NDN Blog

Leader: A Man, A Plan, A Public-Private Partnership: Geithner!

- Treasury Secretary Tim Geithner unveiled his plan to rescue the financial sector today.  The plan, which was leaked over the weekend, will encourage private investors to buy bad assets by offering them low-interest loans. Markets have reacted positively around the world.  In part, surely, in relief that there is finally a plan that seems at least half-baked.  

- Some investors have been spooked by the congressional plan to yank bonus money back from A.I.G., fearing they could face similar outrage if they get involved in the current program. Some are demanding that the government offer guarantees against federal involvement in compensation, if they are to take part in the plan.

- Tim Geithner has an op-ed in today's WSJ, marketing his plan.  Paul Krugman writes in today's NY Times, with a somewhat different message. 

Politics

- President Obama went on 60 Minutes yesterday, and laid hard into Dick Cheney. He hit Cheney particularly for the former VP's public criticism of the foreign policy taken by the Obama administration.  

- Sen. Kent Conrad, chair of the Budget Committee, is getting ready to wield his knife on President Obama's budget blueprint. 

Economy

- The Obama administration is planning regulatory changes that would prevent another recession like this one, and will begin revealing some of their ideas this week. 

International

- The LA Times reports that Mexican drug cartels have played a major role in facilitating illegal immigration.  The NY Times, meanwhile, reports on how the Mexican drug war has begun to spill over into the United States, with recent violence in Tucson suspected to be directly connected to violence over the border. 

New From NDN

- Dan wrote Saturday about the weekly Presidential address.  Check it out.

- On Friday, Jake blogged about Jon Wellinghoff, who has appeared at NDN events in the past, and his promotion to head FERC.  Congratulations, Mr. Wellinghoff!

One More Thing

- A song about an economist? Why not?  Especially if you're singing about Paul Krugman: 

Leader: High Dudgeon

- The House voted yesterday to approve a 90 percent tax on bonuses paid to people making more than $250,000 by firms that received at least $5 billion in bailout cash. Because the bill is retroactive to December 31st, many of the tens of thousands of affected employees would have to pay back money that they may have already spent. The Senate will take up a similar bill net week-- one that will likely be broader but less punitive.

- Many bank executives continue to warn that they are being forced to choose between accepting the increasingly tight restrictions associated with government bailout money and returning the money altogether. In other slightly infuriating news, the credit rating agencies that were at the very center of our financial collapse are in a position to make a big bundle of money in the latest plan to soothe credit markets.

- In a Politico op-ed Senator Bernie Sanders calls on A.I.G. to give back the money spent on bonuses-- all of it. In his weekly column, David Brooks wonders at our "perverse cosmic myopia" as we obsess over details while our economy is mauled by a metaphorical tiger.

Politics

- After years of goading from sustainable food policy wonks and local food advocates alike, Michelle Obama will break ground today on a vegetable garden on the south lawn of the White House. The 55 varieties of vegetables will feed the Obamas, but, more importantly, the garden will teach Americans about how easy and inexpensive it is to grow healthy, sustainable food in your backyard.

Economy

- The Congressional Budget Office will release its markup of the Obama Budget Blueprint today. It's likely to be critical of the increases of debt and deficit it would cause, and may suggest that the White House lowballed those numbers.

International

- President Obama spoke directly to the Iranian people yesterday in a video the White House released, complete with Persian subtitles. In the video, he states a commitment to diplomacy, and wishes them a happy new year (today is the first day of the Iranian year).

- Reports are emerging from within the Israeli military of wanton killing of civilians during the incursion in Gaza. Given the blowback from that war, and unease around the world with their new far-right foreign minister, these latest revelations will only make a bad diplomatic situation worse for Israel.

New From NDN

- We hosted a terrific event yesterday with NDN fellows Morley Winograd and Mike Hais, celebrating the release of the paperback edition of their critically acclaimed book, Millenial Makeover. Winograd and Hais laid out a fresh argument about the civic nature of the Millennial Generation, and how this shift will propel a Democratic majority for decades to come. (Video will be coming soon!)

- Following on the event, Melissa reported on congressional efforts to move forward with President Obama's  plan to expand national service. According to Winograd and Hais, one of the hallmarks of this new, civic era, will be a commitment to public service-- and Obama is ahead of the curve in recognizing this.

- Rob Shapiro released a new essay, arguing that inflation could causes us long-term problems... but we can forestall the problem if we act now.

One More Thing

- The Association of Pool and Spa professionals is pissed a Joe Biden for suggesting that bailout money ought not be spent on new pools and spas for corporate executives. The yachting and recreational space travel industries are likewise displeased.

- Obama became the first sitting president to appear on late night TV yesterday, sitting down with Jay Leno for a chat. He walked a fine line between appearing presidential and cracking wise.  Most responses have been positive, though he was not gaffe-free.

- Last, Stephen Colbert lets the beat drop and his rap battle with Michael Steele is ON.  This will be the best six minutes of your day: 

Leader: Young Money Trillionaire

- With interest rates already near zero, the Fed must have been feeling impotent... Chairman Bernanke announced yesterday that the Fed would be pumping $1.2 trillion into the financial system by buying Treasury bonds and mortgage-related securities.  The move is designed to lower borrowing costs for mortgages and other types of loans, and, ultimately, stimulate economic activity. 

- The Fed will, effectively, be minting the money it needs, which will, in turn, raise the specter of inflation. Indeed, the value of the dollar did sink yesterday, though, to be fair, mortgage rates also fell immediately, as well. The markets, too, reacted favorably-- after starting the day down 50 points, ended up nearly 100.

Politics

- The Congressional Hispanic Caucus met with the President yesterday, and discussed immigration and the unrest in Mexico.  The SF Chronicle quoted Simon:  "The White House is going to realize that passing comprehensive immigration reform is one of the easier things he can do this year." Kos chronicled the broad popular support for immigration reform. The Spanish-language AP was also on the case.

- President Obama will add the United States to the list of countries sponsoring a UN resolution calling for the global decriminalization of homosexuality. This represents the reversal of a Bush policy.

- Whipping boy, lightning rod, call him what you will: Treasury Secretary Tim Geithner has assumed a rather unenviable position at the center of this economic firestorm.

Economy

- A.I.G. Chief Executive Edward Liddy, after a slightly brutal day yesterday, asked those employees who had received bonuses to give back "at least half" of what they received.  Some employees have already returned the money they received.  Congress is still not satisfied.

- Arianna Huffington chronicled a genuine whodunit yesterday, as prospective Sherlocks raced around Capitol Hill yesterday, trying to figure out who had removed language from the stimulus bill that would have put the lid on executive bonuses at places like A.I.G.  Turns out Chris Dodd and the Senate Banking Committee dunit.

International

- The humanitarian situation in Sri Lanka is growing ever more dire, as 180,000 ethnic Tamil civilians remain trapped in a small pocket of land where the military has cornered the  Tamil Tiger separatists. 

- French President Nicolas Sarkozy wants to redesign Paris... intriguing idea, and one certain to elicit enraged responses from around the world.

- The NY Times reports on a rare oasis untouched by Mexico's drug war: Futbol!

New From NDN

- Simon released a backgrounder of our best work on immigration from over the years. Now would be a good time to bone up...

- Yesterday, Dave remarked on President Obama's picks for the NCAA basketball tournament.  He picked UNC to win it all, so needless to say, Coach K, Simon, and other Duke fans everywhere are pissed.

One More Thing

- Spencer Ackerman caught a priceless Freudian slip as former President GW Bush announced his memoir:  "I'm going to put people in my place, so when the history of this administration is written at least there's an authoritarian voice saying exactly what happened."

- Last, Politico has a montage of President Obama telling jokes.  Awesome:

This morning I linked to a WaPo op-ed by Edward Liddy, the chief executive of A.I.G. in which he says, basically, that there was no way he could have avoided paying the $165 million in bonuses to current and former A.I.G. employees because, well, a deal's a deal.

I missed, however, this column by Steve Pearlstein, in which he rips Liddy into a million liddle pieces-- excoriating him for a lack of creativity, and a failure to understand that it's no longer business as usual on Wall Street.  

Here's where it gets good:

After all, if the government hadn't stepped in, AIG would have gone bankrupt and those whiz-bang traders could have lined up with all the other unsecured creditors at the bankruptcy court to see how much money they might receive three or four years down the road. And the government could still put the company into bankruptcy anytime it chooses.

Moreover, the Justice Department would surely have been within its rights to launch an extensive civil and criminal investigation into whether those bonuses were granted as part of an ongoing conspiracy to defraud shareholders -- a conspiracy in which the traders were knowing participants. As part of that investigation, prosecutors could have also prepared a public report to the Treasury, the Federal Reserve and Congress listing the names and home addresses of all the traders who were slated to receive the bonuses, along with a detailed description of their role in creating the mess that brought down the company. There could even be a chart listing their salaries, bonuses and other perks over the past decade.

Pearlstein is right on, here.  Liddy's inability to anticipate the backlash this has caused, and his staggering inside-the-box thinking is indicative of an endemic failure to comprehend how the ground has shifted. So many of the old rules just don't apply anymore.

Leader: Outrage and the Outrageous

- The A.I.G. saga grew ever more infuriating yesterday, particularly to members of  Congress, it seems, who are cooking up myriad ways to punish the recipients of bonsus at the insurance giant.  The $165 million in bonuses were paid to just 418 employees last week, including 58 who no longer work at A.I.G.  Seventy-three people took in bonuses of $1 million or more.  Nearly everyone in the financial services unit responsible for ruining the company got a bonus.

- The White House says they didn't hear about the bonuses until Thursday, and they've made clear that the burden of the kerfuffle sits squarely on the shoulders of Treasury Secretary Tim Geithner. He has said he will work to take the bonuses back from the recipients.  Congress has their own designs to do so, with most plans something like Senator Dodd's idea of a 100% tax on bonuses paid by A.I.G.  Punitive, yet satisfying.

- For Slate,  Eliot Spitzer writes that the real scandal here is not the bonuses but that A.I.G. is repaying its trading partners in full. They all took a risk, it went south, they should feel the burn...

- Edward Liddy, the white knight chief executive of A.I.G. has an op-ed in today's Post, acknowledging that "mistakes were made, but arguing that "In America, when you owe people money, you pay them." Ehh.

Politics

- A year ago today, Senator Barack Obama gave a speech on race in Philadelphia.  Since then, say Nia-Malika Henderson & Carrie Budoff Brown in Politico, he has been too silent on the subject.

- Rep. Ellen Tauscher is on her way to a new job in the State Department. We wish her the best of luck in this new endeavor!

- President Obama will be undertaking high-tech fireside chats to explain his policy goals to the American people.  

- Ben Smith and Manu Raju write on Obama's "big bang" theory of politics. Is he moving too fast even for fellow Democrats?

International

- The Obama administration is considering seriously expanding its strikes in Pakistan, even potentially going after targets in Baluchistan.  

- Russian President Dmitry Medvedev "struck a Cold War tone," writes the WSJ, as the country announced plans for a serious rearmament to balance the expansion of NATO into Eastern Europe.

New From NDN

- Zuraya looked forward to the President's meeting with the Congressional Hispanic Caucus slated for today.

- Dave O'Donnell celebrated St. Patrick's day with a salute to our new ambassador to Ireland (who doubles as the owner of Dave's favorite football team).

One More Thing

- Senator Grassley's suggestion that AIG execs take their own lives was purely hyperbole.  Or so he says.

- Last, I should have posted this yesterday, but as we all recover from yesterday's St. Patrick's festivities, it's worth remembering that we have an Irish president: 

Leader: Vast Public Rage

- A.I.G. is still the top news story-- or rather, the vast public rage at A.I.G. is now the top story.  President Obama yesterday said he and his Treasury Department would pursue "every legal avenue" to block the $165 million in bonuses headed toward the architects of A.I.G.'s failure.  Going forward, it looks like that will mean trying to ensure that taxpayers recoup the cost of the bonuses, and the A.I.G. execs are put on a shorter leash. 

- New York Attorney General Andrew Cuomo is planning to subpoena A.I.G. for the names, job descriptions, and performance evaluations of all employees slated to receive bonuses. Said Cuomo: "You could argue that if taxpayers hadn’t bailed out A.I.G., the contracts wouldn’t be worth the paper they were signed on."

- Andrew Ross Sorkin writes in the NY Times that we should let it go-- let the execs have their bonuses.  His point isn't a bad one: "If you think this economy is a mess now, imagine what it would look like if the business community started to worry that the government would start abrogating contracts left and right."

Politics

- Kos of DailyKos came out with a big post yesterday calling for immigration reform to be put back on the agenda.  He quotes a recent essay of Simon's at length.

- The Politico reports that our congresspeople just don't get YouTube--  it might as well be called ME-Span.

- Senate Dems are putting full court press on the opposition, trying to persuade Sen. Arlen Specter to switch sides and join the majority.

Economy

- President Obama spoke to small business owners yesterday, pledging to help them through this economic crisis by buying up $15 billion of securities linked to small-business loans.  This would hopefully help make credit more available to new or nascent small businesses.

- Cathy Rampell of EconoMix looks at the plight of state tax revenues from the end of last year. Twelve states saw increases, but everyone else is in pretty bad shape.  Budget shortfalls are likely to last longer than their stimulus checks, so either tax increases or service cuts are likely in many states.

International

- President Marc Ravalomanana of Madagascar has handed the reins of government to the military-- specifically to Admiral Hyppolite Ramaroson. After weeks of protests led by Andry Ralijaona, a former DJ and mayor of Antananarivo (the capital city), President Ravalomanana has effectively fled the palace under fire, and may not return.

- Pope Benedict XVI, on his way to Africa for a seven-day tour, said that condoms make the AIDS problem worse, which is really just the most ridiculous thing I've ever heard.

New From NDN

- Michael Moynihan has a smart new piece addressing the problem of how we can price the seemingly un-priceable assets held by the banks.

- Zuraya offers her weekly immigration update, in which she analyzes the effects of local immigration enforcement, and how the debate over organized crime on the border affects immigration reform.

One More Thing

- Happy St. Patrick's Day!

- Last, Robert Gibbs, getting up to some shenanigans:

Leader: A.R.G!

- AIG issued a receipt to the American people yesterday, detailing where it had spent $75 billion in federal bailout money.  Goldman Sachs was the big winner, taking nearly $13 billion from the insurer; Deutsche Bank and Société Générale both pulled in $12 billion, and a who's who of big American banks all drew smaller (but still large) amounts. Twenty U.S. states also made the list. These funds all came from the initial $85 billion administered last fall.  

- All this has not quite distracted attention from the story that AIG has plans to dole out millions in bonuses to some of the very executives who caused this mess.  The WSJ reports that as much as $450 million will be paid out in bonuses.  An analysis piece from the NY Times looks at the Obama administration's response, as seen on the Sunday talk shows.  There is fear that AIG's behavior will prompt a populist backlash among the American people that will make it difficult for the Administration to rescue the financial system.

Politics

- Politico reports that the White House is launching an all-out messaging war to promote the President's budget and disparage Republicans as nothing more than political naysayers. It remains to be seen whether they will take Simon's admonition to find a way to cast the budget and other major economic actions as part of one, large, crucial plan to save our economy.

- Mark Danner has a piece in the NYRoB, reviewing and excerpting from a new Red Cross report on the treatment of "high-value detainees" in CIA custody during the Bush years.  Pretty chilling, all the way through.

- Noam Scheiber has a new profile of Larry Summers in TNR. Duly recommended.

International

- After a day of violent anti-government street protests in Pakistan yesterday, opposition leader Nawaz Sharif and thousands of supporters marched on Islamabad, demanding, among other things, the reinstatement of the Chief Justice of the Supreme Court.  Amazingly, President Asif Ali Zardari capitulated, reinstating Iftikhar Mohammed Chaudhry, and ending the standoff. The compromise, praised by the U.S. State Department, has re-emphasized the weakness of President Zardari, and solidified Sharif as the face of the opposition.

- In Newsweek, Fareed Zakaria offers a stern rebuke to those who have criticized President Obama's changes to foreign policy as too conciliatory or too diplomatic. Our foreign policy under Bush is better understood as "imperial policy," and we would be well-advised to move beyond it.

New From NDN

- Be sure to read Simon's new piece from Saturday, in which he talks about the importance of the White House finding the right way to talk about economic recovery.

- Simon also looked back at a 2007 essay by Rob Shapiro, newly relevant in this economic crisis.

One More Thing

- Dick Cheney is pissed that George Bush didn't cut his buddy down from the tree.

- Last, Politico rounds up all the hilarious stuff from the weekend:

You say tomato, I say public health concern.

President Obama broke his streak of weekly addresses concerned with the economy, and instead took on another issue that touches all of us: Food and drug safety.  He is creating a "food safety working group" to help move past Bush-era shortcomings that left us with unacceptable "hazards to public health." We also learn that Sasha Obama and I have similar eating habits.

But don't take my word for it:

Leader: High Roller Coaster

- Yesterday, GE was stripped of its AAA credit rating for the first time since 1956.  But it was only brought down one notch, and so shares of GE surged 13%-- that, apparently, is how desperate the market is for "good" news, even if said news would have been bad news just a few months ago.  On this and other not-so-bad news, the Dow gained 3.5% yesterday, and the S&P 500 rose 4%.

- This on the same day that the Fed released numbers revealing that American families lost 18% of their net worth in 2008-- 11 trillion dollars, poof, gone. Chinese Prime Minister Wen Jiabao added to nervousness, expressing some doubt about the safety of U.S. Treasury bonds.  Hopefully, for everyone's sake PM Wen isn't thinking about dumping his trillion-dollar investment. 

Politics

- Josh Holland of AlterNet looks at the potential for comprehensive immigration reform to become reality this year. Simon is quoted: "Getting 5 percent of the workforce out of the shadows, giving them the opportunity to unionize, getting them minimum wage protections -- this is such an important goal for progressives that they need to be willing to accept some compromise."

- Ron Kirk was approved yesterday by the Senate Finance Committee to be our next Trade Representative. He'll go before the whole Senate soon, and shouldn't face any issues.

Economy

- After pleading guilty to 11 counts of fraud, Bernie Madoff will be going directly to jail (not passing go), as the judge denied his request for bail.  His sentencing will take place in June, and from there he'll be off to Sing Sing for 150 years.  Is it wrong to take a little satisfaction in this?

International

- President Obama is considering sending National Guard troops to the U.S. border with Mexico, as concerns rise that our southern neighbor's drug war could spill over the border. He's "not interested in militarizing the border," but may soon have no choice.

- The Iraqi Shoe Hurler will spend three years in prison.  Muntader al-Zaidi pleaded not guilty, saying his action was a "natural reaction to the crimes of the occupation." His act will, no doubt, live in the Iraqi lore surrounding the American occupation of Iraq.

New From NDN

- In a new essay, Rob Shapiro explains why a multi-pronged approach to the economic crisis is necessary.  We need stimulus, and financial reform, and help for homeowners, all at once.

- Video is now available from Tuesday's event with Joe Rospars!  It was a terrifically engaging event, and you can watch it here.

- Dan Boscov-Ellen publishes his latest Weekly New Tools feature, looking at the sudden growth in the popularity of social networks. 

One More Thing

- The House of Representatives took a moment yesterday to recognize the mathematical constant pi. Next week, they'll be pausing to recognize the exclamation point for its years of service as both an emphatic mark of punctuation and as the mathematical symbol for the factorial function. 

- Last, Jon Stewart makes peace by inviting Jim Cramer on his show and ripping him to shreds in person (Huffington Post has all three, unedited original segments here)

Leader: Fraudsters

- Bernard Madoff pled guilty to all 11 counts of fraud this morning.  The maximum sentence for these crimes is 150 years, which should be long enough.  Later today, the judge will rule whether Madoff will be eligible for bail, or if he should be sent immediately to prison as he awaits sentencing.

- Attorneys General around the country are beginning a surge of prosecutions for financial fraud. Loan processors, mortgage brokers, and bank officials may all find themselves in the crosshairs.

Politics

- Rep. Eric Cantor is open to the idea of a second stimulus package, providing it offers ample help to "small business people." By which he presumably meant people who run small businesses, rather than diminutive shopkeepers.

- Ross Douthat of the Atlantic will be filling the shoes of Bill Kristol on the NY Times op-ed page-- shoes once worn by the big feet of William Safire.  Douthat is a young, intellectual, conservative voice, and one that will hopefully breathe a bit of sensibility into a movement that's gone off the rails. Ben Smith and I both look forward to reading his column.

- Andrew Rasiej and Micah Sifry have a piece in Politico today on the future of privacy in social networks, particularly Facebook, as they increasingly political tools.

Economy

- The Financial Times is publishing a great new series of articles on "The Future of Capitalism." A new piece today from Chrystia Freeland looks at the new progressive era President Obama is trying to define in the wake of this economic crisis. 

International

- The administration will look for an additional $100 billion to fund the IMF, and keep poor governments from falling apart. In his speech yesterday, Treasury Secretary Tim Geithner also called on other Western nations to raise their commitment to the international organization.

New from NDN

- Simon has a salute to Al From as he steps down from his role at the head of the DLC.

- Following on Jake's criticism of the new law, Zuraya yesterday attacked the provision in the stimulus that prohibits recipients of bailout money to hire foreign workers.  She calls it "bad policy and bad politics at a bad time." 

One More Thing

- Levi Johnston and Bristol Palin have broken up.  If they can't make it, I don't know what hope there is for the rest of us.

- Last, the next installment in the war between CNBC and Jon Stewart: