Pufferfish

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.

Question Of The Moment

Can the Democrats govern?

There are those who say that Democrats shouldn't favor any system that continues to include private insurers. Good luck with that. I've been covering these issues for 40 years and I've come to this conclusion: anything that actually helps people is good, whether or not it fits into an ideological pattern. Covering 30 million more people is good. Preventing private insurers the ability to deny coverage to countless others is also good. Those who stand against these essential principles because of an ideological conceit--whether it be Joe Lieberman's opposition to a public option, Ben Nelson's opposition to abortion funding or Democracy for America's opposition to an individual mandate--are proving a point that conservatives have long made: that Democrats are too feckless to govern.

One could almost say that it's time to set aside these childish things. Speaking of, maybe it's time for that someone to speak up, talk loudly, and start swinging a big damn stick.

Original Intent

I mean, really:

The founding fathers said nothing about the filibuster or about Senate super-majorities. [...]

Elections matter, and if the Republicans manage to elect a president and 54 or 57 senators, they'd have won the right to enact their agenda. Whether I agreed with it is irrelevant. As I've written many times, the problem may be healthcare in the immediate instance, but the larger problem is that the system has broken down.

The problem isn't Lieberman insomuch as it's the rules that Lieberman's been able to take advantage of. The 60 vote threshold means not only are we giving a wildly disproportionate amount of governing power to state's with an inordinate number of Lion's Den truck stops, but the indifference to reasonable representative democracy has created an opening for starlets like Joey Lieberman to step up and get their picture in the paper.

For all those exulting Lieberfreude and hoping to expel the little trollop from the caucus, well, it's never as easy as it seems. Is it?

The administration has been open about his role in the climate bill as Lieberman, Sen. John Kerry (D-MA) and Sen. Lindsey Graham (R-SC) are huddling five times a week on the legislation that will ultimately hit the Senate floor.

A Congressional source described Lieberman as "incredibly engaged" on the issue, and said his position is even arguably "progressive."

That doesn't mean we're not going to be served up another Lieberman special when cap and trade hits the senate floor. But the sad upshot to all this is that Lieberman remains a necessary egomaniac, unreliant on DCCC dollars to get re-elected. Here's the silver-lining:

Disappointed progressives may be wondering whether their efforts were a waste. They most decidedly were not. The campaign for the public option pushed the entire debate to the left -- and, to use a military metaphor, it diverted enemy fire away from the rest of the bill. If Lieberman and his allies didn't have the public option to attack, they would have tried to gut the subsidies, the exchanges, or some other key element. They would have hacked away at the bill, until it left more people uninsured and more people under-insured. The public option is the reason that didn't happen.

I'm amazed that giving money to poor people didn't draw more fire. Along with insurance reform, that's the win.

-- Update --

Looks like there's some on the left trying hard to be relevant:

The bloggers who are focused on political organizing and pulling Dems to the left mostly seem to want to kill the bill, while the wonkier types want to salvage it because they think it contains real reform and can act as a foundation for further achievements.

In the former camp are bloggers like Markos Moulitsas, former House candidate Darcy Burner, and the Firedoglake crew. They mostly deride the bill as a giveaway to the insurance companies that does nothing for consumers. A quick rundown of their opinions right here.

I'll stick with the wonks.

Keeping It Realist

Maybe someone should tell somebody about this:

There is no reason to tolerate this degree of misery. We know exactly what to do. The government has the fiscal tools to do it. Start by bailing out state and local governments (if Congress would prefer to call it a loan and require payback over the next five years, fine). Renew unemployment and COBRA benefits. Increase federal spending on infrastructure. If we have to, hire people directly. The package should be $400 billion over two years.

But then suffering is the best way to get people to appreciate their bootstraps. A quick summary of the cluster-bang Obama finds himself in: To reduce the deficit over the long-term, the economy has to grow (the bigger the economy, the more the government collects in taxes). But to grow, we have to increase the deficit in the short-term with more stimulus dollars. But increasing the deficit in the short-term will cause Joe Lieberman and Evan Bayh to reflexively sprint to the nearest microphone and, while dizzy with worry, proselytize the country on their "principled decision"against a Jobs Bill. It's almost like we slept through the last eight years of what not to do:

Congress should cut the top marginal tax rate for individuals as its newest stimulus, Sen. Jim DeMint (R-S.C.) said Tuesday.

If Only They Gave Mulligans

A funny thing happens when people start talking. They start talking about lots of things, freely. Suddenly the levies break (as Bush can tell you with Katrina). Or in this case, the sculpture crumbles:

The Tiger Woods that was constructed for corporate consumption was spotless and smooth, an edgeless brand easily peddled to sheikhs and shakers. The perfect marriage with the perfect kids slipped so easily into the narrative it seemed he'd been born married.

The golfing press became aware that stories about Tiger's temper, say, or about his ties to unsavory corporate grifters, would mean the end of access to the only golfer in the world who matters. There is a quick way to tell now which journalists have made this devil's bargain and which ones haven't — the ones insisting that this "accident" is somehow "not a story" are the sopranos in the chorus.

He's the Cool Hand Luke of the links who makes advertisers (and girls with bounded career ambition) curl their toes. But for a Stanford man, it would appear Tiger's not well versed in the ways of keeping sins of the flesh under wraps. Sexting? With a girl so desperate for US Weekly stardom that she went on an MTV reality show that millions of tweens haven't even heard of? Clearly Earl didn't teach Tiger about everything. But then it shouldn't be too much to ask with $1 billion sloshing around in Cayman Island bank accounts and the G-strings of random Vegas strippers, for someone in Tiger's IMG entourage to drop a little knowledge on how not to get caught cheating. Twice. In one week.

Some will shrug and say that he simply thought he was untouchable. He was bulletproof. Please. It's always less power-tripping and more bootylicious-addled stupidity. There's a lesson here that extends from Bill Clinton's Oval Office to Larry Craig's favorite stall to Tiger Woods's wild rumpusing. And that lesson is this: pay for it. Yeah, it might be easier and perhaps in better "moral" taste not to cheat at all. But who are we kidding? And so if you're a famous dude with an image that matters and are dead-set on ignoring the fine standard set by Derek Jeter—who has remained single while shagging anything that moves within the 212 area code (and getting appropriately named Sportsman of the Year for his efforts)—then it's best to make your "transgressions" a business transaction. No late night phone calls. No tabloid interviews. No girls parked outside of your house waiting to run off to Mexico or wherever the hell it was Don Draper was promising. The trailer park drama is more likely to be contained when you're dealing with professionals.

There is also a corollary provided by Jerry Springer and Eliot Spitzer. If you're going to cheat with high priced talent then don't make taxpayers finance the deal or go for the $10,000 hottie when the $5,000 girl will do (besides we all know Amber and Tiffany are one and the same).

But don't feel too bad for Tiger. Sports Illustrated is eager to write the redemption story. And there's no doubt Tiger can quickly gain back the ephemeral adulation from throngs of salon-sniffing corporate yahoos when he wins the Masters in a few months by holding off a cadre of challengers while keeping one eye on the gallery for his wife's impactful swing.

(Editor's note: Ms. Noonan, if you're reading, this is all conjecture.)