Saturday, February 07, 2009

Racist Hate Crimes Continuing

One of the things that African-American blogs do is track racial crimes like racial attacks and police assaults on African-Americans with tasers. The progressive blogger Digby has started picking up on the taser story (Here's some of my posts on tasers as well), but African-American blogs have been on it for more than a year.

Following up on Post-Racial Blog and Antoinette's Point of View, the African-American Political Pundit has a story on the arrest of seven white males for beating an African-American guy names Brandon Manning of Richmond, California.

Manning couldn't believe it:
"I don't understand how somebody could do that in this day and age," Manning said Sunday. "I never, never thought it would happen to me."
Unfortunately, this is easier to believe in Kentucky. Our local school system had a nasty incident involving threats against black students about a year and a half ago. Police shootings of African-Americans in Louisville and the Cincinnati riot are still in the memory as well.

It's important to highlight these kinds of incidents to understand the continuing current of racial violence against African-Americans. The big progressive blogs like HuffPo should start picking up on these stories.

Stimulus Package--Not Enough

I've long stopped hoping that the current stimulus package would be big enough to fully address the current economic decline.

Still, many of the cuts in the Senate compromise were extremely disappointing. I'm especially thinking of the whole $40 billion in state fiscal stabilization that was cut out by moderate negotiators like Susan Collins (R-ME), Arlen Specter (R-PA), and Ben Nelson (D-NE). State and local governments are huge employers (about 5% of the total work force) and state government expenditures also support a lot of private business (mostly education and construction in Kentucky). In his first response to the Senate bill, Paul Krugman rightly emphasizes what would have been the stimulative value of helping the states.
In particular, aid to state governments, which are in desperate straits, is both fast — because it prevents spending cuts rather than having to start up new projects — and effective, because it would in fact be spent; plus state and local governments are cutting back on essentials, so the social value of this spending would be high. But in the name of mighty centrism, $40 billion of that aid has been cut out.
However, I'm not sure why Krugman and liberal bloggers like Digby are so despairing about coming back to Congress for another stimulus package. Digby is especially pessimistic in thinking that the game is rigged so that conservatives can blame the government if the stimulus package fails and not credit the government if the package succeeds.

My own view is that the current economic and political situation is too fluid for foreordained outcomes of any kind. Instead of seeing a game that's already lost, I view the current economic crisis more as a test of the viability of the American political system. It's evident that the American political system as a whole is not flexible enough at the present time to produce an adequate stimulus package in the first go-round. Free-market sentiment among politicians and media elites is too strong, filibusters give the Republicans have too much leverage in the Senate, and the Obama administration hasn't realized the extent to which they'll have to fight to get reasonable policies enacted. As a result, the Senate version of the stimulus is 50-75% of what's needed.

But there's no reason to think that the political climate will stay the same if the economy continues to deteriorate as rapidly as it has been. Massive layoffs by big business have been announced but have yet to settle into the unemployment numbers, consumer numbers, housing numbers, and other measures of economic decline. The same with the layoffs from state and local government that will be coming through the pipeline.

Given that big unemployment numbers and the even larger symbolic impact of large-scale unemployment is likely to have a tremendous impact on American politics, it's highly possible that the Obama administration will come back for another stimulus package.

The question is whether the American political system has enough flexibility to go through another stimulus battle. My own guess is that it does.

Sarah Palin's Natural Constituency

One hundred and fifty people had to be rescued from a breakaway eight-mile ice floe on the Western end of Lake Erie. One died.

Unprecedented numbers of fishermen have taken to the ice this winter because thicker ice allowed them to go farther out onto the lake, according to the Cleveland Plain Dealer. But Saturday's unseasonably high temperatures apparently melted chunks of the ice.

Ice fishermen towing trailers with snowmobiles and all-terrain vehicles filled the parking lot of Catawba Island State Park on Friday, the newspaper reported.

Given that the weather was warming up, it was pretty stupid for all the ice fishers to be out on the ice. They even built "a makeshift bridge to get from one section of the ice to the other" so they could get farther out on the lake.

And then the ice broke off and they all had to be rescued, with one fatality.

Sounds like Sarah Palin's natural constituency.

The Downward Slide

This chart on the unemployment trend is from Nancy Pelosi's office and shows how steeply the U. S. economy is falling during the current recession.
The top two lines illustrate what relatively mild recessions look like. The blue line is the 1990 recession in which employment losses stopped falling after 11 months and totaled 1.6 million jobs. During the 2001 recession, the economy lost most of its 2.7 million jobs during the first 12 months and then sank more gradually for another 15 months.
The difference between the current recession and the other two is stark. Where the sharpest rise in job losses were over after 12 months in the previous two recessions, this recession has seen an acceleration in job losses after 12 months.
This is one reason why a major stimulus package is necessary now.

Friday, February 06, 2009

Wimpy Stimulus Limps to the Finish Line

It looks like the Senate has come to a tentative agreement on a wimpy $780 billion stimulus package that contains too much in the way of tax cuts and not nearly enough in the way of spending.

I hope it works, but I really don't think $780 billion is going the job done.

That makes it likely that Obama will have to come back for another huge stimulus package next year.

Principles of Stimulation

Matthew Yglesias has a good comment on the inappropriateness of all the plans to cut the Obama stimulus package.
It’s really remarkable to see all this talk, and even action, of people cutting things out from the recovery bill. Even more remarkable is that the folks doing the talking aren’t being compelled to provide any rationale for what they’re doing.

For Yglesias, the stimulus package needs to be enormous to be effective. Therefore it's cutting things from the stimulus package needs to be viewed with a great deal of scepticism, not the spending.

But it's possible to go further. As I understand Obama's pronouncements, the purpose of the stimulus package is both to reverse the current economic decline and enact fundamental change in the health and energy sectors.

In this light, the Obama administration might consider promoting the stimulus package in terms of three principles.

1. The stimulus package is designed to create a gigantic stimulus on the level of WWII. That's what's needed to prevent a slide from recession to depression.

2. The purpose of the stimulus is also to enact fundamental health reform and begin the transition to a green economy.

3. The stimulus package should also include reforms to keep Wall Street from driving the economy back into the ditch.

These are principles that the Obama administration could sell to the public. The Obama people just have to get out there and shill for it.

Thursday, February 05, 2009

Short Stimulus Notes

Obama's speech. It's good for Obama to get out there and campaign for his broader vision of stimulating the economy, reforming health care, and dealing with the energy situation. He also needed to be explicit in rejecting Republican tax cut dogma.

But, Obama should recognize that the Republican Party does not accept accommodation with either his administration or the Democrats. There are four GOP moderates in the Senate who are willing to negotiate and compromise with Obama. They're Olympia Snowe, Susan Collins, Arlen Specter, and George Voinovich. The rest are dogmatic conservatives who view the stimulus fight as a chance to continue John McCain's presidential campaign.

The Permanent Campaign. To counter the Republican "war against Obama," Obama needs to run a presidential campaign while he's in office. Washington has been in the grips of "the permanent campaign" for more than 15 years and Obama doesn't have enough clout to end the fight. That's an unfortunate reality, but it is reality.

Actually, Obama won't be able to run his particular presidential campaign. Instead of focusing on the broader message and grass-roots organizing, Obama is going to have to dirty himself with the effort to dominate day to day media cycles.

It's an ugly job, but it has to be done if Obama is going to succeed as president.

Allergies Prevent Blogging

I had a pretty bad allergic reaction to Rader Hall on the Morehead State University campus today. All the paint and varnish kicked my butt. So blogging has been out.

The Harry Markopolos Time Bomb

Sure Harry Markopolos is the financial sleuth who uncovered the $50 billion Madoff ponzi scheme, and he's to be congratulated for that. But Madoff also reminds me a little bit of Ross Perot. He seems like an over the top guy who's eventually going to go off in an embarrassing way.

Wednesday, February 04, 2009

NPR Tolerance--Rising

As RSI readers know, I don't particulary like NPR. But I've been trying to revamp my attitude toward the public media over the last several months. It started with KET inviting me to appear on a panel on "Race and Politics in Kentucky." Likewise, the people at MSPR have been very nice to me over the last few months, helping me with my fall series of lectures and forums and interviewing me several times in relation to political events. Three students I know and like are on air as well.

With all those connections and good will, it's just hard to be hostile.

So, I've listening to NPR more than I used to and got through a whole dinnertime set of errands listening on and off to "All Things Considered."

Robert Segal and Melissa Block are still pretty annoying, but my tolerance level is definitely up.

Tuesday, February 03, 2009

Obama Follows McCaskill's Lead on Salaries

There's a report in the very important New York Times that the Obama administration is going to impose a $500,000 CEO salary cap on companies receiving big TARP handouts.

Needless to say, there's a lot of wailing and gnashing of teeth from the business ideologists.
"That is pretty draconian; $500,000 is not a lot of money, particularly if there is no bonus," said James F. Reda, founder and managing director of James F. Reda & Associates, a compensation consulting firm . . . Mr. Reda said only a handful of big companies pay chief executives and other senior executives $500,000 or less in total compensation. He said such limits will make it hard for the companies to recruit and keep executives, most of whom could earn more money at other firms.
Of course, one could ask why making $500,000 in 2009 would hurt Kenneth D. Lewis of Bank of America given that he "took home more than $20 million in 2007. " Of course, $500,000 might not be enough for Lewis if he treated his personal finances like he did the bank's and leveraged himself to the hilt.

I have to admit that I have limited sympathy for someone who can't manage himself on $20.5 million of income in three years.

It would also be interesting to see which big banks would hire Lewis for more than $500,000 given that practically all of them are taking TARP money and therefore subject to the same salary limitations.

In the same way, the Times article mentions that Rick Waggoner of GM made $1.6 mill in 2007 and therefore would have to take a 66% salary cut.

Given the enormity of GM's losses that's hardly unreasonable.

But let's say that Waggoner just can't do with less than $1.5 million. What company would he go to as an alternative--Chrysler, Ford.

I don't think so.

What about Toyota? Toyota is the biggest car company in the world. Well, Toyota CEO Katsuaki Watanabi made $900,000 in 2007 for a company that did a hell of a lot better than General Motors with Waggoner making almost 15 times Watanabi's salary.

And Watanabi is in line for a salary cut this year after Toyota lost money.

It doesn't seem that big business in Japan is as eager to reward failure as business in the U. S.

I'm glad to see Obama do this. If the American financial sector is going to survive, it needs to get out of the super-speculative, get filthy rich, lord of the universe mentality.

Being forced to subsist on $500,000 a year will help encourage financial executives to develop another mind-set.

The Power of the Times

Talk about the influence of the New York Times among the political elites, Tom Daschle scuttled his nomination after seeing an editorial in the New York Times urging him to withdraw.

Daschle Withdraws

It's just coming out that Tom Daschle has withdrawn his candidacy to be Secretary of Health and Human Services.

It wasn't just his failure to pay more than $100,000 in taxes.

Daschle is so deep in the Washington special interest sludge that he really can't hold any responsible position.

One of the interesting questions about the Daschle fiasco concerns his status as a member in good standing in the American political elite. These are the reasons why Daschle would have to have been considered part of the political elite six months ago:

1. Daschle had converted his status as former Senate majority leader into a big money political consultant position with the health and telecommunications industries;
2. He was part of the pool out of which Barack Obama chose his cabinet nominations;
3. Daschle was personally friendly with Obama.

It was because of Daschle's elite position in the Washington political establishment that a guy with $250 million to burn like Leo Hindery let Daschle have a car and a driver.

But there's a decent chance that the failure of his nomination to head HHS means that Daschle falls off the elite wagon. Daschle is certainly out of the running for any kind of big political position in the Obama or any future Democratic administration. That removes a big chunk of Daschle's elite clout. So, two questions remain. First, will the big health and pharmaceutical companies think Tom Daschle is enough of a Big Kahuna that they will gladly pay millions of dollars for his political "advice." Second, will senior people in the Obama administration still call Daschle for advice or take Daschle's calls?

There's no guarantee they will.

In fact, Tom Daschle might fall so far that he might actually have to humble himself and start working as a paid lobbyist.

Just like his wife.

Sunday, February 01, 2009

The Super Bowl: Damn!

Another prediction down the drain. I guess the Steelers were stronger opponents than John McCain.

Prediction: Cardinals Win Obama Style

Cardinals win by 10 in a triumph of hope over tradition.

Give Michael Phelps a Break

So Olympic swim hero Michael Phelps was caught on the wrong end of a bong last weekend. Big deal. How many years did Phelps live like a monk getting up to swim every morning at 5:00am? He's been swimming competitively since he was seven years old in 1992. That's 16 years. I can give him a break if he's decided to catch up on some partying.