Wednesday, December 31, 2008

Add Up the Damage

Bob Herbert
The New York Times
December 31, 2008

Does anyone know where George W. Bush is?

You don’t hear much from him anymore. The last image most of us remember is of the president ducking a pair of size 10s that were hurled at him in Baghdad.

We’re still at war in Iraq and Afghanistan. Israel is thrashing the Palestinians in Gaza. And the U.S. economy is about as vibrant as the 0-16 Detroit Lions.

But hardly a peep have we heard from George, the 43rd.

When Mr. Bush officially takes his leave in three weeks (in reality, he checked out long ago), most Americans will be content to sigh good riddance. I disagree. I don’t think he should be allowed to slip quietly out of town. There should be a great hue and cry — a loud, collective angry howl, demonstrations with signs and bullhorns and fiery speeches — over the damage he’s done to this country.

This is the man who gave us the war in Iraq and Guantánamo and torture and rendition; who turned the Clinton economy and the budget surplus into fool’s gold; who dithered while New Orleans drowned; who trampled our civil liberties at home and ruined our reputation abroad; who let Dick Cheney run hog wild and thought Brownie was doing a heckuva job.

The Bush administration specialized in deceit. How else could you get the public (and a feckless Congress) to go along with an invasion of Iraq as an absolutely essential response to the Sept. 11 attacks, when Iraq had had nothing to do with the Sept. 11 attacks?

Exploiting the public’s understandable fears, Mr. Bush made it sound as if Iraq was about to nuke us: “We cannot wait,” he said, “for the final proof — the smoking gun that could come in the form of a mushroom cloud.”

He then set the blaze that has continued to rage for nearly six years, consuming more than 4,000 American lives and hundreds of thousands of Iraqis. (A car bomb over the weekend killed two dozen more Iraqis, many of them religious pilgrims.) The financial cost to the U.S. will eventually reach $3 trillion or more, according to the Nobel laureate economist Joseph Stiglitz.

A year into the war Mr. Bush was cracking jokes about it at the annual dinner of the Radio and Television Correspondents Association. He displayed a series of photos that showed him searching the Oval Office, peering behind curtains and looking under the furniture. A mock caption had Mr. Bush saying: “Those weapons of mass destruction have got to be somewhere.”

And then there’s the Bush economy, another disaster, a trapdoor through which middle-class Americans can plunge toward the bracing experiences normally reserved for the poor and the destitute.

Mr. Bush traveled the country in the early days of his presidency, promoting his tax cut plans as hugely beneficial to small-business people and families of modest means. This was more deceit. The tax cuts would go overwhelmingly to the very rich.

The president would give the wealthy and the powerful virtually everything they wanted. He would throw sand into the regulatory apparatus and help foster the most extreme income disparities since the years leading up to the Great Depression. Once again he was lighting a fire. This time the flames would engulf the economy and, as with Iraq, bring catastrophe.

If the U.S. were a product line, it would be seen now as deeply damaged goods, subject to recall.

There seemed to be no end to Mr. Bush’s talent for destruction. He tried to hand the piggy bank known as Social Security over to the marauders of the financial sector, but saner heads prevailed.

In New Orleans, the president failed to intervene swiftly and decisively to aid the tens of thousands of poor people who were very publicly suffering and, in many cases, dying. He then compounded this colossal failure of leadership by traveling to New Orleans and promising, in a dramatic, floodlit appearance, to spare no effort in rebuilding the flood-torn region and the wrecked lives of the victims.

He went further, vowing to confront the issue of poverty in America “with bold action.”

It was all nonsense, of course. He did nothing of the kind.

The catalog of his transgressions against the nation’s interests — sins of commission and omission — would keep Mr. Bush in a confessional for the rest of his life. Don’t hold your breath. He’s hardly the contrite sort.

He told ABC’s Charlie Gibson: “I don’t spend a lot of time really worrying about short-term history. I guess I don’t worry about long-term history, either, since I’m not going to be around to read it.”

The president chuckled, thinking — as he did when he made his jokes about the missing weapons of mass destruction — that there was something funny going on.

Copyright 2008 The New Times Company

Tuesday, December 30, 2008

Bristol Palin has a boy

Joan Walsh
December 30, 2008

I'm the lucky on-call editor today and this news is just in: Congratulations to Bristol Palin for having a healthy baby boy, Tripp Easton Mitchell Johnston.

Bristol gave the baby the surname of his father, 18-year-old Levi Johnston, although the pair is not yet married. Tripp is a somewhat more conventional and less inspired moniker than Trig, Track, Willow, Bristol and Piper, the now infamous names of grandma Sarah Palin's five kids. It's hard not to notice how American political dynasties get a wee bit less creative and robust every generation.

There is no word about whether Bristol will wed Levi, as planned last summer, after her mom, Alaska's governor, got the GOP vice presidential nomination. (It's been so long, it's hard to type that and really believe it really happened.) Both families have had their issues lately; Palin went home to defeat in November, and this month Johnston's mother was arrested for the illegal sale of the prescription drug Oxycontin. Nasty classist folks like to call it "hillbilly heroin;" I prefer to think of it as Rush Limbaugh's drug of choice. Of course, drug problems and unmarried pregnancies hit Democrats and Republicans, but one party tends to scold more.

The Oxycontin problem aside, I've been hoping since August, when the news broke, Bristol would find a better future than marrying her self-described "redneck" boyfriend. It's even possible she – and/or Levi – voted for Barack Obama, because they knew the chance of a politically mandatory wedding would plummet when John McCain lost.

In all seriousness, Broadsheet sends best wishes to Bristol and Tripp. May all mothers and babies born in the Obama era get the love and support they need, no matter the circumstances. And may all teenagers everywhere get honest and accurate information about family planning in the new year.

Copyright ©2008 Salon Media Group, Inc.

Sunday, December 28, 2008

You’re Likable Enough, Gay People

Frank Rich
Op-Ed Columnist
The New York Times
December 28, 2008

IN his first press conference after his re-election in 2004, President Bush memorably declared, “I earned capital in the campaign, political capital, and now I intend to spend it.” We all know how that turned out.

Barack Obama has little in common with George W. Bush, thank God, hisobsessive workouts and message control notwithstanding. At a time when very few Americans feel very good about very much, Obama is generating huge hopes even before he takes office. So much so that his name and face, affixed to any product, may be the last commodity left in the marketplace that can still move Americans to shop.

I share these high hopes. But for the first time a faint tinge of Bush crept into my Obama reveries this month.

As we saw during primary season, our president-elect is not free of his own brand of hubris and arrogance, and sometimes it comes before a fall: “You’re likable enough, Hillary” was the prelude to his defeat in New Hampshire. He has hit this same note again by assigning the invocation at his inauguration to the Rev. Rick Warren, the Orange County, Calif., megachurch preacher who has likened committed gay relationships to incest, polygamy and “an older guy marrying a child.” Bestowing this honor on Warren was a conscious — and glib — decision by Obama to spend political capital. It was made with the certitude that a leader with a mandate can do no wrong.

In this case, the capital spent is small change. Most Americans who have an opinion about Warren like him and his best-selling self-help tome, “The Purpose Driven Life.” His good deeds are plentiful on issues like human suffering in Africa, poverty and climate change. He is opposed to same-sex marriage, but so is almost every top-tier national politician, including Obama. Unlike such family-values ayatollahs as James Dobson and Tony Perkins, Warren is not obsessed with homosexuality and abortion. He was vociferously attacked by the Phyllis Schlafly gang when he invited Obama to speak about AIDS at his Saddleback Church two years ago.

There’s no reason why Obama shouldn’t return the favor by inviting him to Washington. But there’s a difference between including Warren among the cacophony of voices weighing in on policy and anointing him as the inaugural’s de facto pope. You can’t blame V. Gene Robinson of New Hampshire, the first openly gay Episcopal bishop and an early Obama booster, for feeling as if he’d been slapped in the face. “I’m all for Rick Warren being at the table,” he told The Times, but “we’re talking about putting someone up front and center at what will be the most-watched inauguration in history, and asking his blessing on the nation. And the God that he’s praying to is not the God that I know.”

Warren, whose ego is no less than Obama’s, likes to advertise his “commitment to model civility in America.” But as Rachel Maddow of MSNBC reminded her audience, “comparing gay relationships to child abuse” is a “strange model of civility.” Less strange but equally hard to take is Warren’s defensive insistence that some of his best friends are the gays: His boasts of having “eaten dinner in gay homes” and loving Melissa Etheridge records will not protect any gay families’ civil rights.

Equally lame is the argument mounted by an Obama spokeswoman, Linda Douglass, who talks of how Warren has fought for “people who have H.I.V./AIDS.” Shouldn’t that be the default position of any religious leader? Fighting AIDS is not a get-out-of-homophobia-free card. That Bush finally joined Bono in doing the right thing about AIDS in Africa does not mitigate the gay-baiting of his 2004 campaign, let alone his silence and utter inaction when the epidemic was killing Texans by the thousands, many of them gay men, during his term as governor.

Unlike Bush, Obama has been the vocal advocate of gay civil rights he claims to be. It is over the top to assert, as a gay writer at Time did, that the president-elect is “a very tolerant, very rational-sounding sort of bigot.” Much more to the point is the astute criticism leveled by the gay Democratic congressman Barney Frank, who, in dissenting from the Warren choice, said of Obama, “I think he overestimates his ability to get people to put aside fundamental differences.” That’s a polite way of describing the Obama cockiness. It will take more than the force of the new president’s personality and eloquence to turn our nation into the United States of America he and we all want it to be.

Obama may not only overestimate his ability to bridge some of our fundamental differences but also underestimate how persistent some of those differences are. The exhilaration of his decisive election victory and the deserved applause that has greeted his mostly glitch-free transition can’t entirely mask the tensions underneath. Before there is profound social change, there is always high anxiety.

The success of Proposition 8 in California was a serious shock to gay Americans and to all the rest of us who believe that all marriages should be equal under the law. The roles played by African-Americans (who voted 70 percent in favor of Proposition 8) and by white Mormons (who were accused of bankrolling the anti-same-sex-marriage campaign) only added to the morning-after recriminations. And that was in blue California. In Arkansas, voters went so far as to approve a measure forbidding gay couples to adopt.

There is comparable anger and fear on the right. David Brody, a political correspondent with the Christian Broadcasting Network, was flooded with e-mails from religious conservatives chastising Warren for accepting the invitation to the inaugural. They vilified Obama as “pro-death” and worse because of his support for abortion rights.

Stoking this rage, no doubt, is the dawning realization that the old religious right is crumbling — in part because Warren’s new generation of leaders departs from the Falwell-Robertson brand of zealots who have had a stranglehold on the G.O.P. It’s a sign of the old establishment’s panic that the Rev. Richard Cizik, known for his leadership in addressing global warming, was pushed out of his executive post at the National Association of Evangelicals this month. Cizik’s sin was to tell Terry Gross of NPR that he was starting to shift in favor of civil unions for gay couples.

Cizik’s ouster won’t halt the new wave he represents. As he also told Gross, young evangelicals care less and less about the old wedge issues and aren’t as likely to base their votes on them. On gay rights in particular, polls show that young evangelicals are moving in Cizik’s (and the country’s) direction and away from what John McCain once rightly called “the agents of intolerance.” It’s not a coincidence that Dobson’s Focus on the Family, which spent more than $500,000 promoting Proposition 8, has now had to lay off 20 percent of its work force in Colorado Springs.

But we’re not there yet. Warren’s defamation of gay people illustrates why, as does our president-elect’s rationalization of it. When Obama defends Warren’s words by calling them an example of the “wide range of viewpoints” in a “diverse and noisy and opinionated” America, he is being too cute by half. He knows full well that a “viewpoint” defaming any minority group by linking it to sexual crimes like pedophilia is unacceptable.

It is even more toxic in a year when that group has been marginalized and stripped of its rights by ballot initiatives fomenting precisely such fears. “You’ve got to give them hope” was the refrain of the pioneering 1970s gay politician Harvey Milk, so stunningly brought back to life by Sean Penn on screen this winter. Milk reminds us that hope has to mean action, not just words.

By the historical standards of presidential hubris, Obama’s disingenuous defense of his tone-deaf invitation to Warren is nonetheless a relatively tiny infraction. It’s no Bay of Pigs. But it does add an asterisk to the joyous inaugural of our first black president. It’s bizarre that Obama, of all people, would allow himself to be on the wrong side of this history.

Since he’s not about to rescind the invitation, what happens next? For perspective, I asked Timothy McCarthy, a historian who teaches at Harvard’s Kennedy School of Government and an unabashed Obama enthusiast who served on his campaign’s National Lesbian, Gay, Bisexual and Transgender Leadership Council. He responded via e-mail on Christmas Eve.

After noting that Warren’s role at the inauguration is, in the end, symbolic, McCarthy concluded that “it’s now time to move from symbol to substance.” This means Warren should “recant his previous statements about gays and lesbians, and start acting like a Christian.”

McCarthy added that it’s also time “for President-elect Obama to start acting on the promises he made to the LGBT community during his campaign so that he doesn’t go down in history as another Bill Clinton, a sweet-talking swindler who would throw us under the bus for the sake of political expediency.” And “for LGBT folks to choose their battles wisely, to judge Obama on the content of his policy-making, not on the character of his ministers.”

Amen. Here’s to humility and equanimity everywhere in America, starting at the top, as we negotiate the fierce rapids of change awaiting us in the New Year.

Copyright 2008 The New York Times Company

Thursday, December 25, 2008

It Is a Wonderful Life

BocaGuys Note: Wishing anyone a Merry Christmas and hope Santa was good to you

Jamie Lee Curtis
The Huffington Post
December 24, 2008

In It's a Wonderful Life, the classic holiday film, the hero, George Bailey, saved the small, family Savings and Loan that his father started from a run by nervous investors, convincing them to take out only what they needed, that if they stuck together, they could avert the failing of the business. He became a local hero and the fat cat, Potter, who wanted the institution to fail was thwarted. When, by accident (actually theft) all of the deposits are lost and he realizes that the Savings and Loan would now have to go under and Potter would win, George wished he had never been born. When an angel comes to show him what the world would have been like without him and he is shown what his one human life accomplished, the people he helped, that he was a wonderful son, brother, husband, father, friend and community member, he and we all are all reminded about our own unique power and generosity.

Many Americans are now feeling that pitiful and incomprehensible demoralization of financial loss and despair and many are facing financial ruin, only now the real Potter is a scumbag named Madoff whose greed and avarice is beyond words. Many men and women are feeling the shame and fear and anguish. I'm sure many have wondered if the world would be better off without them, that the judgments made about subprime loans and the lies that they were fed about them, were their fault and failures -- theirs alone. They are not alone.

I don't know if we should bail out the broken auto industry. Now that gas is back down are we all going to go back to business as usual? Go out and buy a big guzzler just to keep the broken thing creaking along. Is that real help? I don't know. Is loading up our plastic really going to help? Is debt the answer? I don't think so.

What I do know is that we are fat. Obese. See WALL-E. That is the future. We have fat lifestyles, fat habits, fat minds and arteries. Last week, Obama said that it was going to get worse but that we would emerge, leaner and meaner..I don't think lean is just rhymes. Lean is healthy. Most of us eat too much, super sized lives and meals. My four words to a better life, brand new, self-help/beauty/how-to book is being published right here on the Huffington Post, downloadable for free -- right here, right now.

Eat Less, Move More.

What this crisis is going to do is bring us into financial alignment. Families may have to livetogether again! What a concept. Grandparents will live with their grown children and help raise their grandchildren -- even at 1600 Pennsylvania Ave. Neighbors are going to meal share and carpool and child care for each other and maybe even rent out parts of homes to other families. Less meat, more beans. Might be better for you anyway. Less indoor gym workouts and more walking, more park time, more family outdoor time.

Obama promised change. Change comes from truth, Jung said, "only that which changes, remains true." but as Jack Nicholson said in A Few Good Men, "you can't handle the truth!" Can you? Can you handle the change? You can if you understand that you are not alone, but that we can handle anything together.

In John Steinbeck's masterwork, The Grapes of Wrath, required reading for all this holiday season, during another time of great difficulty, like now, of the Powerful vs. the Powerless, where Big Business and the land companies and natural disasters created the perfect dust storm of the 1930's, people were thrown together. In the story, the Joad's, a multi-generational farming family from Oklahoma are forced, like so many others, off their land, mortgaged and foreclosed on and they head West to the promised land of California. On their first night camping by the side of the highway they meet another family.

One man, one family driven from the land; this rusty car creaking along the highway to the west. I lost my land, a single tractor took my land. I am alone and I am bewildered. And in the night one family camps in a ditch and another family pull in and the tents come out. The two men squat on their hams and the women and children listen. Here is the node, you who hate change and fear revolution. Keep these two squatting men apart; make them hate, fear, suspect each other. Here is the anlage of the thing you fear. This is the zygote. Fore here "I lost my land" is changed; a cell is split and from its splitting grows the thing you hate -- " We lost our land." The danger is here, for two men are not as lonely and perplexed as one. And from this first " we" there grows a still more dangerous thing: " I have a little food " plus " I have none." If from this problem the sum is "We have a little food," the thing is on its way, the movement has direction. Only a little multiplication now, and this land, this tractor are ours. The two men squatting in a ditch, the little fire, the side-meat stewing in a single pot, the silent, stone-eyed women; behind the children listening with their souls to words they do not understand. The night draws down. The baby has a cold. Here, take this blanket. It's wool. It was my mother's blanket-take it for the baby. This is the thing to bomb. This is the beginning-from "I" to "we."

If you who own the things people must have could understand this, you might preserve yourself. If you could separate causes from results, if you could know that Paine, Marx, Jefferson, Lenin, were results, not causes, you might survive. But that you cannot know. For the quality of owning freezes you forever into "I," and cuts you off forever from the "we."

That is it, my fellow Americans.

At the end of It's a Wonderful Life, George Bailey is shown, kindness, love, support, familial bonds strengthen and deep, abiding friendships flourish.

As we head out of the darkness of the Bush and into the promise of a new day that Barack Obama has offered us, remember, "we" exist. "We" can help each other, " we " can lead our governments, businesses and institutions to change. " We" can do it. " We" can reach out, spare the dime, dollar, meal, roof.

"We" can scare the shit out of the land companies. "We" can and will and have and will again!

Peace and love to you and yours this holiday season.

Copyright 2008

Wednesday, December 24, 2008

A cup of Sarah: Do as I say..not as I do

Andrew Halcro
Andrew Halcro blog
December 10, 2008

You'd think with all the lather Governor Sarah Palin worked up, telling Alaskans that her administration would be open and transparent as opposed to that bastardy secretive Murkowski administration, she'd actually keep her promise. If you thought that, you'd be dead wrong.

Now comes the opportunity once again for Palin to put meaning behind her words after twisting legal opinions like a New York pretzel, but instead she does what she's good at...let someone else speak for her.

The latest controversy appears to be the fact that Governor Palin, after preaching about how she wanted an open and fair process with the investigation into Troopergate is now refusing to release  her deposition that was accepted without question by Investigator Tim Petumenos and the grounds for his questionable findings.

I guess it wasn't enough that her administration has withheld hundreds of emails the public should be able to read. It wasn't enough that an internal opinion by her Attorney General said her husband was a trusted confidant, thus able to send and receive confidential emails about trying to get Palin's brother in law fired and other sensitive state matters without having them available for public disclosure. 

No that wasn't enough.  A few weeks later, yet another contradictory opinion making excuses for the administration's contempt for transparency.

The latest opinion was from Investigator Petumenos who ruled that Todd Palin wasn't a special case, he was just an average citizen and thereby the governor had no authority to try and stop him from using her office and her staff to try and get Palin's ex brother in law fired. 

So what is it; is Todd Palin a confidential consultant to the governor that has special privileges and access or is her just an average Joe who has no more privilege than you or I.. but yet gets to use the governor's office and instruct her staff to take actions on his behalf?

But the biggest hypocrisy is Palin's refusal to release her deposition regarding the personnel board's investigation.

In December of 2004, Palin along with former Democrat State Rep. Eric Croft filed a complaint with the personnel board against former attorney general Greg Renkes for possible ethics violations for insider trading.

On December 11, 2004 Palin stated the need for quick resolution. "It would be in the public's best interest to have this addressed sooner rather than later, before the legislative session gets started. Lawmakers want to be able to concentrate on the people's business," Palin said.

Four months later, after Renkes resigned, Palin dropped her complaint but remained critical of the personnel board process. 

In a March 9, 2005 story in the Anchorage Daily News, Paula Dobbyns wrote, (Palin) "said it's more important that the investigative file be released, something that could not happen as long as the secrecy-cloaked personnel board was involved."

"It's important to get these documents made public so Alaskans can make their own judgments," Palin said. She went on to say that she hoped that the e-mails will surface, and that the release of Renkes' and former Governor Frank Murkowski's depositions, with the rest of the investigative file, will resolve any lingering questions.

A few days later, Palin was back in the press criticizing the process of the investigation and accusing the governor's office of pressuring the personnel board to say explicitly that former Governor Murkowski had not violated ethics act procedures.

But yet now Palin is hiding under the same cloak that she criticized former Attorney General Gregg Renkes and Governor Murkowski for hiding under.

On Sunday December 7, 2008 the Anchorage Daily News wrote an editorial critical of Palin's refusal to do what she has demanded other do. Responding to a Daily News request for it, spokeswoman Sharon Leighow said in an e-mai:

"The matter was investigated and voted on by the only entity in state law empowered to rule on ethics complaints against members of the Executive Branch. This matter is closed. We see no public purpose in artificially prolonging this controversy."

Artificially prolonging this controversy?

Is that what Palin was doing four years ago when she demanded that the Renkes and Murkowski depositions be released after it was over.

Do as I say, not as I do.

copyright 2007 Andrew Halcro, All Rights Reserved.

Tuesday, December 23, 2008

More stuffing of cash into the pockets of banks by the Bush Administration

Brilliant at Breakfast
December 23, 2008

There used to be a game show called "Supermarket Sweep", in which contestants had a certain amount of time to stuff as many groceries as possible into a shopping cart and whoever had the most value in their cart at the end was the winner. The Bush Administration reminds me right now of the hosts of that game show, with the banks and the financial industry being the people tearing around with shopping carts -- all trying to stuff as much as possible of the United States Treasury into their pockets before getting outta Dodge:
The financial world was fixated on Capitol Hill as Congress battled over the Bush administration's request for a $700 billion bailout of the banking industry. In the midst of this late-September drama, the Treasury Department issued a five-sentence notice that attracted almost no public attention.

But corporate tax lawyers quickly realized the enormous implications of the document: Administration officials had just given American banks a windfall of as much as $140 billion.

The sweeping change to two decades of tax policy escaped the notice of lawmakers for several days, as they remained consumed with the controversial bailout bill. When they found out, some legislators were furious. Some congressional staff members have privately concluded that the notice was illegal. But they have worried that saying so publicly could unravel several recent bank mergers made possible by the change and send the economy into an even deeper tailspin. 


The change to Section 382 of the tax code -- a provision that limited a kind of tax shelter arising in corporate mergers -- came after a two-decade effort by conservative economists and Republican administration officials to eliminate or overhaul the law, which is so little-known that even influential tax experts sometimes draw a blank at its mention. Until the financial meltdown, its opponents thought it would be nearly impossible to revamp the section because this would look like a corporate giveaway, according to lobbyists.

Andrew C. DeSouza, a Treasury spokesman, said the administration had the legal authority to issue the notice as part of its power to interpret the tax code and provide legal guidance to companies. He described the Sept. 30 notice, which allows some banks to keep more money by lowering their taxes, as a way to help financial institutions during a time of economic crisis. "This is part of our overall effort to provide relief," he said.

The Treasury itself did not estimate how much the tax change would cost, DeSouza said. 


Section 382 of the tax code was created by Congress in 1986 to end what it considered an abuse of the tax system: companies sheltering their profits from taxation by acquiring shell companies whose only real value was the losses on their books. The firms would then use the acquired company's losses to offset their gains and avoid paying taxes.

Lawmakers decried the tax shelters as a scam and created a formula to strictly limit the use of those purchased losses for tax purposes.

But from the beginning, some conservative economists and Republican administration officials criticized the new law as unwieldy and unnecessary meddling by the government in the business world. 


The opposition to Section 382 is part of a broader ideological battle over how the tax code deals with a company's losses. Some conservative economists argue that not only should a firm be able to use losses to offset gains, 
but that in a year when a company only loses money, it should be entitled to a cash refund from the government.

Remember the outrage over the notion that people whose incomes are so low that after exemptions and the standard deduction, they don't pay income tax, receiving a stimulus check? Where is the similar outrage over the idea that when a company suffers losses, whether due to business conditions or simple mismanagement, that the government should refund their taxes?

Once again we are seeing what I've called the "tipping point of evil" being played out by the Bush Administration on its way out the door; the rule that if an administration is heinous enough to reach that tipping point, the public will be simply beyond outrage and will have little stomach for accountability. Remember, however, after we are ALL scrambling for the scraps tossed us by those who caused this mess, just who it was that brought us there. And remind your conservative friends, too. Because I suspect they will be thinking Sarah Palin is the answer to all their problems.

Copyright 2008 Brilliant at Breakfast

Sunday, December 21, 2008

Who Wants to Kick a Millionaire?

Frank Rich
Op-Ed Columnist
The New York Times
December 20, 2008

DURING the Great Depression, American moviegoers seeking escape could ogle platoons of glamorous chorus girls in “Gold Diggers of 1933.” Our feel-good movie of the year is “Slumdog Millionaire,” a Dickensian tale in which we root for an impoverished orphan from Mumbai’s slums to hit the jackpot on the Indian edition of “Who Wants to Be a Millionaire.”

It’s a virtuoso feast of filmmaking by Danny Boyle, but it’s also the perfect fairy tale for our hard times. The hero labors as a serf in the toilet of globalization: one of those mammoth call centers Westerners reach when ringing an 800 number to, say, check on credit card debt. When he gets his unlikely crack at instant wealth, the whole system is stacked against him, including the corrupt back office of a slick game show too good to be true.

We cheer the young man on screen even if we’ve lost the hope to root for ourselves. The vicarious victory of a third world protagonist must be this year’s stocking stuffer. The trouble with “Slumdog Millionaire” is that it, like all classic movie fables, comes to an end — as it happens, with an elaborately choreographed Bollywood musical number redolent of “Gold Diggers of 1933.” Then we are delivered back to the inescapable and chilling reality outside the theater’s doors.

Just when we thought that reality couldn’t hit a new bottom it did with Bernie Madoff, a smiling shark as sleazy as the TV host in “Slumdog.” A pillar of both the Wall Street and Jewish communities — a former Nasdaq chairman, a trustee at Yeshiva University — he even victimized Elie Wiesel’s Foundation for Humanity with his Ponzi scheme. A Jewish financier rips off millions of dollars devoted to memorializing the Holocaust — who could make this stuff up? Dickens, Balzac, Trollope and, for that matter, even Mel Brooks might be appalled.

Madoff, of course, made up everything. When he turned himself in, he reportedly declared that his business was “all just one big lie.” (The man didn’t call his 55-foot yacht “Bull” for nothing.) As Brian Williams of NBC Newspointed out, the $50 billion thought to have vanished is roughly three times as much as the proposed Detroit bailout. And no one knows how it happened, least of all the federal regulators charged with policing him and protecting the public. If Madoff hadn’t confessed — for reasons that remain unclear — he might still be rounding up new victims.

There is a moral to be drawn here, and it’s not simply that human nature is unchanging and that there always will be crooks, including those in high places. Nor is it merely that Wall Street regulation has been a joke. Of what we’ve learned about Madoff so far, the most useful lesson can be gleaned from how his smart, well-heeled clients routinely characterized the strategy that generated their remarkably steady profits. As The Wall Street Journal noted, they “often referred to it as a ‘black box.’ ”

In the investment world “black box” is tossed around to refer to a supposedly ingenious financial model that is confidential or incomprehensible or both. Most of us know the “black box” instead as that strongbox full of data that is retrieved (sometimes) after a plane crash to tell the authorities what went wrong. The only problem is that its findings arrive too late to save the crash’s victims. The hope is that the information will instead help prevent the next disaster.

The question in the aftermath of the Madoff calamity is this: Why do we keep ignoring what we learn from the black boxes being retrieved from crash after crash in our economic meltdown? The lesson could not be more elemental. If there’s a mysterious financial model producing miraculous returns, odds are it’s a sham — whether it’s an outright fraud, as it apparently is in Madoff’s case, or nominally legal, as is the case with the Wall Street giants that have fallen this year.

Wall Street’s black boxes contained derivatives created out of whole cloth, deriving their value from often worthless subprime mortgages. The enormity of the gamble went undetected not only by investors but by the big brains at the top of the firms, many of whom either escaped (Merrill Lynch’s E. Stanley O’Neal) or remain in place (Citigroup’sRobert Rubin) after receiving obscene compensation for their illusory short-term profits and long-term ignorance.

There has been no punishment for many of those who failed to heed this repeated lesson. Quite the contrary. The business magazine Portfolio, writing in mid-September about one of the world’s biggest insurance companies, observed that “now that A.I.G is battling to survive, it is its black box that may save it yet.” That box — stuffed with “accounting or investments so complex and arcane that they remain unknown to most investors” — was so huge that Washington might deem it “too big to fail.”

Sure enough — and unlike its immediate predecessor in collapse, Lehman Brothers — A.I.G. was soon bailed out to the tune of $123 billion. Most of that also disappeared by the end of October. But not before A.I.G. executives were caught spending $442,000 on a weeklong retreat to a California beach resort.

There are more black boxes still to be pried open, whether at private outfits like Madoff’s or at publicly traded companies like General Electric, parent of the opaque GE Capital Corporation, the financial services unit that has been the single biggest contributor to the G.E. bottom line in recent years. But have we yet learned anything? Incredibly enough, as we careen into 2009, the very government operation tasked with repairing the damage caused by Wall Street’s black boxes is itself a black box of secrecy and impenetrability.

Last week ABC News asked 16 of the banks that have received handouts from the Treasury Department’s $700 billion Troubled Asset Relief Program the same two direct questions: How have you used that money, and how much have you spent on bonuses this year? Most refused to answer.

Congress can’t get the answers either. Its oversight panel declared in a first report this month that the Treasury is doling out billions “without seeking to monitor the use of funds provided to specific financial institutions.” The Treasury prefers instead to look at “general metrics” indicating the program’s overall effect on the economy. Well, we know what the “general metrics” tell us already: the effect so far is nil. Perhaps if we were let in on the specifics, we’d start to understand why.

In its own independent attempt to penetrate the bailout, the Government Accountability Office learned that “the standard agreement between Treasury and the participating institutions does not require that these institutions track or report how they plan to use, or do use, their capital investments.” Executives at all but two of the bailed-out banks told the G.A.O. that the “money is fungible,” so they “did not intend to track or report” specifically what happens to the taxpayers’ cash.

Nor is there any serious accounting for executive pay at these seminationalized companies. As Amit Paley of The Washington Post reported, a last-minute, one-sentence loophole added by the Bush administration to the original bailout bill gutted the already minimal restrictions on executive compensation. And so when Goldman Sachs, Henry Paulson’s Wall Street alma mater, says that it is not using public money to pay executives, we must take it on faith.

In the wake of the Madoff debacle, there are loud calls to reform the Securities and Exchange Commission, including from the president-elect. Under both Clinton and Bush, that supposed watchdog agency ignored repeated and graphic warnings of Madoff’s Ponzi scheme as studiously as Bush ignored Al Qaeda’s threats during the summer of 2001.

But fixing that one agency is no panacea. All the talk about restoring “confidence” and “faith” in capitalism will be worthless if we still can’t see what’s going on in the counting rooms. In his role as chairman of the Federal Reserve Bank of New York, Timothy Geithner, Barack Obama’s nominee for Treasury secretary, has been at the center of the action in the bailout’s black box, including the still-murky and conflicting actions (and nonactions) taken with Lehman and A.I.G. His confirmation hearings demand questionsevery bit as tough as those that were lobbed at the executives from Detroit’s Big Three.

On Friday, Geithner’s partner in bailout management, Paulson, asked Congress to give the Treasury the second half of the $700 billion bailout stash. But without transparency and accountability in Washington’s black box, as well as Wall Street’s, there will continue to be no trust in the system, no matter how many cops the S.E.C. puts on the beat. Even the family-owned real-estate company of Eliot Spitzer, the former “Sheriff of Wall Street,” hadentrusted money with Madoff.

We’ll keep believing, not without reason, that the whole game is as corrupt as the game show in “Slumdog Millionaire” — only without the Hollywood/Bollywood ending. We’ll keep wondering how so many at the top keep avoiding responsibility and reaping taxpayers’ billions while relief for those at the bottom remains as elusive as straight answers from those Mumbai call centers fielding American debtors.

This wholesale loss of confidence is a catastrophe that not even the new president’s most costly New Deal can set right.

Copyright 2008 The New York Times Company