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Courtney a “New Democrat”

Tuesday, March 10, 2009

Hmmm.

From an email from Joe Courtney’s office:

Today at the White House, Congressman Joe Courtney and other members of the New Democrat Coalition met with President Obama to discuss critical issues facing our nation. The New Democrat Coalition is a group of like-minded moderate Democrats who have joined to seek solutions on issues such as the economic crisis, healthcare, and energy and technology innovation.

The “New Democrats” are the folks who led the fight to “improve” the recent bankruptcy amendments to make them more banker friendly, because after all, at this particular time, there’s no one in the country more deserving of a little love than your friendly neighborhood mega-bank.

Just when we thought we’d captured two out of three branches of government, we see our party at work, rapidly abandoning their president and trying to appease the non-existent middle. If the Republicans are too fixated on appeasing their base, the Democrats are too anxious to stab their own in the back. What we will get from the New Democrats is “responsible” policy positions that will be half measures in a time when only bold action will do. Personally, I prefer the old Democrats like Teddy Kennedy, who aren’t afraid to advocate a truly progressive agenda.


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Thorny issue

Monday, March 9, 2009

Charlie Savage of the Times, who has earned his stripes on this issue, examines Obama’s instructions to the Justice Department that it consult with the Justice Department before relying on any signing statement issued by any of his predecessors. Apparently, Obama felt it was impolitic to pick on Bush alone, so he has required his minions to consult on 200 years of signing statements.

Obama also stated that he would use signing statements himself, though far more judiciously than Bush.

I just watched Keith Olbermann, who opined that Obama has it wrong. In his opinion the president should either sign without comment or veto. The issue is a bit more complicated that that, since, as Savage points out:

.. [L]egal scholars, while critical of Mr. Bush’s use of the device, said that the bar association’s view was too extreme because Congress sometimes passed important legislation that had minor constitutional flaws. They said it would be impractical to expect a president to veto the entire bill in such instances.

As a practical matter, the president is charged with enforcing the law, and like any law enforcement officer, he has a lot of latitude in how he goes about enforcing them. If Obama does as he promises, his use of the signing statement may be non-controversial. What rankled most about the Bush signing statements was the audacity of them-in many cases the claims of unconstitutionality were obviously wrong, with legal reasoning direct from the John Yoo school of “let’s make it up”.

What Obama is now proposing to do with past signing statements is, among other things, a recognition that such statements are merely an expression of policy and have no legal effect whatsoever. What one president can state, another can un-state. Still, it would be best if there were some way to get meaningful and expeditious judicial review of these statements in appropriate cases. If any member of Congress who voted for the bill in question had standing to sue for declaratory relief, the problem would, perhaps, be largely solved.


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John Larson on cramdowns

Monday, March 9, 2009

A while back I mentioned that, according to Firedoglake, John Larson had lined up behind a “New Democrat” push to water down Obama’s bankruptcy cramdown proposal. I got an email from one his staff people, and we had a brief email exchange. According to the staffer:

I wanted to inform you that Congressman Larson is supportive and voted in favor of The Helping Families Save Their Home Act. In fact, the Congressman has worked with the members of House Judiciary Committee and authors of the legislation on establishing an accurate and thorough message highlighting the overall importance of this legislation in stabilizing the housing market.

The legislation provides fairness to those families facing foreclosure through no fault of their own. By providing bankruptcy judges the chance to modify existing mortgages for families who file for Chapter 13, families will be afforded the ability to make their payments and stay in their homes. All of this will be accomplished without one federal dollar being spent. Rep. Larson understands the importance of this bill in stabilizing the housing market, restoring our economy, and keeping American families in their homes.

Unfortunately, Firedoglake misinterpreted and misrepresented Congressman Larson’s role and stance concerning this legislation. Below I have provided you with a press release by Congressman Larson after the House of Representatives passed the legislation on Thursday.

Here is the text of a press release from Larson’s office on the issue:

Washington, DC – Today, the House of Representatives passed fair legislation to help keep American families who are facing foreclosure in their homes. Without spending any taxpayer money, the legislation gives bankruptcy court judges the chance to modify existing mortgages for families who file for Chapter 13 bankruptcy. Chapter 13 is not an easy way out of debt. It is a cumbersome and invasive process that requires a family to open up their finances to the oversight and management of the courts for five years.

Congressman John B. Larson (CT-01), Chairman of the House Democratic Caucus, said:
“The American Dream has been bruised and damaged by the record level of home foreclosures we’ve seen in this country over the last year. Millions of Americans either have or are at risk of losing their homes. The legislation we passed in the House today is a fair response to this crisis. Without spending one federal dollar it could keep hundreds of thousands of families in their homes. The Helping Families Save Their Home Act gives average Americans who own one home the same rights to keep that home when they face bankruptcy as investors and speculators who own two, three or more houses. The aspirations of the American Dream should apply to everyone, not just the wealthy.

Stabilizing the housing market is an important piece of our economic recovery. As long as Americans are losing their homes, the foundation of our economy and our neighborhoods is shaky. This legislation, along with President Obama’s plan to keep 8-9 million families in their homes will go a long way to restoring our communities and keeping the American Dream intact.”

Okay, I diligently tried to untangle this. First, I believe that the bill as originally proposed can be found here, and the bill as eventually passed can be found here. If I’m wrong then all I can say is that there are no other versions at the Thomas website.

There are significant changes from the first bill, none of which are advantageous to the consumer. One fairly major change allows the creditor to share in the profit should the debtor sell the home after the mortgage is modified. As an example: Debtor files for bankruptcy. He has mortgage debt of $150,000.00. The judge determines that the house is only worth $100,000.00 so he modifies the principal amount of the mortgage to $100,000.00. A year later the debtor sells the house for $110,000.00. The bank gets $8,000.00 of the $10,000.00 difference. The proportion is lowered as time goes on. I don’t believe there is a similar requirement in other cramdown situations, but I could be wrong.

There is also a condition that the debtor prove that he or she attempted to modify the mortgage privately before filing, which is just an additional nuisance requirement at best, and at worst a source of confusion if creditors can then claim that the borrower unjustifiably refused a proferred modification less generous than that allowed by the new law. There is also the problem that it is sometimes impossible to identify anyone with whom one can talk about modifying a mortgage.

There is also a change in language regarding the interest rates to which loans can be modified, though it is unclear to me which way it cuts. However, since all the other changes to the original act are favorable to creditors, I’m going to assume that the interest rate change is similar.

Overall, the changes introduce impediments to this process, which is unfortunate, because if it worked efficiently and quickly it would probably benefit everyone, including the banks.

Of course none of the above tells us much about Larson’s position in all of this. The statement he released is not inconsistent with Firedoglake’s report that he was among the “New Democrats” that watered down the bill, nor does it establish that he was among that group. The fact that he supported the final bill also proves nothing either way. The bill is better than nothing, and were I in Congress I would have voted for it, given the status quo alternative.

So, at least from the vantage point of this blogger, on this issue, the Congressman gets a Scottish verdict of “not proven” on the charge of conspiracy with the “New Democrats”. I should add that whatever his role in this particular case, I think he’s an excellent Congressman overall. He opposed the Iraq war from the start and as I wrote a while back, he’s leading a probably futile campaign to impose a carbon tax rather than the more cumbersome, less workable cap and trade system.


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Yet more on credit default swaps

Sunday, March 8, 2009

It is becoming crystal clear that, as Gretchen Morgenstern reports in today’s Times, the AIG bailout is in fact a backdoor bailout of the folks who purchased credit default swaps from AIG. The government has refused to disclose the names of these counterparties, but word is leaking out, and suffice it to say, the list is larded with the usual suspects (e.g., Goldman Sachs, Merrill Lynch, etc.).

There are interesting articles about the AIG bailout in particular, and the resulting counterparty bailout here and here. One very interesting factoid concerns Goldman Sachs. It’s former CEO was at the table when the AIG rescue was hammered out, despite the fact that everyone at the table knew or should have known that Goldman would be one of the primary beneficiaries of the AIG “rescue”

I have been looking for a coherent explanation of why it is necessary for the government to step in and pay full dollar on these instruments, which are referred to as insurance, but appear to have been only a sophisticated form of gambling. On the one hand, we seem to be directly shoring up these institutions, by helping them out from under the bad loans they made. On the other hand we are paying them full dollar on “insurance policies” on those same bad loans. It would be ever so nice if someone could explain why throwing $180 billion dollars at AIG (which then goes to these counterparties) is a more productive use of that money than using it to build infrastructure, or educate kids, or for a thousand other uses. I know that we are constantly told that it would be the end of the civilized world if these gamblers didn’t win all their bets, but I am beginning to suspect that this is a form of socialism we could all do without.


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Earmarks

Sunday, March 8, 2009

The earmark debate is a distraction of major proportions. It is also an example of hypocrisy of major proportions, as Taxpayer for Common Sense documents. You can download there data at this location.

The data demonstrate quite conclusively that earmarks are largely, though not solely, the domain of those states and of that party that keeps lecturing the rest of us about-well, about how terribly irresponsible our government is due to all those earmarks. By and large, Republican Senators lead the pack in requesting and getting earmarks. By and large the money is flowing from those states that pay the lions share of the taxes (e.g, the Northeast) to those that have made a century long habit of sucking the public teat (e.g., the South). It would be interesting to see what the per capita expense for earmarks is for those states that voted for McCain versus those that voted for Obama. Bear in mind that those states are largely the less populated ones, though each has two senators elbowing their way to the front of the lunch line.

Ryan Grim at the Huffington Post concludes:

Rural and small-state voters were the big winners on an absolute and on a per capita basis, even though it was big states and urban areas that have delivered Congress and the White House to Democrats. Of the top ten earmarking senators, only Sen. Dianne Feinstein (D-Calif.; $77 million solo; $235 combined), represents a large state and only three of the top ten are blue states. In the top 20, only six blue states are represented.

I’m not sure all those conclusions are expressly supported by the Taxpayers for Common Sense data, but its reasonable to conclude that earmarks do constitute a massive shift of wealth from Blue to Red States, and from urban to rural states, and therefore, by extension, from us socialists to the hardy self reliant folk in the “heartland”. Most of the Republican Senators railing against earmarks are, in essence, demanding that we stop them before they kill again.

There’s nothing wrong in theory with earmarks, and some of them are worthwhile. In total they are an extremely small percentage of the budget. They are a talking point really, and it would be nice if Reid (who is a sinner in his own right) would call their bluff by stripping the bill of any earmark requested by any Republican complaining about them (McConnell has 36 private earmarks (total cost a little more than $51 million). By way of comparison, the entire New England Delegation has 47 (total cost about 21 million), with the Democrats in the delegation accounting for 1 of those earmarks. If you include Bernie Sanders as a Democrat, the number increases to 17.

Reid may or may not need 60 votes to pass anything in the Senate, but he could stop a lot of the Republican nonsense by doing a better job of illuminating their hypocrisy.


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Leave Rush alone

Saturday, March 7, 2009

Unless you’ve been living under a rock, you have no doubt seen the Chris Crocker “Leave Britney alone” video, one of the most viewed youtube videos ever. If you have been living under a rock you can view it here. I am still not sure if he (she?) is serious or pulling our legs

Here’s John Amato with probably the thousandth takeoff on this classic video, entitled Leave Limbaugh Alone:


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Larson pushes for carbon tax

Saturday, March 7, 2009

John Larson is fighting a lonely, apparently hopeless fight to do something that is extremely sensible:

Representative John B. Larson embarked again this week on his lonely quest to enact a national tax on carbon dioxide emissions.

His idea is to set a modest price on a ton of emissions, gradually increasing it each year until the desired reduction in heat-trapping-gas pollution is achieved. Under the bill he introduced this week, virtually all the revenues from the tax would be returned to the public in lower payroll taxes.

“The American people want us to level with them,” Mr. Larson, a moderate Democrat from Connecticut and a member of the House leadership, said in an interview. “We create price certainty without any new bureaucracies or complicated auction schemes.”

Many economists and academics, as well as a handful of Mr. Larson’s colleagues on both sides of the aisle and perhaps a few White House officials, if secretly, agree that a carbon tax is a simpler and more effective means of tackling global warming than the complex cap-and-trade scheme embraced by the Obama administration and most Democratic leaders in Congress.

Even Al Gore has accepted the political reality that only a more cumbersome and less effective “cap and trade” system has any possibility of becoming law, though he would prefer a plan like Larson’s. The article points out that the cap and trade systems adopted in Europe have not performed well.

It’s true, as I’ve noted before, that the perfect is the enemy of the good. But there are also times when the “possible” is the enemy of the necessary. That seems to be the case with the carbon tax/cap and trade issue, as it is with the single payer/complex-make-sure-you-subsidize private insurance health care issue and the nationalize/throw money at banks issue.

Perhaps this is simply the playing out of an historical dynamic. Maybe all political systems ultimately fall apart because of the accumulated weight of choosing the possible over the necessary. What’s troubling is that so often we assume what is necessary is not possible. Cap and trade advocates point out that carbon tax proposals have been unpopular elsewhere. The fact is that both the straight on tax or “cap and trade” will be violently opposed in this country. Larson’s idea is to use the carbon tax to reduce the payroll tax, meaning it would benefit the vast majority of workers in this country from a financial perspective, not to mention that it would be more effective in preserving the planet on which they reside. It should be possible to sell that kind of tax, if one marketed it right, particularly if one were not overly concerned with being charged with waging “class warfare”. Parenthetically, isn’t it funny that the people most opposed to class warfare are the most likely to support any other form of warfare.

Larson may lose this fight, but he should be congratulated for waging it.


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Friday Night Music-Smokey Robinson

Friday, March 6, 2009

You can’t say much for the video in this clip, but the sound is great, and if the person who posted this to youtube is to be believed, this performance took place in October 2008. His voice is still superb, unlike some of the geezers who are still out there.


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Jon Stewart hits the mark

Thursday, March 5, 2009

Just got back from Drinking Liberally and definitely not up to writing anything.

Instead, I invite you to watch this clip from the Daily Show. It’s must viewing.


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A hard case

Wednesday, March 4, 2009

There’s an old saw in the legal biz: Hard cases make bad law. If that’s true, then the Supreme Court is about to make bad law.

In 2002 a West Virginia jury awarded $50 million dollars in damages to a coal plant operator that it found was fraudulently forced into bankruptcy by a company owned by one Don Blankenship. Blankeship took an appeal to the West Virginia Supreme Court. By a bizarre coincidence, at the same time that he took his appeal Mr. Blankenship took an interest in electoral politics. Specifically, he became outraged, simply outraged, at a judicial decision of the elected West Virginia chief justice (who just happened to have a judicial philosophy that made it unlikely he would rule for Blankenship), and proceeded to spend $3 million dollars to run a slime campaign against him. It worked, and his successor and the hitherto little know beneficiary of all that largess, cast the deciding vote that reversed the judgment. That successor, one Brent Benjamin, ignored requests that he recuse himself due to what some (well, actually, almost everyone) might say is at least the appearance of a conflict of interest.

The Supreme Court must decide if the plaintiff was denied due process as a result of Benjamin’s failure to recuse himself.

There is no easy answer for the court. If it rules in favor of the plaintiff then, among other things, it, or the lower federal courts, will have to intrude into the operation of the state courts, essentially policing elected judges. If it rules in favor of Blankenship, it will be green-lighting the buying and selling of judges. The problem is real. Until relatively recently, the big money did not go into judicial campaigns. That’s changed, and corporations are now sinking big money into judicial campaigns, often following Blankenship’s playbook of sliming sitting judges for rulings in emotional cases having nothing to do with the corporate interests they are actually trying to advance.

So even I feel a bit sorry for the court on this one. The obvious solution is to get rid of elected judges, but that’s not a realistic option for the Court. The truly troubling thing about this case is that certain of the Supreme Court justices are not troubled by it at all, a fact indicative of a degree of moral blindness one would rather not see in a Supreme Court judge:

[Plaintiff’s counsel Theodore] Olson says that an ordinary person may begin to doubt the neutrality of a judge if, oh, say, “that judge has just been put on the bench during the pendency of the trial of the case by his opponent’s contribution of $3 million …” Scalia says Olson has it all wrong. When people contribute millions of their own dollars to judicial-election campaigns, it’s because “they want me to be a good judge … and I’m showing my gratitude by being a good judge.” That’s the only expectation they have.

Of course, this is the guy who has no problem going duck hunting with a guy one day, and then ruling in his favor the next. Still, it’s hard to believe that even Scalia would utter such sentiments with a straight face. It’s one thing to feel that staying out of the fray is the lesser of two evils, it’s quite another to fail to see the evil.

As always, it will probably be up to Justice Kennedy to decide this case. It’s unfortunate that our “swing justice” appears to have little to recommend him, other than the fact that he is not quite so crazy as his four right wing friends on the court. This case cries out for a wise old man, and Kennedy can claim only one of those adjectives.

By the way, yes it is indeed Ted Olson, ex-Clinton prosecutor, representing the plaintiff. From a purely emotional view of the case, he’s on the right side this time.


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