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Knowing That Pundits Don’t Know What They’re Talking About Is A Huge Strategic Advantage

[ 134 ] November 6, 2014 |

A useful summing up on McConnell:

But at a time when McConnell is likely poised to take over as Senate Majority Leader, it’s worth taking a moment to acknowledge his political acumen. Not acumen in winning reelection, but acumen in masterminding the Republican comeback after the huge Democratic wave elections in 2006 and 2008. His master plan was simple — hang together and say no. And, by and large, it worked. McConnell is not the most charismatic politician of our time, but he is arguably the sharpest mind in contemporary politics on a strategic level.

[…]

To prevent Obama from becoming the hero who fixed Washington, McConnell decided to break it. And it worked. Six years into the affair, we now take it for granted that nothing will pass on a bipartisan basis, no appointment will go through smoothly, and everything the administration tries to get done will take the form of a controversial use of executive power.

It’s been ugly. But in most voters’ mind, the ugliness has attached to Obama and, by extension, Democrats. It was a very counterintuitive strategy, but it was well-grounded in the best political science available. And it worked.

Most political coverage is premised on some potentially noble lies about how the public will punish politicians who subvert basic institutional norms or prevent popular things from being done. McConnell’s evil genius is to see that it’s all nonsense. The public generally doesn’t pay attention to the details of political squabbles. For all intents and purposes nobody in Congress pays a real price for obstructionism; even if the popularity of the party is dragged down it doesn’t affect the election chances of the vast majority of members. By the same token, Republican statehouses can refuse the Medicaid expansion and Obama will get more blame than the Republicans who turn it down, and so on. This cold strategic logic presents a serious problem because the structure of American government requires certain norms of comity to function in most circumstances — we’re about to get a lot of grim lessons about the superiority of parliamentary systems that don’t massively dilute and misallocate accountability — but this isn’t McConnell’s problem.

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NPR: Unionbuster

[ 10 ] November 6, 2014 |

Our valued commenter Bruce Vail has an important piece at In These Times on the Baltimore NPR station hiring a notorious unionbusting firm to ensure its workers do not have a voice

Jonathan Rogers, Chair of the WYPR Board of Directors and an executive of Merrill Lynch, the stock brokerage unit of Bank of America, told In These Times that the board had approved the hiring of Jackson Lewis but denied it was an attempt to defeat the union.

“We felt it was in the best interest of the station to ensure that the concerns of the organization were heard,” in the course of the NLRB process, Rogers says. Asked whether he was opposed to recognizing the union, Rogers replied, “My personal feelings are irrelevant.”

Marc Steiner disagrees. A former WYPR executive who now hosts a program for a competing radio station in the Baltimore market, Steiner was ousted from the station in 2008 after a showdown with current WYPR President Anthony Brandon over control at the station. He counters that the personal feelings of the board members are very relevant.

“The Board is made up of corporate executives and wealthy people, most of whom do not understand public radio,” Steiner says. “It is really run, or at least it was when I was there, more like a commercial station.”

Steiner says that WYPR workers he has spoken with wanted a union in part “to ensure a firewall between those corporate interests and programming. Unless things have changed [since I worked there], programming is under constant pressure to mold what is heard on the airwaves to interests of underwriters.” He also reports hearing consistent complaints about heavy-handed management techniques and substandard pay levels—many complaints revolve around Brandon’s perceived autocratic style of management. on the job.

Look, we hired this union busting firm but not because we wanted to stop our workers from unionizing. We wanted to make sure our corporate voice was heard through the kind of legal shenanigans that only a union busting firm can provide. Now please give us more money during the next pledge drive.

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The JP Morgan Chase Whistleblower

[ 44 ] November 6, 2014 |

Good to see Taibbi back to doing what he does best:

Fleischmann is the central witness in one of the biggest cases of white-collar crime in American history, possessing secrets that JPMorgan Chase CEO Jamie Dimon late last year paid $9 billion (not $13 billion as regularly reported – more on that later) to keep the public from hearing.

Back in 2006, as a deal manager at the gigantic bank, Fleischmann first witnessed, then tried to stop, what she describes as “massive criminal securities fraud” in the bank’s mortgage operations.

Thanks to a confidentiality agreement, she’s kept her mouth shut since then. “My closest family and friends don’t know what I’ve been living with,” she says. “Even my brother will only find out for the first time when he sees this interview.”

Six years after the crisis that cratered the global economy, it’s not exactly news that the country’s biggest banks stole on a grand scale. That’s why the more important part of Fleischmann’s story is in the pains Chase and the Justice Department took to silence her.

She was blocked at every turn: by asleep-on-the-job regulators like the Securities and Exchange Commission, by a court system that allowed Chase to use its billions to bury her evidence, and, finally, by officials like outgoing Attorney General Eric Holder, the chief architect of the crazily elaborate government policy of surrender, secrecy and cover-up. “Every time I had a chance to talk, something always got in the way,” Fleischmann says.

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Dirty Deeds, Done Dirt Cheap?

[ 21 ] November 6, 2014 |

Looks like he’s on the Highway to Hell.

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A Chicken in Every Pot

[ 90 ] November 6, 2014 |

Andrew Lawler provides an excellent history of chicken’s rise through the 20th century from minor part of the American diet to American companies feeding the world with it. The modern chicken is a technological marvel, with all the advantages and horrors that comes with it.

Also, I find it a little disturbing that the average American eats 100 lbs of chicken of year.

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What’s Going on with the Mexican Cartels?

[ 13 ] November 6, 2014 |

Benjamin Smith has your day’s must read about the status of the Mexican drug cartels and what seems to be the Mexican government’s attempt to create a sort of super-cartel to keep the peace. There pretty much is no positive angle in any of this, be it the effects on the Mexican people, the possibility of a state-cartel alliance, or anything related to how it effects the United States. Depressing, but important and with excellent analysis.

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Soviet Housing Foundations

[ 74 ] November 6, 2014 |

Leave it to the Soviets to have done the worst possible thing in any given situation:

After the war, with Brest’s Jewish community devastated, the Communists set about getting rid of the remnants of Jewish culture in the town. In 1959 they dismantled the Jewish cemetery-one of the oldest and largest in Belarus-and turned it into a sports stadium. As the dismantling process got underway, Communist Party members, along with enterprising locals, recognized the high quality of the headstones and “recycled them.” As well as in the foundations of houses, these Jewish graves have since been discovered in the makeup of Brest’s road surfaces, pavements, and gardens.

In May, with diggers churning up the ground to build a new supermarket, more recycled headstones started popping up. Debra Brunner, co-director of the Together Plan, a UK-based charity supporting community empowerment in Eastern Europe and the Former Soviet Union, told me, “I can’t even begin to explain what it felt like to actually stand among the graves. Picture a huge mound of freshly dug mud with Jewish headstones coming out at all angles. It was a macabre sight.”

I just….

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Other people’s money

[ 16 ] November 5, 2014 |

Berkeley law professor Steven Solomon has a curious piece in the NYT today on how and why the Thomas Jefferson School of Law managed to survive, for now, by working out a deal with its creditors after defaulting on its bond obligations this summer.

Solomon argues that it doesn’t make financial sense for private creditors of free-standing schools, or central university administrators of university-affiliated schools (90% of ABA law schools are in the latter category) to close down a law school, at least while there’s any reasonable prospect of bringing revenues and expenses into balance:

[A] closed law school is worth little, or most likely nothing, to creditors. The value is only in the revenue stream it produces and perhaps its building. (You could say the books also, but these are increasingly fewer.) And these days, that revenue stream is down 20 to 40 percent, meaning that if law schools were for-profit businesses, most would be failures.

A troubled law school is like Dracula: hard to kill. Creditors will not do so because even keeping a struggling school alive means there is some possibility of repayment.

Most law schools, however, don’t have huge bonds to service, or at least, the debt they have is borne by the university. For these schools, the calculus is even easier. If a closed law school is worth nothing and a nice big building without students is useless, then keeping it open remains the only option.

Shutting down a law school at a larger university also puts the administrators and others out of work, with few options for employment. They have every incentive to keep the school alive.

This explains why, despite forecasts that up to a third of law schools could close, even the most financially dire have not. Instead, law schools are doing everything they can to push down costs hard and fast. Reports of layoffs of professors, buyouts and job cuts abound even for those with tenure. For years, central campuses sucked money out of law schools. Now they are keeping them alive.

Solomon sees all this as evidence that “the market” is working, if somewhat slowly and imperfectly:

The failure of law schools to close may also simply be a recognition that the market is adjusting to today’s realities. The struggle is pushing down the costs of operating a law school, and law schools are still valuable to universities. It may be tempting to shut them in these difficult times, but it can cost tens of millions to open a new one. Better to invest and cut back on expenses for a while and see what happens.

The status quo is likely to remain as some are forecasting that the bottom is almost here for law schools. This is how economics works: Markets tend to overshoot on the way up, and down.

Stephen Harper, author of The Lawyer Bubble, points out what’s missing from this analysis:

Solomon suggests that creditors made the only deal possible and the school is the ultimate winner. He gives little attention to the real losers in this latest example of a legal education market that is not working: Thomas Jefferson’s students, the legal profession, and taxpayers.

In retrospect, the restructuring agreement between the school and its bondholders reveals that a deal was always likely. That’s because both sides could use other people’s money to make it, as they have since 2008.

According to published reports, interest on the taxable portion of the 2008 bond issuance was 11 percent. Tax-exempt bondholders earned more than 7 percent interest. Thanks to federally-backed student tuition loans, taxpayers then subsidized the school’s revenue streams that provided quarterly interest and principal payments to those bondholders. (emphasis added)

That attending TJSL turns out to be a life-wrecking disaster for a very large proportion of its students is, as Harper emphasizes “irrelevant” in this sort of deeply dysfunctional market:

Thomas Jefferson’s low bar passage rate [54% in 2012] made no difference to most of its graduates because the full-time long-term bar passage-employment rate for the class of 2013 was 29 percent, as it was for the class of 2012.

Meanwhile, its perennially high tuition (currently $44,900 a year) put Thomas Jefferson #1 on the U.S. News list of schools whose students incurred the greatest law school indebtedness: $180,665 for the class of 2013 [Note that this figure doesn’t include interest accrued during law school, so the average TJSL graduate has well over $200,000 in law school debt alone at graduation]. According to National Jurist, the school generates 95 percent of its income from tuition.

This invites an obvious question: How did the school survive so long and what is prolonging its life?

First, owing to unemployed recent graduates with massive student loans, bondholders received handsome quarterly payments for more than five years — much of it tax-exempt interest. The disconnect between student outcomes and the easy availability for federal loans blocked a true market response to a deteriorating situation. Bondholders should also give an appreciative nod to federal taxpayers who are guaranteeing those loans and will foot the bill for graduates entering income-based loan forgiveness programs.

Second, headlines touted Thomas Jefferson’s new deal as “slashing debt” by $87 million, but bondholders now own the law school building and will reportedly receive a market rate rent from the school — $5 million a year. Future student loans unrelated to student outcomes will provide those funds.

Third, the school issued $40 million in new bonds that will pay the current bondholders two percent. Student loan debt will make those payments possible.

Precisely.

Solomon doesn’t resist the urge to take a crack at certain unnamed critics of the law school status quo in America, who were supposedly enjoying “shivers of delight” at the prospect of seeing TJSL “keel over.” (Solomon links to an article in which I’m quoted using the latter phrase.) I’m not going to resist the urge to quote a couple of comments from the NYT site regarding his article:

Prof. Solomon’s stance in the face of this debacle is puzzling. He sardonically calls out the “shivers of delight” he attributes to critics such as Brian Tamanaha and Paul Campos who for years have been writing soberly and lucidly about these highly unethical operations that are just conduits of federal loan funds to overpaid faculty and administrators (the president/dean of Thomas Jefferson reportedly makes well over $500,00 per annum). Why Prof. Solomon feels called upon to defend this unconscionable system is a mystery.

To which another reader replies:

Yes, such a riddle wrapped up in an enigma why Prof. Solomon would support this money-printing operation. Someone please get the FBI on the case. We need answers, because I just can’t fathom why Berkeley law professor Solomon would support the Thomas Jefferson School of Law. It really makes no sense. I’m going to have to sleep on this one and see if I come up with some answers in the morning. Better yet, I’ll retain the services of an Ivy League consultant to perform an analysis on why Prof. Solomon would defend this institution. It’s a modern day mystery!

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At the State Level, Candidates Matter A Lot

[ 69 ] November 5, 2014 |

Here’s the thing: Republicans were slaughtered in 2006. Reagan’s Republicans lost 8 Senate seats in 1986. LBJ’s Democrats lost 3 Senate seats (with a more than 8% negative vote swing) and lost 47 seats in the House. FDR’s Democrats lost 72 House seats and 7 Senate seats, in 1938 — which understates matters, given that FDR’s attempt to get anti-New Deal Democrats defeated in primaries came up a cropper. (Bill Clinton, I will grant, broke even in the Senate and gained slightly in the House, but in addition to the frivolous impeachment that was in motion the deal-making he used to maintain popularity 1)is no longer possible, and 2)was dubiously desirable.)

You get the idea. The in-party — even in cases where presidents are transformative and/or have bold agendas that deliver plenty to their constituents — rarely fares well in the midterms of term 2. Combined with a very unfavorable map, the fact that midterms massively favor the Republican electorate, and Republicans at both the state and federal level figuring out that the damage you inflict on constituents will actually be held against the party controlling the White House, the Democrats were going to get clobbered, and the “this proves Obama should have led with leadership by (proposing the most politically efficacious policy which by pure coincidence happens to be the policy I prefer on the merits)” genre is mostly a waste of time. Messaging and position-taking might matter a little at the margins, but there wasn’t any magic formula that was going to prevent the 2014 midterms from being a bloodbath at the federal level.

As Alec MacGillis argues, though, it’s crucial not to lump the inevitable Republican wave at the federal level with the state races. Some of the factors pertain, especially with respect to turnout, but fundamentals become less important and cadidates moreso, which was bad news for Democrats in some blue states:

I’m skeptical of that claim. No doubt, disaffection and low turnout among core Democratic voters hurt the party’s gubernatorial candidates in blue states as it did Senate candidates in red and purple ones. And anti-Washington, anti-Obama sentiment certainly played a role in the GOP’s Senate takeover. But to explain why some Democratic gubernatorial candidates lost in blue states while others (such as Gina Raimondo in Rhode Island, Dannel Malloy in Connecticut, and John Hickenlooper in Colorado) managed to hang on, one really needs to take into account the state and local context of the races.

[…]

But why would Coakley and Brown go down, while Hickenlooper and Malloy survived? Here one has to consider the ultimate local context, the quality of the candidates. Hickenlooper and Malloy provoked plenty opposition in their states, not least with their signing of sweeping gun control legislation after the Newtown, Connecticut, massacre. But voters also had a clear sense of where these men stood. The same could not be said for the lackluster Coakley and, especially, for Brown, who ran one of the worst campaigns I’ve ever observed up close. The son of a Jamaican father and Swiss mother, a colonel in the Army Reserve and former JAG officer whom O’Malley plucked out of relative obscurity in the Maryland House of Delegates to be his running mate in 2006, Brown is an amiable enough fellow but gives off the distinct vibe of a second-stringer. His big chance to show his stuff, the launch of the Maryland insurance exchange under Obamacare, was a total fiasco.

This is a real problem. Massachusetts was the worst example, with a candidate who had already failed disastrously once winning the primary fairly easily, but the weak bench created in part by the 2010 wave might continue to have reverberations.

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Out of Sight

[ 40 ] November 5, 2014 |

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Out of Sight: The Long and Disturbing Story of Corporations Outsourcing Catastrophe is now available for preorder at Amazon. I know Amazon is evil. However, many independent bookstores now base their orders on preorders from Amazon. So what are you going to do? I am going to have a follow up post about this issue more specifically. In any case, preorders actually really help move a book, or at least this is what I am told.

Anyway, you know it’s going to be an awesome holiday present for yourself or your family. That it isn’t being released until June should not matter in your decision making! If you pay now, you’ll forget about it by then and be surprised by the “free” book you received in the mail!

I am also rather fond of the cover.

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Today In The Glory Of Third Party Politics

[ 109 ] November 5, 2014 |

Have any doubts about the brilliance of splitting the more left-wing vote into multiple parties as a way forward? Surely they’ve been erased now:

Republican Gov. Paul LePage secured a second term early Wednesday morning, defeating Democratic U.S. Rep. Mike Michaud after a long, expensive and often bitter campaign.

[…]

Independent candidate Eliot Cutler, who received 36 percent of the vote four years ago, less than 2 percentage points behind LePage, had 8 percent of the vote. The Cape Elizabeth attorney conceded shortly before 10 p.m.

“Tonight I’m very, very humbled and very proud – very, very proud – because for 50 years plus, I was raised across the street,” said LePage, referring to his childhood home near the Franco American Center. The governor left home at a young age, striking out on his own and fleeing an abusive father.

“I’m home,” he said Tuesday. “But home is Maine.”

He added, “Home is where every person born in Maine should have the opportunity to carve out their piece of the American dream. I have it. I have the American dream.”

LePage never mentioned Michaud but said he had a newfound respect for Cutler. LePage said Cutler should be the state’s attorney general, a position elected by the state Legislature.

I’m sure you do! But, really, what harm can he do?

The [Maine] legislature has voted for a Medicaid expansion five times, but each time it has been vetoed by Governor LePage.. An estimated 28,000 people would sign up for coverage by 2016 if the program were expanded, according to estimates from the Urban Institute.

Well, surely we can all agree that tends of thousands of poor people being denied medical coverage is a price worth paying if it allows onanists to congratulate themselves for being too good for mere politics.

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Postmortem

[ 321 ] November 5, 2014 |

A few thoughts, loosely tied together, on last night’s disaster.

Obviously Democrats need to spend some time figuring out what the heck happened. In many ways, few fundamentals had changed since 2012. Gridlock dominates Washington. The economy is not really any worse for the 99%, but nor is it appreciably better. Yet people seem to genuinely dislike Barack Obama at all points when he is not actively campaigning. Mitch McConnell deserves a lot of credit for understanding that the politics of fireeating would work wonders because everyone would blame the president no matter whose fault the problems in Washington actually lie with. He knows that most Americans simply don’t understand how politics work and want the president to solve problems, period. Manipulating that was horrible for the country but great for the Republican Party.

So it’s tough out there.

I don’t want to hear that the problem last night was the map. Yes, the Senate map was tough for Democrats. Winning at this point in Arkansas, Louisiana, West Virginia, and South Dakota is very difficult. However, that’s a limited explanation because it says nothing as to how the widely despised Paul LePage was reelected in Maine even after Eliot Cutler dropped out. It says nothing as to how Scott Walker was reelected in Wisconsin and Rick Snyder in Michigan. It certainly says nothing as to how a Republican became governor of Maryland. Maryland! This is a lot more than a tough map. Also, you can mostly forget about easily winning the Senate back in 2016. That map isn’t so great either and Democrats are in a deep hole.

I also don’t want to hear too much about money. It’s not that it isn’t important. It’s that a) the plutocrats always have tons of money and have always used it aggressively except for a relatively brief period in the decades after World War II and b) it can be overcome and has been overcome. Elections can be bought but grassroots campaigns can make that not happen. Obviously, Democrats failed miserably on this point.

So what’s up? I think there are a few really important points. Democrats need to just stop trying to appeal to old white people. White men voted for the GOP 64-34. It is a loser strategy. This demographic overwhelmingly votes GOP. Alison Grimes, who ran an utterly pathetic and embarrassing campaign, refusing to say whether she voted for President Obama is the prototype of how not to do it. No one is going to believe you. Heard a bunch about the North Carolina race last night and all the discussion about how Ebola, ISIS, and immigration dominated voters’ agenda. When I hear those three things in this context, I hear three words: racism, racism, and racism. And the Supreme Court supporting racist policies to restrict blacks from voting by eviscerating the Voting Rights Act allowed racists to indeed restrict black voting in meaningful ways that may well have swung North Carolina to the execrable Thom Tillis. Developing entire political campaigns to swing a few of these voters to the Democrats isn’t going to work–as we saw quite clearly last night.

Instead, Democrats need to give Latinos, African-Americans, and the young a reason to vote. Check this out:

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37%!! That means that Democrats simply could not get young people to vote while Republicans did an outstanding job motivating their base.

That means that Democrats have to rethink their midterm election strategy is a very real way. It’s one thing when there’s a presidential campaign. But the politics of midterm elections means that the same types of political calculations don’t work. How do you do that? You make your party about actual issues that young people and people of color care about. You support legalizing marijuana and prison reform. You support a vigorous government jobs program. You embrace immigration all the way, demonizing those who oppose a path to citizenship and the decriminalization of undocumented immigrants as racists. You make a $15 national minimum wage central to your campaign strategy. You have to call for student debt forgiveness. You have to make your party the party of the poor and the non-white, and not just in the passive way. If the racists and the plutocrats don’t like that, well, they weren’t going to vote for you anyway. Alexis Goldstein offers more radical ideas that may well be effective too. See also Harold Meyerson on this.

It’s increasingly clear, with the minimum wage hikes in deep red states and marijuana legalization continuing its march, that the nation wants these progressive policies, but they don’t see the Democratic Party as any vehicle to get them done. And maybe it isn’t. Certainly the party of Andrew Cuomo isn’t going to do much for the poor. And many may say that the Democratic coalition is too diverse for such a program. And the control of Wall Street over Democratic Party is toxic. But in the Senate at least, the remaining Democratic caucus is as progressive or more so than anytime in history. There simply aren’t conservatives left in that caucus outside of Manchin and King, both of whom could flip to the Republicans (although I am a bit skeptical McConnell wants them to since he can use them for his bipartisan cred). Mark Warner will be on the far right of the caucus. Elizabeth Warren, Bernie Sanders, Jeff Merkley, Sherrod Brown–these are people who represent what actual Democrats want to see. They are the future of the party. And the Democratic Senate can push forward really progressive legislation, even if it isn’t going to pass. They can lead the way in developing a left-leaning platform that, hopefully, motivates the young to vote.

Because whatever Democrats are doing is not working and will probably not work in 2018 either. Money will remain vital to that election and Democrats are scared of offending their big money donors (see Mark Pryor saying he doesn’t support raising the minimum wage even though it passes in his state). But that challenge must be overcome to motivate enough voters to compete in the midterms. More commercials about how Republicans are evil isn’t going to do that. Convincing base Democratic groups that the party wants to make their lives better and is the agent for doing that will.

So there’s a lot of work to be done. In case this post was too long, here is a short open letter to the Democratic Party with some visuals.

Dear Democrats,

Less this:

john-kerry-hunting-4

More this:

immigration-march-4

Thanks,
Erik

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