The Jobs Imperative

By PAUL KRUGMAN Published: November 29, 2009 New York Times

If you’re looking for a job right now, your prospects are terrible. There are six times as many Americans seeking work as there are job openings, and the average duration of unemployment — the time the average job-seeker has spent looking for work — is more than six months, the highest level since the 1930s.

You might think, then, that doing something about the employment situation would be a top policy priority. But now that total financial collapse has been averted, all the urgency seems to have vanished from policy discussion, replaced by a strange passivity. There’s a pervasive sense in Washington that nothing more can or should be done, that we should just wait for the economic recovery to trickle down to workers.

This is wrong and unacceptable.

Yes, the recession is probably over in a technical sense, but that doesn’t mean that full employment is just around the corner. Historically, financial crises have typically been followed not just by severe recessions but by anemic recoveries; it’s usually years before unemployment declines to anything like normal levels. And all indications are that the aftermath of the latest financial crisis is following the usual script. The Federal Reserve, for example, expects unemployment, currently 10.2 percent, to stay above 8 percent — a number that would have been considered disastrous not long ago — until sometime in 2012.

And the damage from sustained high unemployment will last much longer. The long-term unemployed can lose their skills, and even when the economy recovers they tend to have difficulty finding a job, because they’re regarded as poor risks by potential employers. Meanwhile, students who graduate into a poor labor market start their careers at a huge disadvantage — and pay a price in lower earnings for their whole working lives. Failure to act on unemployment isn’t just cruel, it’s short-sighted.

So it’s time for an emergency jobs program.

How is a jobs program different from a second stimulus? It’s a matter of priorities. The 2009 Obama stimulus bill was focused on restoring economic growth. It was, in effect, based on the belief that if you build G.D.P., the jobs will come. That strategy might have worked if the stimulus had been big enough — but it wasn’t. And as a matter of political reality, it’s hard to see how the administration could pass a second stimulus big enough to make up for the original shortfall.

So our best hope now is for a somewhat cheaper program that generates more jobs for the buck. Such a program should shy away from measures, like general tax cuts, that at best lead only indirectly to job creation, with many possible disconnects along the way. Instead, it should consist of measures that more or less directly save or add jobs.

One such measure would be another round of aid to beleaguered state and local governments, which have seen their tax receipts plunge and which, unlike the federal government, can’t borrow to cover a temporary shortfall. More aid would help avoid both a drastic worsening of public services (especially education) and the elimination of hundreds of thousands of jobs.

Meanwhile, the federal government could provide jobs by ... providing jobs. It’s time for at least a small-scale version of the New Deal’s Works Progress Administration, one that would offer relatively low-paying (but much better than nothing) public-service employment. There would be accusations that the government was creating make-work jobs, but the W.P.A. left many solid achievements in its wake. And the key point is that direct public employment can create a lot of jobs at relatively low cost. In a proposal to be released today, the Economic Policy Institute, a progressive think tank, argues that spending $40 billion a year for three years on public-service employment would create a million jobs, which sounds about right.

Finally, we can offer businesses direct incentives for employment. It’s probably too late for a job-conserving program, like the highly successful subsidy Germany offered to employers who maintained their work forces. But employers could be encouraged to add workers as the economy expands. The Economic Policy Institute proposes a tax credit for employers who increase their payrolls, which is certainly worth trying.

All of this would cost money, probably several hundred billion dollars, and raise the budget deficit in the short run. But this has to be weighed against the high cost of inaction in the face of a social and economic emergency.

Later this week, President Obama will hold a “jobs summit.” Most of the people I talk to are cynical about the event, and expect the administration to offer no more than symbolic gestures. But it doesn’t have to be that way. Yes, we can create more jobs — and yes, we should.

U.S. Will Push Mortgage Firms to Reduce More Loan Payments

By PETER S. GOODMAN, November 29, 2009 New York Times

The Obama administration on Monday plans to announce a campaign to pressure mortgage companies to reduce payments for many more troubled homeowners, as evidence mounts that a $75 billion taxpayer-financed effort aimed at stemming foreclosures is foundering.

“The banks are not doing a good enough job,” Michael S. Barr, Treasury’s assistant secretary for financial institutions, said in an interview Friday. “Some of the firms ought to be embarrassed, and they will be.”

Even as lenders have in recent months accelerated the pace at which they are reducing mortgage payments for borrowers, a vast majority of loans modified through the program remain in a trial stage lasting up to five months, and only a tiny fraction have been made permanent.

Mr. Barr said the government would try to use shame as a corrective, publicly naming those institutions that move too slowly to permanently lower mortgage payments. The Treasury Department also will wait until reductions are permanent before paying cash incentives that it promised to mortgage companies that lower loan payments.

“They’re not getting a penny from the federal government until they move forward,” Mr. Barr said.

From its inception early this year, the Obama administration’s program, called Making Home Affordable, has been dogged by persistent questions about whether it could diminish a swelling wave of foreclosures. Some economists argued that the plan was built for last year’s problem — exotic mortgages whose payments increased — and not for the current menace of soaring joblessness. Lawyers who defend homeowners against foreclosure maintained that mortgage companies collect lucrative fees from long-term delinquency, undercutting their incentive to lower payments to affordable levels.

Last month, an oversight panel created by Congress reported that fewer than 2,000 of the 500,000 loan modifications then in progress had become permanent under Making Home Affordable. When the Treasury releases new numbers next month, it is expected to report a disappointingly small number of permanent loan modifications, with estimates in the tens of thousands out of the more than 650,000 borrowers now in the program.

More unsatisfactory data is likely to intensify pressures on the Obama administration to mount a more muscular effort to stem foreclosures beyond the Treasury’s campaign this week. Populist anger has been fanned by a growing perception that the Treasury has lavished generous bailouts on Wall Street institutions while neglecting ordinary homeowners — this, in the midst of double-digit unemployment, which is daily sending more households into delinquency.

“I’ve been very frustrated by the pace of the program,” said Senator Jeff Merkley, an Oregon Democrat who sits on the Senate Banking Committee. “Very few people have emerged from the trial period.”

Though the administration’s program was initially proclaimed as a means of sparing three to four million households from foreclosure, “they’re going to be lucky if they save one or one-and-a-half million,” said Edward Pinto, a consultant to the real estate finance industry who served as chief credit officer to the government-backed mortgage company Fannie Mae in the late 1980s.

A White House spokeswoman, Jennifer R. Psaki, said the administration would continue to refine the program as needed. “We will not be satisfied until more program participants are transitioning from trial to permanent modifications,” she said.

Capitol Hill aides in regular contact with senior Treasury officials say a consensus has emerged inside the department that the program has proved inadequate, necessitating a new approach. But discussions have yet to reach the point of mapping out new options, the aides say.

“People who work on this on a day-to-day basis are vested enough in it that they think there’s a need to do a course correction rather than a wholesale rethink,” said a Senate Democratic aide, who spoke on the condition he not be named for fear of angering the administration. “But at senior levels, where people are looking at this and thinking ‘Good God,’ there’s a sense that we need to think about doing something more.”

Mr. Barr, who supervises the program, portrayed such deliberations as part of a constant process of assessment within the Treasury. He expressed confidence that the mortgage program had sufficient tools to deliver relief, characterizing the slow pace as reflecting a lack of follow-through, and not structural defects requiring a revamping.

“We’re seeing a failure by some of the bigger banks on execution,” Mr. Barr said. “We’re going to be quite focused and direct on particular institutions that are not doing a good job.”

The banks say they are making good-faith efforts to comply with the program and provide relief.

“We’ve poured resources into this,” said a spokesman for JPMorgan Chase, Tom Kelly. “We’ve made dramatic improvements, and we continue to try to get better.”

Some senators contend that the Treasury program, addressing mortgages whose low promotional interest rates had soared, is outmoded. At this point, foreclosures are being propelled by joblessness, which is sending millions of previously credit-worthy people with ordinary mortgages into delinquency.

Within the Senate, some discussion now focuses on pursuing legislation that would create a national foreclosure prevention program modeled on one started last year in Philadelphia. That program forces mortgage companies to submit to court-supervised mediation with delinquent borrowers aimed at striking an equitable resolution before they are allowed to proceed with the sale of foreclosed homes.

Some Democrats say the time has come to reconsider a measure opposed by the Obama administration: giving bankruptcy judges the right to amend mortgages as a means of pressuring lenders to extend reductions.

Lawyers who defend homeowners against foreclosure increasingly say they doubt the Treasury program can be made effective. Under the plan, companies that agree to lower payments for troubled borrowers collect $1,000 from the government, followed by another $1,000 a year for up to three years. The program is premised on the idea that a small cash incentive will induce the banks to cut their losses and accept smaller payments.

But the mortgage companies that collect payments from homeowners — servicers, as they are known — generally do not own the loans. Rather, they collect fees from investors that actually own mortgages, and their fees often increase the longer a borrower remains in delinquency.

Under the Treasury program, borrowers who receive loan modifications must make their new payments on a trial basis and then submit new paperwork validating their income to make their modifications permanent.

But borrowers and their lawyers report that much of the required paperwork is being lost in a haze of bureaucratic disorganization. Servicers are abruptly changing fax numbers and mislaying files — the same issues that have plagued the program from its inception.

“People continue to get lost in the phone tree hell,” said Diane E. Thompson, a lawyer with the National Consumer Law Center.

Some lawyers who defend homeowners against foreclosure assert that mortgage companies are merely stalling, using trial loan modifications as an opportunity to extract a few more dollars from borrowers who would otherwise make no payments.

“I don’t think they ever intended to do permanent loan modifications,” said Margery Golant, a Florida lawyer who previously worked for a major mortgage company, Ocwen Financial. “It’s a shell game that they’re playing.”

Virtuous Bankers? Really!?!

By MAUREEN DOWD

WASHINGTON

The Great Vampire Squid has gotten religion.

In an interview with The Sunday Times of London, the cocky chief of Goldman Sachs said he understands that a lot of people are “mad and bent out of shape” at blood-sucking banks.

“I know I could slit my wrists and people would cheer,” Lloyd Blankfein, the C.E.O., told the reporter John Arlidge.

But the little people who are boiling simply don’t understand. And Rolling Stone’s Matt Taibbi, who unforgettably labeled Goldman “a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money,” doesn’t understand.

Banks, Blankfein explained, are really serving the greater good.

“We help companies to grow by helping them to raise capital,” he said. “Companies that grow create wealth. This, in turn, allows people to have jobs that create more growth and more wealth. It’s a virtuous cycle. We have a social purpose.”

When Arlidge asked whether it’s possible to make too much money, whether Goldman will ignore the people howling at the moon with rage and go on raking it in, getting richer than God, Blankfein grinned impishly and said he was “doing God’s work.”

Whether he knows it, he’s referring back to The Protestant Ethic and The Spirit of Capitalism — except, of course, the Calvinists would have been outraged by the banks’ vicious — not virtuous — cycle of greed and concupiscence.

Blankfein’s trickle-down catechism isn’t working. Now we have two economies. We have recovering banks while we have 10-plus percent unemployment and 17.5 percent underemployment. The gross thing about the Wall Street of the last decade is how much its success was not shared with society.

Goldmine Sachs, as it’s known, is out for Goldmine Sachs.

As many Americans continue to struggle, Goldman, Morgan Stanley and JPMorgan Chase, banks that took government bailout money after throwing the entire world into crisis, have said they will dish out $30 billion in bonuses — up 60 percent from last year.

The saying used to be, whatever happens, the lawyers win. Now, it’s whatever happens, the bankers win.

Under pressure from regulators, who were trying to ensure that long-term performance was rewarded, the banks agreed to award more in stock, deferring cash payments.

But as The Times reported this week, the Goldman executives who got stock options instead of bonuses last year, at market lows, got a windfall — so it had nothing to do with bank employees’ performance.

“The company gave its general counsel, for example, 104,868 stock options and 14,117 shares in December, when the bank’s stock was around $78,” Louise Story wrote for The Times. “Now the bank’s shares have more than doubled in value, making that stock and option award worth nearly $12 million.”

As one former Goldman banker told Arlidge, the culture there is “completely money-obsessed. ... There’s always room — need — for more. If you are not getting a bigger house or a bigger boat, you’re falling behind. It’s an addiction.”

It’s an addiction that Washington has done little to quell. President Obama has not been strong on the issue, and Timothy Geithner coddles the wanton bankers whenever they freak out that they might not be able to put in their new pools next summer.

The bankers try to dismiss calls for regulation as populist ravings, but the insane inequity of it cannot be dismissed.

No sooner had the Senate Banking Committee Chairman Chris Dodd announced his plan to overhaul financial regulation Tuesday than compensation experts declared it toothless.

The banks and their lobbyists wheedled concession after concession out of Washington and knocked down proposed inhibition after inhibition. Now the banks are laughing all the way to the bank.

“Saturday Night Live” was tougher on Goldman Sachs than the government, giving the firm flak about commandeering 200 doses of the swine flu vaccine — the same amount as Lenox Hill Hospital got — while so many at-risk Americans wait.

“Can you not read how mad people are at you?” demanded Amy Poehler. “When most people saw the headline ‘Goldman Sachs Gets Swine Flu Vaccine’ they were superhappy until they saw the word ‘vaccine.’ ”

Seth Meyers chimed in: “Also, Centers for Disease Control, you sent the vaccine to Wall Street before schools and hospitals? Really!?! Were you worried the swine flu might spread to the Hamptons and St. Barts? These are the least contagious people in the world. They don’t even touch their own car-door handles.”

And as far as doing God’s work, I think the bankers who took government money and then gave out obscene bonuses are the same self-interested sorts Jesus threw out of the temple.

Frontline's "The Card Game" on PBS

What your credit card company is doing to you with usurous rates, and likely from your bailout money. Tonight on PBS' Frontline. "The Card Game"

Banks, Credit and The American Consumer

A note from Greetings:
A must see on PBS' Frontline tonight. You, your credit cards, and your banks who are raising your interest rates to usury levels... perhaps with the bailout money given to them by you.

The Card Game - On air and online November 24, 2009 at 9:00pm (check local listings) Some top authorities on the consumer lending industry accepted FRONTLINE's invitation to weigh in with commentary on the industry, its range of products, and the debate about a new regulatory framework. This blog is part of a FRONTLINE/New York Times joint project, The Card Game, comprising a series of reports by the Times and a documentary by FRONTLINE, which airs Nov. 24th.

As credit card companies face rising public anger, new regulation from Washington and a potential perfect storm of economic bad news, FRONTLINE correspondent Lowell Bergman examines the future of the massive consumer loan industry and its impact on a fragile national economy. In a joint project with The New York Times, Bergman and the Times talk to industry insiders, lobbyists, politicians and consumer advocates as they square off over new regulation and the possible creation of a consumer finance protection agency. How are the credit, debit and pre-paid card industries repositioning themselves to maintain high profits under the new rules? The stakes couldn't be higher as many fear the consumer loan industry could be at the center of the next crisis.

The Wages of Failure:

Note from greetings: A great analysis of from Harvard's Law School on how the Bear Sterns and Lehman Bros. Execs ransacked the bailout money for their own benefit

Executive Compensation at Bear Stearns and Lehman 2000-2008

Lucian A. Bebchuk,∗ Alma Cohen,** and Holger Spamann***

Abstract

The standard narrative of the meltdown of Bear Stearns and Lehman Brothers assumes that the wealth of the top executives of these firms was largely wiped out along with their firms. In the ongoing debate about regulatory responses to the financial crisis, commentators have used this assumed fact as a basis for dismissing both the role of compensation structures in inducing risk-taking and the potential value of reforming such structures. This paper provides a case study of compensation at Bear Stearns and Lehman during 2000-2008 and concludes that this assumed fact is incorrect.

We find that the top-five executive teams of these firms cashed out large amounts of performance-based compensation during the 2000-2008 period. During this period, they were able to cash out large amounts of bonus compensation that was not clawed back when the firms collapsed, as well as to pocket large amounts from selling shares. Overall, we estimate that the top executive teams of Bear Stearns and Lehman Brothers derived cash flows of about $1.4 billion and $1 billion respectively from cash bonuses and equity sales during 2000-2008. These cash flows substantially exceeded the value of the executives’ initial holdings in the beginning of the period, and the executives’ net payoffs for the period were thus decidedly positive. The divergence between how the top executives and their shareholders fared implies that it is not possible to rule out, as standard narratives suggest, that the executives’ pay arrangements provided them with excessive risk-taking incentives. We discuss the implications of our analysis for understanding the possible role that pay arrangements have played in the run-up to the financial crisis and how they should be reformed going forward.

http://www.law.harvard.edu/faculty/bebchuk/pdfs/BCS-Wages-of-Failure-Nov09.pdf for the entire paper

America’s Defining Choice

By NICHOLAS D. KRISTOF, NY Times Nov. 12, 2009

President Obama and Congress will soon make defining choices about health care and troops for Afghanistan.

These two choices have something in common — each has a bill of around $100 billion per year. So one question is whether we’re better off spending that money blowing up things in Helmand Province or building up things in America.

The total bill in Afghanistan has been running around $1 million per year per soldier deployed there. That doesn’t include the long-term costs that will be incurred in coming decades — such as disability benefits, or up to $5 million to provide round-the-clock nursing care indefinitely for a single soldier who suffers brain injuries.

So if President Obama dispatches another 30,000 or 40,000 troops, on top of the 68,000 already there, that would bring the total annual bill for our military presence there to perhaps $100 billion — or more. And we haven’t even come to the human costs.

As for health care reforms, the 10-year cost suggests an average of $80 billion to $110 billion per year, depending on what the final bill looks like.

Granted, the health care costs will continue indefinitely, while the United States cannot sustain 100,000 troops in Afghanistan for many years. On the other hand, the health care legislation pays for itself, according to the Congressional Budget Office, while the deployment in Afghanistan is unfinanced and will raise our budget deficits and undermine our long-term economic security.

So doesn’t it seem odd to hear hawks say that health reform is fiscally irresponsible, while in the next breath they cheer a larger deployment of troops in Afghanistan?

Meanwhile, lack of health insurance kills about 45,000 Americans a year, according to a Harvard study released in September. So which is the greater danger to our homeland security, the Taliban or our dysfunctional insurance system?

Who are these Americans who die for lack of insurance? Dr. Linda Harris, an ob-gyn in Oregon tells of Sue, a 31-year-old patient of hers. Sue was a single mom who worked hard — sometimes two jobs at once — to ensure that her beloved daughter would enjoy a better life.

Sue’s jobs never provided health insurance, and Sue felt she couldn’t afford to splurge on herself to get gynecological checkups. For more than a dozen years, she never had a Pap smear, although one is recommended annually. Even when Sue began bleeding and suffering abdominal pain, she was reluctant to see a doctor because she didn’t know how she would pay the bills.

Finally, Sue sought help from a hospital emergency room, and then from the low-cost public clinic where Dr. Harris works. Dr. Harris found that Sue had advanced cervical cancer. Three months later, she died. Her daughter was 13.

“I get teary whenever I think about her,” Dr. Harris said. “It was so needless.”

Cervical cancer has a long preinvasive stage that can be detected with Pap smears, and then effectively treated with relatively minor procedures, Dr. Harris said.

“People talk about waiting lines in Canada,” Dr. Harris added. “I say, well, at least they have a line to wait in.”

Based on the numbers from the Harvard study, a person like Sue dies as a consequence of lack of health care coverage every 12 minutes in America. As many people die every three weeks from lack of health insurance as were killed in the 9/11 attacks.

Health coverage is becoming steadily more precarious as companies try to cut costs and insurance companies boost profits by denying claims and canceling coverage of people who get sick. I grew up on a farm in Yamhill, Ore., where we sometimes had greased pig contests. I’m not sure which is harder: getting a good grip on a greased hog or wrestling with an insurance company trying to avoid paying a claim it should.

Joe Lieberman, a pivotal vote in the Senate, says he recognizes that there are problems and would like reform, but he denounces “another government health insurance entitlement, the government going into the health insurance business.” Look out — it sounds as if Mr. Lieberman is planning to ax Medicare.

The health reform legislation in Congress is imperfect, of course. It won’t do enough to hold down costs; it may restrict access even to private insurance coverage for abortion services; it won’t do enough to address public health or unhealthy lifestyles.

Likewise, troop deployment plans in Afghanistan are imperfect. Some experts think more troops will help. Others think they will foster a nationalist backlash and feed the insurgency (that’s my view).

So where’s the best place to spend $100 billion a year? Is it on patrols in Helmand? Or is it to refurbish our health care system so that people like Sue don’t die unnecessarily every 12 minutes?

•

How the Scapegoats Escaped

Prosecutors made two big errors in the federal criminal trial of two former Bear Stearns hedge fund managers. Where is the accountability for the biggest financial crash in modern times?

By WILLIAM D. COHAN, NY Times, Published: November 11, 2009

THE quick “not guilty” verdict reached Tuesday afternoon by a Brooklyn jury in the federal criminal trial of two former Bear Stearns hedge fund managers was at once surprising — for its failure to comport with the zeitgeist — but also entirely understandable, based on a close reading of the prosecution’s arguments and the evidence the judge allowed to be introduced. “There was a reasonable doubt on every charge,” one juror told The Times afterward. “We just didn’t feel that the case had been proven.”

In short, the prosecution blew it — on two counts. First, in devising the original indictment for conspiracy and securities fraud against the two defendants, Ralph Cioffi and Matthew Tannin, it relied on damning snippets of lengthy e-mail messages that when viewed in their entirety proved to be highly ambiguous. Second, the prosecution made a reductionist opening argument claiming the men were nothing more than out-and-out liars, needlessly raising the bar in terms of what it had to prove to jurors.

In that opening speech, Patrick Sinclair, the assistant United States attorney for the Eastern District of New York, tried to head off all the confusing Wall Street jargon soon to be unleashed by claiming the defendants had simply been deceitful. He accused them of lying about the size of their personal investments in the funds and in their dealings with nervous investors who were considering getting out when subprime mortgages — in which the funds had invested heavily — began to rapidly lose value in March 2007.

“They did the best thing that they could think of to keep those investors in the fund and with any luck keep their bonuses coming: they lied,” Mr. Sinclair told the jury. “They lied over and over again to lull those investors into a false sense of confidence and make them think that these failing funds continued to be a good investment when the exact opposite was true.”

Unfortunately for the government, the evidence was not nearly as clear-cut as Mr. Sinclair portrayed it to be, and his strategy to make it seem so backfired. Consider the e-mail messages the prosecution placed at the center of its case.

In the indictment, the prosecution quoted from a note Mr. Tannin sent in April 2007 from his personal Gmail account to Mr. Cioffi’s wife. The government made much of the fact that Mr. Tannin chose not to send it to Mr. Cioffi himself or from his Bear Stearns’ e-mail account, suggesting he was trying to hide something. “The subprime market looks pretty damn ugly,” Mr. Tannin wrote, adding that if a recent financial report was correct, “I think we should close the funds now .... The entire subprime market is toast.”

But the jury eventually saw the entire message, in which Mr. Tannin ruminated at length about various courses of action and seemed to be striving to make the soundest financial choice. In other words, it was just what you would hope your fund manager would be worrying about in a precarious time. In the end, he concluded he was feeling “pretty damn good” about what was happening at the funds and that “I’ve done the best possible job that I could have done.” Any wonder the jurors came away with reasonable doubt?

The prosecution’s misjudgments are doubly vexing because there was other evidence around which it might have built a stronger case. The prime example was a “talking points” memo in June 2007, sent by Bear Stearns’s senior management to its brokers for use in discussions with hedge fund investors worried about a meltdown. The episode raised pretty clear doubts about whether Mr. Cioffi and Mr. Tannin had told investors the truth.

According to the memo, one of the questions deemed likely to be asked was: “I thought the fund was diversified, and now it turns out it seems to have had a fair amount of exposure to the subprime mortgage market. What exactly was the exposure?” The answer: “60 percent.” The problem was that in all previous communications to the investors, the two fund managers had suggested that only about six percent of the funds were invested in subprime mortgages.

During the trial, a prominent former Bear Stearns broker, Shelly Bergman, testified about the damning nature of this talking points memo, which was as close to a smoking gun as prosecutors could have hoped for. Yet the prosecution never made much use of his testimony, and it did a poor job of rebutting the defense’s claims that Mr. Bergman had a conflict of interest in testifying against the two fund managers.

So where does the verdict leave us? Word is that three federal grand juries are still investigating what went wrong at Lehman Brothers in 2007, but those prosecutors may be forced to tread lightly in the wake of what happened this week. Even though the facts and circumstances of the Lehman matter are very different from the Cioffi/Tannin episode, Tuesday’s verdict may be the best news in more than a year for Richard Fuld, the former Lehman chief executive.

For now, Mr. Cioffi and Mr. Tannin remain the only bankers indicted for their professional behavior in what became one of the worst financial crises in our history. They became a symbol of greedy carelessness for a public intent on blaming someone — anyone — for Wall Street’s folly. There must be some accountability for the Bear Stearns calamity, to say nothing of the $12 trillion of taxpayer money used to prop up capitalism, right? Not so fast, this Brooklyn jury declared. “The entire market crashed,” one juror explained. “You can’t blame that on two people.”

William D. Cohan, a contributing editor at Fortune and a former Wall Street banker, is the author of “House of Cards: A Tale of Hubris and Wretched Excess on Wall Street.” In January, he will begin a regular column on business at nytimes.com/opinion.

Boycott Microsoft Bing

By NICHOLAS KRISTOF, NY Times, Nov. 20, 2009

Critics have accused President Obama of kowtowing to Chinese leaders, by failing to meet dissidents, toning down his criticisms and delaying a meeting with the Dalai Lama. On balance, I think that criticism is premature: Confrontation doesn’t help with China and can hurt, and so engagement becomes a fine line to navigate. The Obama visit wasn’t a ringing success, but neither was it a craven embarrassment.

For the latest craven kowtowing, we can look somewhere else: Microsoft and its new search engine, Bing.

Western corporations have often behaved embarrassingly in China, sacrificing any principles to ingratiate themselves with the Communist Party authorities. Yahoo was the worst, handing over information about several email account holders so that they could be arrested – and then dissembling and defending its monstrous conduct. Now Microsoft is sacrificing the integrity of Bing searches so as to cozy up to State Security in Beijing. In effect, it has chosen become part of the Communist Party’s propaganda apparatus.

If you search a term on Bing that is politically sensitive in China, in English the results are legitimate. Search “Tiananmen” and you’ll find out about the army firing on pro-democracy protesters in 1989. Search Dalai Lama, Falun Gong and you also get credible results. Conduct the search in complex Chinese characters (the kind used in Taiwan and Hong Kong) and on the whole you still get authentic results.

But conduct the search with the simplified characters used in mainland China, then you get sanitized pro-Communist results. This is especially true of image searches. Magic! No Tiananmen Square massacre. The Dalai Lama becomes an oppressor. Falun Gong believers are villains, not victims.
What’s most offensive is that this is true wherever in the world the search is conducted – including in my office in New York. If Microsoft felt it had to bow to Chinese censorship within China’s borders, based on the IP address, that might be defensible. But when Microsoft skews its worldwide searches to make Hu Jintao feel better, that’s a disgrace. It becomes simply a unit of the Central Committee Propaganda Department.

(This is an issue with Google as well, but to a much lesser extent. Google censors results on its search engine used within China, google.cn, but offers mostly uncensored results using simplified Chinese characters on its worldwide browser, google.com. However, some searches on google.com, such as images for Falun Gong, are also censored.)

When I originally wrote about this issue back in June, Microsoft protested. “From what you described, that’s not the way Bing is supposed to work,” wrote Kevin Kutz, a company spokesman. He said that Chinese speakers at Microsoft could not replicate my results and did not detect this kind of skewed result. I sent screen shots, and then Microsoft acknowledged the issue but said that it was simply a temporary mistake. “It’s a bug,” Kutz told me. Later, he added: “What’s important is it’s getting fixed.” Soon, he said, Bing searches would be the same for Tiananmen and other sensitive subjects, whatever the language.

Six months later, the censorship continues. And now all of a sudden, it’s company policy.
Microsoft’s current position, which insults my intelligence and yours, is that there was indeed a bug of some kind and that that is fixed – but that searches in simplified characters continue to produce pro-Communist results because of the algorithms used. Mr. Kutz now asserts that a search in any given language emphasizes results from within the country that uses that language. Thus if you search in the simplified characters used within China, then you get disproportionately Chinese propaganda. Thus, he says, the explanation lies in the search algorithms, rather than in Microsoft policy.

Huh? How come that wasn’t the explanation in June? And if that’s the case, then why is there a marked difference between text and image searches? And in any case, why should Bing use an algorithm that results in propaganda and skews results far more than Google? Why isn’t Wikipedia higher on the results with simplified characters?

Of course, it’s possible that Microsoft executives in Redmond, since they can’t read Chinese, are being misled by those executives focused on the China business. Yet my hunch is that Microsoft simply has decided at a top level that it will compromise what principles it must to ingratiate itself with China. This presumably isn’t at China’s specific request: it’s unlikely that Chinese authorities would be so detailed in their demands, and it doesn’t negotiate over minor points like this. But China has made it clear that it dislikes search engines that lead to results it considers seditious, and it can block them.

Microsoft apparently doesn’t want to pursue the Google solution of having separate sites – one that produces generally legitimate results (google.com) and another within China that blatantly censors (google.cn). Instead, Bing figured it would have one site and just censor all the results in simplified Chinese characters. It then compounded the problem by dissembling and disguising its policy. That’s craven and embarrassing, it betrays the integrity of Microsoft searches, and for me it’s a reason to boycott Bing.

UPDATE: Microsoft has posted a measured response: http://bit.ly/6CD49e . It notes that some Bing searches are not skewed even in simplified characters but acknowledges that image searches in particular are sanitized. It says that this is a bug that was identified today and that it will soon be fixed. That’s basically what I was told last June, and I’m very skeptical.

UPDATE 2: For those asking for specific terms, and specific search results, here are some examples by date.

Signs of Hope

By BOB HERBERT, NY Times, Nov. 24, 2009

Detroit

I came to Detroit and its environs, the seat of America’s glorious industrial past, to see if I could get a glimpse of the future. Is the economic, social and physical deterioration that has caused so much misery in the Motor City a sign of what’s in store for larger and larger segments of the United States?

Or are there new industries waiting in the wings — some of them right here in the Detroit metropolitan area — with new jobs and bright new prospects for whole new generations of American dreamers?

I found real reason to hope when a gentleman named Stan Ovshinsky took me on a tour of a remarkably quiet and pristine manufacturing plant in Auburn Hills, which is about 30 miles north of Detroit and is home to Chrysler’s headquarters. What is being produced in the plant is potentially revolutionary. A machine about the length of a football field runs 24 hours a day, seven days a week, turning out mile after mile after mile of thin, flexible solar energy material, from which solar panels can be sliced and shaped.

You want new industry in the United States, with astonishing technological advances, new mass production techniques and jobs, jobs, jobs? Try energy.

Mr. Ovshinsky knows as much or more about the development and production of alternative energy as anyone on the planet. He developed the technology and designed the production method that made it possible to produce solar material “by the mile.” When he proposed the idea years ago, based on the science of amorphous materials, which he invented, he was ridiculed.

But the thin-film photovoltaic solar panel was just one of his revolutionary ideas. He invented the nickel metal hydride battery that is in virtually all hybrid vehicles on the road today. And when I pulled into the parking lot outside his office in Bloomfield Hills, he promptly installed me in the driver’s seat of a hydrogen hybrid prototype — a car in which the gasoline tank had been replaced with a safe solid-state hydrogen storage system invented by Mr. Ovshinsky.

Within minutes, I was driving along a highway in a car that produced zero pollution. No carbon footprint whatsoever. How’s that for a wave of the future?

The point is that these (and many more) brilliant, innovative technologies are here. They are real, tangible. They exist. What’s needed now is the will to develop policies that will vastly expand these advances and radically reduce their costs. The United States should be leading the world in the creation of whole new energy technologies and industries, instead of allowing the forces of the old carbon-based industries — coal, oil, gasoline-powered vehicles — to stand obstinately in the way of real progress.

“Now,” Mr. Ovshinsky told me, “is when we have to build the new industries of the future.” He has always been driven by the desire to use science and technology to solve the real-world problems of real people, and that has meant creating employment and stopping the pollution of the planet. He and his late wife, Iris, formed a company (to become known as Energy Conversion Devices) in Detroit in 1960 with the idea of using their considerable talents, as he put it, “to do good, to change the world.”

After nearly a half-century of revolutionary innovations with the company, Mr. Ovshinsky retired two years ago to focus his attention on the difficult and time-consuming effort to make solar energy economically competitive with coal and oil. “I know solar energy can’t live up to its possibilities unless it’s a hell of a lot cheaper,” he said.

He believes he has assembled a team that, with sustained, intense work under his direction — and if sufficient funding can be secured — will bring the price of solar power below that of coal and oil within a few years.

What’s weird is that this man, with such a stellar track record of innovation on products and processes crucial to the economic and environmental health of the U.S., gets such little attention and so little support from American policy makers. In addition to his work with batteries, photovoltaics and hydrogen fuel cells, his inventions have helped open the door to flat-screen televisions, new forms of computer memory and on and on.

So when Stan Ovshinsky tells us that we should be putting our chips on hybrid and electric vehicles, and that solar and hydrogen power can be the cornerstone of an industrial renaissance in the U.S. as well as a cleaner planet, we should be listening very, very closely.

As oil defined the 20th century, new forms of energy will define the 21st. The U.S. has the opportunity, the intellectual resources and the expertise to lead the world in the development of clean energy. What we’ve lacked so far has been the courage, the will, to make it happen.

GOP Blocks Freeze On Credit Card Interest Rate Hikes

Note from Greetings:
Outrageous... It shows who the GOP's real constituents are. Your bank who wants to charge you 30 percent interest on your credit cards. While they're taking multimillion dollar bonuses from your tax money.

Ryan Grimm, Huffington Post, Nov.18, 2009

Senate Republicans blocked a Democratic effort Wednesday to immediately freeze increases in credit card interest rates, fees and finance charges.

Shortly after Democrats passed credit card reform legislation in May, the card companies began jacking up rates in advance of its implementation. Major parts of the act won't take effect until February and August of 2010.

Earlier this month, to combat the rate hikes, the House passed legislation to move the effective date up to December 1st. The Senate moves much more slowly and the credit card industry has been arguing that it can't practically get its act together to implement the reforms that quickly.

Okay, said Sen. Chris Dodd (D-Conn.), who sponsored the original bill that passed 90-5. Instead of implementing the entire basket of reforms, Dodd proposed instead simply freezing interest rate and fee hikes in advance of the holidays. Surely, he said, that's not too difficult to implement.

"We worked long and hard to enact the safeguards included in the Credit CARD Act," said Dodd. "And no sooner had it been signed into law, but credit card companies were looking for ways to get around the protections this Congress and the American people demanded. This bill would end those abuses and further protect customers today."

The Senate schedule is packed with nominations, health care and appropriations bills, leaving no time for a prolonged floor fight over credit cards.

The only way Democrats could pass the bill in time for the holidays would be with the support of the GOP -- all but five of which voted for it initially.

Dodd, on Wednesday afternoon, asked for unanimous consent to move the bill forward.

"On behalf of several senators on this side of the aisle, I object," said Sen. Thad Cochran (R-Miss.). And that's the end of it.

The Senate moved on to a tribute to the service of Sen. Robert Byrd (D-W.Va.), who became the longest-serving senator in the history of the institution Wednesday.

Republicans Block Dodd's Effort to Protect Consumers from Credit Card Rate Hikes

Senate Republicans blocked Banking Committee Chairman Chris Dodds (D-CT) attempt to pass legislation to stop credit card interest rate hikes.

Credit Card Rates: Banks Plan To RAISE Rates, Annual Fees

Note from Greetings:
Greedy.. with help from their friends in the GOP, who blocked Senator Dodd's bill to freeze these same increases. Whose side are they on? Not yours or mine.

by Jeannine Aversa, AP and Huffington Post, November 11, 2009

WASHINGTON — Banks expect to tighten terms on credit cards in response to a new law that aims to protect consumers from sudden rate hikes, the Federal Reserve said Monday.

A quarterly survey by the Fed found that many banks expect to increase rates, reduce credit limits and raise annual fees for both prime borrowers – those with sound credit histories _as well as more risky "non-prime" borrowers, who have tarnished credit. Banks also expected to raise minimum credit scores for non-prime borrowers, the Fed said.

Banks already have been pushing through rate increases in anticipation of the new rules. Because of that, the House recently approved legislation to speed up the law's effective date and have the provisions take effect immediately, although prospects are dim for Senate passage.

Most of the new credit card provisions are slated to take effect on Feb. 22.

Many people and businesses are still having trouble obtaining loans, a force that is likely to restrain the economic recovery.

It's a delicate dance for policymakers in Washington. They want banks to boost lending, but no one wants a return to the lax standards that many blame for contributing to the worst financial crisis since the 1930s.

The Fed's survey also found that nearly 26 percent of banks said they tightened standards over the past three months on home mortgages for prime borrowers. That was up slightly from almost 22 percent in the survey released in August, but is significantly below the peak of about 75 percent that reported tightening standards for such loans in July 2008.

For the third straight quarter, banks reported that demand for such loans grew, the Fed said.

Just over 30 percent of banks reported tightening standards on nontraditional mortgages, such as adjustable-rate loans with multiple-payment options. That's down from nearly 46 percent in the previous survey.

Information about what impact the new credit card law will have on banks came from a special one-time question in the new survey.

Banks, in another special question, said they were extending commercial real-estate loans more often than refinancing them. They cited lower originations and decreased draw on revolving credit lines as main reasons for a decline in commercial and industrial loans this year.

Commercial and industrial loans fell to $1.37 trillion at the end of October, from $1.48 trillion in July, according to a separate Fed report. Commercial real-estate loans dropped to $1.66 trillion, from $1.69 trillion in July. Consumer loans fell to $847 billion, from $852 billion.

What the Future May Hold

By BOB HERBERT, NY Times, November 17, 2009

What will the United States be like in 20 years when today’s toddlers are in college or trying to land that first job or maybe thinking about starting a family?

The answer will depend to a great extent on decisions we make now about the American infrastructure.

This came to mind as I was reading about yet another closure of the problem-plagued San Francisco-Oakland Bay Bridge, which is more than 70 years old. In 20 years, will today’s toddlers be traveling on bridges and roads that are in even worse shape than today’s? Will they endure mammoth traffic jams that start earlier and end later? Will their water supplies be clean and safe? Will the promise of clean energy visionaries be realized, or will we still be fouling the environment with carbon filth to the benefit of traditional energy conglomerates and foreign regimes that in many cases wish us anything but good?

The answers to these and many other related questions will depend to a great extent on decisions we make now (even in the midst of very tough economic times) about the American infrastructure. We’re trundling along in the infrastructure equivalent of a jalopy, with bridges rotting and falling down, while other nations, our competitors in the global economy, are building efficient, high-speed, high-performance infrastructure platforms to power their 21st-century economies.

We used to be so much smarter about this stuff. A recent publication from the Metropolitan Policy Program at the Brookings Institution reminds us that:

“Since the beginning of our republic, transportation and infrastructure have played a central role in advancing the American economy — from the canals of upstate New York to the railroads that linked the heartland to industrial centers and finally the interstate highway system that ultimately connected all regions of the nation.

“In each of those periods, there was a sharp focus on how infrastructure investments could be used as catalysts for economic expansion and evolution.”

Policy makers all but gave up on that kind of thinking years ago. America’s infrastructure, once the finest in the world, has been neglected for decades, and it shows. Felix Rohatyn’s book on the subject, “Bold Endeavors,” opens with: “The nation is falling apart — literally.”

It’s almost as if we no longer understand the crucial links between infrastructure and the health of the American economy, the state of the environment and the viability of the nation as a whole. We’ve become stupid about this.

Consider transportation. As Brookings tells us, “Other nations around the globe have continued to act on the calculus that state-of-the art transportation infrastructure — the connective tissue of a nation — is critical to moving goods, ideas and workers quickly and efficiently. In the United States, however, we seem to have forgotten.”

Much of the nation’s rail infrastructure is approaching the tail end of its useful life. If you’ve flown anywhere recently, you know what a nightmare that can be.

To the extent that we have any infrastructure policy at all, it is badly disjointed, dysfunctional, often doing more harm than good as it serves the interests of politicians who are crazy for pork rather than the real needs of the American public.

Brookings’ studies of American infrastructure policy have been extensive, and a conversation last week with one of its executives, Bruce Katz, offered a glimpse of the kind of economic environment today’s toddlers could face in a couple of decades if we started getting things right now.

“We’ll very likely have a low-carbon-based economy,” said Mr. Katz, “which will require enormous innovation with regard to energy and the infrastructure. We’ll be much more export-oriented than we are today, less consumption-focused.” And as a nation, he said, we should have a better understanding of the importance of the metropolitan areas that are the major drivers of the U.S. economy, and how essential it is to give them the coordinated national support that they need on infrastructure and other forms of development.

You can’t thrive as a nation while New Orleans is drowning, and Detroit is being beaten into oblivion decade after decade, and a bridge in Minneapolis is collapsing into the Mississippi River, and cities in upstate New York and the Rust Belt are rotting from lack of employment opportunities, and so on.

Imagine, instead, an America with rebuilt, healthy, dynamic metropolitan areas, and gleaming new port facilities, and networks of high-speed rail, an America with electric vehicles and a smart grid and energy generated by the power of the sun and wind and water and the ocean’s waves. Imagine if the children of today’s toddlers had access to world-class public schools all across the nation and a higher education system that is both first-rate and affordable.

Imagine if we set out seriously to do all this.

Imagine.

Goldman To Private Insurers: No Health Care Reform At All Is Best

A Goldman Sachs analysis of health care legislation has concluded that, as far as the bottom line for insurance companies is concerned, the best thing to do is nothing. A close second would be passing a watered-down version of the Senate Finance Committee's bill.

A study put together by Goldman in mid-October looks at the estimated stock performance of the private insurance industry under four variations of reform legislation. The study focused on the five biggest insurers whose shares are traded on Wall Street: Aetna, UnitedHealth, WellPoint, CIGNA and Humana.

The Senate Finance Committee bill, which Goldman's analysts conclude is the version most likely to survive the legislative process, is described as the "base" scenario. Under that legislation (which did not include a public plan) the earnings per share for the top five insurers would grow an estimated five percent from 2010 through 2019. And yet, the "variance with current valuation" -- essentially, what the value of the stock is on the market -- is projected to drop four percent.

Things are much worse, Goldman estimates, for legislation that resembles what was considered and (to a certain extent) passed by the House of Representatives. This is, the firm deems, the "bear case" scenario -- in which earnings per share for the top five insurers would decline an estimated one percent from 2010 through 2019 and the variance with current valuation is projected to be negative 36 percent.

What the firm sees as the best path forward for the private insurance industry's bottom line is, to be blunt, inaction.

The study's authors advise that if no reform is passed, earnings per share would grow an estimated ten percent from 2010 through 2019, and the value of the stock would rise an estimated 59 percent during that time period.

The next best thing for the insurance industry would be if the legislation passed by the Senate Finance Committee is watered down significantly. Described as a "bull case" scenario -- in which there is "moderation of provisions in the current SFC plan" or "changes prior to the major implementation in 2013" -- earnings per share for the five biggest insurers would grow an estimated ten percent and the variance with current valuation would rise an estimated 47 percent.

The report, a Goldman official stressed, was analytic not advocacy-based. Their job was to provide a sober assessment of the market realities facing private insurers under various versions of health care reform

"If no reform at all happens you would see the largest rise in EPS," a Goldman official acknowledged. "But what we are doing is just analyzing what the stocks would do under different scenarios."

The study does note on the front page that the firm "does and seeks to do business with companies covered in its research reports." Those companies include Aetna, Wells Point and United Health.

In the context of the current health care debate, the findings provide a small window into the concerns that have driven the private insurance industry's opposition to reform legislation. Simply put: health care reform

Free to Lose

By PAUL KRUGMAN

Published: November 12, 2009

Consider, for a moment, a tale of two countries. Both have suffered a severe recession and lost jobs as a result — but not on the same scale. In Country A, employment has fallen more than 5 percent, and the unemployment rate has more than doubled. In Country B, employment has fallen only half a percent, and unemployment is only slightly higher than it was before the crisis.

Don’t you think Country A might have something to learn from Country B?

This story isn’t hypothetical. Country A is the United States, where stocks are up, G.D.P. is rising, but the terrible employment situation just keeps getting worse. Country B is Germany, which took a hit to its G.D.P. when world trade collapsed, but has been remarkably successful at avoiding mass job losses. Germany’s jobs miracle hasn’t received much attention in this country — but it’s real, it’s striking, and it raises serious questions about whether the U.S. government is doing the right things to fight unemployment.

Here in America, the philosophy behind jobs policy can be summarized as “if you grow it, they will come.” That is, we don’t really have a jobs policy: we have a G.D.P. policy. The theory is that by stimulating overall spending we can make G.D.P. grow faster, and this will induce companies to stop firing and resume hiring.

The alternative would be policies that address the job issue more directly. We could, for example, have New-Deal-style employment programs. Perhaps such a thing is politically impossible now — Glenn Beck would describe anything like the Works Progress Administration as a plan to recruit pro-Obama brownshirts — but we should note, for the record, that at their peak, the W.P.A. and the Civilian Conservation Corps employed millions of Americans, at relatively low cost to the budget.

Alternatively, or in addition, we could have policies that support private-sector employment. Such policies could range from labor rules that discourage firing to financial incentives for companies that either add workers or reduce hours to avoid layoffs.

And that’s what the Germans have done. Germany came into the Great Recession with strong employment protection legislation. This has been supplemented with a “short-time work scheme,” which provides subsidies to employers who reduce workers’ hours rather than laying them off. These measures didn’t prevent a nasty recession, but Germany got through the recession with remarkably few job losses.

Should America be trying anything along these lines? In a recent interview in The Washington Post, Lawrence Summers, the Obama administration’s highest-ranking economist, was dismissive: “It may be desirable to have a given amount of work shared among more people. But that’s not as desirable as expanding the total amount of work.” True. But we are not, in fact, expanding the total amount of work — and Congress doesn’t seem willing to spend enough on stimulus to change that unfortunate fact. So shouldn’t we be considering other measures, if only as a stopgap?

Now, the usual objection to European-style employment policies is that they’re bad for long-run growth — that protecting jobs and encouraging work-sharing makes companies in expanding sectors less likely to hire and reduces the incentives for workers to move to more productive occupations. And in normal times there’s something to be said for American-style “free to lose” labor markets, in which employers can fire workers at will but also face few barriers to new hiring.

But these aren’t normal times. Right now, workers who lose their jobs aren’t moving to the jobs of the future; they’re entering the ranks of the unemployed and staying there. Long-term unemployment is already at its highest levels since the 1930s, and it’s still on the rise.

And long-term unemployment inflicts long-term damage. Workers who have been out of a job for too long often find it hard to get back into the labor market even when conditions improve. And there are hidden costs, too — not least for children, who suffer physically and emotionally when their parents spend months or years unemployed.

So it’s time to try something different.

Just to be clear, I believe that a large enough conventional stimulus would do the trick. But since that doesn’t seem to be in the cards, we need to talk about cheaper alternatives that address the job problem directly. Should we introduce an employment tax credit, like the one proposed by the Economic Policy Institute? Should we introduce the German-style job-sharing subsidy proposed by the Center for Economic Policy Research? Both are worthy of consideration.

The point is that we need to start doing something more than, and different from, what we’re already doing. And the experience of other countries suggests that it’s time for a policy that explicitly and directly targets job creation.

Trawling for assassins':Fringe nuts want Obama dead

There’s a new slogan making its way onto car bumpers and across the Internet. It reads simply: "Pray for Obama: Psalm 109:8" A nice sentiment? Maybe not.

The psalm reads, "Let his days be few; and let another take his office." But the verse immediately following the psalm referenced is a bit more ominous: "Let his children be fatherless."

Kudos to the Secret Service who are now onto the people behind this.

by kat68 , Daily Kos

Tue Nov 17, 2009 at 09:38:22 PM PST

Tonight, Rachel Maddow aired a bonechilling interview with former fundamentalist leader Frank Schaeffer in which Schaeffer accuses evangelical zealots and far-right wing nuts of fomenting violence against our president.

This new "American Taliban," Schaeffer says, is essentially "trawling for assassins," using coded, Biblical language in hopes of inciting some lunatic to kill the president.

Apologies in advance for the quick and dirty diary, but I found this interview so deeply disturbing, I wanted to share it with the Daily Kos community.

Rachel's interview was sparked by a Christian Science Monitor story, "Biblical anti-Obama slogan: Use of Psalm 109:8 funny or sinister?

The story's lead:

There’s a new slogan making its way onto car bumpers and across the Internet. It reads simply: "Pray for Obama: Psalm 109:8"

A nice sentiment?

Maybe not.

The psalm reads, "Let his days be few; and let another take his office."

Presidential criticism through witty slogans is nothing new. Bumper stickers, t-shirts, and hats with "1/20/09" commemorated President Bush’s last day in office.

But the verse immediately following the psalm referenced is a bit more ominous: "Let his children be fatherless, and his wife a widow."

I did some Googling and this slogan is available on t-shirts, on bumper stickers, on coffee cups, on just about any merchandise you can think of. And while some find humor in this, Schaeffer sees grave danger.

A partial transcription of Schaeffer's comments:

The situation that I find genuinely frightening right now is that you have a ramping up of Biblical language, language from the anti-abortion movement, for instance, death panels and this sort of thing, and what it's coalescing into is branding Obama as Hitler...as something foreign to our shores, we're reminded of that he's born in Kenya, as brown, as black, above all, as not us. He is Sarah Palin's "not a real American." But now it turns out that he joins the ranks of the unjust kings of ancient Israel, unjust rulers to which all these Biblical allusions are directed, who should be slaughtered, if not by God, then by just men. So there's a direct parallel here with Timothy McVeigh's t-shirt on the day of the Oklahoma City bombing in which he said the tree of liberty had to be watered occasionly by the blood of tyrants. And that quote we saw again at a meeting at which Obama was present being carried on a placard by someone carrying a loaded weapon.

Schaeffer says this Biblical sloganeering, combined with a daily diet of hyped-up scaremongering from right wing outlets like Fox, is tantamount to "trawling for assasins."

This is serious business. It's unAmerican, it's unpatriotic and it goes to show that the religious right, the Republican far right, have coalesced into a group that truly wants revolution and if it turns out to be blood in the streets, so be it.

Schaeffer stresses that these messages shouldn't be dismissed, especially in light of the fact the threat level against Obama is 400 percent higher than at any other time in 52 years.

This bumper sticker simply says to them, 'It's open season.'

Schaeffer notes that no one in the GOP leadership or the evangelical community is doing anything to tamp down on this rhetoric...this from a community that routinely denounces Islamic leaders for not speaking out more forcefully against terrorism. "Where the hell are you?" he asks. "And be it on your head if something happens to our president...Until they speak out, they're culpable."

I urge you to watch this interview in full to truly understand what our president is up against, and to heed Schaeffer's final plea:

Obama supporters had better start speaking up in support of him and not sniping at him all of the time because he's not moving towards change as fast as we'd like in every area. This is serious stuff. The chips are down, he has real enemies--some of them are violent--and as far as I'm concerned it's time to support our president, stand with him and not only wish him the best, but pray for his safety in the face of these religious maniacs....There are not many steps left on this insane path.

UPDATE: A great suggestion from Regina in a Sears Kit House:

We can not stand idly by, while this fringe bunch takes and keeps the stage. I think each of us should write a letter to the editor and if we belong to a faith community, tell our rabbi, pastor, priest, mullah, that we need them to be very clear about respect and caring for everyone.

We need lessons in the difference between disagreement and dislike. Somehow there are enough people who don't get the difference to make difference dangerous.

I hope DKos people talk about this tomorrow. I saw TRMS tonight too, and found it unspeakably scary.

We should discuss and debate policy, but we must protect the man and I daresay, his family.

UPDATE 2: It seems that both CafePress and Zazzle.com are selling this merchandise (h/t karenc13). Let them know what you think of that here and here.

*****UPDATE 2A: Great news! Thanks to all of your e-mails and calls, CafePress has pulled their Psalm 109 merchandise. Here is their response per Eric RoM:

Dear XXXX,
As you may know, CafePress.com provides an automated service to a rich and vibrant community of international users. Unfortunately, because our service is automated, sometimes content that is not consistent with our Offensive Material & Prohibited Content policy is posted on CafePress.com. We appreciate that you have brought this content to our attention and it has been removed from our site. Please let us know if we can be of further assistance.

****

UPDATE 2B: According to kalmoth, Zazzle.com has now taken down some of their Psalms merchandise, but not all. Let's keep bugging them.
BREAKING NEWS: Ypu guys did it! Zazzle has just posted the following message on their website:

Dear Zazzle Member or Concerned Citizen—

Today, there has surfaced a great deal of discussion and debate over certain products in the Zazzle Marketplace which reference text from Psalm 109 in combination with reference to President Barack Obama. We at Zazzle are aware of the issue, and would like to take this opportunity to respond in a unified and public fashion to all parties and viewpoints.

Zazzle puts great value on its Marketplace as a forum for discussion and debate of the issues of our day. We are proud of the fact that no matter how arcane or apparently esoteric a subject may be, there can often be found Zazzle products pertaining to it. We are particularly sensitive to Zazzle as an open forum for the expression and debate of political viewpoints. The rigorous debate and discussion of political issues, including candidates for political office, our elected leaders, and pending and actual legislation, is something that drives the very democracy that in turn allows for our freedom as citizens to make these expressions in the first place.

With that in mind, it is only after great thought that we have determined that these products, in the context of the full text of Psalm 109, may be interpreted in such a way as to suggest physical harm to the President of the United States. In deference to the Office of the President of the United States, and in accordance with federal law prohibiting the making of threats against the physical wellbeing of the President of the United States, Zazzle has therefore determined that these products are in violation of the Zazzle User Agreement and not appropriate for inclusion in the Zazzle Marketplace. We have begun efforts to remove them from our website, and we will be vigilant to the publication of similar products moving forward.

Zazzle will continue to allow and encourage the submission of products that express disapproval or approval of the President’s policies and actions, but Zazzle will not permit products that may be interpreted to suggest violence toward the President.

Sincerely,
The Zazzle Team

GREAT WORK! Zazzle is also accepting comments on their decision here.

UPDATE 3: Thanks to Stuart Heady for this one. He e-mailed staff@fredstates.com, the e-mail listed at the bottom of UpYoursObama.com, which sells a lot of the designs seen on Cafe Press and Zazzle.

More from Stuart. Perhaps we can make this person a little uncomfortable.

domainreg@smnet.com (1+ / 0-)

This is the email address for the administration contact listed on WHOIS for UpYoursObama.com, the main originator for content that people have been complaining to Cafe Press and Zazzle about.

Theresa Taylor is listed as the owner and is listed only by a PO Box in Santa Monica.

I just emailed domainreg@smnet.com to point out that a lot of buzz has been generated by the campaign to call for Obama's assassination, apparently being promoted on this website and perhaps they should look into it - especially since they might be getting some unwanted attention from the Secret Service, et al.

I recommend everyone send something similar to them.

FINAL UPDATE: For those who don't feel like digging through more than 1200 comments, I want to highlight some amazing investigative work by Stuart Heady, mahakali overdrive and foggycity. The relevant thread is here: unmasking the people behind UpYoursObama.com. It is fascinating reading and the upshot is that the person behind this website and the Psalms 109 merchandise has been reported to the Secret Service. In fact, this entire thread has been sent to the SS. Kudos to them for helping make our president a little safer today.

I also want to thank all of the many people who commented here. There are some fantastic ideas for combatting this poisonous and dangerous rhetoric--far too many to list here in an update. It would be great to collect them all in some kind of action diary. I'm tired of watching this venom being spewed day after day and doing nothing.less, and his wife a widow." If this is not treason, it's at least sedition.

Goldman To Private Insurers: No Health Care Reform At All Is Best

A Goldman Sachs analysis of health care legislation has concluded that, as far as the bottom line for insurance companies is concerned, the best thing to do is nothing. A close second would be passing a watered-down version of the Senate Finance Committee's bill.

A study put together by Goldman in mid-October looks at the estimated stock performance of the private insurance industry under four variations of reform legislation. The study focused on the five biggest insurers whose shares are traded on Wall Street: Aetna, UnitedHealth, WellPoint, CIGNA and Humana.

The Senate Finance Committee bill, which Goldman's analysts conclude is the version most likely to survive the legislative process, is described as the "base" scenario. Under that legislation (which did not include a public plan) the earnings per share for the top five insurers would grow an estimated five percent from 2010 through 2019. And yet, the "variance with current valuation" -- essentially, what the value of the stock is on the market -- is projected to drop four percent.

Things are much worse, Goldman estimates, for legislation that resembles what was considered and (to a certain extent) passed by the House of Representatives. This is, the firm deems, the "bear case" scenario -- in which earnings per share for the top five insurers would decline an estimated one percent from 2010 through 2019 and the variance with current valuation is projected to be negative 36 percent.

What the firm sees as the best path forward for the private insurance industry's bottom line is, to be blunt, inaction.

The study's authors advise that if no reform is passed, earnings per share would grow an estimated ten percent from 2010 through 2019, and the value of the stock would rise an estimated 59 percent during that time period.

The next best thing for the insurance industry would be if the legislation passed by the Senate Finance Committee is watered down significantly. Described as a "bull case" scenario -- in which there is "moderation of provisions in the current SFC plan" or "changes prior to the major implementation in 2013" -- earnings per share for the five biggest insurers would grow an estimated ten percent and the variance with current valuation would rise an estimated 47 percent.

The report, a Goldman official stressed, was analytic not advocacy-based. Their job was to provide a sober assessment of the market realities facing private insurers under various versions of health care reform.

"If no reform at all happens you would see the largest rise in EPS," a Goldman official acknowledged. "But what we are doing is just analyzing what the stocks would do under different scenarios."

The study does note on the front page that the firm "does and seeks to do business with companies covered in its research reports." Those companies include Aetna, Wells Point and United Health.

In the context of the current health care debate, the findings provide a small window into the concerns that have driven the private insurance industry's opposition to reform legislation. Simply put: health care reform is going to hurt their bottom line. No less a prestigious voice than Goldman Sachs is telling them so.

Some insurers, in the end, will be hit harder than others. CIGNA is the lowest of the big five, for instance, because it does little business providing insurance plans to Medicare patients, individuals and families buying health plans directly, or small employers that offer health plans to their workers.

In addition, some reforms are going to hurt the industry more than others. Regulatory changes -- such as prohibiting the prejudice against consumers with pre-existing conditions -- will have an impact across the board, as will the funding cuts to Medicare Advantage.

Overall, Goldman calculates the probability of reform passing Congress at 75 percent. Though the limitations of Goldman's political prognostications were on full display earlier in the document:

By mid-late October, we expect a cloture vote (60 votes) to bypass a potential filibuster followed by several weeks of debate over proposed amendments on the Senate floor (with a similar process under way in the House). If both the Senate and House are able to pass legislation (perhaps before the Thanksgiving recess), a House-Senate conference negotiation should produce combined legislation for final approval (perhaps by mid-December).

Free to Lose

By PAUL KRUGMAN, NY Times, November 13, 2009

Consider, for a moment, a tale of two countries. Both have suffered a severe recession and lost jobs as a result — but not on the same scale. In Country A, employment has fallen more than 5 percent, and the unemployment rate has more than doubled. In Country B, employment has fallen only half a percent, and unemployment is only slightly higher than it was before the crisis.

Don’t you think Country A might have something to learn from Country B?

This story isn’t hypothetical. Country A is the United States, where stocks are up, G.D.P. is rising, but the terrible employment situation just keeps getting worse. Country B is Germany, which took a hit to its G.D.P. when world trade collapsed, but has been remarkably successful at avoiding mass job losses. Germany’s jobs miracle hasn’t received much attention in this country — but it’s real, it’s striking, and it raises serious questions about whether the U.S. government is doing the right things to fight unemployment.

Here in America, the philosophy behind jobs policy can be summarized as “if you grow it, they will come.” That is, we don’t really have a jobs policy: we have a G.D.P. policy. The theory is that by stimulating overall spending we can make G.D.P. grow faster, and this will induce companies to stop firing and resume hiring.

The alternative would be policies that address the job issue more directly. We could, for example, have New-Deal-style employment programs. Perhaps such a thing is politically impossible now — Glenn Beck would describe anything like the Works Progress Administration as a plan to recruit pro-Obama brownshirts — but we should note, for the record, that at their peak, the W.P.A. and the Civilian Conservation Corps employed millions of Americans, at relatively low cost to the budget.

Alternatively, or in addition, we could have policies that support private-sector employment. Such policies could range from labor rules that discourage firing to financial incentives for companies that either add workers or reduce hours to avoid layoffs.

And that’s what the Germans have done. Germany came into the Great Recession with strong employment protection legislation. This has been supplemented with a “short-time work scheme,” which provides subsidies to employers who reduce workers’ hours rather than laying them off. These measures didn’t prevent a nasty recession, but Germany got through the recession with remarkably few job losses.

Should America be trying anything along these lines? In a recent interview, Lawrence Summers, the Obama administration’s highest-ranking economist, was dismissive: “It may be desirable to have a given amount of work shared among more people. But that’s not as desirable as expanding the total amount of work.” True. But we are not, in fact, expanding the total amount of work — and Congress doesn’t seem willing to spend enough on stimulus to change that unfortunate fact. So shouldn’t we be considering other measures, if only as a stopgap?

Now, the usual objection to European-style employment policies is that they’re bad for long-run growth — that protecting jobs and encouraging work-sharing makes companies in expanding sectors less likely to hire and reduces the incentives for workers to move to more productive occupations. And in normal times there’s something to be said for American-style “free to lose” labor markets, in which employers can fire workers at will but also face few barriers to new hiring.

But these aren’t normal times. Right now, workers who lose their jobs aren’t moving to the jobs of the future; they’re entering the ranks of the unemployed and staying there. Long-term unemployment is already at its highest levels since the 1930s, and it’s still on the rise.

And long-term unemployment inflicts long-term damage. Workers who have been out of a job for too long often find it hard to get back into the labor market even when conditions improve. And there are hidden costs, too — not least for children, who suffer physically and emotionally when their parents spend months or years unemployed.

So it’s time to try something different.

Just to be clear, I believe that a large enough conventional stimulus would do the trick. But since that doesn’t seem to be in the cards, we need to talk about cheaper alternatives that address the job problem directly. Should we introduce an employment tax credit, like the one proposed by the Economic Policy Institute? Should we introduce the German-style job-sharing subsidy proposed by the Center for Economic Policy Research? Both are worthy of consideration.

The point is that we need to start doing something more than, and different from, what we’re already doing. And the experience of other countries suggests that it’s time for a policy that explicitly and directly targets job creation.