Friday, November 28, 2008
Thursday, November 27, 2008
Havoc for the Holiday
The Mumbai massacres undermine our shaky faith in human nature as American families gather for loving celebration in the safety they always took for granted before 9/11.
The identity of the killers matters less than their purpose--to "cry havoc and let loose the dogs of war," in Shakespeare's phrase--to attack civilization itself in bloodthirsty rage and hate.
As grievous as the slaughter of innocents is the knowledge that these acts of darkness, planned with precision, are abetted and amplified by the technology that has done so much to improve modern life, that computer and TV screens which create community can also be used to convey chaos.
It's hard to turn our eyes away from the carnage and concentrate on our good fortune without feeling that, no matter who these murderers turn out to be and whatever their "cause," we are living in a world where their like will be with us for a long time to come.
The identity of the killers matters less than their purpose--to "cry havoc and let loose the dogs of war," in Shakespeare's phrase--to attack civilization itself in bloodthirsty rage and hate.
As grievous as the slaughter of innocents is the knowledge that these acts of darkness, planned with precision, are abetted and amplified by the technology that has done so much to improve modern life, that computer and TV screens which create community can also be used to convey chaos.
It's hard to turn our eyes away from the carnage and concentrate on our good fortune without feeling that, no matter who these murderers turn out to be and whatever their "cause," we are living in a world where their like will be with us for a long time to come.
Bargain-Hunting Home Buyers
Bottom feeders pushed up the stock market this week. Shoppers should flood the stores for Black Friday specials tomorrow. Will potential buyers who have been waiting for housing prices to sink to their lowest go into action this weekend?
After an $800 billion stimulus plan for the credit markets announced this week by the Federal Reserve and Treasury Department, fixed-rate mortgages have been falling by as much as a full percentage point.
There are signs of movement in the housing market. "Almost immediately," according to a report from Sacramento, "homebuyers with deals pending raced to lock in rates. Potential homebuyers called their agents and said they were ready to look in earnest. Homeowners took a fresh look at the refinance market."
The leveling of home prices would be a major step in slowing foreclosures and unfreezing credit in general. After lunching on leftover turkey sandwiches, home seekers may start looking in earnest for places to host family Christmas dinners.
After an $800 billion stimulus plan for the credit markets announced this week by the Federal Reserve and Treasury Department, fixed-rate mortgages have been falling by as much as a full percentage point.
There are signs of movement in the housing market. "Almost immediately," according to a report from Sacramento, "homebuyers with deals pending raced to lock in rates. Potential homebuyers called their agents and said they were ready to look in earnest. Homeowners took a fresh look at the refinance market."
The leveling of home prices would be a major step in slowing foreclosures and unfreezing credit in general. After lunching on leftover turkey sandwiches, home seekers may start looking in earnest for places to host family Christmas dinners.
Wednesday, November 26, 2008
No Norman Rockwell Thanksgiving
On the eve of our annual day of excess, we are all suffering from the heartburn of years of greed and over-consumption that a ton of antacids won't cure.
In today's Times, Tom Friedman catalogues the gluttons: "People who had no business buying a home, with nothing down and nothing to pay for two years; people who had no business pushing such mortgages, but made fortunes doing so; people who had no business bundling those loans into securities and selling them to third parties, as if they were AAA bonds, but made fortunes doing so; people who had no business rating those loans as AAA, but made a fortunes doing so; and people who had no business buying those bonds and putting them on their balance sheets so they could earn a little better yield, but made fortunes doing so."
In the traditional celebration of plenty, Americans will be forced to give some thought to how much is enough as an outgoing government keeps pouring money into who-knows-where and to what effect while the incoming crew chafes at the bit with "new thinking" from some of the same people who championed the old.
As Americans sit down to turkeys with all the trimmings in Norman Rockwell settings, they are not living in that 20th century world of bounty and won't be for the foreseeable future.
The President-Elect managed to reassure the stock markets into gains this week, but our government may have to provide more than $7.76 trillion to rescue the financial system after guaranteeing $306 billion to Citigroup--as much as half the value of everything produced in the nation last year.
That's a lot turkey, yams and pumpkin pie.
In today's Times, Tom Friedman catalogues the gluttons: "People who had no business buying a home, with nothing down and nothing to pay for two years; people who had no business pushing such mortgages, but made fortunes doing so; people who had no business bundling those loans into securities and selling them to third parties, as if they were AAA bonds, but made fortunes doing so; people who had no business rating those loans as AAA, but made a fortunes doing so; and people who had no business buying those bonds and putting them on their balance sheets so they could earn a little better yield, but made fortunes doing so."
In the traditional celebration of plenty, Americans will be forced to give some thought to how much is enough as an outgoing government keeps pouring money into who-knows-where and to what effect while the incoming crew chafes at the bit with "new thinking" from some of the same people who championed the old.
As Americans sit down to turkeys with all the trimmings in Norman Rockwell settings, they are not living in that 20th century world of bounty and won't be for the foreseeable future.
The President-Elect managed to reassure the stock markets into gains this week, but our government may have to provide more than $7.76 trillion to rescue the financial system after guaranteeing $306 billion to Citigroup--as much as half the value of everything produced in the nation last year.
That's a lot turkey, yams and pumpkin pie.
Obama View From Barbara Walters
In the face of change, the timeless Barbara Walters scores another "get" with an exclusive interview with the Obamas, in which the new President talks about moral responsibility and the First Lady reveals that her daughters will be making their own beds in the White House.
Detroit automakers, Barack Obama tells her, are "a little tone deaf to what's happening in America right now...a problem for the captains of industry, generally. When people are pulling down hundred-million-dollar bonuses on Wall Street, and taking enormous risks with other people's money...they're not seeing what's going on out there, and one of the things I hope my presidency helps to usher in is a return to an ethic of responsibility."
In the interview, there are echoes of JFK's Inaugural Address ("Ask not what your country can do for you but what you can do for your country"):
"(T)here's got to be a point where you say, 'You know what, I have enough, and now I'm in this position of responsibility, let me make sure that I'm doing right by people, and, and acting in a way that is responsible.' And that's true, by the way, for members of Congress, that's true for the president, that's true for Cabinet members, that's true for parents. I want all of us to start thinking a little bit more, not just about what's good for me...but what's good for our children, what's good for our country. The more we do that, the better off we're going to be."
It's good to see Walters, in her eightieth year, still out-hustling the competition after more than half a century, starting with her first job doing publicity for Redbook when I was editor.
Later, when the president's daughter, Lynda Bird Johnson, went to work at McCalls, there were almost daily calls to get me to arrange an exclusive interview. Barbara didn't get that one, but there are few she has missed since then.
It's good to see that not everything changes.
Detroit automakers, Barack Obama tells her, are "a little tone deaf to what's happening in America right now...a problem for the captains of industry, generally. When people are pulling down hundred-million-dollar bonuses on Wall Street, and taking enormous risks with other people's money...they're not seeing what's going on out there, and one of the things I hope my presidency helps to usher in is a return to an ethic of responsibility."
In the interview, there are echoes of JFK's Inaugural Address ("Ask not what your country can do for you but what you can do for your country"):
"(T)here's got to be a point where you say, 'You know what, I have enough, and now I'm in this position of responsibility, let me make sure that I'm doing right by people, and, and acting in a way that is responsible.' And that's true, by the way, for members of Congress, that's true for the president, that's true for Cabinet members, that's true for parents. I want all of us to start thinking a little bit more, not just about what's good for me...but what's good for our children, what's good for our country. The more we do that, the better off we're going to be."
It's good to see Walters, in her eightieth year, still out-hustling the competition after more than half a century, starting with her first job doing publicity for Redbook when I was editor.
Later, when the president's daughter, Lynda Bird Johnson, went to work at McCalls, there were almost daily calls to get me to arrange an exclusive interview. Barbara didn't get that one, but there are few she has missed since then.
It's good to see that not everything changes.
Tuesday, November 25, 2008
Gates-Keeping
With the imminent naming of Hillary Clinton as Secretary of State, the retention of Robert Gates at Defense will raise questions about exactly what Barack Obama means by "change."
One thing is clear: The new president does not equate change with personal revenge (Joe Lieberman's survival even more than Clinton's appointment proves that) or even, as with Gates, new faces.
Idealistic as he may be, Obama is also a pragmatist and keeping Gates is a practical solution during the necessary emphasis on the economy in the early days of the new administration.
Next week, Obama will be naming the rest of his foreign-policy team, which will reorient our Middle East policy away from Iraq toward the dangers posed by Afghanistan and Pakistan. In his two years at Defense, Gates has clearly been as realistic as could be expected, while serving Bush, on that subject.
Moreover, as soon as he replaced Rumsfeld, he saved American lives by giving priority to mine-resistant, ambush-protected trucks (MRAPs) that had been stalled for two years by Pentagon bureaucrats and, in succeeding months, aligned himself with Condoleeza Rice in blunting the push of Cheney's Neo-Cons for attacking Iran.
"Off with their heads" ideologues won't be satisfied by the arguments for retaining Gates, but he will be a reassuring figure as Obama goes about saving the economy and getting us out of Iraq.
One thing is clear: The new president does not equate change with personal revenge (Joe Lieberman's survival even more than Clinton's appointment proves that) or even, as with Gates, new faces.
Idealistic as he may be, Obama is also a pragmatist and keeping Gates is a practical solution during the necessary emphasis on the economy in the early days of the new administration.
Next week, Obama will be naming the rest of his foreign-policy team, which will reorient our Middle East policy away from Iraq toward the dangers posed by Afghanistan and Pakistan. In his two years at Defense, Gates has clearly been as realistic as could be expected, while serving Bush, on that subject.
Moreover, as soon as he replaced Rumsfeld, he saved American lives by giving priority to mine-resistant, ambush-protected trucks (MRAPs) that had been stalled for two years by Pentagon bureaucrats and, in succeeding months, aligned himself with Condoleeza Rice in blunting the push of Cheney's Neo-Cons for attacking Iran.
"Off with their heads" ideologues won't be satisfied by the arguments for retaining Gates, but he will be a reassuring figure as Obama goes about saving the economy and getting us out of Iraq.
Flying Turkeys of Yesteryear
It's not every day you get to write a sentence like this:
As Keith Olbermann was making a pumpkin pie with Martha Stewart yesterday, they discussed the video of Sarah Palin cheerfully pardoning a Thanksgiving turkey with others being slaughtered in the background, as he recalled the classic 1978 WKRP sitcom episode of turkeys being dropped from a helicopter on the mistaken assumption that they could fly.
In the context of politicians scrambling around to give Citibank, AIG and other plummeting turkeys a soft landing, there is something symbolic about Palin's rescue plan for one bird while others are going down.
After all this, the nostalgic may opt for a Thanksgiving dinner of moose chili and watching tapes of Jimmy Carter's fireside chats about the ailing economy back then.
As Keith Olbermann was making a pumpkin pie with Martha Stewart yesterday, they discussed the video of Sarah Palin cheerfully pardoning a Thanksgiving turkey with others being slaughtered in the background, as he recalled the classic 1978 WKRP sitcom episode of turkeys being dropped from a helicopter on the mistaken assumption that they could fly.
In the context of politicians scrambling around to give Citibank, AIG and other plummeting turkeys a soft landing, there is something symbolic about Palin's rescue plan for one bird while others are going down.
After all this, the nostalgic may opt for a Thanksgiving dinner of moose chili and watching tapes of Jimmy Carter's fireside chats about the ailing economy back then.
Monday, November 24, 2008
Two Presidents at a Time
As the incoming president introduced his economic team and said there isn't "a minute to waste" in putting them to work, there was a brief, almost ghostly sighting of George W. Bush and Henry Paulson on cable news to promote the Citibank bailout, which Bush said he had discussed with Obama before it was announced.
"My commitment is to do what is required," Obama said at his Chicago news conference today. "President Bush has indicated that he has the same approach, the same attitude."
The President-Elect added that he has asked his new team to consult with Congress, the Bush Administration and the Federal Reserve on economic developments over the next two months.
So much for one president at a time, but the cooperative effort is not going to solve the main problems. The Citibank bailout was needed but drew immediate criticism from economists for being too large. too generous and without adequate supervision.
No matter how hard both Administrations try to deal with it, the two-presidents trap is going to be messy and expensive from now until January 20th.
"My commitment is to do what is required," Obama said at his Chicago news conference today. "President Bush has indicated that he has the same approach, the same attitude."
The President-Elect added that he has asked his new team to consult with Congress, the Bush Administration and the Federal Reserve on economic developments over the next two months.
So much for one president at a time, but the cooperative effort is not going to solve the main problems. The Citibank bailout was needed but drew immediate criticism from economists for being too large. too generous and without adequate supervision.
No matter how hard both Administrations try to deal with it, the two-presidents trap is going to be messy and expensive from now until January 20th.
Rethinking Risk
In all the replays of what went wrong with the economy, the recurring theme is the failure of risk management--by the government, Wall Street and overreaching home buyers.
Over the weekend, we get disheartening replays of how the Bush Administration abdicated responsibility for regulation and how greedy hotshots at Citibank created a mess that taxpayers will now have to clean up with billions in a bailout.
"In normal times," the Economist says in its piece on Treasury Secretary-to-be Timothy Geithner, "risk aversion damps economic cycles; in a crisis, it accentuates them, leading to withdrawn credit, evaporating liquidity, margin calls, falling asset prices, and more risk aversion. 'The brake becomes the accelerator,' as he puts it."
So we have a topsy-turvy world now in which prudence that has morphed into fear is causing the freezing of credit, and the kind of gambling that caused the problem is the prescription for curing it:
"Mr Geithner understands better than almost anyone that in crises you throw out the forecast and focus on avoiding low probability events with catastrophic consequences. Such judgments are excruciating: do too little, and you undermine confidence and generate a bigger crisis that needs even bigger policy action. Do too much, and you look panicked and invite blowback from Wall Street, Congress and the press. At times during the crisis Mr Geithner would counsel Mr Bernanke on the importance of the right 'ratio of drama to effectiveness.'”
For those of us who grew up with a Depression mentality (my parents wanted me to be a teacher because in hard times they still have jobs), this upends a lifetime of trying "not to live beyond your means."
We watch in wonder as a beleaguered government frantically throws billions into rescuing institutions that broke all the rules of our lifetime and wonder, when this is mercifully over, how will we get back to a sane balance of risk and reward to help our children and grandchildren pay for all this madness?
Over the weekend, we get disheartening replays of how the Bush Administration abdicated responsibility for regulation and how greedy hotshots at Citibank created a mess that taxpayers will now have to clean up with billions in a bailout.
"In normal times," the Economist says in its piece on Treasury Secretary-to-be Timothy Geithner, "risk aversion damps economic cycles; in a crisis, it accentuates them, leading to withdrawn credit, evaporating liquidity, margin calls, falling asset prices, and more risk aversion. 'The brake becomes the accelerator,' as he puts it."
So we have a topsy-turvy world now in which prudence that has morphed into fear is causing the freezing of credit, and the kind of gambling that caused the problem is the prescription for curing it:
"Mr Geithner understands better than almost anyone that in crises you throw out the forecast and focus on avoiding low probability events with catastrophic consequences. Such judgments are excruciating: do too little, and you undermine confidence and generate a bigger crisis that needs even bigger policy action. Do too much, and you look panicked and invite blowback from Wall Street, Congress and the press. At times during the crisis Mr Geithner would counsel Mr Bernanke on the importance of the right 'ratio of drama to effectiveness.'”
For those of us who grew up with a Depression mentality (my parents wanted me to be a teacher because in hard times they still have jobs), this upends a lifetime of trying "not to live beyond your means."
We watch in wonder as a beleaguered government frantically throws billions into rescuing institutions that broke all the rules of our lifetime and wonder, when this is mercifully over, how will we get back to a sane balance of risk and reward to help our children and grandchildren pay for all this madness?
Sunday, November 23, 2008
Can Obama Stop the Panic?
The Lame Duck has laid an egg on the economy, and nothing better can hatch until he gets out of the nest.
Tomorrow the President-in-Waiting-Who-Can't-Afford-to-Wait will announce his financial dream team and game plan as panic buttons are being pushed all over the world.
*On Meet the Press, Bush family Consiglere James Baker, who muscled W. into office in 2000, now suggests he vacate early by sitting down with Obama now "to see if there isn't something that they could do jointly, together, over the next 58 to 60 days that would help us make sure that the financial system is stabilized and secure," warning that "this thing is even, believe it or not, going to get worse...(S)itting down together and seeing if there's not one thing that they could come together on would do a lot to restore confidence and remove the anxiety and fear that's out there."
*Senior advisor David Axelrod says Obama "wants a plan big enough to deal with the large challenges we face. And I think there's a growing consensus across the spectrum among economists that we're going to have to do something big,"
*The International Monetary Fund's Chief Economist predicts "The worst is yet to come" in the universal liquidity crisis.
*The usually sunny Thomas Friedman quotes a Yale professor of international finance questioning whether "we are staring at a deep hole that the entire world could fall into” and, if so, declaring " we need a huge catalyst of confidence and capital to turn this thing around. Only the new president and his team, synchronizing with the world’s other big economies, can provide it.
“The biggest mistake Obama could make is thinking this problem is smaller than it is."
Tomorrow at midday, the President-Elect takes the stage to do what he can to stop the panic. By late afternoon, the stock market will have given us a first reading on how well he has managed to do it.
Tomorrow the President-in-Waiting-Who-Can't-Afford-to-Wait will announce his financial dream team and game plan as panic buttons are being pushed all over the world.
*On Meet the Press, Bush family Consiglere James Baker, who muscled W. into office in 2000, now suggests he vacate early by sitting down with Obama now "to see if there isn't something that they could do jointly, together, over the next 58 to 60 days that would help us make sure that the financial system is stabilized and secure," warning that "this thing is even, believe it or not, going to get worse...(S)itting down together and seeing if there's not one thing that they could come together on would do a lot to restore confidence and remove the anxiety and fear that's out there."
*Senior advisor David Axelrod says Obama "wants a plan big enough to deal with the large challenges we face. And I think there's a growing consensus across the spectrum among economists that we're going to have to do something big,"
*The International Monetary Fund's Chief Economist predicts "The worst is yet to come" in the universal liquidity crisis.
*The usually sunny Thomas Friedman quotes a Yale professor of international finance questioning whether "we are staring at a deep hole that the entire world could fall into” and, if so, declaring " we need a huge catalyst of confidence and capital to turn this thing around. Only the new president and his team, synchronizing with the world’s other big economies, can provide it.
“The biggest mistake Obama could make is thinking this problem is smaller than it is."
Tomorrow at midday, the President-Elect takes the stage to do what he can to stop the panic. By late afternoon, the stock market will have given us a first reading on how well he has managed to do it.
Saturday, November 22, 2008
45 Years Ago Today
As editor of Redbook, I was about to make a lunchtime speech to three hundred advertising people at the Ambassador East in Chicago. After that, I would check out, have dinner on the Twentieth Century Limited, read myself to sleep and be home in the morning.
Shortly after noon, I was at a table with guests, nattering about nothing over shrimp cocktails, when a waiter bent to my ear and whispered, "President Kennedy's been shot."
I followed him into the kitchen. A small TV set was surrounded by waiters holding trays, chefs with knives and cleavers, maids carrying mops, frozen in shock, tears in their eyes. On the grainy screen, Walter Cronkite was talking evenly about a motorcade, a book depository, Parkland Hospital, but his stricken face was telling more.
I came back to the dining room, went to the platform and tapped on the microphone. As the clatter calmed, I found words coming out of my mouth.
"I'm sorry to have to tell you, but President Kennedy's been shot and it looks...bad. I know you'll want to go where you can find out more. Thank you for coming."
As I sat down dazed, the waiter asked if I wanted lunch and I shook my head. A minute later he put a goblet of brandy in front of me.
A white-haired man came up and asked, "Aren't you going to make your speech?" I shook my head.
The large TV screen upstairs showed Cronkite's face crumpling as he told of Kennedy's death. I packed my bags.
On the train, I felt I was going from where my life had been to somewhere else. In my fortieth year, in the dining car, I tried to take in people talking and laughing, but nothing made sense. I went to my roomette for a night of sleepless sleep.
Three months earlier, I had been in the Oval Office with the man now dead in Dallas. Kennedy was sitting in a rocking chair and his face, under the Hyannisport tan, was drawn, lines around his sunken eyes telling an unspoken story of pain and pills. We talked for half an hour and, when he rose to shake hands goodbye, I thought I saw him wince.
Now he was gone, and the world would never be the same again.
Shortly after noon, I was at a table with guests, nattering about nothing over shrimp cocktails, when a waiter bent to my ear and whispered, "President Kennedy's been shot."
I followed him into the kitchen. A small TV set was surrounded by waiters holding trays, chefs with knives and cleavers, maids carrying mops, frozen in shock, tears in their eyes. On the grainy screen, Walter Cronkite was talking evenly about a motorcade, a book depository, Parkland Hospital, but his stricken face was telling more.
I came back to the dining room, went to the platform and tapped on the microphone. As the clatter calmed, I found words coming out of my mouth.
"I'm sorry to have to tell you, but President Kennedy's been shot and it looks...bad. I know you'll want to go where you can find out more. Thank you for coming."
As I sat down dazed, the waiter asked if I wanted lunch and I shook my head. A minute later he put a goblet of brandy in front of me.
A white-haired man came up and asked, "Aren't you going to make your speech?" I shook my head.
The large TV screen upstairs showed Cronkite's face crumpling as he told of Kennedy's death. I packed my bags.
On the train, I felt I was going from where my life had been to somewhere else. In my fortieth year, in the dining car, I tried to take in people talking and laughing, but nothing made sense. I went to my roomette for a night of sleepless sleep.
Three months earlier, I had been in the Oval Office with the man now dead in Dallas. Kennedy was sitting in a rocking chair and his face, under the Hyannisport tan, was drawn, lines around his sunken eyes telling an unspoken story of pain and pills. We talked for half an hour and, when he rose to shake hands goodbye, I thought I saw him wince.
Now he was gone, and the world would never be the same again.
The Coming of a Can-Do Government
In the wreckage of this week's news, it's encouraging to watch the Obama Administration taking shape with an emphasis on extreme competence (no heck-of-a-job Brownie in the lot).
Today's New York Times describes it as "tilting toward the center, inviting a clash of ideas," but the left-right analysis seems less to the point than the question of getting things done as transition team members "believe that the new administration will have no time for a learning curve."
Starting with the choice of Rahm Emanuel, a can-do guy if there ever was one, the new President clearly intends to surround himself with brains and real-world experience rather than like-mindedness and loyalty.
That was reflected in the leak yesterday about the new Treasury Secretary, Timothy Geithner, a pragmatist with deep experience, whose choice sent the stock market into euphoria. As America's face to the financial world, he will represent steady resolve compared to former Treasury chief Lawrence Summers, a bombastic figure Obama considered putting back into the job, who will likely end up in the White House as a senior economic adviser.
After such choices as the new Attorney General Eric Holder, Peter Orszag as Budget Director and Greg Craig as White House Counsel, conservative David Brooks calls the new Obama team "more impressive than any other in recent memory...open-minded individuals who are persuadable by evidence...admired professionals" who are "not excessively partisan" and "not ideological."
How does Hillary Clinton fit into this picture? She certainly would not blend into the Obama woodwork, but there is something more at stake in her choice as Secretary of State. For those who have become unsure about American values, she would make the Bush-Cheney worldview look like the aberration it has been and reassure continuity of our good intentions and good sense.
As with all of Obama's other choices, personal loyalty would be beside the point.
Today's New York Times describes it as "tilting toward the center, inviting a clash of ideas," but the left-right analysis seems less to the point than the question of getting things done as transition team members "believe that the new administration will have no time for a learning curve."
Starting with the choice of Rahm Emanuel, a can-do guy if there ever was one, the new President clearly intends to surround himself with brains and real-world experience rather than like-mindedness and loyalty.
That was reflected in the leak yesterday about the new Treasury Secretary, Timothy Geithner, a pragmatist with deep experience, whose choice sent the stock market into euphoria. As America's face to the financial world, he will represent steady resolve compared to former Treasury chief Lawrence Summers, a bombastic figure Obama considered putting back into the job, who will likely end up in the White House as a senior economic adviser.
After such choices as the new Attorney General Eric Holder, Peter Orszag as Budget Director and Greg Craig as White House Counsel, conservative David Brooks calls the new Obama team "more impressive than any other in recent memory...open-minded individuals who are persuadable by evidence...admired professionals" who are "not excessively partisan" and "not ideological."
How does Hillary Clinton fit into this picture? She certainly would not blend into the Obama woodwork, but there is something more at stake in her choice as Secretary of State. For those who have become unsure about American values, she would make the Bush-Cheney worldview look like the aberration it has been and reassure continuity of our good intentions and good sense.
As with all of Obama's other choices, personal loyalty would be beside the point.
Friday, November 21, 2008
Wall Street Life Preserver
A stock market starving for reassurance bounced up 500 points late this afternoon on reports that Timothy Geithner, president of the New York Federal Reserve, is going to be Barack Obama's Treasury Secretary.
For a look at what he will bring to the crisis, a piece by Noam Scheiber in the New Republic is a good place to start, reporting an almost picture-perfect combination of the kind of intelligence, judgment, temperament and experience for that crucial position.
Wall Street was in need of a life preserver to keep from drowning in panic, and the Administration-to-be threw out one that should buoy investors up, through the weekend at least.
So much for the theory of releasing only bad news on Friday nights.
For a look at what he will bring to the crisis, a piece by Noam Scheiber in the New Republic is a good place to start, reporting an almost picture-perfect combination of the kind of intelligence, judgment, temperament and experience for that crucial position.
Wall Street was in need of a life preserver to keep from drowning in panic, and the Administration-to-be threw out one that should buoy investors up, through the weekend at least.
So much for the theory of releasing only bad news on Friday nights.
Making Scenes and Making Laws
As pop culture goes gaga over teenage vampires, Washington's idea of infusing new blood is a Congressional coup with 69-year-old Henry Waxman wresting chairmanship of the House Energy and Commerce Committee from 82-year-old John Dingell.
Such generational change is stirring hopes on the left and fears on the right that Detroit will be pressured to stop making gas guzzlers as a start toward energy independence that could help the economy and slow global warming.
But the difference between the new chairman's Hollywood constituency, which feeds on trends like popcorn, and Washington, where inertia is a way of life, should give pause to those reading too much into the ascendance of Waxman, whose rise to power has been marked by championing such causes as expanding Medicaid coverage for children, helping AIDS patients and making generic drugs widely available.
But he is no Frank Capra hero, constantly grabbing attention with such stunts as horning in on the Valerie Plame publicity and hauling Roger Clemens in front of TV cameras for alleged steroid use.
In the Bush years, Waxman has had ample opportunity to strike poses, but how will he do at making deals that lead to legislation?
The Wall Street Journal is convinced that "Mr. Waxman, speaking for the upscale precincts of Beverly Hills, wants to phase out coal and cars that use gasoline. The coastal elites who now dominate Democratic politics will happily trade the blue collar for the green collar...It's obvious who now pulls the Democratic levers of power, and anyone in the energy or health-care business had better erect the barricades."
Nice imagery for a Hollywood movie, but how will it play out in Washington?
Such generational change is stirring hopes on the left and fears on the right that Detroit will be pressured to stop making gas guzzlers as a start toward energy independence that could help the economy and slow global warming.
But the difference between the new chairman's Hollywood constituency, which feeds on trends like popcorn, and Washington, where inertia is a way of life, should give pause to those reading too much into the ascendance of Waxman, whose rise to power has been marked by championing such causes as expanding Medicaid coverage for children, helping AIDS patients and making generic drugs widely available.
But he is no Frank Capra hero, constantly grabbing attention with such stunts as horning in on the Valerie Plame publicity and hauling Roger Clemens in front of TV cameras for alleged steroid use.
In the Bush years, Waxman has had ample opportunity to strike poses, but how will he do at making deals that lead to legislation?
The Wall Street Journal is convinced that "Mr. Waxman, speaking for the upscale precincts of Beverly Hills, wants to phase out coal and cars that use gasoline. The coastal elites who now dominate Democratic politics will happily trade the blue collar for the green collar...It's obvious who now pulls the Democratic levers of power, and anyone in the energy or health-care business had better erect the barricades."
Nice imagery for a Hollywood movie, but how will it play out in Washington?
George W. Bush's Impossible Achievement
As he serves out his time, the self-styled Decider is putting Americans through the most agonizing period of indecision in three-quarters of a century, leaving a unified nation holding its breath until January 20th.
Paul Krugman cites today's parallel with the "power vacuum" in 1932-1933 that was "disastrous for the U.S. economy, at least in part because the outgoing administration had no credibility, the incoming administration had no authority and the ideological chasm between the two sides was too great to allow concerted action."
George W. Bush has spent eight years using the power of an imperial presidency to make government impotent and has succeeded so well that Congress is helpless to do anything about saving a failing economy until he leaves Washington.
His Treasury Secretary has disbursed almost half of the $700 billion bailout money he begged for and, with the crisis worsening, has gone into hiding until he can get out of town.
Congressional Democrats are tap-dancing for time by castigating drowning Detroit auto makers for not flying tourist class while checking airline schedules for their own two-month vacations.
Meanwhile, Wall Street keeps sinking to new lows daily, credits markets are freezing up again and the rest of America is facing a holiday season of deep despair.
Bush's crowning achievement is that he will leave the White House, having united the country, in fact the whole world, in a universal hunger for government to do something, anything but what he has been doing and not doing during his tenure in office.
The minute Barack Obama takes the oath, there will be a huge sigh of relief heard around the globe.
Paul Krugman cites today's parallel with the "power vacuum" in 1932-1933 that was "disastrous for the U.S. economy, at least in part because the outgoing administration had no credibility, the incoming administration had no authority and the ideological chasm between the two sides was too great to allow concerted action."
George W. Bush has spent eight years using the power of an imperial presidency to make government impotent and has succeeded so well that Congress is helpless to do anything about saving a failing economy until he leaves Washington.
His Treasury Secretary has disbursed almost half of the $700 billion bailout money he begged for and, with the crisis worsening, has gone into hiding until he can get out of town.
Congressional Democrats are tap-dancing for time by castigating drowning Detroit auto makers for not flying tourist class while checking airline schedules for their own two-month vacations.
Meanwhile, Wall Street keeps sinking to new lows daily, credits markets are freezing up again and the rest of America is facing a holiday season of deep despair.
Bush's crowning achievement is that he will leave the White House, having united the country, in fact the whole world, in a universal hunger for government to do something, anything but what he has been doing and not doing during his tenure in office.
The minute Barack Obama takes the oath, there will be a huge sigh of relief heard around the globe.
Thursday, November 20, 2008
Obama's Women
With the Hillary Clinton melodrama still unfolding, the news today is about two women heading for the Obama cabinet--Janet Napolitano as head of Homeland Security and fund-raiser Penny Pritzker for Secretary of Commerce.
Gov. Napolitano of Arizona won reelection in John McCain's home state by a nearly 2-1 margin in 2006 and, during her years as a US attorney, was involved in the investigation of the Oklahoma City bombing. Her new job could position her to run against McCain for the Senate in 2010.
Ms. Pritzker, on the other hand, is a Chicago billionaire with no previous political experience but much in the field of commerce as a member of one of America's least-known richest families.
My final years as editor of McCalls were spent working for her uncles, who bought the magazine as a minor investment in the 1970s and were astonished to find themselves on the front pages of the New York Times. "Welcome to the information industry," I told them by way of explanation.
Their niece may be similarly surprised if and when she faces Senate confirmation and finds herself being grilled about her stint with the Superior Bank of Chicago, another minor family subsidiary that made headlines by being embroiled in a subprime mortgage mess two decades ago. But her career in business and philanthropy will no doubt override that minor embarrassment.
Meanwhile, along with the appointment of Karen Kornbluh as his chief policy director and longtime family friend Valerie Jarrett as White House senior adviser, Barack Obama has made a good start at surrounding himself with powerful women, no surprise for a young man who was reared by a strong grandmother and chose an even stronger wife.
Update: Ms. Pritzker late today announced her withdrawal from consideration for the Commerce position. As I recall, her family always hated getting too much attention to their business dealings.
Gov. Napolitano of Arizona won reelection in John McCain's home state by a nearly 2-1 margin in 2006 and, during her years as a US attorney, was involved in the investigation of the Oklahoma City bombing. Her new job could position her to run against McCain for the Senate in 2010.
Ms. Pritzker, on the other hand, is a Chicago billionaire with no previous political experience but much in the field of commerce as a member of one of America's least-known richest families.
My final years as editor of McCalls were spent working for her uncles, who bought the magazine as a minor investment in the 1970s and were astonished to find themselves on the front pages of the New York Times. "Welcome to the information industry," I told them by way of explanation.
Their niece may be similarly surprised if and when she faces Senate confirmation and finds herself being grilled about her stint with the Superior Bank of Chicago, another minor family subsidiary that made headlines by being embroiled in a subprime mortgage mess two decades ago. But her career in business and philanthropy will no doubt override that minor embarrassment.
Meanwhile, along with the appointment of Karen Kornbluh as his chief policy director and longtime family friend Valerie Jarrett as White House senior adviser, Barack Obama has made a good start at surrounding himself with powerful women, no surprise for a young man who was reared by a strong grandmother and chose an even stronger wife.
Update: Ms. Pritzker late today announced her withdrawal from consideration for the Commerce position. As I recall, her family always hated getting too much attention to their business dealings.
Health Care in a Sick Economy
As jobs disappear and economic anxiety spreads, the incoming Congress is showing signs of getting serious about health care reform, and the entrenched health insurers are signaling their willingness to negotiate.
Two trade groups, America’s Health Insurance Plans and the Blue Cross and Blue Shield Association, are saying they would guarantee coverage for people with pre-existing medical conditions, if they can get a mandate for individual coverage by everyone, sick or well.
This "concession" comes as seven senators responsible for health legislation met yesterday and promised to work together--Democrats Max Baucus, Chris Dodd, Ted Kennedy and John D. Rockefeller IV along with Republicans Michael Enzi, Charles Grassley and Orrin Hatch.
The imminent appointment of Tom Daschle as Obama's point man on the issue is another sign that the failing economy is putting more pressure on Washington to create a health care safety net for everyone just as the 1930s produced Social Security for the old.
Without limits on predatory premiums and safeguards against fraud by providers, guaranteed coverage would do nothing to solve the crisis in which one out of every three dollars spent on health is going to insurers' overhead and profits.
But at least the issue is on the table, and the Wall Street Journal is sounding the alarm about a "slow-motion catastrophe" that might "add tens of millions more people to the federal balance sheet. Because the public option will enjoy taxpayer sponsorship, it will offer generous packages to consumers that no private company could ever afford or justify. And because federal officials will run not only the new plan but also the 'market' in which it 'competes' with private programs--like playing both umpire and one of the teams on the field--they will crowd out private alternatives and gradually assume a health-care monopoly."
Sounds something like the approach of a single-payer system, which rational observers have been urging all along, but nothing could be worse than what we have now
Two trade groups, America’s Health Insurance Plans and the Blue Cross and Blue Shield Association, are saying they would guarantee coverage for people with pre-existing medical conditions, if they can get a mandate for individual coverage by everyone, sick or well.
This "concession" comes as seven senators responsible for health legislation met yesterday and promised to work together--Democrats Max Baucus, Chris Dodd, Ted Kennedy and John D. Rockefeller IV along with Republicans Michael Enzi, Charles Grassley and Orrin Hatch.
The imminent appointment of Tom Daschle as Obama's point man on the issue is another sign that the failing economy is putting more pressure on Washington to create a health care safety net for everyone just as the 1930s produced Social Security for the old.
Without limits on predatory premiums and safeguards against fraud by providers, guaranteed coverage would do nothing to solve the crisis in which one out of every three dollars spent on health is going to insurers' overhead and profits.
But at least the issue is on the table, and the Wall Street Journal is sounding the alarm about a "slow-motion catastrophe" that might "add tens of millions more people to the federal balance sheet. Because the public option will enjoy taxpayer sponsorship, it will offer generous packages to consumers that no private company could ever afford or justify. And because federal officials will run not only the new plan but also the 'market' in which it 'competes' with private programs--like playing both umpire and one of the teams on the field--they will crowd out private alternatives and gradually assume a health-care monopoly."
Sounds something like the approach of a single-payer system, which rational observers have been urging all along, but nothing could be worse than what we have now
Wednesday, November 19, 2008
Rivals, Retreads and Other Irrelevance
As he picks Rahm Emanuel, Eric Holder, Tom Daschle and flirts with the former First Lady, there is a predictable chorus of criticism that going back to the Clinton years is not the change Barack Obama promised in his campaign.
Some of that was heard when he chose Joe Biden as his running mate, but Obama's goal all along was to persuade voters wary of his inexperience that the best of the past would not be swept away in rhetorical enthusiasm for the new.
He is fulfilling that promise and concentrating on the real change from the Bush-Cheney years, bringing competence back to Washington, wherever he finds it--in the over-touted Lincolnesque "team of rivals" or in the best of the 1990s.
Holder, the new Attorney General who served under Janet Reno, will have the monumental job of restoring Justice to its pre-Ashcroft, pre-Gonzales stature, as he indicated in a speech last June, citing that "disrespect for the rule of law is not only wrong, it is destructive in our struggle against terrorism."
"Our government," he said, "authorized the use of torture, approved of secret electronic surveillance against American citizens, secretly detained American citizens without due process of law, denied the writ of habeas corpus to hundreds of accused enemy combatants, and authorized the use of procedures that violate both international law and the United States Constitution."
Obama's apparent willingness to consider keeping Robert Gates on as Secretary of Defense is based on Gates' capable performance following Don Rumsfeld's ideological reign in the Pentagon, and there may well be places in the new administration for Colin Powell, Chuck Hagel and other able Republicans.
So far, Obama's choices have reflected well on his judgment about the judgment of those who will be helping him, regardless of their resumes. January 20th can't come a minute too soon.
Some of that was heard when he chose Joe Biden as his running mate, but Obama's goal all along was to persuade voters wary of his inexperience that the best of the past would not be swept away in rhetorical enthusiasm for the new.
He is fulfilling that promise and concentrating on the real change from the Bush-Cheney years, bringing competence back to Washington, wherever he finds it--in the over-touted Lincolnesque "team of rivals" or in the best of the 1990s.
Holder, the new Attorney General who served under Janet Reno, will have the monumental job of restoring Justice to its pre-Ashcroft, pre-Gonzales stature, as he indicated in a speech last June, citing that "disrespect for the rule of law is not only wrong, it is destructive in our struggle against terrorism."
"Our government," he said, "authorized the use of torture, approved of secret electronic surveillance against American citizens, secretly detained American citizens without due process of law, denied the writ of habeas corpus to hundreds of accused enemy combatants, and authorized the use of procedures that violate both international law and the United States Constitution."
Obama's apparent willingness to consider keeping Robert Gates on as Secretary of Defense is based on Gates' capable performance following Don Rumsfeld's ideological reign in the Pentagon, and there may well be places in the new administration for Colin Powell, Chuck Hagel and other able Republicans.
So far, Obama's choices have reflected well on his judgment about the judgment of those who will be helping him, regardless of their resumes. January 20th can't come a minute too soon.
Bailouts: The Game Show
TV news is beginning to look like the mother of all game shows with Washington contestants competing to pick a jackpot for the economy.
Here is Henry Paulson wavering between the curtains marked Toxic Loans and Bank Capital, some members of Congress wanting to take a flyer on Detroit, Sheila Bair of the FDIC choosing Foreclosure Relief as the audience of lobbyists cheers them on and the rest of us wait anxiously for someone to come up with a winner.
Mitt Romney, whose family money comes from the car industry, shows up today to opt for Big Three Bankruptcy while a nearby New York Times editorial urges Congress to open the curtain marked Modifying Home Loans.
The Bailout Show so far is not getting stock-market ratings like the Neilsens of such classics as Deal or No Deal, but changing the host in January may make a difference. Meanwhile we're all watching, remote in hand, hoping that no one shows up to repossess the TV set.
So far, the show looks far from ready for prime time.
Here is Henry Paulson wavering between the curtains marked Toxic Loans and Bank Capital, some members of Congress wanting to take a flyer on Detroit, Sheila Bair of the FDIC choosing Foreclosure Relief as the audience of lobbyists cheers them on and the rest of us wait anxiously for someone to come up with a winner.
Mitt Romney, whose family money comes from the car industry, shows up today to opt for Big Three Bankruptcy while a nearby New York Times editorial urges Congress to open the curtain marked Modifying Home Loans.
The Bailout Show so far is not getting stock-market ratings like the Neilsens of such classics as Deal or No Deal, but changing the host in January may make a difference. Meanwhile we're all watching, remote in hand, hoping that no one shows up to repossess the TV set.
So far, the show looks far from ready for prime time.
Tuesday, November 18, 2008
Triumph of the Turncoat Houdini
Today's escape from losing his chairmanship of the Senate Homeland Security Committee caps Joe Lieberman's career of having it both ways in two decades of sanctimonious posturing and backroom politicking.
With a novelist's eye for the absurd, Joan Didion nailed him in her reporting of the 2000 election campaign:
"Senator Lieberman, who had come to the nation's attention as the hedge player who had previously seized center stage by managing both to denounce the president [Bill Clinton] for "disgraceful" and "immoral" behavior and to vote against his conviction (similarly, he had in 1991 both voiced support for and voted against the confirmation of Clarence Thomas) was not, except to the press, an immediately engaging personality...
"His speech patterns, grounded in the burdens he bore for the rest of us and the personal rewards he had received from God for bearing it, tended to self-congratulation."
Lieberman called today's verdict “fair and forward-looking” and one of “reconciliation and not retribution,” but others, like this constituent, will see it as another slithering out of responsibility for his actions by the weasel who was voted out by his party in the 2006 primaries but kept his seat when Republicans named a non-entity to throw the three-way race his way.
The President-Elect and Senate Democrats may congratulate themselves on today's act of anonymous generosity, but Connecticut residents who are enraged by and stuck with Lieberman's smug, self-righteous, self-serving wrong-headedness won't join in the celebration.
With a novelist's eye for the absurd, Joan Didion nailed him in her reporting of the 2000 election campaign:
"Senator Lieberman, who had come to the nation's attention as the hedge player who had previously seized center stage by managing both to denounce the president [Bill Clinton] for "disgraceful" and "immoral" behavior and to vote against his conviction (similarly, he had in 1991 both voiced support for and voted against the confirmation of Clarence Thomas) was not, except to the press, an immediately engaging personality...
"His speech patterns, grounded in the burdens he bore for the rest of us and the personal rewards he had received from God for bearing it, tended to self-congratulation."
Lieberman called today's verdict “fair and forward-looking” and one of “reconciliation and not retribution,” but others, like this constituent, will see it as another slithering out of responsibility for his actions by the weasel who was voted out by his party in the 2006 primaries but kept his seat when Republicans named a non-entity to throw the three-way race his way.
The President-Elect and Senate Democrats may congratulate themselves on today's act of anonymous generosity, but Connecticut residents who are enraged by and stuck with Lieberman's smug, self-righteous, self-serving wrong-headedness won't join in the celebration.
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