we keep it.” That’s true–we are competitive in aerospace. And ignoring labor laws is one way to convince corporations to keep (not recreate, but shift from expensive to cheap states) jobs in the US.

There are other ways, of course, like direct incentives and requirements on American made goods. Obama has been better than recent presidents, but has done nothing near what the countries we compete against have done. But there are affirmative ways to make this happy rather than asking workers to forgo their rights in the name of everyone getting along.

I was thinking of this as I read this follow-up post at POGO. An earlier POGO report–based on a liberated IG Report–had detailed how Boeing had massively overcharged the US for helicopter spare parts.

The DoD OIG scrutinized Army Aviation and Missile Life Cycle Management Command (AMCOM) transactions with Boeing that were in support of the Corpus Christi Army Depot (CCAD) in Texas. The audit focused on 24 “high-dollar” parts. Boeing had won two sole-source contracts (the second was a follow-on contract awarded last year) to provide the Army with logistics support—one of those support functions meant Boeing would help buy and/or make spare parts for the Army—for two weapons systems: the Boeing AH-64 Apache and Boeing CH-47 Chinook helicopters.

Overall, for 18 of 24 parts reviewed, the DoD OIG found that the Army should have only paid $10 million instead of the nearly $23 million it paid to Boeing for these parts—overall, taxpayers were overpaying 131.5 percent above “fair and reasonable” prices. The audit says Boeing needs to refund approximately $13 million Boeing overcharged for the 18 parts. Boeing had, as of the issuance of the audit, refunded approximately $1.3 million after the DoD OIG issued the draft version of its report. Boeing also provided a “credit” to the Army for another part for $324,616. The Army has resisted obtaining refunds worth several million dollars on some of the overpriced spare parts, in opposition to the DoD IG’s recommendations. For instance, one of the IG’s recommendations was that the Army should request a $6 million refund from Boeing for charging the Army for higher subcontractor prices even though Boeing negotiated lower prices from those subcontractors. In response, the Army said that “there is no justification to request a refund.”

Note that last bit: the Army is, in some cases, refusing to ask for its (our!) money back.

To which a POGO reader asks,

POGO reader Mike offers his two cents on Boeing’s taxpayer ripoff:

The real question is when will the Army be held accountable? The Army was permitted to ignore billions in DCAA [Defense Contract Audit Agency] findings on contracts with KBR for war related contracts. The Army and DoD in general will continue to permit contractors to rip off the taxpayers because the contractors hold the power. Nothing will change as along as the Army and other services get away with it.

Any guesses whether the Army will be held accountable for its $71.01 straight pins?

Again, I’m not saying I want the government to outsource purchase of straight pins to China. But if we’re going to subsidize strategically chosen corporations in this way–and, potentially, by ignoring our own labor laws–then aren’t there better, more honest ways to subsidize these companies, ones that offer workers more say than just a plaintive “can’t we all get along”?