Not the Change We Need: Part VIII in a Continuing Series

Robert Reich has some good thoughts on the Obama administration’s financial regulation plan:

The plan doesn’t stop stop bankers from making huge, risky bets with other peoples’ money. It does increase capital requirements and oversight, but it doesn’t require bankers to take their pay in long-term stock options or warrants, and it doesn’t even hint that banks should go back to being partnerships instead of publicly-held corporations.

All this means traders still have very incentive to place big and often wildly risky bets as long as the potential winnings are big enough, and top executives have very little incentive to monitor what traders are up to as long as the traders are collecting large commissions on the bets.


In short: It’s a mere filigree of reform, a sheer gossamer of government. Wall Street must be toasting its good fortune. Unless Congress shows some spine, the great Wall Street meltdown of 2007 and 2008 — which lead to the biggest taxpayer bailout in history, very likely the largest taxpayer losses on record, and the largest investor losses since 1929 — will repeat itself within a decade, if not sooner.

This is not the change we need. It is increasingly clear that Barack Obama has little desire to be a Roosevelt, either trust-busting Teddy or regulating Franklin. There seems to be no good reason for taking such a soft touch with the financial industry, though it is enough to make me wonder whether the President’s caution may in fact be timidity. Financial regulation may not have even been on the President’s radar when he launched his campaign, but it is now one of the most important issues facing him. And this plan is not sufficient. I acknowledge that he may wish to focus on health care instead (after all, this is why torture investigations cannot proceed, why don’t-ask-don’t-tell is still policy, and why climate change legislation is being ignored), but the economic benefit of a real health care reform plan could be easily consumed in another financial meltdown 10-20 years from now. This is not the change we need.

On the same subject, we have Paul Krugman, questioning those to champion breaking up the banks.

I’m a big advocate of much strengthened financial regulation. One argument I don’t buy, however, is that we should try to shrink financial institutions down to the point where nobody is too big to fail. Basically, it’s just not possible.

The point is that finance is deeply interconnected, so that even a moderately large player can take down the system if it implodes. Remember, it was Lehman — not Citi or B of A — that brought the world to the brink.

The interesting thing there, is that Krugman seems to assume that the impetus behind antitrust action against too-big-to-fail banks is the belief that if we had smaller banks, we wouldn’t need to regulate them as strongly. I disagree. I am less concerned about too-big-to-fail (a measure which, if it has any meaning, must be a measure of importance not size) than too-big-to-regulate. I have no real knowledge here, but I once witnessed the considerable work that would be needed to pursue even a fairly small alter ego claim. My instinct is that attempting to understand, let alone regulate, a multinational behemoth is a correspondingly Augean task.

Do the regulatory benefits of breaking up the banks, then, outweigh whatever benefits are obtained consolidation? I have no idea. But, this is question to ask, and it does not seem to be the one Krugman is answering.

People Who Know What They’re Talking About

After my post last week on the need for columnists who know something about the history of political ideology, it is refreshing to see these two pieces in the Boston Globe.

The conservative cries of fascism…:

Make no mistake, however: Cries of fascism are fast emerging as the favored conservative criticism of the Obama administration. You can see why: Given its inextricable link to Mussolini and Hitler, fascism carries no end of unsavory connotations. And, of course, charges of socialism haven’t stuck to Obama.

But wait. Where is the extreme militaristic nationalism that the Encyclopedia Britannica tells us is fundamental to fascism? The contempt for electoral democracy and cultural liberalism? The effort to subordinate the individual to an authoritarian state?

Those are matters an intelligent commentator would want to consider before invoking the term.

…and socialism:

Still, branding someone as a socialist has become the slur du jour by members of the American right, from Newt Gingrich to Rush Limbaugh. Some, like Mike Huckabee, intentionally blur the differences between socialism and communism, between democracy and totalitarianism.

If we could get beyond such nonsense, I think this country could use a good debate about what goes on here compared with places with a long social-democratic tradition like Sweden, Norway, and Finland, where, by and large, the middle class has a far higher standard of living.

Kudos to the Globe for a healthy dose of realty in an unreal debate (and, of course, to Bernie Sanders for speaking unpopular truths).

Newly Released OLC Torture Memos: First Thoughts

I don’t have the time to read them completely, nor to respond in any kind of detail, but here is my first thought. Doesn’t this (h/t Glenn Greenwald):


Remind you of this?

‘The worst thing in the world,’ said O’Brien, ‘varies from individual to individual. It may be burial alive, or death by fire, or by drowning, or by impalement, or fifty other deaths. There are cases where it is some quite trivial thing, not even fatal.’

He had moved a little to one side, so that Winston had a better view of the thing on the table. It was an oblong wire cage with a handle on top for carrying it by. Fixed to the front of it was something that looked like a fencing mask, with the concave side outwards. Although it was three or four metres away from him, he could see that the cage was divided lengthways into two compartments, and that there was some kind of creature in each. They were rats.

‘In your case,’ said O’Brien, ‘the worst thing in the world happens to be rats.’

A sort of premonitory tremor, a fear of he was not certain what, had passed through Winston as soon as he caught his first glimpse of the cage. But at this moment the meaning of the mask-like attachment in front of it suddenly sank into him. His bowels seemed to turn to water.


Here are the links to the memos themselves care of the ACLU (h/t emptywheel):

August 1, 2002 John Yoo memo

First May 10, 2005 Steven Bradbury memo

Second May 10, 2005 Steven Bradbury memo

May 30, 2005 Steven Bradbury memo

Finally, I agree entirely with emptywheel that the ACLU deserves more support. Like so many other organizations that rely on donations, they’ve been hard hit by the economic downturn, but they’re still fighting the good fight.

Update: Firedoglake has a petition asking Eric Holder to appoint a special prosecutor who will determine whether criminal prosecutions are warranted. Sign it here.

Published in: on April 16, 2009 at 3:09 pm  Leave a Comment  
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Not the Change We Need: Part V in a Continuing Series (Updated)

When President Obama ordered executive officials not to rely on Bush-era signing statements on Monday, I decided to take the optimistic view that this was a good sign. Emptywheel was not so optimistic.

Savage (who of course wrote the book on this stuff) goes on to explain the background of Bush’s abuse of signing statements, and to note that Obama says he will use signing statements, “with caution and restraint” (whatever that means).

Clearly, my optimism wasn’t warranted.

President Obama on Wednesday issued his first signing statement, reserving a right to bypass dozens of provisions in a $410 billion government spending bill even as he signed it into law.

In the statement — directions to executive-branch officials about how to carry out the legislation — Mr. Obama instructed them to view most of the disputed provisions as merely advisory and nonbinding, saying they were unconstitutional intrusions on his own powers.

However, there isn’t a consensus that the provisions really are unconstitutional limitations on his powers. For example, Jonathan Turley, a professor at GW Law School, has concerns regarding the provision relating to UN peacekeeping missions. He makes the point that the Constitution gave Congress the ability to restrict “foreign entanglements and adventures” through the power of appropriations. This is true whether or not we agree with Congress’s limitations.

More broadly, however, the use signing statements that alter the meaning of provisions would seem to undermine the constitutional balance of powers. When combined with the Obama Administration’s defense of the state secrets privilege, the delay in releasing the contents of additional Bush-era OLC memos, and the adoption of certain rhetoric about the war on terror, this paints the disturbing picture that the Obama Administration is not serious about rolling back the Bush Administration’s executive overreach. While they have taken some symbolic steps, there doesn’t seem to be a serious commitment to either revealing Bush-era abuses of executive power or halting all such future abuses. Rather, they appear inclined to reserve the ability to abuse power in more limited ways.

This is not the change we need.

Update: The Obama Administration has moved to dismiss another civil case involving torture, on the grounds that the right of prisoners at Guantanamo not to suffer abuses was not established at the time. Unacceptable.

Not the Change We Need: Part IV in a Continuing Series

(This is not about the President’s address tonight, which I liked a great deal. I do find his focus on deficit reduction to be a little puzzling given his commitment to Keynesian stimulus, but that is a topic for another time.)

Constitutional Law Professor Jonathan Turley was on the Rachel Maddow Show again on Monday, this time to discuss Karl Rove’s failure to appear to testify before Congress. In the second half of the interview, however, the issue turned to the Obama Administration’s recent decision to adopt the Bush Administration position on a lawsuit over the retention or recovery of White House emails.

The Obama Administration is carrying a lot of water for the Bush Administration. Each day they seem to be taking the position of the Bush White House…He is doing exactly what the Bush Administration tried to do and that is to extinguish this litigation.

Among the carried water, Turley cites: statements supporting the Bush administration on treatment of detainees, the endorsement and adoption of Bush administration rhetoric of the war on terror, and the refusal to investigate war crimes.

He concludes:

These weren’t good arguments before. To argue them in court makes you equally guilty of the types of excesses of your predecessor.

I, and many others, supported President Obama during the campaign precisely because he campaigned against these kinds of executive overreach. It increasingly appears that it was unrealistic to expect that any president would willingly participate in any significant rollback of executive power. This is nevertheless disappointing from a candidate that preached both change and hope. With each decision by this president to continue the failed policies of his failed predecessor, I find it increasingly hard to find the audacity to believe in either.

Glenn Greenwald also has a post discussing other instances policy and practice continuity between the Bush and Obama administrations, citing specifically the approach to press management. It also discusses the highly disturbing reports from The Guardian that Binyam Mohamed may have been tortured while in American custody within the past few weeks.

Mohamed will arrive back tomorrow in the UK, where he was a British resident between 1984 and 2002. During medical examinations last week, doctors discovered injuries and ailments resulting from apparently brutal treatment in detention.

Mohamed was found to be suffering from bruising, organ damage, stomach complaints, malnutrition, sores to feet and hands, severe damage to ligaments as well as profound emotional and psychological problems which have been exacerbated by the refusal of Guantánamo’s guards to give him counseling.

Mohamed’s British lawyer, Clive Stafford Smith, said his client had been beaten “dozens” of times inside the notorious US camp in Cuba with the most recent abuse occurring during recent weeks. He said: “He has a list of physical ailments that cover two sheets of A4 paper. What Binyam has been through should have been left behind in the middle ages.”

Lieutenant colonel Yvonne Bradley, Mohamed’s US military attorney, added: “He has been severely beaten. Sometimes I don’t like to think about it because my country is behind all this.

The possibility that this abuse may have occurred after President Obama’s inauguration is very concerning, and should be addressed by the administration as soon as possible.

Not the Change We Need: Part III in a Continuing Series

From Jonathan Turley:

Graham then asked “If our intelligence agencies should capture someone in the Philippines that is suspected of financing Al Qaeda worldwide, would you consider that person part of the battlefield?” “Do you agree with that?”

Kagan replied, “I do” and the marriage with the Bush policies was complete. So much for change. Both Holder and Kagan have now taken such a vow with Senators in order to secure their confirmations. The message appears to be a uniquely English approach to government. We will continue policies and laws that can do great harm to civil liberties, but we will use them in a beneficent way. Your “change” is not that we will get rid of the policies. Your change is that you get us. This “trust us we’re the government” approach to civil liberties was precisely what Madison and other framers rejected. To have a well-respected academic voice such views is a terrible disappointment for civil libertarians, who are being offered a meaningful commission as a type of air kiss toward war crimes.

I do trust Barack Obama more than I trusted George Bush. This is not a particularly high standard. But I don’t want to have to trust my leaders not to infringe on the Constitution. Civil liberties are supposed to be a firewall against tyranny, regardless of leader. It saddens me that the President and his appointees apparently do not realize this, or more dangerously, do not care.

As an aside, I find it a historical irony that the United States appears to be conceptualizing something similar to the dar al-Harb, or house of war. The question, though, is if legal residents in the United States can be detained at will, as in the case of Ali Saleh Kahlah al-Marri, then where is the counterpart, the dar as-Salam?

Not the Change We Need: Part II of a Continuing Series

Yesterday, the Obama administration formally adopted the Bush administration position that the state secrets privilege could be used to dismiss a civil lawsuit on the theory that any adjudication would endanger national security. This is a dangerous position that undermines citizen access to the courts. See Gleen Greewald for a more complete discussion of Obama’s flip-flop on this issue. ABC News is reporting the same.

A source inside of the Ninth U.S. District Court tells ABC News that a representative of the Justice Department stood up to say that its position hasn’t changed, that new administration stands behind arguments that previous administration made, with no ambiguity at all. The DOJ lawyer said the entire subject matter remains a state secret.

This is a depressing turn of events. The case revolves around claims made by five men that they were extraordinarily renditioned rendered to prisons overseas where they were tortured. This assertion of the privilege is especially disconcerting in light of the claims coming from Britain that the Obama administration has been pressuring British courts to block the release of information regarding the potential torture of a British national. (Although the Telegraph is reporting that the British Government suppressed the evidence because MI6 was involved in the torture, which included slicing his genitals with a scalpel.)

This is not change, it’s more of the same.

Bipartisanship and The Courts

The announcement of Justice Ginsberg’s cancer on Thursday rather prominently raised the issue of the future of the Supreme Court. The ages of the liberal justices make it likely that President Obama will have the opportunity to appoint one or two justices over the next four years, both of which will need to be fairly liberal to maintain the court’s current ideological balance. Perhaps more importantly, he will have the chance to shift the ideological balance of every one of the Circuit Courts of Appeals. This causes me a certain amount of concern.

The President’s performance in the stimulus debate has been disappointing, especially in his attempt to preemptively negotiate with Republicans by offering a weaker bill than most Democrats would have supported. A similar strategy for a court appointment could be a disaster – picking a moderate to preemptively mollify conservatives.

Given the current make up of the Senate, I fail to see how any of his nominees would not be approved, given the lack of obvious scandal or professional deficiency. Equally, the risk of a filibuster should be dramatically less, especially if the Republican members of the ‘gang of 14’ have any intellectual honesty. However, the worrying question I have is will the President’s commitment to bipartisanship sacrifice the courts for Republican good will?

Stimulus, What Stimulus? (Updated)

Here is Paul Krugman’s very initial take on the Senate stimulus package (emphasis added).

Now the centrists have shaved off $86 billion in spending — much of it among the most effective and most needed parts of the plan. In particular, aid to state governments, which are in desperate straits, is both fast — because it prevents spending cuts rather than having to start up new projects — and effective, because it would in fact be spent; plus state and local governments are cutting back on essentials, so the social value of this spending would be high. But in the name of mighty centrism, $40 billion of that aid has been cut out.

My first cut says that the changes to the Senate bill will ensure that we have at least 600,000 fewer Americans employed over the next two years.

Every state in the country is facing serious cuts in services over the next few years. In some cases, this means reduced health care or unemployment benefits. In many, layoffs of state employees. California is among the hardest hit in the country, and had its first unpaid furlough this past Friday. The furlough has the effect of lowering employees’ salaries by over 9%. All of these cuts and layoffs have the effect of pulling more money out of the economy, worsening the recession.

The bill is bad, and the blame for it largely rests with President Obama. Certainly, House Democrats deserve blame for larding the bill up, giving Republicans the chance to attack it, and the Senate deserves a healthy dose of blame for passing this milquetoast monstrosity. However, President Obama’s failure to lead on the stimulus is the real problem. He could, and should, have presented a list of demands to the House and used his serious popularity to force it through relatively unchanged. An additional future stimulus, negotiated more fully in the Congress, could have been passed in six months or so, giving Congress the opportunity to pursue its pet agendas.

A large part of his failure to lead is his obsession with bipartisanship. He attempted preemptive compromise with Congressional Republicans, which weakened the bill from the very beginning. He refused to make an aggressive, public case for a large, spending-oriented stimulus, giving Republicans cover to 1) vote against it and 2) hold it hostage. And, finally, he backed Congressional Democrats into a corner where if they didn’t weaken the bill to fit Republican sensibilities they would be seen as going against the highly charismatic and popular leader of their party. A bad move all around. I only hope than in 6 months we have the opportunity to revisit a second stimulus package – this one better designed. I also hope that California’s government lasts that long.

Update: Brad DeLong has the list of spending cut from the stimulus. What the hell was the Senate thinking?

Published in: on February 7, 2009 at 4:40 pm  Leave a Comment  
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Bush Administration Legal Memos

ProPublica has published an interactive list of Bush Administration ‘secret’ memos on torture, wiretapping, and the scope of executive authority. It is an important reference on the subject.

Ultimately, President Obama and the Attorney General will have to decide whether to release these memos to the public. Regardless of whether investigations or prosecutions of Bush officials occur, these memos should be released so the nation can appropriately discuss and repudiate the actions and legal positions of the last eight years.