Politics Plus

Today I have a couple articles about the collapse of our financial markets.  The information is still trickling in.

The Federal Reserve’s haste in bailing out AIG last year forced the US government to come up with tens of billions of dollars more for the insurance giant’s counterparties, auditors said.

"The logo of the American International Group (AIG) outside their office in the lower Manhattan area of New York. The Federal Reserve’s haste in bailing out AIG last year forced the US government to come up with tens of billions of dollars more for the insurance giant’s counterparties, auditors said."

A report to be released Tuesday by special inspector general Neil Barofsky, who is overseeing spending of the 700-billion-dollar Troubled Asset Relief Program, said the central bank was forced to act quickly with AIG on the verge of a meltdown that some believed would have crippled the financial system.

Acting through the Federal Reserve Bank of New York, the central bank had to pull together a loan of 85 billion dollars for AIG on September 16, 2008, after a private bank consortium rejected a new credit line of 75 billion dollars, the report said.

"In a rush to take action quickly, the (Fed) did not craft its own terms and instead simply adopted in substantial part the economic terms of a draft term sheet under consideration by a consortium of private banks," Barofsky wrote.

The high interest rate in the loan weakened AIG further, he said, and the bailout reduced any leverage in negotiating "haircuts" with AIG counterparties — banks and others that had obtained credit default swaps, a form of insurance for their mortgage securities, through AIG.

In finance, a haircut is a percentage subtracted from the par value of assets used as collateral.

The government’s AIG bailout eventually reached over 170 billion dollars, including 62.1 billion dollars that was "effectively transferred" by the government to various banks at 100 percent of face value, the inspector general said.

The report said questions had been raised about whether this was a "backdoor bailout" of banks.

Although the intent to bail out banks was not clear, the report said the effect of the actions was "that tens of billions of dollars of government money was funneled inexorably and directly to AIG’s counterparties."

The report said Fed officials believe these funds will eventually be repaid from the underlying mortgage assets, but that "it is difficult to assess the true costs of the Federal Reserve’s actions until there is more clarity as to AIG’s ability to repay all of its assistance from the government."

The counterparty payments were not initially disclosed but in March AIG revealed the amounts paid to major banks… [emphasis added]

Inserted from <Alternet>

TARP was supposed to purchase troubled assets.  Instead Tim Geithner and Larry Summers manipulated the program into socialism for the rich.  We’re just beginning to get an understanding of this now, and I’m pleased to say that we’re finally about to do some serious investigation.

In a recent Nation cover story, William Greider decried the lack of attention being paid by the media to the Financial Crisis Inquiry Commission (FCIC) charged with investigating the causes of the financial meltdown.

"The press has moved on. Financial crisis was last year’s story," he wrote. But "how can Washington reform the financial system when we still don’t know what happened?"

On Friday, FCIC Chairman Phil Angelides was in DC to deliver a keynote address at a New America Foundation conference on financial reforms, jobs, housing and the dollar. Economists, policy-makers, activists and some press were in attendance, but coverage was once again scant, even though there are encouraging signs that the commission is now ready to kick into high gear.

Angelides told the audience that the ten-member bipartisan Commission will "examine the causes of the financial crisis, writing the official history of what brought our financial and economic system to its knees." Throughout next week the FCIC will announce senior staff positions. Expect hearings "all throughout next year," and subpoena power to be used to compel testimony and access documents when necessary. Where criminal conduct is suspected, referrals will be made to the Department of Justice or appropriate state attorney general.

"This accounting is desperately needed," said Angelides. "The fact is that late in 1929, people were throwing themselves out of windows on Wall Street. This year they’re lining up for bonuses. There has been no serious self-examination on Wall Street of what has occurred and what should be in the future."

The hope of progressives is that the FCIC will meet the high bar set by the 1930s Pecora Commission, whose investigation exposed Wall Street corruption and helped galvanize public support for New Deal reforms like the Glass-Steagall Act, the repeal of which is considered a contributor to the financial collapse… [emphasis added]

Inserted from <The Nation>

This is coming about a year late.  It should have begun while Crawford Caligula was still in office, because two major reforms are desperately needed.  The first is legislating that too big to fail is too big to exist.  The second id putting banksters behind bars.

President Obama’s success for placing judicial appointments is at a record setting low.  Why?  The reason is that all the nation’s business is languishing in a morass of GOP obstruction, calling it bipartisanship.

Despite a solid Democratic majority in the Senate, President Obama is on pace to set a record for the fewest judges confirmed during a president’s first year in the White House.

So far, only six of Obama’s nominees to the lower federal courts have won approval. By comparison, President George W. Bush had 28 judges confirmed in his first year in office, even though Democrats held a narrow majority for much of the year. President Clinton put 27 new judges on the bench in his first year.

The slow pace of approving judges has gotten little attention while Democrats and Republicans have fought over healthcare, the budget and the economic stimulus bill. In mid-summer, Obama and the Democrats also won confirmation for Supreme Court Justice Sonia Sotomayor.

But liberal activists have voiced growing irritation that Republicans are quietly using their minority power to block Senate votes on Obama’s judicial nominees. They note that during the Bush administration, Republicans insisted the president’s nominees deserved up-or-down votes.

"This has become more bitter and more partisan than the Clinton years. It is obstructionism across the board," said Nan Aron, president of the Alliance for Justice, an association of environmental, civil rights and consumer advocacy organizations.

The dispute is due to come to a head Tuesday, when the Senate votes on whether to cut off debate on Judge David F. Hamilton of Indiana, Obama’s first court nominee.

In mid-March, the White House trumpeted Hamilton’s nomination to the U.S. 7th Circuit Court of Appeals in Chicago and cited the choice as an example of "setting a new tone" and putting "the confirmation wars behind us."

A veteran trial judge with the reputation of a moderate, Hamilton was the son and grandson of Methodist ministers in southern Indiana. The state’s well-respected Republican Sen. Richard G. Lugar also said he "enthusiastically supported" the nomination.

But Hamilton ran into a buzz saw of criticism from conservative activists in Washington. They noted he had worked for the American Civil Liberties Union before becoming a judge in 1994.

And they pointed in particular to two of his judicial decisions as evidence he was a liberal activist. In one, Hamilton blocked the Indiana General Assembly from opening sessions with Christian prayers. In a second, he blocked a state law from taking effect that set a mandatory waiting period for women seeking abortions.

Some Republicans also said they were not obliged to readily support Obama’s nominees because Democrats had blocked several well-qualified Bush nominees.

In June, Hamilton won approval on a party-line vote in the Senate Judiciary Committee. Since then, Republicans have refused to permit a floor vote on his confirmation.

Under Senate rules, court nominees need just a majority, or 50 votes. But the minority can refuse to agree to a deadline for ending debate.

The only option for Senate Majority Leader Harry Reid (D-Nev.) was to invoke "cloture," which requires 60 votes. Such a motion also commits the Senate to as many as 30 hours of debate on the nomination.

Last week, Reid announced he would seek a cloture vote on Hamilton.

Sen. Jeff Sessions (R-Ala.), a leader of the Republican opposition, won applause Thursday from the conservative Federalist Society when he described the fight over Hamilton as a part of an ideological struggle over the judiciary.

"Today, we find ourselves at a legal crossroads," he said. "We are in a struggle to determine whether or not the classical Western tradition of law will continue to exist."

Liberal advocates scoffed at the notion that Hamilton was extreme or out of the mainstream.

"This is a terrific first nominee, a brilliant young judge with bipartisan support in Indiana," said Douglas Kendall, president of the Constitutional Accountability Center. "In any normal world, he should be confirmed easily and unanimously."… [emphasis added]

Inserted from <LA Times>

Do you remember the “nuclear option”?  In 2005, the GOP majority in the Senate threatened to change the Senate floor rules, disallowing filibusters on judicial nominees, because Democrats had filibustered just a few of the most extreme ideologues Bush was trying to appoint to the federal courts.  This became known as the “nuclear option”.  It never came to pass, because a group of fourteen so-called moderates, seven Republicans and seven Democrats, subsequently known as the “gang of fourteen”, made a deal.  They all promised to vote against the nuclear option and to filibuster judicial nominees only in the most extreme cases.  The GOP had driven several of their members out of office, but a few remain.  They are Susan Collins (R-ME), Lindsey Graham (R-SC), Joe LIEberman (R-CT), John McConJob (R-AZ), Olympia Snowe (R-ME). At the time, LIEberman was listed as a Democrat, but I include him with the Republicans, because he is one, and it’s time the Democrats recognize that and act appropriately.  The situation has changed.  Republicans are blocking all Obama’s nominees, most of which have been too centrist for my taste, because I believe we need to balance the courts that are now packed with right wing ideologues.

We now have these five Republicans who are on record as having promised not to filibuster judicial nominees, except in the most extreme cases.  Will they keep their promise?  If they do not, should Democrats invove the “nuclear option”?

Far from the diplomatic settlement I have hoped for in this conflict, the situation in the middle-east is deteriorating.

Palestinian Authority leaders say that they are launching a new diplomatic campaign to gain international backing for a Palestinian state, after which they will unilaterally declare statehood in the West Bank, Gaza Strip, and East Jerusalem – without waiting for a peace treaty with Israel.

Israel pushed back Sunday, issuing a warning that such a declaration of statehood would destroy previous peace agreements and goodwill.

The already rocky road to peace talks – which the US and other international mediators have for months been trying to coax Israelis and Palestinians back onto – just got rougher.

The statehood push comes just 10 days after Palestinian President Mahmoud Abbas said the he would not seek office in the next Palestinian elections, and phrased his announcement as an effective threat of resignation not just from office but the peace process itself. Israeli intransigence and US ineffectiveness over Israeli settlements were largely to blame, he said.

Now, Mr. Abbas plans to actively solicit worldwide support for a declaration of Palestinian statehood, irrespective of any negotiations with Israel.

Statehood by UN vote

Abbas’ chief negotiator, Saeb Erekat, said in an interview this weekend with the newspaper al-Ayyam that the Palestinian leader was going to turn to the UN Security Council to obtain recognition of a Palestinian state through a vote. In launching this campaign for statehood, aides said Abbas would travel to Cairo Wednesday to discuss the idea with Egyptian President Hosni Mubarak, after which he would visit other regions – including Europe and Latin America – to shore up support.

The move could be a spark for stalled peacemaking efforts, or it could itself spur further conflict between Palestinians and Israelis – who view the Palestinian proposal to unilaterally declare statehood as an out-and-out threat. Either way, the latest Palestinian moves show the extent to which the Palestinian leadership is frayed by the last few frustrating weeks of failed diplomacy, and appears to have lost faith in a US-brokered peace process bringing genuine results.

"The Israelis impeded negotiations, and therefore we are left with only this option in order to safeguard our national project," says Mohammed Shtayyeh, a member of the Fatah Central Council in Ramallah.

"We have been left with no other choices and nothing to lose," Mr. Shtayyeh says. "How can Abbas or any other Palestinian leader survive in this context without political developments? This is the only thing we can offer our people now. The time is right."

Netanyahu: Only one way forward

Israel Prime Minister Benjamin Netanyahu warned on Sunday night that negotiation was the only way forward, and that a unilateral move on the Palestinians’ part would mean the end of the process begun with the 1993 Oslo Accords.

"There is no substitute for negotiations between Israel and the Palestinian Authority, and any unilateral path will only unravel the framework of agreements between us and will only bring unilateral steps from Israel’s side," Netanyahu told a Middle East policy conference.

Earlier in the day, Israeli Defense Minister Ehud Barak warned Netanyahu’s cabinet at its weekly meeting that the risks of the Palestinians declaring their own state were real, because many countries across the international community could be expected to support the statehood proposal. Israel itself was created by a vote in the United Nations.

"Without an agreement, there is a possibility that support will increase for the Palestinians declaring a state unilaterally," Mr. Barak told the cabinet, according to a statement released afterwards.

Hani el-Masri, a political analyst and columnist in the West Bank city of Ramallah, says that Abbas sees his list of options as running short. Attempts to restart peace talks since President Obama took office in January have not borne fruit, which Abbas blames primarily on Israel’s refusal to call a total freeze on settlement growth. Netanyahu says he’s ready to come back to talks without preconditions, meaning a settlement slow-down is all that’s on offer… [emphasis added]

Inserted from <CS Monitor>

Apparently Netanyahu plans to annex the Israeli settlements in Palestinian territory, if Palestine declares statehood.  As I see it, there is no peace possible in the region as long as Israel refuses to negotiate in good faith.  Such negotiation must include a willingness to stop their de facto takeover of Palestinian territory by building settlements within its boundaries.  I find it especially ironic that Israel objects so strongly to Palestine to take the very same path to statehood that Israel took in 1948.  The US must give our objection to settlement building teeth, not just the wink and smile it has had to date.

I found an interesting article about the practical effects of the Stupak-Pitts amendment.

Like most anti-choice efforts we’ve seen come out of Congress and state legislatures in the past 30+ years since abortion was legalized, Stupak’s Coathanger amendment is another attack on the practical side of the issue: on access. Rather than going for Roe and actually proposing something that could result in it’s being overturned, he’s going the practical route of making it more difficult to obtain by stretching the limits of the Hyde amendment beyond the breaking point.

The Stupak amendment does not literally say that plans on the exchange can’t include abortion coverage, it just makes it completely impossible that a plan could for several reasons. To pretend that a reading of the Stupak amendment could not easily be used to stop the sale of plans covering abortion on the exchange is absurd. That is like claiming a law making it illegal to sell tubes capable of having a bullet pass through at high speeds would not be a ban on firearms. Nita Lowey is correct that this amendment could easily put new restrictions on a woman’s ability to buy an insurance plan that does include abortion coverage from a private insurance company, even with her own money.

Once the dust settles on the legal issues of what this bill does, you have to look at the practical results. Even if insurers participating in the exchange can find the needle to thread to offer abortion coverage, would they? No, says one industry expert.

"I really think it would be impractical," says Robert Laszewski, a health insurance industry consultant….

Laszewski says the problem is that by all estimates, the vast majority of people who will be shopping in the new exchanges will be getting subsidies, so they won’t be allowed to get abortion coverage. Thus, if a health insurer did offer a separate plan with abortion coverage, it would only be available to a small universe of buyers, and it simply wouldn’t make much business sense.

"It’s not an ideological issue, it’s not about abortion or not abortion," Laszewski says. "It’s about what is administratively simpler, easier to administer. It just adds a level of complexity they will likely avoid."

Sara Rosenbaum, a health lawyer and professor at George Washington University, agrees that it’s impractical to expect health insurance plans to cover abortion in the exchanges, even for people paying the full premiums without federal help.

"If you speak to insurers in the industry, they will tell you that they simply can’t operate under these circumstances," Rosenbaum says. "They need to be able to offer standard products that get administered in a standard way for everybody."

For insurers, it’s about the bottom line, and the bottom line is easier to maintain through standardized, streamlined processes. That means offering a standard product, in this case one that excludes abortion… [emphasis added]

Inserted from <Daily Kos>

In my last article on this subject, I said essentially the same thing, but did I did not reason it out as clearly as this does.  This is a Republican attempt to kill health care reform and a DINO attempt to win points with the theocon set.  Nothing we can do will influence the Republicans in Congress.  The only solution for them is to vote them out of office, but we should pressure the DINOs in every way possible.  I received a petition from Credo Mobile that I found most appropriate:

Sign this petition and send a coat hanger to the 20 formerly pro-choice Democrats — all men — who voted to pass the Stupak Amendment.

"We know what happens when women are denied access to reproductive health care including abortion. And we can’t go back to an era of coat hangers and back alley abortions. Reconsider your vote on the Stupak Amendment. Tell House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid that the final health care bill that emerges from the conference committee can’t turn the clock back on women’s rights."

To send a DINO a coat hanger, Click Here.