The P.O. Yo-Yo

Harry Reid pulled the yo-yo trick today. First some anonymous staffers were quoted in the NYT that the Majority Leader's merged bill that will go to the Senate floor would not include a public insurance option. Then Reid's spokesman denied it to Greg Sargent.

These yo-yo maneuvers really dispirit people, and I don't know if they're meant to be trial balloons or what, but the leadership needs to at least try to crack down on the leaks. Anyway, the public comments are quite enough, thanks. Reid himself called Olympia Snowe's trigger option "pretty doggone good" last weekend. Bill Clinton did the same thing on Meet the Press. There's no need for an additional article contributing to the death narrative. It saps the energy for reform from the most vociferous reformers, and that's probably by design.

The public option will come up for a vote in the Senate Finance Committee as soon as tomorrow. Liberal supporters admit they don't have the votes. But it will force many centrists to go public on the issue, opening them up to criticism. And even if Reid doesn't include the provision in the bill, he'll certainly allow amendments to that effect on the floor. So this is really just the beginning of a fight that will continue right through to the conference committee.

In the end, whether or not the public option survives depends on the White House's advocacy. So the only tea leaves worth reading are the ones about which politicians they are pushing to support the bill.

...I've now seen a couple assertions that 60 votes will be required for any strengthening amendments on the Senate floor. I'm not sure where people are getting this, but historically that has been something used to preserve the final bill. If this is the case, then, as Chris Bowers writes, Reid's inclusion of a public option in the merged bill really is the hinging point for whether or not it will ultimately be included.

Wasting An Opportunity

A poll on the economy has an interesting nugget about who the public blames for the nation's perilous state.

One year after Wall Street teetered on the brink of collapse, seven out of 10 Americans lack confidence the federal government has taken safeguards to prevent another financial industry meltdown, according to a new Associated Press-GfK poll.

Even more — 80 percent — rate the condition of the economy as poor and a majority worry about their own ability to make ends meet. The pessimistic outlook sets the stage for President Barack Obama as he attempts to portray the financial sector as increasingly confident and stable and presses Congress to act on new banking regulations [...]

Still, Obama generally avoided public blame for the recession or the condition of the banking sector.

Only one out of five surveyed said Obama bore responsibility for the recession; 54 percent blamed former President George W. Bush and 19 percent blamed former President Bill Clinton.

Financial institutions, however, bore the brunt of the criticism — 79 percent of those surveyed said banks and lenders that made risky loans deserve quite a bit of the blame. Sixty-eight percent held the federal government responsible for not adequately regulating banks and 65 percent blamed borrowers who could not afford to repay loans.

I love the blaming of the Clenis, presumably from the hardest-core teabaggers and conservative ideologues (yes, he ruined the country with all that peace and prosperity). But ultimately, the vast majority of Americans blame Bush. And in this respect, they are absolutely right and we have numbers to prove it.

On every major measurement, the Census Bureau report shows that the country lost ground during Bush's two terms. While Bush was in office, the median household income declined, poverty increased, childhood poverty increased even more, and the number of Americans without health insurance spiked. By contrast, the country's condition improved on each of those measures during Bill Clinton's two terms, often substantially.

The Census' final report card on Bush's record presents an intriguing backdrop to today's economic debate. Bush built his economic strategy around tax cuts, passing large reductions both in 2001 and 2003. Congressional Republicans are insisting that a similar agenda focused on tax cuts offers better prospects of reviving the economy than President Obama's combination of some tax cuts with heavy government spending. But the bleak economic results from Bush's two terms, tarnish, to put it mildly, the idea that tax cuts represent an economic silver bullet.

Yet, this majority consensus that George Bush's economic plan was an unmitigated disaster for the country has flourished despite a virtual code of silence from Democratic leaders since the President entered office. People had to come to this conclusion all by themselves, and a lot of them did. But an effective campaign, armed with the facts, would go a long way to setting the record straight.

This should be something that every American knows. And every Republican should be asked why they voted for all the things that Bush wanted than made that happen. But for for some reason, Bush has been disappeared, as if the directive to "look forward" means that we can't even hold the Republicans responsible for their own political failure. (We already know that can't be held accountable for their illegal behavior.) And the result of that is very likely to be that blame for the failures of the Bush years will be applied to the Democrats. It already is among the teabaggers.

"The Republican recession" has a nice ring to it and should have been the mantra for months now. It certainly should be the mantra of the 2010 mid-term. And all those facts and figures about the Bush years should be part of every Democrat's stump speech. People need to know this stuff, not just for political reasons but because they need to start understanding where these conservative policies lead. If the Democrats don't use the greatest example of conservative failure since Hoover to illustrate that, it's going to happen all over again.

It's probably too late to get the maximum mileage out of this kind of education campaign. That's a damn shame, because we have a President who seeks post-partisanship instead of helping himself by laying out what choices destroyed the economy and what choices can fix it. But that would take a Party with the courage of their own convictions.

Memory Lane

As we await tonight's speech, here are a couple other Presidential moments that Obama would do well to emulate.

Bill Clinton Address On Health Care Reform, September 1993.

Though eventually the reform failed, this speech was so successful that Clinton's approval ratings soared. If it had come near the end of the debate, as Obama's will, instead of right at the beginning, maybe Clintoncare would have had a chance. He put the choice on health care in very moral terms, challenging the Congress to get it done. And he framed the concept of health care as a choice for security - the peace of mind knowing that you will not go broke if you or a member of your family gets sick, and you will be able to find the care you need at an affordable cost. This is some great rhetoric:

And now it is our turn to strike a blow for freedom in this country, the freedom of Americans to live without fear that their own Nation's health care system won't be there for them when they need it. It's hard to believe that there was once a time in this century when that kind of fear gripped old age, when retirement was nearly synonymous with poverty and older Americans died in the street. That's unthinkable today, because over a half a century ago Americans had the courage to change, to create a Social Security System that ensures that no Americans will be forgotten in their later years.

Forty years from now, our grandchildren will also find it unthinkable that there was a time in this country when hardworking families lost their homes, their savings, their businesses, lost everything simply because their children got sick or because they had to change jobs. Our grandchildren will find such things unthinkable tomorrow if we have the courage to change today.

This is our chance. This is our journey. And when our work is done, we will know that we have answered the call of history and met the challenge of our time.

Then there's this speech: Lyndon Johnson's Special Message to the Congress: The American Promise, March 1965.

This came at the beginning of Johnson's first full term, and he started with "I speak tonight for the dignity of man and the destiny of democracy." Faced with a southern flank that wanted no part of civil rights, Johnson spoke eloquently about the need to solve "an American problem" with honesty and respect for individual rights. It's an amazing speech:

The issue of equal rights for American Negroes is such an issue. And should we defeat every enemy, should we double our wealth and conquer the stars, and still be unequal to this issue, then we will have failed as a people and as a nation.

For with a country as with a person, "What is a man profited, if he shall gain the whole world, and lose his own soul?"

There is no Negro problem. There is no Southern problem. There is no Northern problem. There is only an American problem. And we are met here tonight as Americans--not as Democrats or Republicans-we are met here as Americans to solve that problem.

This was the first nation in the history of the world to be founded with a purpose. The great phrases of that purpose still sound in every American heart, North and South: "All men are created equal"--"government by consent of the governed"--"give me liberty or give me death." Well, those are not just clever words, or those are not just empty theories. In their name Americans have fought and died for two centuries, and tonight around the world they stand there as guardians of our liberty, risking their lives.

Those words are a promise to every citizen that he shall share in the dignity of man. This dignity cannot be found in a man's possessions; it cannot be found in his power, or in his position. It really rests on his right to be treated as a man equal in opportunity to all others. It says that he shall share in freedom, he shall choose his leaders, educate his children, and provide for his family according to his ability and his merits as a human being.

To apply any other test--to deny a man his hopes because of his color or race, his religion or the place of his birth--is not only to do injustice, it is to deny America and to dishonor the dead who gave their lives for American freedom.

These two knew how to put their opponents up against a rhetorical wall. I hope we see some of that tonight.

Alternatively, Obama could just crib from Robert Reich on the public option. 2:30 of brilliance.

The Great North Korean Thaw?

What's up with Lil' Kim and the gang over in North Korea? First, they release two American journalists who they accused of "hostile acts." Then they send their condolences to South Korea on the death of Kim Dae-jung, and plan to send a delegation to the funeral, an unusual show of diplomacy between the two countries who are technically still at war. And then, they set up a meeting with Bill Richardson, out of the clear blue sky:

Senior North Korean diplomats are heading to meet with New Mexico Gov. Bill Richardson on Wednesday, opening a new front in informal discussions the country has sought in recent days.

The two diplomats, who are with the North Korean mission to the United Nations, sought out Richardson for the latest encounter, an official said. Richardson is a former U.S. ambassador to the United Nations. He last visited North Korea two years ago, on a mission to retrieve the remains of Korean War veterans.

The DPRK has not committed to returning to six-party talks. But there are a lot more constructive actions going on now than when they were firing off rockets every two weeks. Perhaps the nuclear tests actually failed? Maybe Bill Clinton let them know that the US knew about that? Or maybe they just wanted the respect of an ex-President coming to their doorstep?

Who knows, but aside from Afghanistan, which is a horror show, Obama's foreign policy is really starting to pay off.

Something We Can Call Health Care Reform NOW

So I decided to listen to the Clinton keynote instead of blog it. He's such a pro, he goes an hour without notes and weaves in a dozen subjects seamlessly. Lane Hudson, an LGBT activist, yelled out a challenge to Clinton about his signing of DOMA and Don't Ask Don't Tell, and while he was clearly angered, he never missed a beat, and gave his rebuttal (some of which is legitimate, some spin).

The overall thrust of his argument last night was the "half a loaf" argument, as Clinton implored the crowd to essentially settle for what we can get, because no bill would be a disaster. Which is true to an extent. Clinton was talking about the politics of health reform, and the idea that Obama's approval will skyrocket after a bill signing, and even more when all of the scare tactics put out there by conservatives fail to materialize. But there's another side to that. A bad bill, one where the tangible benefits do not outweigh the costs, will actually realize some of those worst fears, or at least give conservatives the opening to protest loudly about them. If middle-class people aren't getting enough in subsidies, if everyone waits around four years for the insurance exchanges and then they cannot be accessed by everyone, people will take it out on the President. So I do believe details matter.

Now we're in the hall waiting for the Howard Dean health care session, and there's a sign being handed out in the hall that says "we want discussion not disruption". It's not exactly the stuff of which stirring protest slogans are made. "CIVIL DISCUSSION NOW!!!!"

...Lane Hudson explains why he interrupted the President.

Thursday Keynote Netroots Nation

Sitting here in the hall, listening to an organizer from the United Steelworkers (who's hilarious), waiting for the Bill Clinton keynote. The cocktail hour was sponsored by AFSCME, and they actually played the famous "we're the $%@^&! union" video to kick off the session. Good stuff.

There's a certain uneasiness this year, as everyone wants to get things done with the majorities we have in Washington. For all the talk of conservatives awakening a "sleeping giant" with their teabagger protests, there's a progressive block ready to howl, and I hope it readies itself this weekend.

More if my battery can stand it...

...Judd Legum, running for the Maryland House of Delegates, is now speaking. His website here.

...Debra Bowen coming to the stage. The only Secretary of State who needs her staff to keep her off of Twitter and Facebook.

Bowen mentioned a project to create a Wiki at the Secretary of State's page to use social networking toward participatory democracy. "Voters deserve transparent and verifiable elections... 'Just trust us' is not the basis of a viable democracy, just check out Iran."

...Bowen talks about the correlation between voter confidence and voter participation. Also, she is talking about how she isn't co-chairing anyone's Presidential campaign while running Presidential elections.

...New Democrat Network leader Simon Rosenberg introducing Bill Clinton speaking. I expect Clinton to get a rousing ovation.

John Futterman, the Mayor of Braddock, PA, is speaking. He is really an amazing success story, turning a steel town in the Monongahela Valley into a green oasis in Western PA. The guy looks like a pro wrestler, and he's building green enterprise zones all over the Mon Valley. I'll have a special post about a certain factory in the Mon Valley next week.

The County Executive of Allegheny County, a Democrat running for Governor, Dan Onoronda (sp?), is up.

...Onoronda talks about the story of Western Pennsylvania, how they moved away from the steel economy, invested in the people, and transformed the entire region. It's really a great untold story, based entirely on good government investment, that ought to get out there.

Fantastic News

My friend Euna Lee is coming home.

North Korean leader Kim Jong Il has issued a "special pardon" to two American journalists convicted of sneaking into the country illegally, and he ordered them released during a visit by former U.S. President Bill Clinton, North Korean media reported early Wednesday.

The release of Laura Ling and Euna Lee was a sign of North Korea's "humanitarian and peaceloving policy," the Korean Central News Agency reported.

Clinton, who arrived in North Korea Tuesday on an unannounced visit, met with the reclusive and ailing Kim — his first meeting with a prominent Western figure since his reported stroke nearly a year ago.

Euna and Laura Ling have been in North Korean custody since St. Patrick's Day. Activists have worked tirelessly for this release, and the high-profile visit by President Clinton worked.

Tremendous.

UPDATE: Media turning this into Bill Clinton "upstaging" the White House. Uh, what? Also the usual suspects, John Bolton et al talking about Clinton used as a "propaganda tool." You'd almost think they would rather have two American citizens rot in a North Korean labor camp....

God, they really can't get over their Clinton obsession.

...the Bolton video. Maybe he should visit Euna Lee's family and tell her how their daughter needs to stay in a prison cell because anything else would send a bad message.

Big Dog To Pyongyang

Great news.

Former U.S. President Bill Clinton is on his way to North Korea to try to negotiate the release of two American journalists convicted by the communist state of "grave crimes," South Korea's Yonhap news agency said on Tuesday.

Clinton had already left for the North but had not yet arrived in Pyongyang, Yonhap said in a report from Washington quoting a source familiar with the issue.

"As soon as he arrives, he will be entering negotiations with the North for the release of the female journalists," the source was quoted as saying.

Clinton wouldn't embark for North Korea without knowing he would be let in and have something to negotiate. He met with Kim Jong-il today.

The residual benefit of a former President showing respect to the North Koreans could be that it restarts nuclear talks. All the DPRK really seems to want is respect.

But I'm more concerned about Euna Lee and Laura Ling, and the fact that diplomatic talks are underway is a great sign. Fingers crossed.

Amazing How Leaving Public Office Can Clear Your Mind

If anyone thinks Bill Clinton's new position on gay marriage has anything to do with an evolution of his views and not the fact that he'll never run for public office again, they need to take a second look. Ex-politicians have a remarkably more open mind on this issue than active politicians, and that's no accident. I think it's a mistake with how active politicians view the beliefs of the electorate, but that's a different story.

Censure and MoveOn?

The South Carolina Republican Party took a page from the largest progressive organization in America. Never thought I'd write that.

After nearly four hours of deliberation and multiple rounds of balloting, the South Carolina Republican Party voted Monday night to censure Mark Sanford for traveling overseas to visit his mistress -- but stopped short of calling on the governor to resign.

Members of the South Carolina GOP's executive committee approved a resolution censuring Sanford for conduct that demonstrated "repeated failures to act in accordance" with the party's core principles and beliefs, according to GOP sources on the teleconference.

The resolution also reprimands the governor for "falling below the standards expected of Republican elected officials."

Sanford issued a short response to the censure through his spokesman late Monday.

"The governor fully appreciates the party's position, and he intends to work diligently to earn back its trust," said spokesman Joel Sawyer.

The censure is a first for any sitting Governor in South Carolina, but it looks like the state GOP will let it lay there.

Just like they did for Bill Clinton.

Right?

(Incidentally, Clinton didn't leave America without telling anyone to go huddle with Monica Lewinsky for a week. That would be the difference.)

It's Not Like There Would Be Anything Noteworthy In Bill Clinton's Email

Well here we go again.

WASHINGTON — The National Security Agency is facing renewed scrutiny over the extent of its domestic surveillance program, with critics in Congress saying its recent intercepts of the private telephone calls and e-mail messages of Americans are broader than previously acknowledged, current and former officials said.

The agency’s monitoring of domestic e-mail messages, in particular, has posed longstanding legal and logistical difficulties, the officials said.

Since April, when it was disclosed that the intercepts of some private communications of Americans went beyond legal limits in late 2008 and early 2009, several Congressional committees have been investigating. Those inquiries have led to concerns in Congress about the agency’s ability to collect and read domestic e-mail messages of Americans on a widespread basis, officials said. Supporting that conclusion is the account of a former N.S.A. analyst who, in a series of interviews, described being trained in 2005 for a program in which the agency routinely examined large volumes of Americans’ e-mail messages without court warrants. Two intelligence officials confirmed that the program was still in operation.

As Rush Holt, one of the few in Congress who seems to know what he's talking about with this program, “Some actions are so flagrant that they can’t be accidental." In one instance, the NSA accessed Bill Clinton's email:

(An analyst) said he and other analysts were trained to use a secret database, code-named Pinwale, in 2005 that archived foreign and domestic e-mail messages. He said Pinwale allowed N.S.A. analysts to read large volumes of e-mail messages to and from Americans as long as they fell within certain limits — no more than 30 percent of any database search, he recalled being told — and Americans were not explicitly singled out in the searches.

The former analyst added that his instructors had warned against committing any abuses, telling his class that another analyst had been investigated because he had improperly accessed the personal e-mail of former President Bill Clinton.

I'm sure that investigation was completely stringent. And I'm sure that "ban" on explicitly singling out individuals was strictly enforced. Because why would anyone want to know what Bill Clinton's doing?

Don't B.S. us with the fig leaf of "inadvertent overcollection." This happens virtually the same way every time.

Every time new revelations of illegal government spying arise, the same exact pattern repeats itself: (1) euphemisms are invented to obscure its illegality ("overcollection"; "circumvented legal guidelines"; "overstepped its authority"; "improperly obtained"); (2) assurances are issued that it was all strictly unintentional and caused by innocent procedural errors that are now being fixed; (3) the very same members of Congress who abdicate their oversight responsibilities and endlessly endorse expanded surveillance powers in the face of warnings of inevitable abuses (Jay Rockefeller, Dianne Feinstein, "Kit" Bond, Jane Harman) righteously announce how "troubled" they are and vow to hold hearings and take steps to end the abuses, none of which ever materialize; (4) nobody is ever held accountable in any way and no new oversight mechanisms are implemented; (5) Congress endorses new, expanded domestic surveillance powers; and then: (6) new revelations of illegal government spying emerge and the process repeats itself, beginning with step (1).

And if you thought that the Congress or the Justice Department could at least revisit step (5) once step (1) re-occurs over and over again, Attorney General Eric Holder helpfully informs you that telecom immunity and the FISA Amendments Act is settled law, unable to be tweaked or fixed or even investigated. Holder wouldn't even stand by his statement that violating FISA breaks the law - he can't now, because as the Attorney General he would be obligated to act on his words.

FEINGOLD: On another topic, I wrote to the president on Monday about my continued concern that the administration has not formally withdrawn certain legal opinions, including the January 2006 white paper that provided the justification for the Bush administration's warrantless wiretapping program. At the letter was prompted in part by a recent speech that I'm sure you're aware of by the director of national intelligence in which he asserted that the program was not illegal, but he later clarified that.

In a speech to the American Constitutional Society in June 2008, you, sir, set the following. "I never thought that I would see the day when a president would act in direct defiance of federal law by authorizing warrantless NSA surveillance of American citizens."

And the president himself also several times as a senator and during the campaign said the program was illegal. Now that you are the attorney general, is there any doubt in your mind that the warrantless wiretapping program was illegal?

HOLDER: Well, I think that the warrantless wiretapping program as it existed at that point was certainly unwise in that it was put together without the approval of Congress and as a result did not have all the protections, all the strength that it might have had behind it, as -- as I think it now exists with regard to having had congressional approval of it. So I think that the concerns that I expressed in that speech no longer exist because of the action that Congress has taken in regard...

FEINGOLD: But I asked you, Mr. Attorney General, not whether it was unwise, but whether you consider it to be an illegal, because that's certainly the implication of what you said in the quote I read and the explicit statement of the man who is now president of the United States.

HOLDER: Yes, well what I was saying in that speech was that I thought the action that the administration had taken was inconsistent with the dictates of -- of FISA, and I think I used the word "contravention," and as a result I thought that the policy was an unwise one. And I think that the concerns that I expressed then have really been remedied by the fact that Congress has now authorized the program.

FEINGOLD: But did you think it was illegal?

HOLDER: Well, I thought that, as I said, it was inconsistent with -- with the FISA statute and unwise as a matter of policy.

And that sound you hear is the soul of Eric Holder breaking.

The rule of law was nice to have around for a while. But it's completely broken and it's not coming back.

Barack, Get Yourself To West Hollywood

When Ted Olson, who argued Bush v. Gore before the Supreme Court, took the case alleging that Prop. 8 violates equal protection laws and that same-sex couples have a Constitutional right to be married, that's one thing. When Republicans like Meghan McCain and Steve Schmidt make pronouncements in favor of gay marriage, it's another. But when Dick Cheney offers his support, and nobody bats an eyelash because he's supported gay marriage since 2004, basically, the political world should take notice.

"I think that freedom means freedom for everyone," replied the former V.P. "As many of you know, one of my daughters is gay and it is something we have lived with for a long time in our family. I think people ought to be free to enter into any kind of union they wish. Any kind of arrangement they wish. The question of whether or not there ought to be a federal statute to protect this, I don't support. I do believe that the historically the way marriage has been regulated is at the state level. It has always been a state issue and I think that is the way it ought to be handled, on a state-by-state basis. ... But I don't have any problem with that. People ought to get a shot at that."

Obviously, if he didn't have direct personal knowledge of gay relationships because of a member of his family, he probably wouldn't have the same position. And you can also see that in Bill Clinton's answer about gay marriage late last week. For context, Clinton signed DOMA and reportedly told John Kerry to endorse local bans against gay marriage and even the Federal Marriage Amendment.

Asked about same-sex marriages, Bush defended the "sacred" institution of wedlock between a man and a woman. Clinton said that the more he knows gay people, the more he thinks their relationships "should be up to them."

Barack Obama needs to talk to some gay Americans. Certainly that would be preferable to talking to the consultants that have him paralyzed with fear over extending civil rights to homosexuals.

Of course, one recognizes that Clinton and Cheney are not in office right now.

...Obama goes out on a limb, reiterates for the 500th time a promise to end the Don't Ask Don't Tell policy. Which he could do by putting a moratorium on firing soldiers today.

My Administration has partnered with the LGBT community to advance a wide range of initiatives. At the international level, I have joined efforts at the United Nations to decriminalize homosexuality around the world. Here at home, I continue to support measures to bring the full spectrum of equal rights to LGBT Americans. These measures include enhancing hate crimes laws, supporting civil unions and Federal rights for LGBT couples, outlawing discrimination in the workplace, ensuring adoption rights, and ending the existing "Don't Ask, Don't Tell" policy in a way that strengthens our Armed Forces and our national security. We must also commit ourselves to fighting the HIV/AIDS epidemic by both reducing the number of HIV infections and providing care and support services to people living with HIV/AIDS across the United States.

Bill Clinton And Derivatives

Bill Clinton, whose Administration set the ball rolling on a lot of the structures that ultimately led to ruin in the financial markets, gives a pretty honest take of where he feels he went right and wrong:

Mr. CLINTON: Now, there basically have been three charges, if you will, laid at our doorstep, because everybody recognizes that I vetoed the securities reform bill and that we had a very different economic philosophy. But they — the three charges are one, because I enforced the Community Reinvestment Act for the first time and over 90 percent of all lending done under that law was done when I was president, $300 billion, that part of that was a lot of little banks made loans to people they had no business making loans to to buy houses so they could check the box for the Community Reinvestment Act. That’s the right-wing argument.

Then there’s the argument from the left that I shouldn’t have signed the bill that got rid of the Glass-Steagall law because that enabled banks and investment banks in effect to merge their functions.

And then there’s the argument that I make, which is that I should have raised more hell about derivatives being unregulated. I believe the last one is by far the most valid, although I don’t think that the Congress would have permitted anything to be done because Alan Greenspan was against it [...]

But I do believe on the derivatives they made the argument, the people who were against regulating it, that people like you weren’t buying derivatives. It wasn’t like you were investing your 401(k) in derivatives. You were investing your 401(k) in mutual funds, which were subject at least under normal times to the jurisdiction of the S.E.C., which was supposed to be minding the store. And so because we had a hostile Republican Congress which threatened not to fund — I don’t know if you remember this but we had a huge knock-down fight when they threatened not to fund the S.E.C. because of what Arthur Levitt was doing to try to protect the American economy from meltdowns. They said, “Oh, he’s interfering with a free market” and all that. This is what he’s supposed to do.

They argued that nobody’s going to buy these derivatives, we’ll do it without transparency, they’ll get the information they need. And it turned out to be just wrong; it just wasn’t true. And once you got that massive amount of money invested in derivatives that people thought — it’s like these credit default swaps, where people thought, the Lehman people talk about it, they thought, or the A.I.G. people, they thought it was 100 percent safe investment, they thought there would never be defaults on these mortgage securities. So of course you wanted insurance there because you got the insurance premium, you make the profit and you couldn’t possibly lose money, right? Well, it turned out to be all wrong. That rested on a lot of assumptions, including the fact that the ratings agencies would do a good job, which didn’t happen, in evaluating risk. So I very much wish now that I had demanded that we put derivatives under the jurisdiction of the Securities and Exchange Commission and that transparency rules had been observed and that we had done that. That I think is a legitimate criticism of what we didn’t do.

Clinton doesn't buy the arguments about Glass-Steagall or the Community Reinvestment Act. And much of his argument rests on the fact that the Bush Administration just gutted the regulatory apparatus, particularly the SEC, and so he was operating under a different environment. And David Leonhardt makes another very good point - the Clinton Administration allowed the run-up of the dot-com stock bubble, so thinking they would have charged in and stopped the housing bubble doesn't really hold water. They were lucky to get out of office when they did.

But this is pretty honest, and points to Clinton's instincts on this, which were always more finely attuned than his advisors. The derivatives market took off after Clinton left office, when the stock bubble popped and the relationship between housing and mortgage-backed securities started to realize itself. At the same time, Long-Term Capital Management, which invested heavily in derivatives, failed during Clinton's tenure (he couldn't come up with the name in the interview), and apparently this led Clinton to approach Alan Greenspan on the subject, who predictably said that derivatives were a niche market. In other words, Clinton deferred to Greenspan. So how would he have stopped the bubble from inflating, then? I can't see Clinton having bungled the issue as much as Bush, but while his instincts were solid, the follow-through, not so much.

Meanwhile, we have the benefit of hindsight now, and certainly a desire to regulate derivatives. Which makes the banksters unhappy:

For credit-default swaps, information about intraday trades and prices has long been controlled by a handful of large banks that handle most trades and earn bigger profits from every transaction they facilitate if prices aren't easily accessible.

For example, credit-default swaps tied to bonds of companies such as General Electric Capital and Goldman Sachs typically have a pricing gap of 0.1 percentage point between the bid and offer price. That translates into a $40,000 margin for every $10 million in debt insured for five years. Greater price transparency could narrow that gap, lowering costs for buyers and sellers but reducing fees for banks.

Just so you know who's looking out for you. Now, if the banksters still run the place, as Dick Durbin said, then everyone can be right about the dangers of the financial markets and it wouldn't amoung to a hill of beans.

Pandora's Box Already Open

Today is the opening of CPAC, the Conservative Political Action Conference. Expect lots of 2012 Presidential candidates to stop by and kiss the rings of the activists - there's even a straw poll - along with thundering denunciations of the socialist terrorist Obama. However, there is, via John Cole, at least one Republican strategist who understands that the party is headed for oblivion.

I just got off the phone with a very plugged-in Republican strategist who told me that Republican reaction to President Obama’s speech, which the party will roll out in the next few days, will mark the beginning of a new GOP approach to opposing the president’s initiatives. (No, Bobby Jindal’s ineffective response was not part of that new approach—everyone seems a little embarrassed about that.) The Republican leadership in the House has concluded that in the stimulus debate, the GOP succeeded in dominating a number of news cycles but failed to score any points on actual policy. That, the leaders believe, has got to change.

“You’re seeing a major doctrinal shift in how Republicans are going to focus all these debates,” the strategist told me. “The key is to focus on winning the issue as opposed to winning the political moment. If you win the issue, people will think you are ready to govern.”

I asked him to elaborate a little. “With the political moment, it’s how can you find the one thing that gives you the momentary upper hand in terms of the coverage for the next six hours—as opposed to engaging the electorate in creating a structural change in their opinion on which party is better able to handle an issue.”

During the stimulus debate, the strategist argued, Republicans had an actual alternative but were unable to direct much attention to it—in part because they were focusing so much of their rhetoric on the massive and unnecessary spending in the bill. The debate became a question of an up-or-down decision on the Obama/Democratic plan—not a choice between the Obama/Democratic plan and a Republican plan. “The coverage of the stimulus bill focused on the difference between the House and Senate versions,” the strategist told me, “which were basically two sides of the same coin.” The Republican role was limited to a) saying no to the Obama/Democratic bill, and b) having three moderates in the Senate approve of the bill as long as it offered a little less than what Democrats proposed. The idea that Republicans, mostly in the House, had an actual full-scale alternative, was lost. “On the Sunday talk shows, right after it passed, find me one person who mentioned the Republican alternative,” the strategist said.

This is mostly true, but as Cole says, they actually had no alternative. It was the same "tax cuts fix everything" logic that has brought us to where we are.

However, I question the ability to actually change their strategy at this point. They have pretty much banked on intellectual dishonesty and stunts for close to a decade. That's what's ATTRACTED what's left of their followers. The activist base is throwing a Boston Tea Party at the White House tomorrow, headlined by Joe the Plumber. Sorry, but that's the GOP these days. It's a party that thinks it's clever calling an $800 billion dollar stimulus package with $300 billion in tax cuts a trillion dollar spending bill because they've just now gotten around to factoring in interest on the debt, which wasn't a problem when George Bush was driving up debts faster than any President in history. It's a party that pores over testimony by government officials to make sure 9/11 is mentioned. That's the sorry state of the Republican Party. And one strategist realizing that winning the news cycle does not win much of anything is nice, but not likely to change much.

I think Bill Clinton, who knows a thing or two about beating Republicans, actually offers some good advice.

Their only shot to get back in this debate is to look like they’re willing to cooperate with him now, and then to develop alternative ideas. Newt Gingrich even recognized that, that’s why he ran on that Contract with America. It’s just that he still had a country which was still vulnerable to the appeals of the Republican right. [People are] just not there anymore.

The Independents and the Democrats have all moved with the President. And the Republicans have isolated themselves by having predictable, tired old objections which are not supportable by the facts…

They should give him some more votes now in the Congress and develop an alternative plan for the future that’s different, and say, “We’re all in a terrible crisis now, we’ll help him get through the emergency, but we don’t agree with his long term approach.” That I think would be a good strategy for them [...]

Most Americans … rejected the way [Republicans] think. They basically said, look we’ve been around this track twice now, and both times ended in economic calamity. The first time produced my election, the second time was worse, and produced President Obama’s. And now, unlike the first time, they have now lost their natural cultural advantage, and the country thinks more like we do…

I know we always need two parties, but they both need to be arguing within a real-world context that’s relevant to America’s present and future. And these guys just haven’t yet caught up.

Until they do, it's going to be a long road for Republicans.

GOP Obstruction In Conflict With GOP Future

I wouldn't read a whole lot into the Gallup poll showing Congress' approval rating up to 31%. I think they're drafting off of Obama's honeymoon a bit, and since they were able to put a stimulus package on the President's desk (despite the sausage-making), they're getting a little credit for that. More than anything it suggests the power of sustained action. All the ratings increases come from Democrats. As Congress is able to get a few Democratic bills done with their increased numbers (Ledbetter, SCHIP, the stimulus), Democrats are rewarding them. And seeing that the stimulus foretells a new era of social spending in Washington, the preferred action for Democrats is to continue moving on these crucial priorities in areas like health care and energy. As they expand recovery to the greatest possible number of Americans, that number will return the compliment.

What the numbers do say is that Republican intransigence is flopping. It makes for fun backslapping and Aerosmith videos, but I think the public isn't biting at all. And the consequent desperation of Republican attacks - really, Barack Obama is responsible for the stock market from the moment he was ELECTED? - shows that even their lines of attack are thin and meager. Many Republican Governors are backing away from their rump faction and building bridges to the popular President because they actually have to govern, and as such can't fall back on conservative ideology, which has no use in a crisis.

The words of Bill Clinton, still great at giving Republicans hell, are worth noting:

Roberts: What do you think of the job that President Obama did on steering the stimulus plan through Congress, and does he in fact have the experience necessary to be a good president, reach across party lines and craft a bipartisan bill?

Clinton: Well first of all, he has reached across, and it takes two to tango. I find it amazing that the Republicans who doubled the debt of the country in eight years and produced no new jobs doing it, gave us an economic record that was totally bereft of any productive result are now criticizing him for spending money. You know, I'm a fiscal conservative, I balanced the budget, I ran surpluses. If I were in his position today, I would be doing what he's doing. Why? Because the problem with the economy is the housing decline led to the general decline in values. Assets are going down. This stimulus is our bridge over troubled waters till the bank reforms kick in. He did the right thing, he did everything he could to get Republican support. He took some of their tax-cutting ideas.

But if you look at this bill, it is designed do three things. And it does all three. It puts money in the hands of people who need money to survive -- unemployment benefits, food stamp benefits, tax cuts. Second thing it does is to give money to state and local governments so they don't have to lay a million people off or raise taxes. Either one would be bad for the economy. The third thing is it does is create new jobs. Given the Congress he had and the environment and the speed with which they had to move, I think he did a fine job with this.

And that's what Americans are responding too.

Clinton's Confirmation Hearing

I watched a good bit of the Clinton nomination hearings this morning, and I did it on C-SPAN, because I didn't want to hear the gasbags going on and on about all those terrible conflicts of interests between the Secretary of State and the Clinton Foundation. Um, wasn't Hillary Clinton a SENATOR before all this? If these conflicts with the Clinton Foundation getting cash from foreign governments to influence American foreign policy are a conflict now, wouldn't they have been before? Furthermore, what giant political family DOESN'T have conflict of interest ties like this? It just seems like this manufactured outrage is practically reserved for the Clintons.

The latest high school-level argument that the press is making is that John Kerry wanted the job and now that he's Senate Foreign Relations Committee chair, there are going to be all kinds of petty animosities and grumbling. Have these reporters evolved at all from the time when the key question was who was going to ask who to the prom?

So I'd rather focus on the specifics, at least as I saw them. There's an AP writeup of the hearing here.

Hillary Rodham Clinton said Tuesday that she intends to revitalize the mission of diplomacy in American foreign policy, calling for a "smart power" strategy in the Middle East and implicitly criticizing the Bush administration for having downgraded the role of arms control [...]

"America cannot solve the most pressing problems on our own, and the world cannot solve them without America," she said, her daughter Chelsea seated behind her in the audience. "The best way to advance America's interest in reducing global threats and seizing global opportunities is to design and implement global solutions. This isn't a philosophical point. This is our reality." [...]

In discussing the problem of peacemaking in the Middle East, Clinton referred to her husband's extensive, though ultimately unsuccessful, efforts to strike a comprehensive peace deal.

"As intractable as the Middle East's problems may seem and many presidents, including my husband, have spent years trying to help work out a resolution, we cannot give up on peace," she said. She said that she and Obama are "deeply sympathetic to Israel's desire to defend itself" against Hamas rockets fired from the Gaza Strip but also worried about the humanitarian situation in Gaza.

"We must also actively pursue a strategy of smart power in the Middle East that addresses the security needs of Israel and the legitimate political and economic aspirations of the Palestinians; that effectively challenges Iran to end its nuclear weapons program and sponsorship of terror, and persuades both Iran and Syria to abandon their dangerous behavior and become constructive regional actors." she said.

I think you're going to hear "smart power" a lot during Clinton's tenure. It fits the combination of tough-minded diplomacy and global cooperation we can expect from her, and it's certainly a break with the past.

Top dislike: the continued use of "all options are on the table" when it comes to Iran. Our rhetoric is not only overheated, but everyone seems to have forgotten that the latest National Intelligence Estimate on Iran showed that they stopped their nuclear program four years ago. You don't have to believe that, but you could at least cite it.

Top like: Clinton over and over again suggested that our over-reliance on contractors weakens our national security and is not even fiscally responsible. The multiple abuses by contractors trouble her, and she feels that State Department personnel can better handle the job and would not have to be constantly retrained. However, Clinton neglected to call for a ban on mercenaries, which was a campaign promise of hers. She needs to be pushed on that. Also, Clinton will be dogged in her efforts to secure the proper funding for the department and bring into balance the State/Defense relationship. On more than one occasion she has said that the Pentagon has 10 times the budget of Foggy Bottom, and they have been carrying out functions usually reserved for State. As even the Chairman of the Joint Chiefs said yesterday, we need less of a reliance on the military in foreign policy, which speaks well of the effort to get someone of such prominence to helm the State Department.

There was also talk of Afghanistan, which I'll get to in a later post.

Clinton Derangement Syndrome

I think the biggest reason why I've eventually come around to the idea that Hillary Clinton as Secretary of State is an excellent idea is by watching the traditional media froth at the mouth about it. David Broder is but a symbol of this consensus freak-out.

The last thing Obama needs is a secretary of state carving out an independently based foreign policy. He needs an agent, not an author.

Even if Hillary Clinton were ready to play such a subordinate role, which she might be, in return for a promise that her voice would be heard in the most serious policy debates, the presence of Bill Clinton makes that a doubly difficult assignment. The former president has, through the Clinton Global Initiative and his own extensive foreign travels and worldwide contacts, made himself a force in international affairs. It would be unfair, and unlikely, for him to shut down his own private foreign policy actions because they might conflict with his wife's responsibilities. But foreign leaders would inevitably see Bill Clinton as an alternative route toward influencing American policy. And he would be unlikely to remain silent.

I just don't know where Broder gets the idea that Clinton would be necessarily carving out an independent foreign policy, or that Obama would allow that to happen. As for Bill Clinton, there's a small amount of concern there, but I think it's overblown. Considering the enormous conflicts of interest from this President, who owed his business career to the Saudis, I think that Clinton's involvement with foreign nationals - which is to be expected from a former President - is unlikely to inform his wife's duties at State. Anyway, Bill is willing to make the necessary concessions.

It's amusing that people like Broder are throwing this fit about the return of the Clintons, while bloggers like John Aravosis - perhaps Clinton's biggest critic in the primaries - are willing to make nice:

Hillary's comportment during the primaries, as a primary contender, is a far cry from what Joe Lieberman did in actually endorsing the GOP candidate. When you are running for office you are granted a certain degree of latitude in how nasty you can be against your fellow primary contenders. Yes, we get pissed at you at the time, we strike back just as hard, but then we get over it. But running against, and criticizing, fellow Dems in a primary is not the same thing as joining with the enemy after the primaries are over.

I liked Hillary and Bill before the heat of the primaries, and I'm starting to like them all over again. I really believe Hillary would make a fantastic Secretary of State, and her husband's international ties would only benefit the Obama administration. If anyone can fix America's tattered image in the world, it's President Obama aided by a tag-team of Clintons. And I really am serious. I think this could be an incredible opportunity for America.

Quite a turn of the tide, ay?

Good Picks

With all the focus and attention on Hillary Clinton, some of the other strongly rumored choices for the Obama Administration are getting less scrutiny. One is pretty big: Eric Holder as the next Attorney General.

President-elect Obama has decided to tap Eric Holder as his attorney general, putting the veteran Washington lawyer in place to become the first African-American to head the Justice Department, according to two legal sources close to the presidential transition.

Holder, who served as deputy attorney general during the Clinton administration, still has to undergo a formal “vetting” review by the Obama transition team before the selection is final and is publicly announced, said one of the sources, who asked not to be identified talking about the transition process. But in the discussions over the past few days, Obama offered Holder the job and he accepted, the source said. The announcement is not likely until after Obama announces his choices to lead the Treasury and State departments.

Holder was #2 at Justice under Janet Reno and the DC US Attorney from 1993-1997. He was an early and enthusiastic Obama supporter. He apparently was involved with signing off on the Marc Rich pardon, but that won't hold up the confirmation process. And he's really good on what we care about:

Holder charged the detention facility at Guantanamo Bay was a "moral hazard," which he compared to the original constitutional flaw that permitted slavery to continue, to President Lincoln's decision to suspend habeas corpus during the Civil War and to the decision by President Franklin Roosevelt to create the Japanese internment camps during World War II.

"We have squandered one of our greatest strengths as a nation," Holder said, taking a partisan swipe at the Bush administration.

He insisted it was disgraceful that the Supreme Court "had to order the president to treat detainees in accord with the Geneva Convention."

In the months and years since 9/11, the Bush administration took many steps that were excessive and unlawful," Holder continued. "We authorized torture and we let fear take precedence over the rule of law, as we overreacted to perceived danger."

In addition to closing Gitmo, Holder insisted the next president should:

* Declare without qualification a policy that the United States will not torture political detainees, engage in forced interrogations or submit people to degrading treatment in prison;

* End all programs, covert or otherwise, to transfer detainees to nations that practice torture;

* Stop domestic search and seizures without warrant and end wiretapping of citizens.

"We have lost our way before," Holder told the 350 attendees at the Friday evening session. "Now we must step back into the shining path envisioned by our founding fathers in such icons of liberty as the Declaration of Independence, the Constitution and the Bill of Rights."

I'm OK with that.

And I'm even more OK with the appointment of Peter Orszag as White House Budget Director.

President-elect Barack Obama is preparing to tap Congressional Budget Office Director Peter Orszag, once a veteran economic adviser in the Clinton White House, to become his budget director, according to several National Journal sources. The Office of Management and Budget job -- seen as a key post to help Obama deliver on his domestic policy agenda amidst the gloom of a $700 billion federal financial rescue, a recession and the prospects of a $1 trillion deficit next year -- carries Cabinet rank. An announcement is expected soon, but could come with other personnel decisions Obama is making to lead the Treasury Department and National Economic Council in his White House.

Orszag is young, smart, and has been fantastic on health care policy (he says reform is desperately needed to stave off a budget nightmare) and climate change. He also happens to be the only Budget Director ever to have been a blogger.

These are Clinton Administration officials, but I would hardly call them "Clintonites." The fact is that finding anyone with relevant experience to lead in the new Administration will ultimately have ties to the only Democratic President of the last 28 years. And besides, a lot of people LIKED the Clinton Administration. It had a lot of diligent employees working in it, and not everyone there was somehow tainted by the missed opportunities at the top.

Now, if Obama would give Eliot Spitzer a second chance and a shot running a regulatory agency, I'd be pretty happy about all this....

Hillary To State?

OK, since this appointment of Hillary Clinton as Secretary of State is appearing more likely (though not yet a done deal as the Guardian says) I thought I'd write about it. The top-level view of this is that Bill Clinton's business dealings are the major stumbling block, many of which could give the appearance of a conflict of interest.

The vetting of Mr. Clinton’s myriad philanthropic and business dealings is “complicated, and it may be the complications that are causing hesitation on both sides,” said Abner J. Mikva, one of Mr. Obama’s closest supporters and a White House counsel during the Clinton administration. “There would have to be full disclosure as to who all were contributors to his library and foundation. I think they’d have to be made public.”

While aides to the president-elect declined Monday to discuss what sort of requirements would make it possible for Mrs. Clinton to serve as secretary of state, they said Mr. Obama would not formally offer her the job unless he was satisfied that there would be no conflicts posed by Mr. Clinton’s activities abroad.

I don't think the husband of the Secretary of State could accept lump sum payments from foreign governments. Even if it had no effect on governance, the appearance of impropriety would drive the cable sharks mad.

Which in many ways you're already seeing. With the serious challenges that we have to face at home an abroad, I don't know why you would risk endless distraction just because of a fetish with Doris Kearns Goodwin's book "Team of Rivals" (and like I said, the REAL rivals were seceding from the Union and forming an Army at that time). Hillary Clinton is quite confirmable and wouldn't have a problem there, but the spigot of Clinton gossip would be wide open and unbearable.

That is not a reason not to do it, however. You employ the best men and women for the job. And so the question becomes, is Hillary that person? I know that she accompanied Madeleine Albright abroad often during her run as Secretary of State, and she certainly has a wealth of experience. It is also true that my comfort level with Obama over Clinton in the primaries was mainly cased on foreign policy. Clinton is probably more progressive than Obama on the domestic front, but she called his idea for diplomacy with enemies to be "dangerous and naive." A lot of that is campaign talk, and I'm sure she'd carry out Obama's wishes. At the same time, the leaders of these various departments are not without power and influence. And they are also managers of a large agency, and Clinton didn't do entirely well with that in the primaries.

I'm very torn on the idea, and I see it as high risk with the potential for high reward. Clinton is a pro, but the gossipmongers and Kremlinologists will be out in force to look at every nod and wink and gesture for signs of tension. If the media could be cordoned off with strict limits on Clinton discussion, well then OK.

...It's entirely possible that the gasbag outcry is the desired effect, a misdirection so that Obama can govern and Hillary can take the circus-like atmosphere. I'm not sure it would work out that way, but it's possible.

I Don't Care

The Hillary-Obama spat that consumed everyone during the primaries always left me cold. It's this overblown soap opera that the media is drawn to like flies to a lamppost. Apparently Obama offered her the Secretary of State job. MAYBE. It seems like yet another trial balloon, thrown out there to gauge public opinion and set the media tongues a-waggin'.

Who gives a crap about this? It's idle speculation at best, and besides she's perfectly qualified for the position. Anyway, Obama is confident enough in his abilities that his perspective is going to be what drives the agenda. There are a lot of Clinton-era officials in the transition team so far because the only Democrats with any executive experience are Clinton-era officials. Susan Rice worked in the Clinton Administration but she was against the Iraq war, as have been most of the Obama foreign policy team. Do they deserve to be tarred with the brush of being "Clinton-era officials"? John Podesta is the founder of the Center for American Progress and a very liberal guy. He was Clinton's Chief of Staff at one point. Is he dead to everyone, then? It's ridiculous.

I mean, stuff like this is absurd.

The pick of the former presidential contender and Senate Armed Services Committee member would go a long way toward healing any remaining divisions within the Democratic Party after the divisive primaries.

What divisions? Obama got 89% of Democrats on Election Day and has a 70% approval rating.

As Eric Boehlert said:

What is clear is that Obama and Clinton are conducting themselves as adults trying to help lead the country, while the portions of the press corps (sadly, it's the so-called 'elite' portions) continue to behave like juveniles.

If something actually happens on this, call me. Until then, I really couldn't care less.