Month: January 2010 Page 2 of 5

On January 21, 2010

Guess a kick in the head sometimes knocks some sense into people. I confess I’m surprised. Maybe they can learn.

The White House wants commercial banks that take deposits from customers to be barred from investing on behalf of the bank itself—what’s known as proprietary trading—and said the administration will seek new limits on the size and concentration of financial institutions.

… Banks shielded from risk through federal-deposit insurance, or aided in financial crises by low-interest loans from the Federal Reserve Board, would no longer be allowed to engage in trading unrelated to their customers’ interests, one senior administration official said.

Under the proposed rule, commercial banks would be prohibited from owning, investing in or advising hedge funds or private equity firms. Bank regulators would not be simply given the discretion to enforce such rules. They would be required to do so.
…
Administration officials said they also want to toughen an existing cap on bank market share. Since 1994, no bank can have more than 10% of the nation’s insured deposits. The Obama administration wants that cap to include non-insured deposits and other assets.

This is the right thing to do. I agree with Johnson that they should also launch anti-trust investigations of the banks. I would add, that in addition, they should launch criminal fraud investigations into bank behaviour leading up to the financial crisis. Keep these people so tied up, and get them so scared that they want peace at any cost.

As Johnson notes, it seems unlikely this can pass the Senate. But if Obama wants to not have a disaster in the 2010 elections, he should make these sort of actions the centerpiece of his administration for the next year. Run against the banks, and go hardcore populist. Because if he doesn’t, the Republicans will go faux populist, and win on it.

We’ll see, in the next few months, how serious Obama is about taking. Is this for real and will he pursue it with all his might, making a fight of it, or he will pursue it like everything else he’s done—half-heartedly, and for show? Will he push it hard in the Senate, or when the Senate balks, will he shrug and say ‘whatever Ben Nelson wants?”

I’m not optimistic, but at least, in a pleasing change from most of his behaviour since the election, Obama is talking about doing the right thing.

Lemmings Have Nothing On Democrats

On January 20, 2010

So, in addition to screwing up healthcare and escalating in Afghanistan, it seems that Obama is set to appoint a deficit reduction panel. Their job will be to come up with a “bipartisan” way of cutting the deficit by cutting Medicare and Social Security. There is no other way to cut the deficit, because the only other large bucket of money, the defense budget, is off the table, and no one is willing to radically raise taxes on the rich.

Despite being called “bipartisan”, cutting Social Security and Medicare will take place under a Democratic President, though probably not a Democratic Congress (since the vote will occur after the 2010 elections.) The Republicans will allow just enough members to vote to get it through, then will run, as a party, blaming Democrats for gutting SS and Medicare.

And people thought my piece yesterday yesterday predicting electoral carnage in 2010 and 2012 was overwrought?

Excuse me while I take time out to laugh.

(Update: I meant Congress, not Senate. I don’t see the Dems losing the Senate in 2012, I do see them losing the House. Oops.)

An optimist and a damned fool are the same thing

On January 20, 2010

Back in April I noted that the fools (and yes, they were fools) who kept mocking the right for being dead, and believing their own propaganda, were full of it.

Enjoy mocking Republicans all you want, but in your cold hard calculating heart, take them very very seriously.

Of course, Huffington Post didn’t promote that piece, because back then those of us throwing the cold water of realism on the fevered delusions of Obamadom were out of favor.

So how’d that work out for the reality denying triumphalists? Hmmm?

Mind you, Obama and the Democratic leadership screwed things up even faster than I, whom most people consider a pessimist, expected. Leading me to conclude that the rule of Bush is now the rule of Obama.

“Obama is more incompetent than you think he is, even if you take this rule into account.”

Also, optimists and damn fools are the same thing, at least when it comes to analysis. It may be good for your health to be unrealistic about the future, but it makes you bloody lousy at predicting the future. Thinking back to major analytical mistakes I’ve made in the last 5 years, only two of them were due to negative expectations, and one of those was actually optimism in pessimism drag: I thought the Fed would not be so foolish as to keep the housing and financial bubbles going for as long as they did.

My grandmother told me that an optimist and a damn fool were the same thing when I was 5, and so far nobody has ever shown me otherwise. Lord knows, Obama isn’t going to, and neither are any of his Obots.

Pessimism is usually, actually, realism. Because most people have an optimistic bias. Their optimism feeds them the delusions they need to get through their lives.

Coakley Concedes, You Ain’t Seen Nothing Yet

Well, so much for that.

What does this mean?

First of all, this will be taken as meaning HCR must be passed exactly as the Senate Bill. That’s already clear. The Democratic reaction to losing Kennedy’s seat will be to do exactly what voters were punishing them for.

In 2010 Democrats will be slaughtered, absolutely slaughtered, because Obama and the senior Democratic leadership does not learn.

In 2012 Obama will become a 1 term president, and a right wing populist will get into power. That populist will turn out not to be a populist, and will do even stupider things than Obama economically (and may start a war, too).

The job is to prepare for this, to get new members and leadership in in 2014. Start working on it now.

Because 2014 and 2016 are going to be your last chance. If the US doesn’t elect people who are willing to do what it takes in those two election years, then the US economy is going to be a smoking ruin, far worse even than it is now.

This group of Dems have proved they can’t learn. Fortunately, and yes, I do mean fortunately, they are going to be swept out of power. Yes, they’ll be replaced by Republicans who are marginally worse, but that will give you your one chance to fix America.

Up to you if you’re up for it. Good luck.

Ummm, No

Just no:

The corporations that make money from health care — and want the status quo — know whose side Scott Brown will be on:

An index of health-care companies in the S&P 500 led the advance with a 1.9 percent rally. U.S. Democrats face the possibility of losing a Senate seat held by the late Edward Kennedy as voters in Massachusetts go to the polls. A loss could cost them a 60-vote supermajority needed to help pass a health- care overhaul.

Investors know that Brown winning means the Senate bill passes exactly as is, which is what they want. When the Senate bill passed, the stock market went up.

Partisan instincts are overcoming rationality amongst most progressive bloggers.

Coakley Is A National Election

And yes, it is a referendum on Obama, and health care. The more Coakley said she was the 60th vote for healthcare “reform”, the worse her numbers became. The more she said “I’m Obama’s 60th vote” the worse her numbers became. Yes, she took the election for granted at the beginning, but let’s be honest: who the hell thought the Democrats could lose Ted Kennedy’s seat?

What people are hearing; what they believe, is that the money for HCR is coming from cuts to Medicare, and not from cuts to the insurance industry, pharma or taxes on rich people. And, actually, they’re right about this. One might argue that the Medicare cuts are “fat” and “justified” but people aren’t buying it.

Win or lose, if Democrats are in trouble even in Kennedy’s seat, then 2010 is looking grim indeed. And while I have been surprised by how close this election has become, I am not surprised by the fact that 2010 is looking grim. I have been warning since the stimulus bill (a horrible mess) that bad policy leads to bad outcomes which leads to voters hating the party in power. I have been warning since Obama pushed through TARP that if Democrats refused to be populist, right wing populism would surge.

No matter the outcome, Obama needs to try fake populism (because we all know he won’t do the real thing) and needs to pray that his economic program, such as it is, produces better economic results than even his own economic advisers think likely. This will be done by faux populist measures such as the bank levy, and on the economic front, by both using the unlimited guarantees given to Freddie and Fannie to reinflate the propery market and through military Keynesian stimulus from the Afghan escalation.

I suspect it’s going to be better than people think, but it’s still not going to be enough. The 2010 elections are going to be ugly for Democrats.

Which, sadly, is exactly what they deserve.

An Observation On Haiti