A Conservative Leaves the Nest — Not Far Enough, Though

Michael Smerconish is Philly’™s big conservative radio talk show host, and yesterday’™s column by him in the Philadelphia Inquirer asks some tough questions, even condemns the Bush Administration, though he is careful not to even use the words ‘œBush’ or ‘œCheney’ in his piece. I suppose he’™s a big wimp and using Rumsfeld as [...]

Commentary By: Steven Reynolds

Michael Smerconish is Philly’™s big conservative radio talk show host, and yesterday’™s column by him in the Philadelphia Inquirer asks some tough questions, even condemns the Bush Administration, though he is careful not to even use the words ‘œBush’ or ‘œCheney’ in his piece. I suppose he’™s a big wimp and using Rumsfeld as a scapegoat.

Instead, I suspect we are completely reliant on Musharraf, who is willing to do only as much as guarantees him the continued support of America, but not enough to undermine his tenuous hold over his nation’™s tribal leaders. During my trip, I questioned senior military leaders about my suspicion.

One was quick to use the word sovereignty in his reply before describing the search as ‘œdifficult and nuanced.’ Another told me the hunt was the equivalent of finding one man in the Rockies. Several asked me what would happen if they did find him, insinuating that support for the war in Iraq would further dissipate if that were to occur.

I’™m not blaming our military. But if I am correct

Sunday, July 31st, 2011 by Richard Blair |

Sweet Caroline

The public is clamoring for the appointment of Caroline Kennedy to the Senate, and that’s a good thing for Democrats as it takes the media away from corrupt Illinois Governor Blagojevich. I’m thinking Governor Patterson will be talked into making an announcement early to get a handle on positive news in the weekend’s news cycle.

Commentary By: Steven Reynolds

Is it true that the Neil Diamond hit, so loved by Boston Red Sox fans, is about Caroline Kennedy? Man, is that a big Eww or what? Still, I’m enamored of the mature Caroline Kennedy, and it appears the voters in New York are as well. That’s what the polls are saying as they gauge public support for Caroline Kennedy replacing Hillary in the Senate. I know the arguments about not putting her in because of her name, that it is something like nepotism or maybe a celebrity appointment. I’m confident she’d do a good job, and she’s a bit symbolic, and I think symbols are just fine.

Speaking of polls, Barack Obama is enjoying huge approvals (73%!) as we sneak our way towards the inaugural. In contrast to the Bush Administration, garnering huge poll numbers isn’t exactly tough. The Blagojevich scandal will likely hurt Obama in this regard, and any replacement for him in the Illinois Senate seat is going to be tainted now, but that Caroline Kennedy possibility counters the bad press from Illinois pretty well, in my view.

Expect an appointment soon so that the weekend news cycle is not dominated by the auto bailout and Rod Blagojevich.

Thursday, December 11th, 2008 by Steven Reynolds |

Bloated Rhetoric and PR Sinks the Big 3 Bailout

This bailout of the Big Three automakers is not an easy issue, and their flying in three seperate private jets is just part of the problem. Americans will take this hit, including the unions and including the notion of both jet pooling, carpooling and a commitment to mass transit. This is an opportunity Bush will shrink from, as have the Dems, so far.

Commentary By: Steven Reynolds

I am reminded of those dancing hippos in Disney’s Fantasia. Everyone is dressing up nice, flying on their fanciest corporate jets, puffing themselves up before the camera. Congressmen, Titans of failing industry, Senators, Talk Show babblers, Union Leaders. It’s all a dance with far more attention to the drama than to the facts of the issue. Will a bailout help America? Isn’t that the most basic issue here? It seems much less the focus today than that a potential candidate for President in 2012, Mitt Romney, has come out against the bailout in the New York Times. This has become far more a PR and political event than a rational and steady examination of the economic advantages and disadvantages, as far as I can tell.

On the PR side, the Big 3 Execs should certainly have jet-pooled to the hearings in Washington. Oops! Tres stupide, non? We just got out of an election where the word “elitist” is being thrown around like confetti and the boys from Detroit each take their own private jet to DC? Hey, don’t get me wrong, I believe in companies using private jets. I am the son of an executive and I flew on those jets with Dad for several years, at least a half dozen times. I have no problem with the use of private jets, but GOOod GOD, MAN, FIRE YOUR PR PEOPLE NOW! Mr. Wagoner, Mr. Mulally and Mr. Nardelli, get a clue.

How about those bloated salaries? Do you think, Mr. Wagoner, that it is unfair of we who you are asking for a handout ask about your pay? (Forbes rates it around $14MM last year.) Mr. Mulally? ($21.7MM in 2007.) As far as creating a little tiny bit of goodwill in front of Congress and the Senate is concerned, these guys should have opened with a description of plans already underway for scaling back pay of executives, including themselves. They did not, but instead showed up in a phalanx on private jets. That PR blunder is overshadowing the issue, and part of delivering a message is managing such distractions.

More bloviation comes from the Senate, where Harry Reid is passing the buck to George Bush and to a GOP proposal. Hey, Bush has got the cash now in that $700BB bailout package they don’t seem to be spending, and he’s still in charge. There aren’t two Presidents at a time, after all. Bus will do the sensiblwe thing, right? Can you say “Heck of a job, Pausony?”

This is a debacle in the making with no easy solutions. The potential impact is devastating, whether we go through bankruptcies for the Big Three or whether we bail them out. The State of Michigan could go under, we could lose millions of jobs, and inaction or the wrong action could trigger a deep depression. Or so the bloviating is warning us. It’s time for a steady hand, and that hand we elected doesn’t enter office until January 20th. But let me suggest a solution.

Someone should take charge. The salary and pension structure at the Big 3 is the problem, and if there is a bankruptcy, then the Big 3 would be able to bargain hard for concessions. Bankruptcy has its perils, however, in that people likely won’t buy cars from companies in peril, as they are worried about warranties and the like. Bankruptcy is rightly seen by the automakers as the first step towards collapse. Whoever takes this by the horn needs to offer a way to keep the auto companies viable for the long term, and that means massive UAW concessions. Nope, that’s not going to make the unions happy, but it is reality. It’s time to mandate a government controlled reorganization tied to a bailout, a reorganization tied to cuts in pay and pension reform for the entire auto industry. If this means an equity stake by the government, just as we now have one in much of the banking industry, then so be it.

Bold? You betcha! Politically risky, since it stomps on the unions like a bug? You betcha! But let’s look at some positives about the US Auto Industry. JD Power’s evaluations of the quality of the cars themselves are as high as they’ve been in a long time. The productivity of American auto workers is high, though their salaries be bloated. What is needed here is a plan that addresses costs for the auto industry both short and long term, that addresses the need to turn the industry radically towards energy efficiency and new energy technologies, and that injects buying power into the hands of American consumers. Only government action can do such a thing, and only bold government action.

I imagine at Barack Obama headquarters, where today they are focused on Janet Napolitano, our soon-to-be Secretary of Homeland Security. It is time for Barack Obama to call up Nobel Laureate Paul Krugman, investment genius Warren Buffet, and the rest of his stellar economic team and ask what the bold plan should be, the nuts and bolts of it, and then take that plan to the people. I can hardly blame Obama if he does not push this hard, given that he is not President yet, but it seems to me that the time is here for action, and nobody trusts Bush. This one will ultimately be in Obama’s hands, so maybe it is time to act now so that Bush and the GOP don’t dig us a deeper problem.

Hey, check that out. A confirmed liberal, I just proposed a plan that smacks the unions hard and blames Democrats in Congress for passing the buck. Of course, I also blame the Republicans for ineptitude. Still, this is not a partisan issue. It is about our entire country potentially going into a depression, not a mere recession. That means drastic action, guided by the smartest men and women out there, needs to be put on the table and now.

Thursday, November 20th, 2008 by Steven Reynolds |

Joe the Turncoat and Harry the Indecisive

Spineless Dems strike again. This time it is Harry Reid, who should have brought the hammer down on Joe “the Turncoat” Lieberman long, long ago. There was no obligation that Lieberman support Obama in the election, but there was an obligation that he not attack Obama. This after Obama campaigned for Lieberman in his tight race.

Commentary By: Steven Reynolds

Harry Reid called Joe Lieberman into his office today to talk about Joe’s behavior lately. Let’s just say not any of us Democrats has been pleased with Joe’s attending the Republican Convention and speaking out against Barack Obama. Let’s call him “Joe the Turncoat” for the purpose of this little piece. And Harry? We could call him “Harry the Reluctant,” or ” Harry the Weasel,” or maybe “Harry the Unforcer,” but I think I’ll go with “Harry the Indecisive” for my purposes today.

OK, Harry Reid didn’t make any decisions yet about what to do with Joe the Turncoat, and that’s what’s got me peeved so far. This is a slam dunk for anyone with a set. (Maybe that’s the new name for Harry Reid, “Harry the Stoneless?”) Here’s how they report it in the New York Times:

“No decisions have been made,” Mr. Reid said. “While I understand that Senator Lieberman has voted with Democrats a majority of the time, his comments and actions have raised serious concerns among many in our caucus. I expect there to be additional discussions in the days to come, and Senator Lieberman and I will speak to our caucus in two weeks to discuss further steps.”

Harry may be indecisive, a quality I do not want as my leader in the Senate, but the Connecticut Democrats will likely censure Joe the Turncoat. Hey, maybe one of them can do Harry the Indecisive’s job? Oh, it’s really too early for me to complain about Harry the Indecisive right now, as he’s presiding over a lame duck Senate, but please, would SOMEBODY stand for election against him? Hey, Hillary Clinton, why not you?

What kills me on the coverage here is that Joe the Turncoat seems to think he has options, or at least that’s the lead in a lot of these stories. The AP has Joe “Mum on his Future,” as if he should have a say about his future int he Democratic Party. The New York Times has Lieberman pretending he has some control in the matter:

“I’m thinking about what my options are,” Mr. Lieberman said.
Mr. Reid issued a statement notably lacking in warmth in which he called the meeting “the first of what I expect to be several conversations.”

I suppose, as Reuters suggests, “keeping all options open” means Joe the Turncoat just might become a Republican. I’ll support that move.

No, Lieberman should have no say, and even if he promises to behave, he shouldn’t be believed. This is not just a Democrat voting his conscience and supporting someone on the other side. Joe the Truncoat had a hard fought battle himself a while back against Ned Lamont. Here’s Stan Simpson at the Hartford Courant about what Joe the Turncoat did then:

The irony of Lieberman’s embrace of McCain, Democratic operatives here in Connecticut tell you, is that Lieberman begged – BEGGED – Obama to come to CT last March to help Lieberman in his race against upstart Ned Lamont. Obama obliged and gave the keynote speech at the Dems’ Jefferson-Jackson-Bailey dinner.

Lieberman later showed his gratitude by stabbing Obama in the back and essentially joining the Republicans in trying to defeat the Democrats.

Look, Joe the Turncoat can’t be trusted anymore. Let him hang out with John McCain from here on out. They can sit on the front porch and practice yelling “GET OFF MY LAWN together or something. But let’s take away his key to the Democratic Cloakroom. It is time Harry the Indecisive make the right decision and ditch Joe the Turncoat. Frankly, it’s time the Democratic Caucus replace Harry the Indecisive.

Thursday, November 6th, 2008 by Steven Reynolds |

Bailout Imbroglio: Politics, Power, Pulpits, & Profit

The failure to pass bailout legislation is a symptom of a larger issue…one that percolates in the background. Good governance must promote a social structure that insists the nation be neutral while accepting the soul’s autonomy. Preserving our American identity hangs in the balance.

Commentary By: Daniel DiRito

We’re in uncharted waters with a leaky boat and a storm on the horizon…but the GOP wants us to know that Nancy Pelosi is a mean-spirited partisan.

Let me see if I can get this straight. The Republican president of the United States sends the Secretary of the Treasury and the Federal Reserve Chairman to Capital Hill with a message of impending economic doom…asking the party in power to put aside partisanship and pass necessary legislation.

The party in power (Democrats) holds its nose and puts together a bill premised upon the gravity of the situation, endures John McCain’s grandstanding at the eleventh hour, allows him to characterize his involvement as critical to the success of the process, spends hours meeting with those in the GOP who want to amend the bill, comes to an agreement on a bill the GOP leadership can support, and then brings the bill to a vote.

In that vote, over sixty percent of Democrats support legislation that was requested by the head of the opposition party, two thirds of the presidents fellow Republicans jump ship and oppose the bill, and the GOP house leadership wants Nancy Pelosi and the Democrats to shoulder the blame?! Well there you have it…nothing illogical about that, right?

Frankly, I’ve personally reached the point at which I’m opposed to any attempt to glue what remains of our failed government back together. Unless and until politicians are held accountable for the consequences of their actions, I’m in favor of pulling the rest of the metaphorical china from the cupboard and smashing it all on the floor. I say as much because I don’t think anything will change until the American public is forced to face reality…even if that means standing in line for a loaf of bread and a bowl of soup.

Look, let’s be honest as to what all of this GOP partisanship is about. From their self-serving perspective, it’s power and money…and they’re willing to do whatever it takes to obtain both. Voters, on the other hand, have allowed themselves to be drawn into an ideological struggle to define morality. Taken together, this is the underlying formula for the disaster we’re witnessing.

Instead of a candid discussion on the merits of rescuing our financial structure, the political combatants have spent years defining our differences in terms of good versus evil; right versus wrong. While voters blindly engage in this theoretical tug of war, the real battle for dominance is waged in the trenches…replete with lobbyists looking to commit larceny in tandem with their trusted troopers…the political elite.

The unseen metrics of today’s maelstrom center upon the pursuit of profit. Those house Republicans who opposed today’s legislation tell us they are concerned about main street. In truth they, in concert with their corporate benefactors who want the government to insure their success without foregoing the profits that may eventually result from the government’s intervention, see main street as a peripheral player.

Let me explain. If the bail out takes the current form, the companies that avail themselves of it will have to forego the upside of the very assets that have made them a ton of money during the housing bubble and now leads them to the edge of financial ruin. Conversely, if the legislation is structured as an insurance mechanism, they receive the financial assist they need without foregoing the future profits that may ensue with the passage of time and an improved economy.

In other words, house Republicans are carrying the water of Wall Street while telling us they’re looking out for the interests of taxpayers. You see, one need only look at the proposal that came from the Bush administration…a virtual blank check to assist their wealthy benefactors…to understand their intentions. Only when the legislation, as modified by the Democrats and a handful of Republicans, became apparent, did the GOP revolt materialize. It did so at the behest of their capitalist (and opportunist) friends who stood to see their profit potential handed over to the American taxpayer.

Don’t be fooled…the motivation of many in the GOP, who voted against this bill, has little to do with those of us living on Main Street. The proof is found in today’s vote…and the reality that a bail out is inevitable. The acrimony simply centers on who gets the lion’s share of the benefit.


Monday, September 29th, 2008 by Daniel DiRito |

2008 Election: Wall St., White Knights, White Noise, & White Light

The 2008 election is about many things. Sadly, the manner in which pivotal issues are presented to voters is often hidden beneath the acts of self-appointed white knights and the din of white noise. It’s imperative that we find and follow the white light at the end of the tunnel.

Commentary By: Daniel DiRito

Best as I can tell, John McCain and the term “maverick” is simply another way of describing the “cowboy diplomacy” we’ve endured for nearly eight years under George W. Bush. The move by John McCain to suspend his campaign and race to Washington on his white horse is all too familiar. The only distinction that remains between these two men is that John McCain has yet to find his “dead or alive” moment.

Frankly, McCain’s antics are reminiscent of an impetuous and aged diva demanding one last leading role…despite the fact that his sphere of influence has waned and he can no longer deliver his lines coherently…let alone a last minute deal. The degree of miscalculation on the part of McCain is astounding…and informing.

To understand the magnitude of his tin ear, one need look no further than the brick wall he encountered upon his descent into Washington. While McCain imagined himself as the negotiator in charge, his Republican congressional counterparts were moving towards full-scale mutiny. A moments perusal of the alternate proposal offered by a number of conservative house Republicans provides ample evidence of the disconnect.

Here’s the bullet points directly from the House GOP plan:

* Rather than providing taxpayer funded purchases of frozen mortgage assets, we should adopt a mortgage insurance approach to solve the problem.

* Currently the federal government insures approximately half of all mortgage backed securities. (MBS) We can insure the rest of current outstanding MBS; however, rather than taxpayers funding insurance, the holders of these assets should pay for it. Treasury Department can design a system to charge premiums to the holders of MBS to fully finance this insurance.

* Have Private Capital Injection to the Financial Markets, Not Tax Dollars. Instead of injecting taxpayer capital into the market to produce liquidity, private capital can be drawn into the market by removing regulatory and tax barriers that are currently blocking private capital formation. Too much private capital is sitting on the sidelines during this crisis.

* Temporary tax relief provisions can help companies free up capital to maintain operations, create jobs, and lend to one another. In addition, we should allow for a temporary suspension of dividend payments by financial institutions and other regulatory measures to address the problems surrounding private capital liquidity.

* Immediate Transparency, Oversight, and Market Reform. Require participating firms to disclose to Treasury the value of their mortgage assets on their books, the value of any private bids within the last year for such assets, and their last audit report.

* Wall Street Executives should not benefit from taxpayer funding. Call on the SEC to review the performance of the Credit Rating Agencies and their ability to accurately reflect the risks of these failed investment securities.

* Create a blue ribbon panel with representatives of Treasury, SEC, and the Fed to make recommendations to Congress for reforms of the financial sector by January 1, 2009.

OK, one can view McCain’s misguided judgment from two perspectives. First, one could speculate that McCain believed he could go to Washington and convince these house Republicans to abandon their ill-conceived alternative…a goal fully contrary to the tenuous relationship he has had with the conservative wing of his party. Secondly, one might assume that McCain thought he could convince those who had been working to craft an acceptable revision of Secretary Paulson’s proposal to abandon it and embrace a brand new approach.

By any rational calculation, neither of these goals were plausible. The fact that John McCain admitted on Tuesday…one day before suspending his campaign…that he hadn’t even read the three page Paulson proposal only magnifies the seeming suspension of judgment. With that said, it’s even hard to imagine the basis upon which McCain felt his ploy could succeed.

Notwithstanding the above, there is another possibility…one that is far more concerning. That explanation is that the house revolt was part of an orchestrated performance intended to raise the stakes and allow McCain to be seen as the taxpayers white knight rushing in to champion the introduction of a new plan at the eleventh hour and rescue us from the excesses of government intervention. Yes, part of me finds this hard to imagine since today’s outcome seems to have failed to demonstrate that McCain has played any pivotal role in reaching or reshaping the agreement that will ultimately be approved.

Regardless, I realize the GOP believes they can once again dupe the voting public into thinking they have our interests at heart. It’s my hope that this latest stunt will elicit what will eventually be seen as the defining phrase of this campaign, “Give me a frickin’ break”. If so, it will be the pivotal moment in the rejection of a fully flawed economic philosophy.

Returning to the above proposal from the house Republicans, I want to highlight a couple points. The premise of the plan is intended to suggest that taxpayers shouldn’t foot the bill for the bail out. On its surface, this is a noble endeavor. Unfortunately, the means they propose to achieve this objective is to remove what little regulatory oversight exists and grant further tax breaks to Wall Street. Essentially, the goal is predicated upon the belief that unbridled greed will lead the financial markets to dig their way out of a mess that was created by that very unbridled greed.

The plan completely fails to recognize the immediacy of the need for capital. In this convoluted approach, it will take a tremendous amount of time for the players to raise capital and it does nothing to identify the worthless paper, those who are holding it, and the means to remove it from the equations that facilitate the flow of money from those who have it to those who need it.

The lending bottleneck we’re facing is partially predicated upon uncertainty. That uncertainty comes from fears about the solvency of other financial institutions and the reticence it creates. Until there is more transparency in the balance sheets of the players and their uncertain liabilities are purged, the skepticism will continue and the motivation to lend money won’t exist.

One must also recognize that the addition of an insurance mechanism provides little motivation to correct flawed lending practices. In many ways it provides an endless means to create and dump ill-advised debt. If lenders believe the government will insure whatever paper they write, where is the motivation to stop writing bad paper? To do this, all they have to do is pay the insurance premiums. To pay those premiums, all they have to do is add it to the costs that borrowers will pay…borrowers who are taxpayers. Hence, this model simply encourages the financial industry to do more of the same…and to pass the costs onto the public.

In the end, the proposal is laughable…but that leads me to identify the sentence that best expresses the fundamental objective of this approach…unrestrained profits for the wealthy.


Friday, September 26th, 2008 by Daniel DiRito |

Execs Get Golden Parachute; Taxpayers Get Golden Shower?

The Bush administration is carrying the water for Wall Street executives with regards to their greed for more unchecked compensation. Voters need to let their elected officials know that they are unwilling to take another golden shower in order to enable more golden parachutes.

Commentary By: Daniel DiRito

The more I see and hear about the bail out of Wall Street, the more I oppose it. Here’s the issue. Taxpayers are being asked to ante up for the good of the nation…and to do so with minimal information and even fewer details. At the same time, the White House is suggesting that any limitation on executive compensation may lead companies to decline participation in the program. I’m calling B.S. on this one.

From The Washington Post:

After 7 1/2 years of drift, President Bush has finally returned to his compassionate conservative roots with a heartfelt plea to Congress to help a needy and deserving group: those Wall Street CEOs who, for all their hard work, have been unable to lift themselves up by their wingtips.

Treasury Secretary Hank Paulson (R-Goldman Sachs) made the rounds of the talk shows on Sunday, pleading for financial executives to be allowed to keep their multimillion-dollar compensation packages even if their companies need to be rescued by the $700 billion federal bailout.

“If we design it so it’s punitive and so institutions aren’t going to participate, this won’t work the way we need it to work,” Paulson, whose net worth is said to be north of $600 million, told Chris Wallace on “Fox News Sunday.”

“To have this program work, we don’t want to make it punitive and make it difficult,” Paulson advised George Stephanopoulos on ABC’s “This Week.”

It was a message of mercy and humanity – who, after all, would be so cruel to deny executives their eight-figure bonuses merely because they drove their companies into insolvency? – and administration officials and Republican lawmakers joined the cause of the unappreciated CEOs.

Give me a frickin’ break…just how stupid does the Bush administration think we are. Further, if this isn’t a ploy to manipulate voters, just how damn stupid is the Bush administration? Let’s look at the logic.

First, if we assume that Wall Street is perilously close to collapse, then they need our help, right? Second, if they aren’t willing to accept our demands for fair executive compensation, we have every right to deny them our help. Thirdly, if they have the ability to forego our help in favor of their huge compensation packages, then they aren’t in that bad of shape, right? Fourth, if these companies can put their self-serving interests first, why in the hell should voters forego theirs in order to bail them out. Fifth, if the Bush administration can’t reach these same logical conclusions, then they have no business managing a lemonade stand…let alone the largest bail out in U.S. history.

Honestly, it’s time for voters to call the bluff of the administration that drug us into this mess. If we’re going to get screwed, let’s get screwed on our own terms. There is no plausible rationale to grant unlimited authority to the very people who pushed us into the financial abyss. Beyond that, there is absolutely no justification to take an unwanted screwing, write a huge check for it, and thank the Bush administration for putting it to us.

Truth be told, we have no assurances that this bail out will work. For two years, the Bush administration has told us the economy is sound and that we aren’t in a recession. Two weeks ago they assured us that the Fannie Mae and Freddie Mac seizure was the answer to our problems. In short order, they bail out AIG after telling us the bail outs were over and these companies needed to seek their own solutions. Days later we’re told the sky is falling and we need to bend over.

No way…no how…I’m happy to let it burn to the ground before we give Wall Street a free pass. As they say, beggars can’t be choosers. If they want more of our money, it’s on our terms or to hell with them. Let’s see who blinks first.


We’re hearing a number of insiders suggest that homeowners bear some responsibility for this predicament. The argument contends that too many of us bit off more than we could chew. OK, I’ll accept that there’s some truth to that contention…but it isn’t the whole story. The whole story needs to consider the fact that the average American has spent the last seven years working harder and producing more…for less money.

The fact of the matter is that millions of Americans gambled on the historical data that home prices will rise. When they did, many of them did so because they needed money and the only means available to obtain it was to borrow against the equity they thought they had in their homes.

Yes, that may have been shortsighted and imprudent…but so too is it detestable that our elected officials failed to be good stewards of the economy. The Bush tax cuts for the wealthiest Americans didn’t trickle down…and the few jobs that were created weren’t enough and they weren’t higher paying jobs. Instead, far too much of the Bush tax package was invested in high risk financial gimmicks designed to create easy profits.

If we’re going to assess blame, then let’s not forget where the bulk of it belongs. It belongs squarely on the backs of those who have promoted a morally bankrupt economic philosophy that concentrates wealth in the hands of the few at the expense of the hard work of the many.

There’s one additional saying that applies to the current situation of our greedy cash chasing countrymen…”bet –em high and sleep in the streets”. All that’s left to be said to our Wall Street friends is, “Welcome to Main Street…and don’t forget to bring some cardboard boxes and a warm blanket”.

Cross-posted at Thought Theater

Tuesday, September 23rd, 2008 by Daniel DiRito |

Financial Meltdown: Math & The Myth Of Fiscal Responsibility

As we steel ourselves for the bail out of a failing financial system, it’s time to review the rhetoric of fiscal responsibility. For nearly three decades, the GOP has succeeded in hanging the “tax and spend” label on the Democrats. Accepting that premise has likely enabled this painful fleecing.

Commentary By: Daniel DiRito

While the details haven’t been disclosed, it appears that the powers that be are considering a plan to bail out Wall Street…in a big way…on the backs of the American taxpayer. Troubling as this sounds, it may be the only viable solution. Regardless of the eventual solution, one thing is clear, the losses will be large.

I want to focus on an analysis of the aftermath and the philosophy that led us to this point. I want to do so because I lived through the Savings & Loan scandal and I’ve been convinced for more than two years that the housing bubble, the artificially low interest rates, the lack of proper oversight, and the associated paper “equity” borrowing it fueled would lead to this type of meltdown.

Having established this backdrop, I want to make the case for driving a stake through the heart of trickle down economics, tax cuts for the wealthy, and the meme that the “tax and spend” Democrats are fiscally irresponsible.

Here’s the deal. The existence of large sums of money in the U.S. economy is a given…it has always been there and it will likely continue to be there (though eight years of GOP malfeasance will make digging out from under the enormous debt a formidable obstacle). With that said, we must begin to consider politics and the inevitable debate about what we will do with the money.

By and large, the party that succeeds in holding power and driving public sentiment gets to decide where the money goes. Without a doubt, the GOP has won this battle for the better part of the last thirty years. In doing so, they have succeeded in attaching the “tax and spend” label to the Democrats…driven primarily by highlighting the Democrats desire to fund and insure existing safety net programs (Social security, Medicare, Welfare, and Unemployment benefits…as well as expand others (Healthcare).

At the same time, the GOP has chosen to foster an economic structure that is weighted towards large corporations and the wealthy. Part and parcel of this approach has been the undermining of labor unions, the refusal to increase minimum wages, the willingness to ignore the huge number of uninsured, allowing the influx of illegals to provide cheap labor, and a willingness to accept the growing divide between the haves and the have nots.

So let’s step back for a moment to the S & L scandal (the late 80′s, early 90′s)…the last instance when profits were privatized and losses were socialized. Rampant real estate speculation and a lack of regulation of the financial industry made a number of investors very wealthy while saddling taxpayers with approximately 123 billion dollars of debt. As an aside, it should be noted that numerous investors were building commercial properties and apartments with no intention of ever managing them…they were simply milking the unregulated financial system.

Now let’s take a look at the GOP’s objections to any form of universal healthcare put forth by the Democrats. The argument suggests that it would cost anywhere from 60 to 100 billion dollars annually. At the same time, it must be noted that the Bush tax cuts enacted in 2001 have been projected to cost 2.5 trillion dollars over ten years…and we’re also spending approximately 120 billion dollars annually on the war in Iraq. As to the costs of the current Wall Street bail out, it’s difficult to determine the damages. For the sake of this argument, I’m going to estimate that the final tally will approach a trillion dollars.

Now lets calculate the total dollars these items represent. If we assume that only half of the tax cuts were unwarranted (they went to the very wealthy), we have 1.25 trillion. Let’s add in 600 billion for five years of the Iraq war (we’re being conservative). That leaves the 120 billion lost on the S & L scandal and the trillion dollars we’re assuming will be lost on the Wall Street meltdown. Taken together, this totals just under three trillion dollars.

OK, now lets see how many years have passed since the S & L scandal. We’ll use 1985 as our start date (again we’re being conservative), which equates with 23 years. For this exercise, we’ll go ahead and round that to 25 years.

If we take our 25 years and assume it would have cost 100 billion dollars per year to fund universal healthcare, that brings us to a total of 2.5 trillion dollars. Note that the use of 100 billion per year is also an extremely conservative number as it would have been far cheaper to provide in the earlier years.

As you can see by a simple review of the numbers, we had enough money to fund universal healthcare for the last 25 years…with nearly a half trillion dollars to spare. Unfortunately, we didn’t have universal healthcare. Instead, those of us that have had healthcare insurance, paid for it for 25 years…and we also received a meager tax cut for the last seven years. If you look at the total dollars the average family received in tax cuts for these seven years, I suspect one would be lucky if it would have paid for three or four years of healthcare insurance (we’re completely ignoring the deductibles and copayments).

So if we look at the rhetoric of the GOP for the last 25 years, they want us to believe that any consideration of universal healthcare would have been irresponsible. They’ve repeatedly told us that the Democrats would raise taxes and spend money we didn’t have…on programs we couldn’t possibly afford.

However, if we look at the numbers above, the only thing we received for supporting this philosophy for managing our government’s finances (our money), was minimal tax cuts…promised nearly every election cycle (surprise, surprise?). At the same time, those in charge squandered three trillion dollars of our money on tax cuts for the extremely wealthy, an unwarranted war, and two episodes of enabling unregulated and painful financial disasters.

In the end, you can slice it any way you like…but you can’t disregard the fact that the money was there to provide universal health care…or any number of other programs designed to benefit all Americans. In the interest of being fair, all of the blame can’t be placed on the GOP, since the Democrats went along with many of these ill-advised expenditures…or the policies that enabled them.

Regardless, it’s also true that the Democrats frequently did so because voter sentiment demanded it. In other words, voters bought into the rhetoric that the GOP would let us keep more of our money and the Democrats would undoubtedly take more of it away from us. Since we know that all politicians cater to the whims of voters in the hopes of winning elections, it’s no wonder the Democrats have acquiesced and appeared amazingly weak. They’ve been on the wrong side of the argument and they’ve failed to convince voters otherwise.

That brings us to where we now stand. If we voters fail to recognize what has happened in the last 25 years as a result of enabling the rhetoric and the policies of the GOP, we do so at our own peril. It’s time for us to demand that our money be spent on programs that serve the greater good; not the ones that line the pockets of the greedy and the wealthy. The money is there…it has always been there…it’s time we elect politicians that have the interests of all Americans at heart…politicians who will be honest stewards and spend our money wisely.

If we don’t, let me be the first to predict the next financial scandal. Unless we choose a different course, it will invariably happen as soon our memory of the last one fades and we resume our role as gullible voters who settle for false promises and paltry tax cuts. Rest assured, once the coast is clear, the greedy will gladly step in and bust the bank again…while their bullshitting benefactors turn a blind eye.

Cross-posted at Thought Theater

Friday, September 19th, 2008 by Daniel DiRito |

8/8/08: Accountability Now / Strange Bedfellows Money Bomb

On August 8th, 1974, Richard Nixon resigned the presidency of the United States over issues that carry much less weight than the current political climate in America. How is it that Nixon could be run out of power by his own party, yet the current Democratic Party-controlled congress has failed to act against the Bush administration’s abuses of power?


Become a StrangeBedfellow!Today’s the day.

A few weeks back, the Democratic Party leadership, in both the House and the Senate, capitulated to the petulant demands of George W. Bush, and passed the revised FISA bill. The bill not only codified warrentless wiretapping, but retroactively provided telecommunications companies with immunity from civil lawsuits on the behalf of U.S. citizens who have had their privacy violated at the behest of the Bush administration.

Accountability Now was formed by online activists from across the political spectrum in order to create public education campaigns (TV, print, and internet advertising), and to hold politicians accountable for their actions that run counter to constitutional principles. More information on the organization is available here.

Progressives, conservatives, and libertarians are being asked to contribute today to the effort. Whether it’s $5, $10, $20, $5000, or simply a show of support by whatever means available, today’s “money bomb” (similar to the fundraising efforts that drove Ron Paul’s presidential campaign earlier this year) is key to the success in holding our political leaders accountable to we, the people.

It sounds trite. It’s not. Now more than ever before, it’s clear that corporate interests are driving the political agenda in America. That’s not what the founders intended. Accountability Now can serve as the start of a truly well funded, people-power movement, but only if we support it. Listen, I’m not a rich guy by any stretch of the imagination, but I’m kicking in a few bucks. If you believe in the constitutional principles upon which this country was born, I encourage – no, urge – you to take a few minutes and consider the potential power of thousands like us taking a stake in our collective future.

Conservative, progressive, libertarian, green – it doesn’t matter. At the end of the day, we’re all in this boat together, and none of us are happy with the way things are being run right now. Though the initial focus of the campaign is to hold the Democratic Party leaders (and blue dog Democrats) accountable for their FISA votes, the scope going forward is quite ambitious. But it can only happen if each of us individually seizes this moment of empowerment.

Glenn Greenwald has an extensive kick-off post on Salon today, which I’ve take the liberty of copying in full below the jump…


Friday, August 8th, 2008 by Richard Blair |

FISA: Why I Can No Longer Vote for Barack Obama

Barack Obama lost my vote today. I was never a rah-rah supporter, yet prior to the FISA bill vote today, I believed that I could suck it up and vote for whoever ended up being the eventual Democratic Party nominee. For the first time in my adult life, I’m faced with the unhappy prospect of staying home on November 4th.

Commentary By: Richard Blair

As a true, progressive Democrat, this is incredibly hard for me to write.

Since the start of the presidential election season, I’ve been quite clear that Barack Obama was not my first – or even second – choice as the presidential nominee for the Democratic Party. But I’ve been consistent in saying that I’d support the eventual nominee, whoever he or she might be.

That all changed today. Actually, I’ve become more and more uncomfortable with the now-presumptive nominee since the time that the primary season officially ended. Barack Obama has been tacking toward the center since the time that Hillary Clinton quit her challenge in the race. From Iraq, to the abortion issue, to the Telecom Immunity Act of 2008, I’ve watched closely as Obama has tried to grab some middle ground, and attempt to diffuse future criticism of him by the GOP as being “soft on terrorists” and not a heartland values type of guy.

Earlier today, ASZ’s good friend Brendan commented on a prior post that as an Obama supporter, he’s experiencing extreme “buyers regret”. I can understand that feeling on the part of many starry eyed Obama supporters who felt that he was (in essence) the second coming of John F. Kennedy.

Let me pose a hypothetical: would John F. Kennedy have voted for the FISA bill today had it come up during his time as Senator? … (more…)

Wednesday, July 9th, 2008 by Richard Blair |
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