Pufferfish

Then And Now

The Bush years:

Even beyond the immediate political manipulation there was always a drive to push the country back into a 'high-fear' climate, with a presidential statements, always with some new leaked intel to dramatize the threat, even what you might call the iconography of terror -- color coded threat levels and the like.

But that isn't totally right:

Eight years ago, "a terrorist bomber's attempt to blow up a transatlantic airliner was thwarted by a group of passengers, an incident that revealed some gaping holes in airline security just a few months after the attacks of September 11. But it was six days before President George W. Bush, then on vacation, made any public remarks about the so-called 'shoe bomber,' Richard Reid, and there were virtually no complaints from the press or any opposition Democrats that his response was sluggish or inadequate."

Obviously the Bush administration used terror threats as a political weapon. It's a convenient extension of the conservative worldview which sees aggressive grandstanding and heightened anxiety as a genuine strength. Issuing a threat warning was also a form of foreplay for Dick Cheney. The common thread between the Shoe Bomber and the Underpants Bomber is that both administrations avoided a terrorist attack on their watch through sheer luck. Our best defense was operator error. Because that's clear, neither administration could make a claim to competence or control. So the attacks were spun as non-events. That's the expected reaction by the Obama folks, who downplay everything related to terrorism ("Keep Calm And Carry On" might as well be the mantra, as Marshall notes). For the Bush administration, the Shoe Bomber was a terrorism threat that couldn't be used for political gain. But this one is on Obama's watch. Thus the silence then and the furor now, with the upshot being the GOP will always play the fear card—except when it can't.

Crazy Train

It once was conventional wisdom that Alan Greenspan was the smartest man alive:

And this brings us to Alan Greenspan, whom I've known for over 50 years and who I regarded as one of the best young business economists. Townsend-Greenspan was his company. But the trouble is that he had been an Ayn Rander. You can take the boy out of the cult but you can't take the cult out of the boy. He actually had instruction, probably pinned on the wall: "Nothing from this office should go forth which discredits the capitalist system. Greed is good."

Not that we're showing any inclination of learning from our mistakes. (I'm finding it difficult to write this post while saluting Time Magazine with a double middle finger salute.) Here's Greenspan's disciple in May, 2007:

"Importantly, we see no serious broad spillover to banks or thrift institutions from the problems in the subprime market," Bernanke said. "The troubled lenders, for the most part, have not been institutions with federally insured deposits."

He was wrong. Five of the 10 largest subprime lenders during the previous year were banks regulated by the Fed. Even as Bernanke spoke, the spillover from subprime lending was driving the banking industry into a historic crisis that some firms would not survive. And the upheaval would shove the economy into recession.

And he was wrong again:

The Fed let Citigroup make vast investments without setting aside enough money to cover its eventual losses. The company would need more than $45 billion in federal aid.

The Fed watched as National City made billions of dollars in subprime loans that were never repaid. Regulators would arrange its sale to a rival, PNC.

And the Fed approved Wachovia's purchase of a California mortgage lender shortly before California mortgage lenders led the nation into recession. Wachovia, on the verge of collapse, was bought by Wells Fargo with government help.

And again while serving on the Fed's Board of Governors:

The dangers of securitization were underscored the very next month by the collapse of energy giant Enron, which had abused the same accounting rules to conceal losses from investors. But in 2003, the board that writes accounting rules backed away from planned reforms after banks protested that Enron was an exception. The Fed sided with the industry, telling the board that securitization was safe and important to the economy, according to people familiar with the deliberations.

And how about one more time:

In January 2005, National City's chief economist had delivered a prescient warning to the Fed's board of governors: An increasingly overvalued housing market posed a threat to the broader economy, not to mention his own bank and others deeply involved in writing mortgages.

The message wasn't well received. One board member expressed particular skepticism -- Ben Bernanke.

"Where do you think it will be the worst?" Bernanke asked, according to people who attended the meeting, one in a series of sessions the Fed holds with economists.

"I would have to say California," said the economist, Richard Dekaser.

"They have been saying that about California since I bought my first house in 1979," Bernanke replied.

Woops. Apparently "they" were right. Routinely. Not that Bernanke's resume is going to keep the senate from rubber-stamping his bid for a second term as Fed chairman. He did the only thing that matters: left bankers alone and bailed them out when they fucked up. If only we could all be coddled for our incompetence.

The Mod Squad

Barack Obama took a break from punching hippies in the face over health care to knock some international heads together in Copenhagen:

The deal eventually came together after a dramatic moment in which Mr. Obama and Secretary of State Hillary Rodham Clinton burst into a meeting of the Chinese, Indian and Brazilian leaders, according to senior administration officials. Mr. Obama said he did not want them negotiating in secret.

The intrusion led to new talks that cemented central terms of the deal, American officials said.

Give 'Em A Little Chin Music

Ten years ago Democrats decided they were sick of watching Wall St.'s campaign contributions flow directly into GOP coffers. It was time to get in on the action. One of the legislative results was John McCain voting for and Bill Clinton signing the Gramm-Leach-Bliley Act that repealed Glass-Steagall, the 1933 law separating commercial and investment banking. That move helped make last year's economic implosion possible. Well now McCain—the same Maverick who had arch-deregulator Phil Gramm riding shotgun on the Straightalk Express and served as a useful tool for big business—is all about the do over. Yesterday, the Arizona senator partnered up with Sen. Maria Cantwell to introduce a bill aimed at bringing Glass-Steagall back from the dead. It's not every day you get a politician backing legislation to erase a law he worked to put on the books. Credit where it's due.

While McCain is again reinventing himself (this time in a good way), Joe Lieberman has a better chance of being caught by TMZ cameras doing body shots off of Jane Hamsher at Hawk & Dove than this bill has of being signed into law. Despite Republicans and Democrats telling anyone who will listen that they're opposed to "too big to fail" they haven't demonstrated any willingness to actually do something about it. But sometimes picking a fight you know you're going to lose can be a political winner, as Kevin Drum points out. And with the liberal netroots throwing an epic tantrum over the latest turn in the health care debate, Obama could stand to engender a little good will:

Why not pick a signature issue or two and really hammer away? Make a few fire-breathing speeches about how you agree with Alistair Darling about taxing banks that hand out huge bonuses and will be sending legislation to Congress to make that happen. It'll probably fail, but at least it moves the conversation forward and gets the public engaged. The fact that you fought the good fight won't really hurt you (the nation's bankers obviously don't think much of you already), and far from sinking the whole reform effort, it might actually help keep the rest of the bill(s) from getting watered down even more. A couple million postcards has that effect sometimes.

McCain is providing Obama an opening to sprinkle a little bit of that hopey, changey feeling around that has been missing. Not that he'll bite.

To The Crooks, The Spoils

Matt Taibbi's take down of Rubinites in control Obama's economic agenda is getting tough criticism from the usual suspects, which serves as a great lesson on how to mount a political counter attack: first, attempt to discredit the journalist and his article, then shift blame. But from my reading of Taibbi's article and the fairly weak critiques from administration apologists it looks like they've failed to discredit a fairly obvious charge: That Obama is beholden to the people who bear direct responsibility for the financial crisis.

While defending his piece, Taibbi makes a couple crucial points that illustrate just how top-down the economic thinking is in this country:

We could have paid off every subprime mortgage in America for about $1.4 trillion and instead shelled out at least ten times that to Wall Street, primarily to pay off derivative bets made by bankers on those assets.

Most of the bailouts came in the form of very cheap money lent out to the same banks that caused the crisis, who then took that money and lent it out at market rates, pocketing the difference. That’s where all these billions in bonuses for the major banks are coming from this year. It’s almost impossible to not make mountains of money when your cost of capital is next to nothing because you’re borrowing your money from the government basically for free.

Sure, Bush is responsible for the bailouts and Tarp program, but the Obama team has done little to deviate from that course, with the choreographed anger over bonuses being little more than political theater.

The upshot of all of this is that the co-optation of regulatory reform by Wall Street is a crucial story that deserves more attention. And Taibbi--because he's a great writer who can break down a complicated story into an accessible article--delivers big time. My only issue stemming from Taibbi's article (besides calling Obama's actions a "sellout" when really he's not deviating from the norm) is with liberal bloggers intent on shifting blame onto the left's favorite bogeymen: Ben Nelson and Joe Lieberman (please don't read this to mean those two aren't completely insufferable tools). Sure, those two centrist yahoos have enjoyed garnering plenty of Sunday morning talk show attention for rear-ending the White House's agenda. But this scarecrow building doesn't work with regulatory reform. Taibbi is talking about Obama's economic team. That team has been in office for 10 months and hasn't done a damn thing to address the most glaring problem this country faced when it took office. And the inaction isn't to assuage the moderate tendencies of Ben Nelson.

-- Update --

For more bomb throwing check out the work of Dylan Ratigan.

Nobel Stuff

 

While managing to piss everyone off with his Afghanistan move, Obama made everyone happy with his Nobel speech. Weird. Here's what peeps are saying:

Clive Crook:

He did not glide around the awkwardness of the occasion. He acknowledged it and dealt with it. He was straightforward and unembarrassed about his lack of achievements--no taint of false modesty in the way he expressed it. The award was a "call to action". A little more to my surprise, he confronted head on the oddity of the peace prize going to a leader who had just announced a major escalation of a war. Still more to my surprise, he dwelt on this at some length, putting his decision in the context of "just war" theory. He defended his approach more forthrightly than he had at West Point. A good part of the speech was a lecture on why wars still have to be fought. Not an obvious theme when you're accepting the Nobel peace prize.

Green footballs:

Yes, that’s right — he acknowledged that there is true evil in the world, and made a strong case for the United States as a defender of freedom. Not exactly the words of an America-hating commie traitor, are they?

Kevin Drum:

Given that he was, after all, accepting a peace prize, it was a surprisingly robust defense of war and America's military role in the world. Surprisingly Bushian, really, with one obvious caveat: among the many wars he mentioned as necessary and justified, there was one that was deliberately conspicuous by its absence: Iraq. So neocons have that to gripe about if they're in a griping mood.

James Fallows:

Those trademark elements include: The embrace of contradictions (in this case, a defense of war as a means to peace); the long view; the emphasis on institution-building; the concern about the distortion of religious and ethnic loyalties; and above all a consciousness that was once called Niebuhrian and at this rate will someday be "Obamian," which emphasizes the importance of steady steps forward in an inevitably flawed world.

Gawker:

Because George W. Bush so brazenly co-opted the utopian rhetoric of liberal internationalists, no current politician can speak of the courage and heroism of those who protest oppressive regimes without unintentionally evoking that jackass in all his smirky vainglory.

Joe Klein:

How does a rookie President, having been granted the Nobel Peace Prize, go about earning it? Well, he can start by giving the sort of Nobel lecture that Barack Obama just did, an intellectually rigorous and morally lucid speech that balanced the rationale for going to war against the need to build a more peaceful and equitable world.

Sarah Palin:

I liked what he said. I talked too in my book about the fallen nature of man and why war is necessary at times.

Communist On Communist Crime

Over the past couple of days, Andrew Sullivan has posted a few protests from liberals distraught that "the left" is giving President Obama the dirty hippie business. No shocker that Greenwald isn't buying it:

Those who venerated Bush because he was a morally upright and strong evangelical-warrior-family man and revere Palin as a common-sense Christian hockey mom are similar in kind to those whose reaction to Obama is dominated by their view of him as an inspiring, kind, sophisticated, soothing and mature intellectual. These are personality types bolstered with sophisticated marketing techniques, not policies, governing approaches or ideologies. But for those looking for some emotional attachment to a leader, rather than policies they believe are right, personality attachments are far more important. They're also far more potent. Loyalty grounded in admiration for character will inspire support regardless of policy, and will produce and sustain the fantasy that this is not a mere politician, but a person of deep importance to one's life who -- like a loved one or close friend or religious leader -- must be protected and defended at all costs.

I happen to think Greenwald is being a bit too hard on those who still defend Obama's overall performance, even if they don't agree with several key policy decisions. But what's really worth pointing out is that the left is actually having this debate instead of flooding the echo chamber with a cottage industry of apologists and spinners intent on making every decision Obama makes sound like preordained common sense. That's the difference between liberals falling in love and conservatives falling in line. Right now Greenwald is most likely working on a post accurately cataloging another transparent Obama Justice Department decision that covers-up misdeeds by the Bush crew or embraces the lame "state secret" line, John Aravosis is no doubt furiously pounding out another screed on the importance of immediately turning over DADT, and you can bet Jane Hamsher is once again fitting Harry Reid's testicles into a sling over his handling of health care reform. When it comes to blind devotion within the ranks of the two warring factions, there really isn't a comparison. Engaged liberals are clearly more likely to think for themselves. And if conservatives want to take exception to that then first explain what was going on from 2001 to 2008 when the only internal dispute seemed to be over who could give the sloppiest rhetorical blowjob to a Bush decision and how quickly a boycott of the Dixie Chicks could be organized.

Spin Me Right Round

Good to see Chris Matthews stepping up and admitting it was obnoxious and stupid to say Obama gave his Afghanistan speech at West Point to the "enemy camp." On Tuesday night Matthews wondered aloud why there wasn't more pompom waiving from military cadets; a comment so stupid I had to remind myself to breath. But the larger issue is that Matthews feels free to parrot Republican talking points and assume the military is a "skeptical audience" when a Democrat is commander in chief. Beyond empty Rovian rhetoric there isn't much in the way of evidence except, well, this:

According to an analysis of campaign contributions by the nonpartisan Center for Responsive Politics, Democrat Barack Obama has received nearly six times as much money from troops deployed overseas at the time of their contributions than has Republican John McCain.

I realize that's just a snap shot. But it's the most recent snap shot. And it indicates Matthews wasn't just an ass. He was flat out wrong.

And as long as we're on Afghanistan, I need to make a few broader points. After Obama's speech, Dan Senor, former spokesman for the Coalition Provisional Authority in Iraq and general war fanboy, said with a touch of glee: “If you had told me Obama would have doubled the number of troops in Afghan and not significantly reduced our presence in Iraq, I would have had a hard time believing it.” Throw that together with Bill Kristol's ebullient reaction and it's enough to ask how different our Middle East policy is today than it would have been under a third Bush term.

Now, the fundamental problem I have with Obama's Afghanistan plan is that a) there is no achievable mission (other than temporarily delaying a Taliban resurgence) and b) the initial objective of kicking out al Qaeda has morphed (predictably) into reinventing Afghanistan as a “modern state.” That gets us back to Colin Powell's Pottery Barn maxim on invading Iraq: we broke it, now we own it. And if we're to learn anything from history it's that nation-building is a fool’s errand. The idea that Afghans will be ready to assume control of the country in 18 months would be hilarious if it wasn't the actual stated policy goal. The upshot is that Obama's plan has almost no chance of fundamentally changing the country's long-term prospects. I suppose one could argue that's better than a zero chance. And so in an effort to pacify the military and the GOP, Obama is sending in more troops while using the time line for withdrawal to appease his own party and foreign allies, who wouldn't sign on for an indefinite occupation.

As for the GOP's sad attempts to paint Obama as soft, it's Obama who is doubling the troop levels in Afghanistan while the right neglected the country for years. Earlier this week Dick Cheney attacked Obama’s "weakness" for ordering more troops into Afghanistan—despite being presented with the same request from Gen. David D. McKiernan a year earlier and leaving the decision to be made by the next administration. More worrisome is that the GOP establishment thought we had Afghanistan taken care of years ago. In 2005, John McCain declared victory when he said: “The facts on the ground are we went to Afghanistan and we prevailed there.” It was assumed Afghanistan had been locked down. It wasn't. What confidence should we have that this time will be any different?

That Sinking Feeling

This just about sums up where we are:

The way our politics of fear is now constructed, there is no limit to the costs involved in nation-building in every conceivable failed state that could be a safe harbor for Jihadists. We cannot have the adult conversation about how much terrorist damage the US should tolerate compared with the costs of trying to control this phenomenon at its source. We are not mature enough as a country to have that conversation. And Obama has decided it isn't worth confronting that question now.

The great variable that nobody seems to be able to grapple with is the abject poverty most Afghans live in. There isn't a judge or cop who isn't for sale because the government can't pay enough to support a family. Most people in that country don't have a clue about Western ideas of rule of law and criminal justice. These people are 500 years behind Iraq. And we're actually sitting here talking about setting up an honest working government in 24 months? This is nuts. And in this 24-hour news cycle-driven bizarro world, we're watching Republicans attack Obama as being too "isolationist" for "only" sending in 30,000 troops to a country whose people can't even afford a television to watch the media debate play out.

Welcome To The Suck

When it comes to Afghanistan I've found myself drifting between hawkish and dovish leanings depending on the time of day and what column I read most recently. Yesterday morning I was dead set against sending more troops into a region where less than a quarter of the population is literate. This afternoon I'm open to hearing Obama's rationale. But I also keep rebounding away from the reasonably persuasive point that if we were to leave Afghanistan the Taliban would immediately set up shop again in Kabul.

The reason that line isn't working is because nobody is answering this question: "if a war’s not worth paying for, how can it be worth fighting?" That logic is a basic component gone missing. And is it really my patriotic duty to support an expansion of war while resisting paying more in taxes and maxing out my credit card in an effort to help banks over-leverage themselves and dish out insane bonuses? That's been the Bush-endorsed status quo since 9-11. And it hasn't served us well. Our debt (individual and federal) has exploded while the economy imploded. Now there's a neat trick. So what I'd like to hear from Obama is a way to pay for this war (an increase on capital gains?), coupled with a plan to pass a Jobs Bill that will help the middle class.

Also, too: In addition to the policy debate, there's the purely political considerations Obama faces and lessons learned from Somalia. Call it the inevitability of Afghanistan:

After the Black Hawk Down incident in 1993, conservatives demanded that Bill Clinton pull out immediately.  Not another American life was worth risking for a barren patch of dirt on the Horn of Africa.  Clinton refused, insisting that we "finish the work we set out to do," and kept troops in country for another six months before withdrawing in an orderly way.

And what happened? Conservatives turned around and immediately started building up a mythology that Clinton had lacked spine and immediately ran for the exits at the first sign of trouble.  Just like a Democrat to be so weak-kneed!  What's more, it's now received wisdom on the right that it was this panicky withdrawal that first convinced Muslim fanatics that America was weak and could be attacked with impunity.  In the end, Clinton took a hit for withdrawal even though he was the one who insisted on not cutting and running.

Either way Obama is a coward.