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Dear Sarah, WTF? (Update: An Embezzlement Scandal?)

by Jay McDonough

Sarah Palin announced today she would resign her responsibilities as Alaska governor at the end of July.  She will turn over the responsibility to govern the state to Lt. Gov. Sean Parnell.

The speculation is Ms. Palin abandoned her responsibilities in order to concentrate on a 2012 Republican presidential nomination run. Here's the governors announcement.

Visit msnbc.com for Breaking News, World News, and News about the Economy

The news comes the same week as the release of a devastating Vanity Fair profile of the governor and the leaking of McCain campaign emails.

Honestly, this is the lamest excuse for abandoning elected office I've ever heard.  "I'm a lame duck so I'm just gonna bag it now?"

I'm sure all the Palinphiles will put on their game faces and feebly attempt to argue Ms. Palin is doing the right thing for Alaskans.  The rest of us are just gonna see a narcissist who's bailing from her job midstream in order to pursue yet another office she's unqualified to hold.

Update: by Steve Hynd

Several blogs are leading with speculation that an embezzlement scandal is about to engulf Palin and is the direct cause of her resignation. Brad Friedman writes that:

I've now been able to get independent information from multiple sources that all of this precedes what are said to be possible federal indictments against Palin, concerning an embezzlement scandal related to the building of Palin's house and the Wasilla Sports Complex built during her tenure as Mayor. Both structures, it is said, feature the "same windows, same wood, same products." Federal investigators have been looking into this for some time, and indictments could be imminent, according to the Alaska sources.

The BRAD BLOG has not been able to receive confirm from any federal sources on this. Our information comes from local Alaskans who follow Palin, and who have been keeping an eye on this for some time, while keeping it quiet at the request of federal investigators.

Think Progress adds that:

The gist of the rumor is that an Alaska building company called Spenard Building Supplies (SBS) was awarded a contract by Palin to build a hockey arena in Wasilla, AK, and in return, SBS helped construct Palin’s home

Update 5 July: The FBI's Alaska spokesman says "There is absolutely no truth to those rumors that we're investigating her or getting ready to indict her."

Congress has few philospher kings

By Fester:

I like to live in the real world. It is messy, it is confusing, it often produces non-optimal outcomes (depending on the relevant constraints) but it is tangible. I can also live in a normative world where everything is neat, clean, organized and optimized towards the relevant constraints. However that world seldom exists. I often look for satisficing improvements instead of optimal solutions because the improvements are achievable.

I don't understand the critique of Waxman-Markley that Andrew Samwick and others are advancing in that it is a satisficaing improvement but non-optimal on several grounds:

Much as you may like the idea, this is another 1300 pages of complexity and loopholes. Buried in there, I'll wager, are more than enough ways for large organizations (the ones who hire lobbyists) to get all the exemption and evasion they'll need. Consider the alternative of a carbon tax calibrated to achieve the same emission reductions, and applied to all sectors including vehicle fuel consumption. I'm no expert on translating ideas into pages of a bill, but that can't be much. And given that it allows us to do away with the CAFE standards, I figure we've done a great service of dramatically simplifying the whole regulatory process for carbon emissions.

Economically, a clean carbon tax and a clean cap and trade bill will do the same thing. They will both internalize the currently externalize cost of carbon dioxide emissions. There are two big differences. The first is that a a carbon tax is a price certain option while the cap and trade system is a quantity certain feature.  Secondly, cap and trade is economically more efficient as it allows for market discovery of prices of a scarce good instead of hoping that Congress can hit the right number at any given time for optimal economic efficiency for a given amount of emissions.  

 

His argument is that a carbon tax would be neater and less messy.  Lobbyists would not be able to claw out special interest exemptions and transfers and the legislation would be only several pages long.  He is arguing a straw man here in my opinion.  A properly designed cap and trade system could also be written in a fairly short and concise manner as well.

 

He is bitching and moaning about basic political incentives here.  A complex bill with exemptions, curlicues and who knows what else in it for concentrated interests is far more profitable to the relevant players than a simple, clean sheet proposal with no exemptions.  Dr. Samwick is implicitly arguing that a carbon tax would be less susceptible to this type of manipulation than a cap and trade regime.  I have severe doubts about that.  We have plenty of evidence that tax bills, even comparatively simple tax bills that are mere modifications of existing tax laws can and will be massively abused with exemptions, exceptions, partially refundable credits, donut hole deductions and anything else that concentrated interests can muster to improve their interests against the counterfactual of a clean bill.  The classic example is the agricultural bill where there are significant subsidies for sugar, mohair, honey and other products because there is a strong lobby for those interests while the public purpose of food security, public health and reasonably low prices for a wide selection of goods is often ignored. 

 

I have yet to see a good political reason why the concessions that the Democrats on the Agricultural Committee wanted and received to weaken the bill and make the bill more complex for cap and trade would not also be granted in a carbon tax system.  I think it is very reasonable to assume that Agricultural Committee Democrats would want land use carbon emissions to be exempted from the carbon tax or at least counted under a friendly system.  Those are the concessions that they basically got in cap and trade, and those would be the concessions they would have wanted from a carbon tax regime.  Otherwise they most likely and there would be nothing. 

 

Now if Dr. Samwick wants to argue that doing nothing now is a superior option as the costs of action and inaction escalate the pressure to pass a much cleaner bill that is more to his liking at some uncertain point in the future, that is a defensible argument.  However that is not the argument he is making.  He is whining that Congress is acting like politicians engaged in politics with attendant incentives instead of philosopher king technocrats who will agree with his preferred solutions.  Me, I’m happy for an improvement with the hope that institutional inertia will lead to a good process and outcome over time. 

 

 

Soccer is Un American

Commentary By Ron Beasley

OK, I'm a soccer fan.  It;s probably because I was brain washed  when I lived in Europe for three years.  My oldest son played soccer until basketball became a 12 month sport and I spent many a Saturday morning standing in the Pacific Northwest rain watching him play and loving every minute of it.  And if there was any doubt that I'm a internationalist American football and baseball bore the hell out of me,  I was thrilled to see that the US beat Spain in the Confederation Cup but not everyone was thrilled.  The criminally insane neocons think soccer is un American.  Gary Schmitt:

Well, yes, it is. As someone who didn’t play soccer growing up, but had a dad who did and whose own kids played as well, I can say unquestionably that it is the sport in which the team that dominates loses more often than any other major sport I know of. Or, to put it more bluntly, the team that deserves to win doesn’t. For some soccer-loving friends, this is perfectly okay. Indeed, they will argue that it’s a healthy, conservative reminder of how justice does not always prevail in life.

Well, hooey on that. And, thankfully, Americans are not buying it. In spite of the fact that one can drive by an open field on Saturdays and usually see it filled with young boys and girls playing soccer, the game’s popularity has not moved anywhere toward being a major sport here in the United States. It’s grown for sure but not close to where folks once expected it to be given the number of youth that have played the game over the past two decades.

For sure, there may be a number of reasons that is the case but my suspicion is that the so-called “beautiful game” is not so beautiful to American sensibilities. We like, as good small “d” democrats, our underdogs for sure but we also still expect folks in the end to get their just desert. And, in sports, that means excellence should prevail. Of course, the fact that is often not the case when it comes to soccer may be precisely the reason the sport is so popular in the countries of Latin America and Europe.

This is the neocon/conservative ideology in a nutshell.  Any sport or system where the biggest and baddest don't win is flawed. 

Specter is in trouble... (again)

By Fester:

My great fear of not having Senator Specter's career circling the toilet to write about when I have nothing else to write will not be realized.

Rasmussen reports a race where the fundamental dynamics are working against Senator Specter in the Democratic Primary:

1* Suppose the Democratic Primary for the 2010 United States Senate were held today. Would you vote for Arlen Specter or Joe Sestak?
51% Specter
32% Sestak
4% Some other candidate
13% Not sure

Sure Senator Specter is up by 19 in this poll, which is a significant improvement from being down by half a dozen in the last polling on the Republican Primary before he flipped caucuses, but this is a weak position compared to Joe Lieberman in 2006. The Pennsylvania Democratic Primary is about ten months out. Two months out, Ned Lamont was trailing Senator Lieberman by fifteen points in the Democratic Primary that Mr. Lamont went on to win. Several weeks out, Rep. Toomey was trailing by fifteen points in the 2004 Republican Primary. He closed the gap by thirteen points by primary day. A well funded and well run campaign by a competent candidate who only has to make up two points per month against an incumbent with 100% name ID and little passionate support is in very good shape.

Republican Budget Encore

Commentary By Ron Beasley

Remember the Republican Budget with no budget estimates or numbers. At the time I wrote:

The biggest problem the Republicans have right now is that their House and Senate members were chosen for blind obedience and are incapable of independent thought.  For the most part they are morons who mostly just embarrass themselves.

Well not much has changed.  The Republicans have unveiled their health plan.

House Republicans presented a four-page outline of their health care reform plan Wednesday but said they didn t know yet how much it would cost, how they would pay for it and how many of the nearly 50 million Americans without insurance would be covered by it.

 

Hypocrisy thy name is Republicans

Commentary By Ron Beasley

If the Republicans have one bit of policy consistency it's hypocrisy.

In reversal, GOP balks at war funding

 House Republicans are preparing to vote en bloc against the $106 billion war-spending bill, a position once unthinkable for the party that characterized the money as support for the troops.

For years, Republicans portrayed the bills funding the wars in Iraq and Afghanistan as matters of national security and accused Democrats who voted against them of voting against the troops.

In 2005, Rep. Tom Cole (R-Okla.) went so far as to say sending troops into battle and not paying for it would be an “immoral thing to do.” And just last year, more House Republicans voted for the war supplemental bill than did Democrats, who opposed the legislation because it did little to wind down the military effort in Iraq.

But Republicans say this year is different. Democrats have included a $5 billion increase for the International Monetary Fund (IMF) to help aid nations affected by the global financial crisis. Republicans say that is reason enough to vote against the entire $106 billion spending bill and are certain voters will understand.

The Democrats had better not do what we did!

A spokesman for House Minority Leader John Boehner (R-Ohio) noted the Republican support for the version that did not include the IMF funding and accused Democrats of politicizing the issue by including non-war-funding provisions.

“It is the Democratic leadership that is playing politics with our troops by insisting on using them as leverage to pass over $100 billion in global bailout money for the IMF,” said Michael Steel, Boehner’s spokesman.

However, Republicans also have used the supplemental war bills to advance non-related priorities. In 2006, Republican senators included $4 billion for farm programs and $700 million for a railroad project on the hurricane-battered Gulf Coast.

Republicans also embraced the war supplemental in 2007 — advanced by the Democratic-controlled Congress — that included an increase in the minimum wage.

And the Democrats are ready:

“Anytime there was a Democrat [who] raised concern on some of these supplementals, he was tarred as being anti-troop,” said a House Democratic leadership aide.

The Democratic aide charged House Republicans with “hypocrisy” for opposing a bill because of the IMF funding, which amounts to less than 5 percent of the proposed spending in the legislation.

“It seems like they’re putting the interest of the Republican Party and the ability for them to develop a campaign narrative ahead of the interest of the troops,” he said.

All that said I applaud them.  We need to get out of Iran and Afghanistan and not giving money to the IMF is a really good idea too.
 

Unwinding the leverage age

Commentary By Ron Beasley

David Brooks has an unlikely column today.  It's unlikely because he actually gets a lot of stuff right but when it comes to solutions he becomes the David Brooks we all know and love and gets it wrong. But first where he gets it right:

For about a generation, the U.S. surfed on a growing wave of debt. The ratio of debt-to-personal-disposable income was 55 percent in 1960. Since then, it has more than doubled, reaching 133 percent in 2007. Total credit market debt — throwing in corporate, financial and other borrowing — has risen apace, surging from 143 percent of G.D.P. in 1951 to 350 percent of G.D.P. last year.

Charts that mark these trends are truly horrifying. There is a steady level of debt through most of the 20th century, until the mid-1980s. Then there is a steep accelerating rise to today’s epic levels.

This rise in debt fueled a consumption binge. Consumption as a share of G.D.P. stood at around 62 percent in the mid-1960s, and rose to about 73 percent by 2008. The baby boomers enjoyed an incredible spending binge. Meanwhile the Chinese, Japanese and European economies became reliant on the overextended U.S. consumer. It couldn't’t last.

The leverage wave crashed last fall. Facing the possibility of systemic collapse, the government stepped in and replaced private borrowing with public borrowing. The Federal Reserve printed money at incredible rates, and federal spending ballooned. In 2007, the federal deficit was 1.2 percent of G.D.P. Two years later, it’s at 13 percent.

Of course what he fails to mention is that generation of debt began with the administration of St. Ronnie of Reagan and his destruction of the middle class.  The consumer dependent economy still required that people buy stuff but the middle class had less money.  The solution - lots of easy credit.  We had economic downturns  followed by smoke and mirrors recoveries fueled by debt.  The straw that broke the camels back was the Greenspan/Bush credit binge prior to the 2004 election that made it look like there was a recovery when there wasn't any.  It worked and Bush was reelected in 2004.

Brooks still on target here:

Americans aren’t borrowing the way they used to, but the accumulated debt is still there. Over the next many years, Americans will have to save more and borrow less. The American economy will have to transition from an economy based on consumption and imports to an economy with a greater balance of business investment and production. A country that has become accustomed to reasonably fast growth and frothy affluence will probably have to adjust to slower growth and less retail fizz.

The economic challenges will be hard. Reuven Glick and Kevin J. Lansing of the San Francisco Fed estimate that Americans will have to increase their household savings rate from 4 percent to 10 percent by 2018 to restore balance. That, they write, will produce “a near-term drag on overall economic activity.” Meanwhile, capital and labor will have to flow from sectors that depend on discretionary consumption to sectors based on research and investment.

But it’s the political challenges that will be most hellacious. Basically, everything that a politician might do to make voters happier in the near term will have horrible long-term consequences. Stimulate the economy too much now and you wind up with ruinous inflation down the road. Preserve failing companies and you wind up with Japanese stagnation. Cushion the decline in living standards with easy money now and you just move from a housing bubble to a commodities bubble.

The politicians will indeed be the problem.  How many politicians really think that a message of less is better will get them reelected.  There really aren't enough of us old hippies who know that things don't make you happier to elect anyone.  Of course telling really rich people they need to pay more taxes will be a problem as well.  That will require the admission that supply side economics was a fraud.

Here is where I think Brooks is wrong.

Third, they will have to refrain from doing anything that might further damage America’s fiscal position, which is extremely fragile. That means not passing a health care reform package unless it is really and truly paid for. That means forming a Social Security commission next year to tackle that entitlement problem.

Fourth, the political class is going to attempt the politically unthinkable. The U.S. is going to have to move toward a consumption tax, to discourage spending and encourage savings. There’s also a crying need for tax reform. As economist Douglas Holtz-Eakin points out, the tax code is rife with provisions that encourage leverage and discourage investment. The government will have to spend less on transfer payments and more on investments in science and infrastructure.

We don't need a consumption tax. If people don't have the disposable income and can't borrow they won't consume.  The main problem with Social Security for several years will be can the government pay back the money it has borrowed from the trust fund. Transfer payments to the states will continue to be necessary because the Grover Norquist Yacht Club Republicans have passed draconian state laws that make it impossible for the states to fund necessary services.  So the tax code should return to pre-Reagan percentages.  The little piggies will scream from their yachts and threaten to leave the country.  Don't let the door hit you in the ass on the way out.   

Put Up or Shut Up, Wingnut Haters

By Steve Hynd

Regular readers know I love to read a righteous rant. And they don't come any more righteous than this from my pal Sara Robinson - Memo to the Right Wing: Put Up or Shut Up. A big blockquote is very definitely in order, but go read the whole thing.

Dear Conservatives:

Your fellow Americans demand an answer -- and we want it now. Just one simple question:

Are you deliberately trying to start a civil war?

Just answer the question. Yes or no. Don't insult us with elisions, evasions, dithering, qualifications, or conditional answers. We need to know what your intentions are -- and we need to know NOW. People are being shot dead in the streets of America at the rate of several per month now. You may not want responsibility for this -- but the whackadoodles pulling the triggers make no bones about who put them up to this.

You did.

The assassins themselves are ratting you out. They're telling us, straight up, that they were inspired to act by the hate radio talkers that you empowered -- one of whom is now the de facto head of the Republican party. They got it from media outlets owned by your biggest donors. They got it from bloggers who receive daily talking points faxed in from the GOP. They got it from activists representing causes that would have never become causes in the first place if the issues hadn't been politically expedient for you.

...We are demanding an accounting from you. We are demanding that you take responsibility for the situation you've created. We are looking you straight in the eyes and demanding a straight answer:

Are you deliberately trying to start a civil war?

If your answer is yes, then stop this cowardly half-assed screwing around. You speak the language of war and honor; but the honor code of the warriors you pretend to revere demands that you declare your intentions. If you really believe that the only way to get the America you want is to negate a fair election, shred the Constitution, and violently cleanse the country of everyone who doesn't agree with you, then man up and get on with it. If it's a shooting war you want, do not doubt that there are plenty of progressives who will oblige you. If this goal is so important that you're really willing to kill for it, please don't forget that you will also need to be willing to die for it. Because, like martyrs Greg McKendry and Steven Johns proved, we are willing to do whatever is necessary to stop you.

If your answer is no, then you have just one other choice. Knock off the tantrums, grow up, rebuild your party, come back to the table, and sit down and govern with us. (We know this will be a stretch, but we think some of you are capable of it.) You will need to learn, many of you for the first time, to get your way as adults do -- without fear-based politics, polarizing rhetoric, on-air threats against those who disagree with you, and repeating outrageous lies in the face of stone facts and irrefutable evidence.

And most of all: you need to stop feeding the crazies. You need to disavow them in every way possible -- sincerely, emphatically, and with full awareness that every time one of these people acts, it destroys the credibility of "conservatives," "Republicans," and "the right wing" in the eyes of the country.

It will, of course, fall on mostly deaf ears. Even though they've been actively talking about violence and even a civil war for a long time now, the wingnuts have already exonerated themselves. They know who to blame.

Bolton Stuck In A Timewarp

By Steve Hynd

John Bolton takes to the pages of the WSJ to advocate for allowing, nay encouraging, Israel to attack Iran. (No really, you don't say?)

Bolton's arguments boil down to: Do it soon, everything will be OK. There's a slam-dunk intelligence case for the threat, the war itself will be a cakewalk and we'll be greeted as liberators.

Amazing. I just saw the last eight years flash before my eyes.

The Worst President Ever

Commentary By Ron Beasley

Who is the worst president ever?  According to Robert Parry it's not George W. Bush but Ronald Reagan.

But there's a growing realization that the starting point for many of the catastrophes confronting the United States today can be traced to Reagan's presidency. There's also a grudging reassessment that the "failed" presidents of the 1970s - Richard Nixon, Gerald Ford and Jimmy Carter - may deserve more credit for trying to grapple with the problems that now beset the country.

Nixon, Ford and Carter all recognized the challenges of America's oil dependence, degradation of the environment, nuclear proliferation and the arms race.  And they all tried to address the problem.  And then along came Reagan:

By 1980, Reagan had become a pied piper luring the American people away from the tough choices that Nixon, Ford and Carter had defined.

With his superficially sunny disposition - and a ruthless political strategy of exploiting white-male resentments - Reagan convinced millions of Americans that the threats they faced were: African-American welfare queens, Central American leftists, a rapidly expanding Evil Empire based in Moscow, and the do-good federal government.

In his First Inaugural Address in 1981, Reagan declared that "government is not the solution to our problem; government is the problem."

When it came to cutting back on America's energy use, Reagan's message could be boiled down to the old reggae lyric, "Don't worry, be happy." Rather than pressing Detroit to build smaller, fuel-efficient cars, Reagan made clear that the auto industry could manufacture gas-guzzlers without much nagging from Washington.

The same with the environment. Reagan intentionally staffed the Environmental Protection Agency and the Interior Department with officials who were hostile toward regulation aimed at protecting the environment. George W. Bush didn't invent Republican hostility toward scientific warnings of environmental calamities; he was just picking up where Reagan left off.

Reagan pushed for deregulation of industries, including banking; he slashed income taxes for the wealthiest Americans in an experiment known as "supply side" economics, which held falsely that cutting rates for the rich would increase revenues and eliminate the federal deficit.

Over the years, "supply side" would evolve into a secular religion for many on the Right, but Reagan's budget director David Stockman once blurted out the truth, that it would lead to red ink "as far as the eye could see."

But when it comes to the current economic meltdown Robert Scheer says not so fast - Reagan Didn't Do It.

It is disingenuous to ignore the fact that the derivatives scams at the heart of the economic meltdown didn't exist in President Reagan's time. The huge expansion in collateralized mortgage and other debt, the bubble that burst, was the direct result of enabling deregulatory legislation pushed through during the Clinton years.

Ronald Reagan's signing off on legislation easing mortgage requirements back in 1982 pales in comparison to the damage wrought fifteen years later by a cabal of powerful Democrats and Republicans who enabled the wave of newfangled financial gimmicks that resulted in the economic collapse. Reagan didn't do it, but Clinton-era Treasury Secretaries Robert Rubin and Lawrence Summers, now a top economic adviser in the Obama White House, did. They, along with then-Fed Chairman Alan Greenspan and Republican congressional leaders James Leach and Phil Gramm, blocked any effective regulation of the over-the-counter derivatives that turned into the toxic assets now being paid for with tax dollars.

Reagan signed legislation making it easier for people to obtain mortgages with lower down payments, but as long as the banks that made those loans expected to have to carry them for thirty years they did the due diligence needed to qualify creditworthy applicants. The problem occurred only when that mortgage debt could be aggregated and sold as securities to others in an unregulated market.

Greenspan, Leach and Gramm are no longer in government but Summers and Rubin are.  They played a part in making the mess and now they are charged with cleaning it up.  That's a good idea when your child makes a mess but in this case Summers and Rubin are just trying to sweep it under the carpet and not make any changes.