Tuesday, November 25, 2008


Prominent writers for DailyKos, the country's top liberal blog, are launching a new site to scrutinize and pressure the Democratic Congress.

This week, as most politicos focus on appointments in the incoming Obama administration, DailyKos bloggers began a "soft launch" for Congress Matters, which promises a "community-based political watch party" for Democrats on Capitol Hill.

"It'll be a place where we'll try to explain Congressional rules and procedure so that the netroots community gets a better handle on it and can become more effective advocates for their priorities," said David Waldman, an attorney and former Congressional aide who blogs on the front page of DailyKos under the name Kagro X.

While netroots activists often call Congress, Waldman explained, "the reality is that by the time a bill gets to the floor, it's almost too late to have any real impact by calling." The new blog will tap DailyKos' audience and brand, he told The Nation, with the aim of "getting people involved earlier in the process, teaching them about committee markups and the amendment process to eventually put them in a position where they can intervene at the critical points in the process -- the way lobbyists have learned to do." 2008-11-24-kosmsnbc.png

Another Hill staffer turned blogger, Joan McCarter, penned an open letter to the Democratic Congressional leadership after the election, and posted it on DailyKos' coveted front page real estate. Even after election fever subsided, the site remains the eighth most popular blog in the country. (It beats techie favorites like the Google blog, better-funded news sites including CNN ticker, and even the traffic powerhouse ICanHasCheezburger, which posts pictures of cats.) McCarter pressed for Iraq withdrawal, economic renewal, health care reform and dismantling the unitary executive. "We've been in election land for so long on the blog that the community needs to regroup and change gears," she told The Nation.

The new blog arrives at at time when the traditional media is questioning the netroots' influence after the Democratic Senate Caucus embraced Joe Lieberman, and as some bloggers worry that Obama's initial appointments look more like a third Clinton term than bottom-up change.

This venture rebuffs Washington's penchant for measuring clout and the (understandable) urge to assess a new president. Instead, the Kossacks are bearing down further on legislative activism. In the end, it might even be a good route to influence, too.


The Federal Reserve announced today two new programs to fight the financial crisis by increasing lending to consumers and small businesses and supporting the market for mortgage-backed securities. The Fed will buy up to $600 billion of mortgage-backed securities from Fannie Mae and Freddie Mac, in order to boost the availability of credit for purchasing houses. This means the Fed is directly subsidizing lower mortgage rates, as opposed to tinkering with them indirectly via interest rates. The Fed and the Treasury will also lend $200 billion to holders of assets backed by car, credit card, student, and small business loans. According to Henry Paulson, “It gives institutions liquidity and it’s clearly direct lending that will help consumers.”


posted from Drudge Report

A leading Russian political analyst has said the economic turmoil in the United States has confirmed his long-held view that the country is heading for collapse, and will divide into separate parts.

Professor Igor Panarin said in an interview with the respected daily IZVESTIA published on Monday: "The dollar is not secured by anything. The country's foreign debt has grown like an avalanche, even though in the early 1980s there was no debt. By 1998, when I first made my prediction, it had exceeded $2 trillion. Now it is more than 11 trillion. This is a pyramid that can only collapse."

The paper said Panarin's dire predictions for the U.S. economy, initially made at an international conference in Australia 10 years ago at a time when the economy appeared strong, have been given more credence by this year's events.

When asked when the U.S. economy would collapse, Panarin said: "It is already collapsing. Due to the financial crisis, three of the largest and oldest five banks on Wall Street have already ceased to exist, and two are barely surviving. Their losses are the biggest in history. Now what we will see is a change in the regulatory system on a global financial scale: America will no longer be the world's financial regulator."

When asked who would replace the U.S. in regulating world markets, he said: "Two countries could assume this role: China, with its vast reserves, and Russia, which could play the role of a regulator in Eurasia."

Asked why he expected the U.S. to break up into separate parts, he said: "A whole range of reasons. Firstly, the financial problems in the U.S. will get worse. Millions of citizens there have lost their savings. Prices and unemployment are on the rise. General Motors and Ford are on the verge of collapse, and this means that whole cities will be left without work. Governors are already insistently demanding money from the federal center. Dissatisfaction is growing, and at the moment it is only being held back by the elections and the hope that Obama can work miracles. But by spring, it will be clear that there are no miracles."

He also cited the "vulnerable political setup", "lack of unified national laws", and "divisions among the elite, which have become clear in these crisis conditions."

He predicted that the U.S. will break up into six parts - the Pacific coast, with its growing Chinese population; the South, with its Hispanics; Texas, where independence movements are on the rise; the Atlantic coast, with its distinct and separate mentality; five of the poorer central states with their large Native American populations; and the northern states, where the influence from Canada is strong.

He even suggested that "we could claim Alaska - it was only granted on lease, after all." Panarin, 60, is a professor at the Diplomatic Academy of the Russian Ministry of Foreign Affairs, and has authored several books on information warfare.


Goodbye Dummy #14089 by The Repository.


"One of the reasons the U.S. is in such deep trouble is that it has stopped being smart — turning its back on excellence, sophistication and long-term planning — in its public policies and corporate behavior. We’ve seen it in Iraq, in New Orleans, in the fiscal policies of the Bush administration, in the scandalous neglect of public education, in the financial sector meltdown, the auto industry and on and on. We’ve lionized dimwits. And now we’re paying the price."

Bob Herbert, New York Times - 11/25/08


By Marjorie Cohn, Jurist

Guantanamo detainee.
Judicial branch rejects Bush administration detention policies. (Photo: Brennan Linsley / AP)

Since the Bush administration began transporting men and boys to Guantanamo Bay in January 2002, it has tried to prevent them from presenting their cases before a neutral federal judge. Indeed, the naval base was turned into a prison camp precisely to keep the detainees away from impartial courts. The government argued that federal courts had no jurisdiction over men detained on Cuban soil. Twice, the Supreme Court rejected that argument, finding that the United States exercises complete jurisdiction and control over the Guantanamo Bay base.


Arthur Laffer with Ronald Reagan
posted from dailybeast...written by Arthur Laffer, former Reagan Economic Adviser

Why the proposed $700 billion stimulus plan could drive the country to economy ruin.

As you read this, our government is committing enormous sums of money above and beyond normal spending, solely to stimulate the economy and prop up failing companies and markets. These additional sums are huge by any reasonable measure, with estimates as high as $3 trillion in an economy with a GDP of about $15 trillion.

Here’s the bottom line: Instead of making things better, increased spending will only drive our economy further into the ground.

And there is still a lot more spending to come. First it was a $170 billion stimulus package in February of 2008, then material add-ons to both the housing and agricultural bills, followed by Federal Reserve asset swaps with Bear Stearns and a bailout of AIG (which, by the way, isn’t over yet) and then came the debt guarantees of Fannie Mae and Freddie Mac.

There is no tooth fairy. Every dollar given to someone comes from someone else.

Shortly after that, the administration anted up $700 billion in a bailout package, and now Obama, Reid, Pelosi and Bernanke want another stimulus package of $300 billion. Just this week the powers that be are debating bailouts for Michigan’s auto industry. With the slowdown in the economy, tax receipts are now projected to fall sharply. The logic here is totally upside down, and each new measure, far from helping the economy, does enormous damage.

It is true, as the proponents of these stimulus packages argue, that recipients of government checks will spend more than they otherwise would have spent. And, that increased spending will have a multiplier effect increasing spending even further. But this is only part of the story.

The government can only transfer resources; it can’t create resources. There is no tooth fairy. Every dollar given to someone comes from someone else. The government can’t bail some people out of trouble without putting other people into trouble, plus a hefty “toll for the troll.”

In the case of last February’s stimulus package, the government literally borrowed an extra $170 billion and at the same time sent out checks to the transfer recipients totaling $170 billion. The result was a $170 billion increase in the amount of bonds held by the public, accompanied by a $170 billion increase in the current value of future taxes to pay interest and principle on the additional debt.

From the standpoint of accounting, the government is $170 billion further in the red, and taxpayers are liable for an additional $170 billion worth of taxes. Therefore, for every dollar of transfer payment there’s at least an equivalent dollar of future tax liabilities. Those people with the increased tax liabilities will spend less, thereby dis-employing people who had been supplying them with goods they’ll no longer buy. And the reduction in spending of those with higher tax liabilities will lead to a multiplied reduction in total spending equal to and fully offsetting the increase in total spending from the recipients of government checks. There is no stimulus from the stimulus programs!

To see this point more intuitively, imagine what the “stimulus effect” would be if they borrowed the $700 billion from the same people to whom they gave the $700 billion and then promised to raise their taxes by enough in the future to pay off their bonds. Where’s the stimulus in that?

This point is hugely important. For the proponents of increased government spending to argue that their policies will increase output, it is absolutely essential that the increased spending by transfer recipients more than offset any decline in spending by others. If the income effects of fiscal policy net to zero, there is no rationale for these spending policies. And, the income effects of fiscal policy do indeed net to zero.

The diffuse and imprecise nature of just who bares the increased tax liabilities makes the point difficult to understand. We all know who benefits from government programs: mortgage holders, undercapitalized banks, auto companies, low-income earners and the like. But who bears the increased tax burden? That’s a far trickier question, the answer to which I don’t have. But in the aggregate I do know that for every beneficiary of government spending there is someone who has to pay for it. As Milton Friedman so wisely noted, “There ain’t no such thing as a free lunch.”

What I don’t really know is just how far this process can go and just what it will take to stop this vicious cycle. Combine the unintended consequences of a flawed model with a crashing economy in ever more desperate need of beneficial policies, and the results are lethal. The old adage “if you don’t like government problems just wait till you see government solutions” has never been truer.

Dr. Laffer is chairman of Laffer Associates and co-author of "The End of Prosperity: How Higher Taxes Will Doom the Economy—If We Let it Happen," recently published by Threshold. He’s best known in economics for the Laffer curve, showing the relation between tax rates and revenue take.


The moment many have been anticipating has arrived: Bush has begun the traditional end-of-term presidential pardons. In today’s first round, he granted 14 pardons and two commutations, but none of the possible big names—Plame outer Scooter Libby, junk bond king Michael Milliken, or Republican congressmen in prison for corruption—were among them. Instead, small-time criminals got their criminal records wiped clean of convictions for drug dealing, bank embezzling, and improper food stamp use. “American Taliban” John Walker Lindh and imprisoned media baron Conrad Black also have petitioned the Justice Department’s Office of the U.S. Pardon Attorney, but they might not be as lucky as those pardoned today: “Bush has not been known to be generous with his power to wave away a criminal record,” The Hill reports “The president has now pardoned 171 individuals and commuted sentences for eight people, a relatively small number compared to past administrations.”