Why American Industry (And Its Future) Matters

/82 Comments/in , , , /by
Image from ExploreHistory.com

Image from ExploreHistory.com

Ian has a great piece up at FDL on the financial sector’s problems, their genesis, and the Obama Administration’s conventional wisdom, status quo, manner of dealing with them:

I have become increasingly concerned that some in the Obama administration are treating this economic crisis as a "black swan" event. That is a very rare, random and unpredictable event. The key thing about black swans is that they are random and unpredictable and you can’t stop them from happening, you can only create your systems so that they can handle them if they occur.
…
But, of course, the economic and financial crisis unfolding right now was not random. It was predicted by multiple people, and it was predicted because of policy steps taken by government and widely known private actions.
…
All of which is to say the crisis was caused by a number of factors. It was not random. It was predictable and predicted. If we just muddle through this current meltdown—spend a lot of money bailing out the banks, throw some stimulus around—and don’t fix the fundamentally flawed incentives and structures of the system, it will likely happen again.

Ian was discussing the financial sector, but it strikes me that the same applies for America’s industrial and manufacturing sector. The United States was built on the backs of hard working people that planted and built things, sweated, toiled and prevailed. In the post-modern hustle and flow of the digital and financial whiz bang world, we seem to both forget and neglect the industry, manufacturing and workers that put us here. I want to focus, and open a discussion, on that.

I am not expert on the issues and economics that underpin this area, so I am going to rely on the collective wisdom here to engage and flesh out the discussion. I do, however, want to open that discussion on a familiar note, the American automotive industry. Roland Jones at MSNBC.com yesterday did an interesting piece as to why bankruptcy is not a viable option for General Motors:

“If these companies went into bankruptcy right now, in exactly the position they are in today, they would be liquidated because no one out there would supply them with the financing they need to get through bankruptcy,” Mark Zandi, chief economist with Moody’s Economy.com, told CNBC Wednesday.

That would mean a few million jobs lost, Zandi said, which would be “cataclysmic” for Read more →

Veni, Vidi, Vici – Obama’s Foreclosure Reveal In Phoenix

/72 Comments/in , , /by

246349.thumbnail.jpgAs you may know, President Obama came to Phoenix in order to roll out his $75 Billion Plan to Fight Home Foreclosures. This was exciting for me, because Obama spent last night at a resort, Montelucia, about 3/4 of a mile from my house. Lots of excitement; even more jammed up traffic yesterday afternoon and evening. Still, all in all, pretty exciting for an old desert dweller. Our dog, Kiki, is still barking at all the helicopters. Interlaced into this post will be a series of pictures taken by various Phoenicians and submitted to the Arizona Republic for open use on their website. I would have taken proprietary photos for Emptywheel, especially of the shots going down the road right by my house and entering Montelucia, but, alas, I was tied up with conference calls with multiple attorneys, all of whom are every bit as annoying as I am. Trust me on the latter.

246347.thumbnail.jpgFrom the New York Times:

President Obama pledged on Wednesday to help as many as 9 million American homeowners refinance their mortgages or avert foreclosure, an initiative he said would shore up distressed housing prices, stabilize neighborhoods and slow a downward spiral that he said was “unraveling homeownership, the middle class, and the American Dream itself.”

The plan, more ambitious than many housing analysts had expected, was unveiled by Mr. Obama in a high school gymnasium here, in a community that is among the nation’s hardest hit by the foreclosure crisis.246467.thumbnail.jpg

“This plan will not save every home, but it will give millions of families resigned to financial ruin a chance to rebuild,” the president told the crowd. “It will prevent the worst consequences of this crisis from wreaking even greater havoc on the economy. And by bringing down the foreclosure rate, it will help to shore up housing prices for everyone.”

In a nutshell from the LA Times, the plan would:

• Remove restrictions on Fannie Mae and Freddie Mac that prohibit the institutions, both taken over by the government last year, from refinancing mortgages they own or have guaranteed when more is owed on a home than it is worth. The White House says this could reduce monthly payments for up to 5 million homeowners.

246470.thumbnail.jpg• Create incentives for lenders to modify subprime loans at risk of default or foreclosure. For lenders that agree to reduce rates to levels borrowers can afford, the government will make up part of the difference between the old monthly payment and the new payment. Participating lenders also will be required to cut payments to no more than 31 percent of a borrower’s income. Up to 4 million homeowners could benefit.

Read more →

Obama Hates The Truth On Binyan Mohamed

/119 Comments/in , , , , /by
Graphic by Darkblack

Graphic by Darkblack

The news last week that President Obama had bought into and signed off on the full boat of shameful state secrets assertion in the case of Binyan Mohamed v Jeppesen Dataplan set off a wave of criticism. Obama came to the criticism the old fashioned way, he earned it by breaking his campaign promise and continuing the wretched excess of unitary secrecy. Obama’s about face, and turn to the dark side of Bush/Cheney secrecy shocked even Ninth Circuit Chief Judge Mary Schroeder when confronted with it at the Mohamed v. Jeppesen Dataplan hearing.

That is the part of Obama’s war on Binyam Mohamed through Bush style secrecy that has been widely reported, but there is much more that is not as well known. It ought to be. From this morning’s Guardian:

A policy governing the interrogation of terrorism suspects in Pakistan that led to British citizens and residents being tortured was devised by MI5 lawyers and figures in government, according to evidence heard in court.
…
The existence of an official interrogation policy emerged during cross-examination in the high court in London of an MI5 officer who had questioned one of the detainees, Binyam Mohamed, the British resident currently held in Guantánamo Bay. The officer, who can be identified only as Witness B, admitted that although Mohamed had been in Pakistani custody for five weeks, and he knew the country to have a poor human rights record, he did not ask whether he had been tortured or mistreated, did not inquire why he had lost weight, and did not consider whether his detention without trial was illegal.
…
Mohamed was eventually able to tell lawyers that before being questioned by MI5 he had been hung from leather straps, beaten and threatened with a firearm by Pakistani intelligence officers. After the meeting with MI5 he was "rendered" to Morocco where he endured 18 months of even more brutal torture, including having his genitals slashed with a scalpel. Some of the questions put to him under torture in Morocco were based on information passed by MI5 to the US.

The Guardian has learned from other sources that the interrogation policy was directed at a high level within Whitehall and that it has been further developed since Mohamed’s detention in Pakistan. Evidence of this might emerge from 42 undisclosed US documents seen by the high court and sent to the MPs and peers on the intelligence and security Read more →

BREAKING: Burris Fesses Up

/81 Comments/in , , , /by

rolandburris-1thumbnail.thumbnail.jpgChicago tenor Roland Burris is singing a new tune:

U.S. Sen. Roland Burris has acknowledged he sought to raise campaign funds for then-Gov. Rod Blagojevich at the request of the governor’s brother at the same time he was making a pitch to be appointed to the Senate seat previously held by President Barack Obama.

Burris’ latest comments in Peoria Monday night were the first time he has publicly said he was actively trying to raise money for Blagojevich. Previously Burris has left the impression that he always balked at the issue of raising money for the governor because of his interest in the Senate appointment.

In comments to reporters after appearing at a Democratic dinner, the senator several times contradicted his latest under-oath affidavit that he quietly filed with the Illinois House impeachment panel earlier this month. That affidavit was itself an attempt to clean up his live, sworn testimony to the panel Jan. 8, when he omitted his contacts with several Blagojevich insiders.

Now this is something that Marcy (see: here and here) predicted, as did many of you. So, it is not exactly a shocking Captain Renault moment. That said, it is still extremely damning and is going to lead to a justified uproar. Already Illinois Attorney General Lisa Madigan is calling for a deeper investigation, although she has held short of claiming perjury by Burris.

It is just the bundling efforts that Marcy predicted may be in play that appear to be in issue:

Burris said Robert Blagojevich told him, “‘We need to raise some funds. We hope that you could probably get some of your friends together.’ I said, ‘What type of money we looking for?’ He says, ‘Can you raise us 10-or-15 thousand dollars?’

Here are the new details Burris has copped to as of last night:

“So some time shortly after Obama was elected, the brother called,” Burris said last night of Robert Blagojevich. “And now in the meantime, I’d talked to some people about trying to see if we could put a fund-raiser on. Nobody was—they said we aren’t giving money to the governor. And I said, ‘OK, you know, I can’t tell them what to do with their money.’”

“So when the (governor’s) brother called me back, I said, ‘Well, look Rob…I can’t raise any money from my friends. I said, maybe my partner and I, you can talk this over and see, could we go to some Read more →

GM Gets Its Loan; No Bankruptcy for Now

/21 Comments/in , , /by

When it was announced Sunday that President Obama had decided against appointing an "Auto Czar", instead opting for a panel of Administration financial experts including, but not limited to, Treasury Secretary Timothy Geithner, National Economic Council Director Lawrence Summers and Ron Bloom, it pretty much signaled that the Administration was going to continue to work with GM as an existing, functioning entity instead of forcing them into bankruptcy.

Monday night, that was borne out. From Reuters:

The U.S. government will release $4 billion in additional aid to General Motors Corp (GM.N) on Tuesday as planned, a White House aide said on Monday, ahead of the deadline for the automaker to submit a new survival plan.

The aide said GM’s smaller rival Chrysler LLC’s request for additional aid would be treated as a new request and dealt with separately.

GM is seeking concessions from the United Auto Workers union and creditors under the terms of its $13.4 billion federal bailout. It must submit a restructuring plan to U.S. officials on Tuesday showing how it can cut costs and pay back the loans.

Now that does not mean that the moment is over for GM, far from it. The company still has ongoing crucial negotiations with the auto workers union (UAW) that must be completed, and must formally submit its grand restructuring plan. The plan will not be fully known until officially submitted and made public, which is likely not to occur until the markets close tomorrow, but early details reveal a framework for a radically different General Motors in the future:

G.M. will file what is expected to be the largest restructuring plan of its 100-year history on Tuesday, a step it must take to justify its use of a $13.4 billion loan package from the federal government.

The plan will outline in considerable detail, over as many as 900 pages, how G.M. will further cut its work force, shutter more factories in North America and reduce its lineup of brands to just four, from eight, according to executives knowledgeable about its contents. The remaining core brands will be Chevrolet, Cadillac, GMC and Buick.
…
The plan will also probably include revisions in executive compensation and targets for cutting dealers and brands like Saturn and Pontiac.

Similar discussions are underway with Chrysler, which also has a deadline tomorrow to submit its restructuring plan; details of the plan or government commitment are not yet forthcoming.

Conason’s Lost Truth About Reconciliation

/98 Comments/in /by
h/t Zapirpo @ sahistory

h/t Zapiro @ sahistory

Joe Conason has a new piece out in Salon that is enough to cause sane heads to explode. Noting that, like math, bringing accountability is hard, Conason biliously opines:

Here we have no such consensus and no revolutionary government with the power to mete out retribution to vanquished foes. What we have instead are the unrepentant officials of the Bush era, who continue to justify their misconduct as critical to the nation’s survival. We have a new administration, immured in a world economic crisis, that recognizes conflicting imperatives of accountability and cooperation. And we have a responsibility to explore how the nation embarked on "a dangerous and disastrous diversion from American values," as Leahy put it.

Is there a way for President Obama to pursue that responsibility without inflicting vengeance or humiliation? Perhaps he ought to consider the creation of a presidential commission whose aims would be purely investigative — and encourage the participation of those implicated in the abuses of the past by promising a complete pardon to anyone who testifies fully, honestly and publicly.

With that gesture, he would acknowledge the importance of uncovering the facts, no matter how ugly, while magnanimously binding up the nation’s wounds. He could leave the issue of criminal prosecution to international authorities that can act without any partisan taint. And he could seek truth without vengeance.

Conason waxes romantic about Sen. Pat Leahy’s much ballyhooed truth and reconciliation plan. Here is the money quote from Leahy:

We could develop and authorize a person or group of people universally recognized as fair-minded, and without axes to grind. Their straightforward mission would be to find the truth. People would be invited to come forward and share their knowledge and experiences, not for purposes of constructing criminal indictments, but to assemble the facts.

That’s right, another blue ribbon commission that is going to solve our difficult problems of governance. Yeah, that is going to work out well because, you know, such things always do. Paging Lee Hamilton to the blue ribbon phone. The problem with Leahy and Conason’s commission is that there exists a body of law, both statutory and common, for a reason; for it to be the rule and for the rule to be enforced. Conason wants to be "magnanimous" and "pardon" and "leave the issue of criminal prosecution to international authorities that can act without any partisan taint". What Read more →

President’s Day Down South

/100 Comments/in , , /by

Here it is, another glorious President’s day, and wouldn’t you know it world leaders are exchanging presents. And Venezuelan President Hugo Chavez has sent one President Obama’s way:

President Hugo Chávez handily won a referendum on Sunday that will end presidential term limits, allowing him to run for re-election indefinitely and injecting fresh vibrancy into his socialist-inspired revolution.

The results, coming after voters had rejected a similar effort by Mr. Chávez just 15 months ago, pointed to his resilience after a decade in power, as well as to the fragmentation of his opposition, which as recently as November had won key mayoralties and governorships.

The vote opens the way not only for Mr. Chávez to run for a new six-year term when his current one expires in 2013, but could also bolster his ambitious agenda as an icon of the left and a counterweight to American policies in Latin America.

It also creates a new foreign policy challenge for the Obama administration, strengthening a leader who has made a career of taunting and deriding the United States, even though Mr. Chávez just this weekend seemed to open the door for a different relationship.

Chavez is not going away anytime soon, and with the petro status of Venezuela remaining significant, both as to the US and as a vehicle for Chavez to spread influence in Latin America, Barack Obama needs to fashion a coherent policy for Latin America as a whole and Venezuela in particular. President Obama has shown a refreshing tendency in foreign policy to address glaring problems head on and, unlike the previous Bush Administration, actually use intelligence instead of muscle.

A heavy fist and a thumbed nose was about all the subtlety George Bush showed in his Latin American foreign policy; it is time for that to change. With the decline and fall of Fidel Castro in Cuba, and brother Raul being both slightly more progressive and not long for office himself, coupled with Chavez’s newfound extended lease on power and inability to know what to do the Obama agency of change, it is time for a new direction on both. We don’t need to all be best friends, but we need to quit being intransigent enemies for the sake of nothing more than needing to make each other a villain to play off of. President Obama can stop the stupid; he should.

Burris’ Campaign for the Senate Seat

/39 Comments/in /by

In this post, I’m going to make a wildarsed guess at what actually went down with Burris’ campaign to be Senator. See the timeline of known interactions below.

The key to understanding what really happened in Burris’ campaign to be Senator is a discrepancy between what RobBlago is saying and what Burris is saying. In a statement to the Sun-Times, RobBlago’s lawyer  Michael Ettinger claimed that RobBlago didn’t know about Burris’ interest in the Senate seat when he made three fund-raising calls to Burris.

"He didn’t know he was in the running for the U.S. Senate seat," Michael Ettinger said.

But Burris had already expressed his interest in running to at least three people (John Wyma and Doug Scofield at a June fundraiser, and Lon Monk in July and/or September) by the time RobBlago first called. And Burris said that the Senate seat came up during at least two of their calls. In fact, Burris says that when RobBlago first called in October, RobBlago clearly stated that he knew Burris was in consideration for the seat.

I asked Rob Blagojevich what was going on with the selection of a successor if  then-Senator Obama were elected President, and he said he had heard by name mentioned in the discussions.

So here’s what I think happened (and this is all a wildarsed guess).

Burris told all the Blago people he had ties with of his interest in the seat. By early October, RobBlago was already trying to fund-raise off candidates for the seat. He called Burris and specifically in the context of the Senate seat asked him to do a fund-raiser for Blago (note, this would almost certainly have taken place before Fitz bugged Blago’s office, so there’s almost certainly no tape of this conversation). Burris deferred until after the election, perhaps because he wanted to make sure of two things: that Obama got elected and that he was under serious consideration before he went to the trouble of having a fundraiser. It is fairly clear that Burris was playing Blago’s game at this point, because he was already a known candidate for Obama’s seat–doing a fundraiser in October would be perceived as just as much an "attempt to curry favor" from Blago as would a fundraiser after the election!! But rather than saying no, Burris said, talk to me after the election.

Read more →

Any Bets Burris Did Bundle Donations?

/8 Comments/in /by

Here’s a prediction of where the new Burris controversy is going: I suspect we’ll find out, in coming days, that while Burris did not donate directly to Blago, he never refused to bundle donations for Blago. I don’t know whether Burris actually did bundle donations, but I suspect we’ll learn that Burris has never refused to do so.

As Sun-Times reports, there is some debate over whether, as part of his discussions with Rob Blagojevich after the election, of fund-raising from others for Blago.

In October and again in November, Burris spoke with Robert Blagojevich, who initially asked him to host a fund-raiser. Burris said he’d get back to him after the election, sources with knowledge of the conversations said. The two later talked again, and Burris again was asked for campaign cash.

Burris said he refused to contribute and "made it unequivocally clear … that it would be inappropriate and pose a major conflict because I was interested in the Senate vacancy."

A source with knowledge of the exchange said there was some discussion about Burris possibly getting others to give or raise money on his behalf. Not so, according to Burris: "I did not donate or help raise a single dollar for the governor from those conversations and would never consider making a donation through a third party."

Note the form of Burris’ denial. In response to an assertion that there was "some discussion about Burris possibly getting others to give or raise money on his behalf," Burris (in what appears to be an unsworn statement to the newspaper) responds, "I did not … help raise a single dollar for the governor … and would never consider making a donation through a third party." I’m not sure what the "did not … help raise a single dollar" would include (would it include telling his partner–who was on the board of the charity at which Blago’s wife worked–to go raise money, but then not getting involved in the actual fundraising?), but Burris then says he would not make a donation through a third party, which is slightly different than having others give on your behalf.

Read more →

Burris Did Not Want to Reveal His Conversations–and He Didn’t

/15 Comments/in /by

Check out this video of Roland Burris’ testimony before the IL Legislative Committee. Here’s the transcript, on the interactions between Burris and his lawyer.

Rep. Jim Durkin: Prior to his arrest, did you have any conversations with the governor about your desire to be appointed to the seat?

Roland Burris: No.

Durkin: OK. Did you talk to any members of the governor’s staff or anyone closely related to the governor, including with family members or any lobbyists connected with him, including oh, let me throw out some names: John Harris, Rob Blagojevich, Doug Scofield, Bob Greenlee, Lon Monk, John Wyma? Did you talk to anybody who was associated with the governor about your desire to seek the appointment prior to the governor’s arrest?

Burris (confers with his attorney off-mic and says): I talked to some friends about my desire to be appointed, yes.

Durkin: I guess the point is I was trying to ask: Did you speak to anybody who was on the governor’s staff prior to the governor’s arrest or anybody, any of those individuals or anybody who was closely related to the governor?

Burris (again confers with attorney and says): I recall having a meeting with Lon Monk about my partner and I trying to get continued business and I did bring it up, it must have been in September-maybe it was in July of ’08 and you know, ‘If your close to the governor, well let him know that I will feel certainly interested in the seat.’"

Durkin: OK.

Durkin lists off a list that includes all five people whom Burris has now admitted speaking to about the seat and other issues. Burris’ lawyer seems to know immediately that Burris is going to need help with the question and asks for a moment to confer. Burris gives his attorney a short explanation, the attorney responds with one word (seemingly telling him he has to reveal it), and the elaborates that advice. Burris then gives his weasely answer, "I talked to some friends." Durkin tries again and asks what was in effect a simple yes or no question about whether Burris had talked to anyone on the Governor’s staff or "was closely related" to the Governor.

Rather than saying yes, or starting with those closest to the Governor (his brother), Burris launches into a vague answer about Lon Monk.

And he never gets around to revealing that conversation in which Rob Blagojevich discussed fundraising in the context of the Senate appointment. And here–from later in the transcript–is Burris trying to avoid answering whether or not he would have turned the Blagos in if they asked for a clear quid pro quo.

Durkin: At any time were you directly or indirectly aware of a quid pro quo with the governor for the appointment of this vacant Senate seat?

Burris: No sir.

Read more →