The Unexpected Highlight May 31, 2013June 1, 2013 I took yesterday off — it’s a lot of work having 285 people over for dinner. (Not to my place, mind you. My place seats 8.) It was a mainly LGBT fundraiser with the First Lady t0 celebrate the progress we’ve made since the last time, as a senator’s wife, she spoke at our dinner. Here‘s the video we showed. It begins with an excerpt from her remarks five years ago. There were many highlights — Super Bowl champ Brendon Ayanbadejo was there! Inaugural poet Richard Blanco was there! P-FAW’s Michael Keegan, GLSEN’s Eliza Byard, Lambda’s Kevin Cathcart, and GMHC’s Marjorie Hill were there! A JIHAD FOR LOVE’s gay Muslim documentarian Parvez Sharma was there! Rabbi Sharon Kleinbaum and Freedom to Marry’s Evan Wolfson and the ACLU’s James Esseks and the Victory Fund’s Chuck Wolfe were there! Media Matters founder David Brock and Athlete Ally founder Hudson Taylor and All Out co-founder Andre Banks and SLDN’s Aubrey Sarvis were there! The first transgender member of the DNC’s executive committee, Babs Siperstein, was there! Robbie Kaplan, who argued Edie Windsor’s case before the Supreme Court, was there! Edie Windsor HERSELF was there! – along with Members of Congress, gay and straight, two gubernatorial candidates, the nation’s first openly gay ambassador and, for a few minutes, the President’s Chief of Staff . . . . . . Sara Bareilles sat herself down at a grand piano and sang three great songs . . . . . . and it was no surprise that Bravo’s Andy Cohen would do a fine job emceeing and that NBA center Jason Collins would give the First Lady a great intro and that the First Lady herself would bring the assembled to their feet and leave them cheering . . . all that went as planned . . . but the unexpected highlight of the evening was a 22-year-old transgender woman who did a lovely job of introducing DNC Chair Debbie Wasserman-Schultz and then turned to the portal through which the Congresswoman was to emerge. But was not emerging. She waited a few moments . . . waited a few more . . . nervous, supportive laughter rising from the crowd . . . and then — far from freezing in the headlights — won us over completely by telling us “her story,” taking questions, making us laugh — the transgender CEO of a $3.4 billion-dollar biotech firm at my table with her wife was loving every minute of it — until, at last, DWS appeared . . . by which time young Evie Renee Arroyo was, at least in our eyes, a star.
Spending Versus Doing May 29, 2013May 29, 2013 A FURTHER CASE FOR CAUTION Yesterday, Chris Brown sobered us up a bit. Today, someone going by the name Tyler Durden (“Fight Club”) smacks us around a bit more. Here. SIGA After all that, the stock traded up 18 cents to $3.84 on 2-plus million shares in volume. This suggests people are a little positive, as they assess the Delaware Supreme Court’s ruling, but so far, only a little. Wedbush, which “Ranked 2012 Top Stock Picking Firm” according to its website, raised its target price to $11, with this comment: We view the decision of the Supreme Court to reverse the lower court’s 50% profit remedy and direct the court to restrict its damages to “contract expectation damages” as a victory for SIGA, and expect any subsequent damage remedy to be immaterial to SIGA. Expectation damages are designed to put the aggrieved party in the position they would have enjoyed at the time of the breach of contract, in this case, in 2006, which was prior to any ST-246 procurement contract. PIP’s “legal victory” is hollow as Vice Chancellor Parson’s has already ruled that a specific lump sum for expectation damages is “speculative, uncertain, contingent and conjectural” and therefore, inappropriate.” The market does not agree, at least so far, and I’ve got to say that if I were the judge being overturned on appeal, I wouldn’t suddenly think the company I had branded as the villains in this dispute (SIGA) deserved to be let off with “immaterial” damages. But I sure hope Wedbush is right. Even if they’re not, I’m happy to hold on for the reasons discussed yesterday. And just in case they are right, I couldn’t resist some July and December calls, which at their closing prices last night seemed cheap to me. (If you don’t know what calls are, good. You’ll just lose money. When will I ever learn?) On the bullish side, here is Glenn Hudson’s take. THE VANISHING DEFICIT — II Joe Devney: “I agree with you. Let’s just repeal the sequester. No need to replace it, or tie it to other Congressional actions. There already exists a bill, H.R. 900, to do just that. One sentence: ‘Section 251A of the Balanced Budget and Emergency Deficit Control Act of 1985 is repealed.’ I’ve already written to my Congresswoman (twice!) and my two Senators asking them to support it.” ☞ The idea was to force a grand bargain; but because the only piece that really affected Congressmen was flight delays — and that could be quickly fixed once it began to bite — no grand bargain was reached. So repeal the sequester — but then keep pushing for that grand bargain. We need modestly more tax revenue for the next couple of decades, because for the last three we’ve been leaning too heavily in the direction of private consumption — which has been great for the makers of Korean TV’s, of which I have 7 — and not quite heavily enough in the direction of public consumption — which has led to things like bridges collapsing. We need to cut the size of the military — but let’s start by cutting the programs the Pentagon doesn’t even want, not by cutting indiscriminately. We need to invest in infrastructure — that has to be part of the grand bargain, even though (the crazy way the government does its accounting) it adds to the deficit. And, yes, we need to cut the growth in entitlement spending in “the out years” to show the financial markets around the world that we’re on a sustainable track . . . because if we do, we’ll have a much better chance of building the kind of economic strength that will in fact render those cuts unnecessary before they even begin to kick in. (And if we don’t, we’d more likely have to make the cuts anyway — only with less time to prepare for them, and without having had the benefit of that economic confidence along the way.) SPEND VERSUS DO So one more thing on this. As you know, many average Americans hate government spending. But the indispensable Rachel Maddow notes that they love much of what government does. They love those Medicare and Social Security checks, love our military, love that our meat is inspected and our planes don’t collide . . . so Rachel suggests we remind people what they’re saying when they demand the government spend less: they are demanding government do less. That won’t end the discussion, because many people think we spend 10% of our budget on foreign aid (it’s less than 1%), or that there are tens of billions of dollars to be saved in waste and fraud (you purchase one lousy $600 hammer . . . ) — which there surely are, but (a) in a three point seven trillion dollar budget, tens of billions, while surely worth saving, don’t really mean that much; and (b) no government can operate with zero waste and fraud, hard though every government should try. So let’s get our Republican uncles to come out for maintaining fewer bridges, helping fewer kids get the nourishment they need to concentrate in school, investing less in basic research, providing less care to wounded veterans — not let them off the hook without specifics. Deal?
The Case for Caution May 28, 2013May 27, 2013 Yesterday: these 31 charts to restore your faith in humanity. If you were off barbecuing, take a look! Also, an item on SIGA. If you own it, take a look at that, too. Jim has now posted follow-ups: SIGA: The Judge Is Boxed In and SIGA: The Judge’s Paradox and SIGA: The Parasite’s Dilemma. His conclusion (loosely paraphrased): who the hell knows? But neither he nor I nor my heavily invested institutional friend would be selling at anything like Friday’s $4.40 after-hours close. Finally, there was Matt Yglesias’s The Case for Stocks, citing an argument by Joshua Brown that the S&P earnings and dividends have doubled since 1999, when the index was last so lofty . . . so in a sense, those 500 stocks are only half as expensive as they were then: you get twice the bang for the buck. I called it all “perhaps a little blithe,” hoping to inject a note of caution, but my pal Chris Brown, of Aristides Capital — whose work ethic and rigor exceed mine in the same proportion as, say, chess exceeds checkers or bridge, go fish — responded with a case for caution: While I like Josh Brown to the extent he swears a lot and may be a distant relative, there are two key errors in his piece: (1) the words “profit margin” never appear. Sure, earnings are high, but margins (and the closely related corporate profits as % of gdp) are also near record highs. Corporate profit margins are sustainable to the extent that both (1) we continue to run massive fiscal deficits, and (2) business fixed-investment and new business creation lag. Here’s a nice graph from Hussman: [it shows corporate profits as a share of GDP rising from little more than 4% in 1974 to more than 10% now — in a pretty tight inverse correlation to the level of government and household saving, which was about 8% of GDP in 1974, compared with negative 5% or so now]. (2) Brown writes: “The marginal speculators are doing futures, currencies or some other sort of crack cocaine, and it’s almost impossible to find a regular person who has any interest in talking about the stocks they own.” This is flat out wrong. In the last month, I’ve seen university professors trading solar stocks at >30x next year’s revenue, and a recent dinner guest reported that he and 7-8 buddies had been trading in $10k chunks on such wisdom as “Ford is going up. We should get some.” The 52-week high list is peppered with day trader darlings. A broker told me Friday that hedge fund clients who would normally be 40% net long are 80% net long, just because they see the market going up so much and they want to participate. Some statistics show a lot of speculation as well—the last time there was this much margin debt out there as a % of the whole equity market was the last time the period surrounding the 2007-2009 crash. There’s no reason this has to end tomorrow. Between the Fed printing $85 billion a month, and Japan printing nearly as much (and three times as much relative to the size of their economy), there is a lot of money that needs to go somewhere. We could be early in 1999, or even in 1998 at this point, with the denouement still in the distance. But 2Q 2009 was the time to be buying stocks with both hands; right now is a time to be tilted towards caution.
Good News. Ish. May 27, 2013May 26, 2013 31 CHARTS TO RESTORE YOUR FAITH IN HUMANITY Matt Ball linked me to these. War is down, democracy’s up, slavery’s down, leisure’s up, illiteracy’s out, we’re shooting each other less, living longer . . . Yes, yes, I know: but take a look. All the more reason for us to keep pressing forward, investing in an ever brighter future instead of throwing ourselves off a self-defeating austerity cliff. THE CASE FOR STOCKS Matthew Yglesias’s view, earlier this month in Slate: With the S&P 500 at levels that haven’t been reached since the go-go days of the late-1990s, there’s talk of 2013 being the new 1999. Joshua Brown devastates that comparison in a lengthy post, but the core of it is right here: Here’s a very rudimentary but essential thing to be aware of – in 1999 the S&P finished at 1469, earned 53 bucks per share, and paid out $16 in dividends. These are nominal figures, not adjusted for inflation. The 2013 S&P 500 is earning double that amount – over $100 per share. The index will also be paying out double the dividend this year, more than $30 per share, and returning even more cash with record-setting share repurchases. So that’s the fundamentals. Earnings are double what they were, and dividends have doubled accordingly. It’s a very different market. Gillian Tett, who I normally think is one of the most reliable financial journalists around, recently pooh-poohed current share prices as based on unsustainable central bank interventions. This seems to me to be superficially correct but fundamentally mistaken. What is true is that had the Federal Reserve implemented tighter monetary policy over the past two years, share prices would be much lower today than they are. But under the Fed’s status quo policies, inflation has been below target and unemployment has been high. There’s a strong case money’s been too tight, and zero case that money’s been too loose. Looking forward, you get much the same situation. If the FOMC implements new tight money policies at its next meeting, that will, indeed, crush the market. And that’s something investors should consider. But why would the Fed implement tight money policies with unemployment high and inflation low? Are they deranged sociopaths? A little blithe, perhaps. But this is definitely not 1999. SIGA Delaware’s Supreme Court affirmed much of the lower court’s ruling against SIGA. Yet the stock rose in after-hours trading. A large institutional holder: “In my opinion SIGA has a much stronger position now because the Chancery Judge [to whom the case has now been remanded to reassess damages] is limited to how much he can award Pharmathene. Yes SIGA is liable; but I think a large expectancy award is highly unlikely.” Jim Leff: “I’m not a lawyer, but here’s my read: The precedent-setting approach that yielded the bizarre split-the-baby decision has been overturned. Damages will be assessed with a more rational approach. At the time of the alleged breach, SIGA was a small company with an unproven drug of uncertain potential. Only from the perspective of the current day does Pharmathene deserve billions from this. Damages should be assessed based according to conditions at the time. So I see this is a mild win for SIGA (repeat: I am not a lawyer).” He goes on to say that even in a worst-case scenario, if the Chancery judge still slams SIGA, there should still be tons of profits from the smallpox drug to go around — and the decision only applies to that drug, not to the pipeline of other drugs under development, which may have value as well. “The thing to remember is they have an outstanding product, well-recognized by the scientific community. This was never an exuberance play, there’s value here — a safe/effective drug in late stage development and a contract in hand — which is more than you can say for 95% of biotech plays. Due to the legal (and other) clouds, SIGA’s been undervalued even for the worst case scenario (which accounts for the 20% uptick in after-hours trading).” Here is the company’s own press release. If you bought shares with money you could truly afford to lose — as by now I am certain that you did — hang on. Have a great Memorial Day, as we honor those far braver than I could ever be.
The Vanishing Deficit May 24, 2013 THE DEFICIT It’s falling — not only in dollars terms but, much more meaningfully, relative to the size of our economy. According to the CBO, the deficit Obama was handed by Bush as he took office four months into the 2009 fiscal year was 10.1% of our GDP. For the current year, a deficit of just 4% of GDP is projected — falling to 2.1% by 2015. And if the economy gains strength — as it will if Republicans stop blocking the badly needed infrastructure investments that would put millions more to work — the deficit will fall still further as a proportion of GDP. The deficit never needs to get to zero, let alone surplus, as it did for a bit under Bill Clinton. It need only be small in enough in most years — though not years of economic contraction when we should run a large deficit — that it expands the National Debt at a slower rate than the economy itself is expanding. So I’ve got an idea. Now that deficit is in much more acceptable territory, let’s repeal the sequester. Let’s fix things not just for the Congressmen and their biggest donors whose flights home were being delayed, but for the neediest hurt by the sequester as well. And let’s ramp up our investment in the infrastructure essential to our long-term well-being. Have I mentioned that before? REPUBLICARE With this quote as his launching point . . . House Republicans desperately want to rid the world of the Affordable Care Act. On that, their sincerity cannot be doubted. But as both their budget and their health-care record show, they are woefully unprepared for a world in which they actually succeeded. —The Washington Post . . . Bruce McCall sketches out Republicare in a nutshell, here, in The New Yorker. Have a great weekend!
Standing O’s May 23, 2013 “PIPPIN” All I remember about the original is that — eh? It was a hit? Really? Well, this new production grabs you from the first moment; evoked a standing ovation in mid-act at the performance I saw; and had me “oh — wow”-ing and laughing through to the end. I thought it might be a little racy for your 12-year-old, but the friend I saw it with said I was being ridiculous — it’s fine for a 12-year-old — so if SODA goes up another few points you can bring the whole family. “BUYER & CELLAR” Oh, and while you’re here, get tickets to this little item which The New Yorker calls, “A FANTASY so delightful you wish it were true” and the Times calls, “IRRESISTIBLE! Delicious and Wickedly Funny!” and I myself call “Next year’s rent money, if it sells out, because I have a piece of it” — because I thought it was so much fun when I saw it that I begged to invest. Full disclosure: You have to have some sense who Barbra Streisand is to enjoy the show. Further disclosure: You don’t have to be a fan. Or even the tiniest bit obsessed with her. Just vaguely aware. WHICH TO SEE The two shows could not be more different: PIPPIN is an extravaganza. Hoops! And fire! And magic! And music! Cirque de Soleil meets Moulin Rouge (the movie) meets — I don’t know, the Visigoths, Cabaret, and Sergeant Pepper’s Lonely Hearts Club Band. BUYER AND CELLAR is a one-man show, brilliantly imaginative and acted and just so unexpected: I’m not telling you anything more about it. See both. “NEXT WEDNESDAY” This is not another show, it’s the date of an early dinner in New York with First Lady Michelle Obama and 7-foot-tall NBA Center Jason Collins and Democratic National Committee chairwoman Debbie Wasserman-Schultz and Bravo’s Andy Cohen and Super Bowl champ Brendon Ayanbadejo and a whole bunch others . . . and the reason there was no column yesterday. Do you know how hard it is to bake 250 little White Houses and drizzle them with blueberries and raspberry sauce? On the off chance you could be in New York next Wednesday, are gay or a straight ally, have an extra month’s rent to support the most leveraged of social invetsments, and hold progressive political views, me-mail me and I’ll tell you more.
What The Humane Society Has To Do With Any Of This May 21, 2013 This is the story of how the right destroys, or attempts to destroy, good people working to do good things — in this case, the Humane Society. But you could substitute Al Gore or the Clintons or Barack Obama . . . or advocates for the poor, like ACORN. Read it and see whether it leaves you outraged at the Humane Society — or at the right wing’s attempt to dupe you. Washington’s robust market for attacks, half-truths A look inside an industry of distortion, where unnamed corporations pay richly to bend the debate their way By Michael Kranish The Boston Globe May 19, 2013 WASHINGTON — Even by the contemporary standards of bare-fisted attack ads, the unlikely assault on the president of the Humane Society of the United States seems particularly brazen. “Is Wayne Pacelle the Bernie Madoff of the Charity World?” the ad says, comparing the leader of the nation’s largest animal welfare group to the swindler serving a 150-year sentence for losses of $65 billion in the world’s most notorious Ponzi scheme. As a narrator speaks, an image of Pacelle is shown morphing into Madoff. Then the attack widens. The Humane Society, the narrator says, “gives less than 1 percent of its massive donations to local pet shelters but has socked away $17 million in its own pension fund.” Dollar bills are shown floating in front of Pacelle’s smiling face as the narrator says donors should only continue to contribute to the Humane Society “if you want your money to support Wayne and his pension.” This one-minute ad — viewed 1.7 million times on YouTube and created by a nonprofit organization called the Center for Consumer Freedom — provides a case study of what critics say is an industry of distortion in Washington. Increasingly, groups are seeking to influence public policy not by the traditional methods of lobbying or campaign contributions, but, as in this case, by hurling accusations, true or not, that are intended to destroy an influential target’s credibility. On one level, the charges can be easily refuted, according to the ad’s target, Pacelle. The Humane Society president said his organization shelters more animals than any other group, mostly using its own facilities instead of contributing to others, and he said that the $17 million pension fund covers hundreds of employees, not just himself. . . . But on a broader level, it is the story behind the ad that is most revealing — a story that provides a window into a world of questionable claims, powered by donations from unnamed corporations, and a Washington agenda with many millions of dollars at stake.. . . Does it matter that the charges against the Humane Society are wildly distorted? That Al Gore never said he invented the Internet? (Yet championed its funding long before it was easy to understand or sexy?) Does it matter that the President is a U.S. Citizen? Or that instances of in-person voter impersonation — used to justify photo ID laws that disenfranchise millions of voters — are so rare as to be statistically nonexistent? Or that the damning White House Benghazi e-mail ABC News “obtained exclusively” — that then got picked up by everyone else — had been faked by Republican operatives? Or that the IRS errors — which all condemn as an IRS scandal — were made on the watch of a Bush appointee? That the possible overreach by the Justice Department — in its appropriately independent investigation that Republican senators demanded — was all along slated for national scrutiny? Note, in this last case, the contrast with the Watergate bugging — a true White House scandal: Watergate was an operation (a) launched from the White House (not from the Justice Department); (b) designed to subvert a Presidential election (not to satisfy bipartisan national security concerns); (c) meant to remain secret until all involved were dead (not to be subjected to inevitable national scrutiny once concluded). I’m not even certain the AP phone-record subpoenas is more than simply “deeply concerning.” But even if it rises to the level of scandal, it’s not a White House scandal. And yet the drumbeat continues, enabled even by “moderates” on the right like my friend Peggy Noonan on “Meet The Press” this past Sunday morning: GREGORY: Peggy Noonan, you wrote something this week that really struck me in your column on Friday. And I want to put it up on the screen and ask you about it. “We are in the midst,” you write, “Of the worst Washington scandal since Watergate. The reputation of the Obama White House has, among conservatives, gone from sketchy to sinister, and, among liberals, from unsatisfying to dangerous. No one likes what they’re seeing. [The IRS and AP scandals] have left the administration’s credibility deeply, probably irretrievably damaged. They don’t look jerky now, they look dirty. The patina of high-mindedness the president enjoyed is gone.” I have to say, Peggy, what you don’t talk about here is a man that you worked for [Ronald Reagan] who led the Iran-Contra scandal where they ran a secret war and lied to Congress and all the rest. Overstatement [in what you’ve said] here? NOONAN: I don’t think so. I think this is — what is going on now is all three of these scandals makes a cluster that implies some very bad things about the forthcomingness of the administration and about its ability to at certain dramatic points do the right thing. And I got to tell you, the– you– everyone can argue about which of these things is most upsetting, but this IRS thing is something I’ve never seen in my lifetime. It is the revenue gathering arm of the U.S. government… GREGORY: Peggy– Peggy, wait a second. MS. NOONAN: …going after political… GREGORY: Richard Nixon specifically directed people to investigate to audit people. I mean, of course, we’ve seen it in our lifetime. MS. NOONAN: Understood but this is so broad. This is extremely broad and very abusive to normal U.S. citizens just looking for their rights. And here’s the thing… GREGORY: Right. No question– no questions about– about the egregiousness of it. MS. NOONAN: If it doesn’t stop now, it will never stop. GREGORY: Mm-Hm. MS. NOONAN: And the only way it can stop is if, frankly, a price is paid, if people come forward and they have to tell who did it, why they did it, when it started. Peggy makes it sound as though she’s the only one concerned that the IRS not be politicized. But the President has done exactly what she hopes someone would do: put a stop to it. So why is she maligning instead of applauding? Steve Chapman, in the Chicago Tribune, draws an interesting contrast: . . . Here is what the 44th president [Obama] had to say about how the agency should operate: “Americans have a right to be angry about it, and I’m angry about it. It should not matter what political stripe you’re from. The fact of the matter is the IRS has to operate with absolute integrity.” Obama said this as he announced the dismissal of the acting commissioner for failing to prevent political abuse. Here is what the 37th president [Nixon] had to say about how the agency should operate: “Are we looking over the financial contributors to the Democratic National Committee? Are we running their income tax returns? … We have all this power and we aren’t using it. Now, what the Christ is the matter?” . . . Nixon wanted this done! Obama is outraged that it was done! It is night and day different. . . . One of Nixon’s top aides called the commissioner of the IRS and demanded action, hoping to “send [the DNC chair] to jail before the elections.” Nixon ordered investigations of Democrats who might run against him. Obama’s complaint is that the IRS engaged in unfair treatment of groups that oppose him. Nixon’s was that it was reluctant to engage in unfair treatment of those that opposed him. . . . The right must recognize the difference here, just as they must recognize that the Humane Society is not remotely what they say. Aren’t they even a little embarrassed? To be fighting against the humane treatment of animals? To have fought, successfully, to destroy a principal advocate for the poor? To be fighting to keep the minimum wage low? To be fighting to allow felons and the mentally ill to purchase guns without a background check? To be fighting to make it more difficult for those least advantaged to vote? To be fighting against the very cap-and-trade, the very “individual mandate,” and the very bipartisan deficit committees that they themselves championed until the President embraced them? And to be waging these fights, in the main, so shabbily?
The REAL Willful Misconduct In The Benghazi Tragedy May 20, 2013 IRS Just a reminder: the head of the IRS all the way up until six months ago was a Bush appointee. Why would a Bush appointee condone or keep secret misdeeds that disadvantaged Republicans? If you don’t have a good answer to that, will you please shut up? Or else blame George W. Bush for appointing someone to head the IRS who allowed this to happen? Thanks to Doug Schneller for this piece by Alex Seitz-Wald at Salon: . . . While few are defending the Internal Revenue Service for targeting some 300 conservative groups, there are two critical pieces of context missing from the conventional wisdom on the “scandal.” First, at least from what we know so far, the groups were not targeted in a political vendetta — but rather were executing a makeshift enforcement test (an ugly one, mind you) for IRS employees tasked with separating political groups not allowed to claim tax-exempt status, from bona fide social welfare organizations. Employees are given almost zero official guidance on how to do that, so they went after Tea Party groups because those seemed like they might be political. Keep in mind, the commissioner of the IRS at the time was a Bush appointee.The second is that while this is the first time this kind of thing has become a national scandal, it’s not the first time such activity has occurred. There follows considerable historical background — not to argue that numerous wrongs make a right, which they do not, but to provide context. No one holds that the IRS acted properly. But this is not “a White House scandal,” it’s a monumental IRS screw-up on a Bush appointee’s watch, now being fixed. Can we move on to putting people to work renewing our infrastructure? Enacting comprehensive immigration reform? Keeping felons and the mentally unbalanced from buying guns? BENGHAZI Those emails ABC News said it had exclusively “obtained” showing White House meddling in the talking points? Um, well, it turns out ABC had not actually obtained them. What it had obtained — apparently from a Republican operative — was a doctored email with invented damning language. That’s what ABC quoted on air as having come from the White House, quickly picked up by the other networks and talk radio. And that’s the scandal here — as Rachel Maddow explains (beginning around 3:36). This is a very big deal. No? Take five minutes and watch? Tomorrow: What The Humane Society Has To Do With all This
The So-Called Scandals May 17, 2013May 20, 2013 Fred: “You really think if the Bush Administration had targeted liberal groups and held up their tax exempt status (and even leaked confidential information) that you would be so dismissive and say, as you did yesterday, ‘My guess is that for many of those involved it may not have been political bias’? No, you wouldn’t.” ☞ No, I wouldn’t — because it had already been shown that, in its first term, the Bush Administration had misled us into war — “yellow cake” in his State of the Union and so much more — lied about “by far the vast majority” of his proposed tax cuts going to benefit those “at the bottom” of the economic ladder, hidden the names of the participants in the White House energy summit, used the Justice Department for political ends – and on and on. So — yes — I would have been highly skeptical. The Obama Administration, by contrast, in its first term, had done no such things. (Don’t get me started on all the good things it managed to do — you could write a book!) And the Obama team has no such culture. It has been transparent in important ways. And as soon as the IRS situation came belatedly to light, everyone, from the President on down, embraced the general alarm, taking immediate action to investigate and fix it. I’d also note that it’s not as though those 501(c)(4)’s were shut down (as the right wing managed to shut down ACORN). Or that they lacked access to powerful senators or Fox News. Why didn’t THEY break the story a year or two ago? Because, I presume, they weren’t aware of it. And neither was the White House. (Note, too, that Cincinnati is politically rather conservative; and that many of the IRS employees in that office were hired on former IRS Commissioner Shulman’s watch – a Bush appointee.) Similarly, when people compare this — or the AP subpoenas — to Watergate (“worse than Watergate” I think Michele Bachmann called it) . . . HELLO! Watergate was hatched in the Oval Office! The Justice Department investigation of leaks that led to the AP subpoenas, by contrast, was hatched — or at least demanded — by mostly Republican senators. Moreover, there was never the expectation that those subpoenas would remain secret once the investigation was over. (Why would the news organizations be party to such a coverup?) So it’s not as though the decision to seek those phone logs in furtherance of national security would not ultimately be subject to the very national scrutiny to which it is now rightly being subjected. Seeking to plug a national security leak with methods subject to inevitable public scrutiny is rather spectacularly different from a bugging operation designed to subvert a presidential election and remain secret forever — no? There are two patterns here. One is that when bad stuff is brought to the attention of this President and his Administration, it is acknowledged and action taken to correct it. Benghazi? Immediately recognized as a tragedy, with 29 recommendations for corrective action formulated soon thereafter, all accepted by the Secretary more or less immediately. The IRS outrage? Immediately acknowledged; heads are rolling, steps being taken to make certain it doesn’t happen going forward. The other pattern is that when something bad happens, the right seizes on it for political advantage. That is understandable and, I guess in the current poisonous polarized political environment just comes with the territory. But the rest of us should see it for what it is. None of this is Nixon hatching Watergate in the Oval Office. None of this is Reagan secretly selling arms to Iran to fund the Nicaraguan contras (and his Vice President, who would succeed him, denying knowledge of it). None of this is Bush 43 misleading us into a catastrophic war and a catastrophic tax policy. Rather, these are mistakes being made at lower levels, being acknowledged and corrected. Better still, of course, would be an Administration none of whose people ever made mistakes in the first place – but that’s not realistic. Fred again (after I sent him that long screed): “Wow! Must have touched a nerve!” ☞ Indeed. And here’s why: These kinds of attacks are really important to respond to because they ultimately can have enormous, catastrophic consequences. This is the way they “beat” Al Gore in 2000 — just piling on a lot of stuff no one item of which had merit* . . . yet there were so many of them that people didn’t have time to get into the details and it tore him down very effectively, with the result that we got the Iraq war, wrecked our national balance sheet, delayed the stem cell breakthrough that might one day have saved your life if only it had come faster — and on and on. It’s the same right-wing machine that somehow persuaded 70% of the folks who voted to re-elect Bush that Iraq played a role in attacking us on 9/11. Simply not true, yet helpful in getting him four more years — which allowed him to appoint Roberts and Alito to the Supreme Court, tilting it even more to the right, which gave us Citizens United, which shifting the balance of power yet further from ordinary citizens to the already rich and powerful, and tightening their grip still more. This stuff matters — deeply. I’m not saying our side is perfect. But our President is amazing in his intelligence and temperament and integrity and stamina and judgment and commitment to the best possible future. And his team does its best to measure up. I’m also not saying that the other side has no moderate, sensible, constructive folks (John Huntsman jumps to mind; how’d he do?). But what is moderate, sensible, or constructive in voting down universal background checks when 90% of Americans want them (and when the law bends over backwards to demolish the “slippery slope” argument by including a 15-year prison term for anyone who attempts to set up a national gun registry)? What is moderate or sensible about opposing the cap-and-trade solution that your own party once championed? Or about opposing the “individual mandate” that your own party invented? Or filibustering the bipartisan deficit commission your own party proposed, once the President agreed to it? (We ultimately did get one, Simpson-Bowles, but only by Executive Order; and its deficit-cutting recommendations were killed by the very commissioners, led by Paul Ryan, appointed by the Republicans!) What is moderate or constructive about inflicting self-imposed wounds with the budget ceiling “crisis”? Or – especially – what is moderate or constructive about rejecting the American Jobs Act that would have put more than a million people to work doing things that really need doing – like repairing bridges and modernizing 35,000 schools — and that could be financed with near-zero-rate long-term debt? What is moderate or constructive about not investing in our future when it is clearly the best way to invigorate our economy (which would lower our deficit) and lay the foundation for the brightest possible future? I’ve made my point – or certainly taken enough of your time trying — but I can’t resist reminding you that one of the leaders of the right-wing machine is Rush Limbaugh, who labels “science” one of the “four pillars of deceit.” Science! Along with “government,” which he tears down at every opportunity, “academia” — who would want to listen to an egghead when they can listen to Joe the Plumber parroting what he heard from Rush? — and “the media” (not, presumably, including FOX or his own). Have a great weekend. Your January 2015 42.5 SODA LEAPS, if you bought any, have nearly doubled in a month, so this might be a good time to sell half, recouping most of your funds, and then just see what happens with the rest. *E.g., “the Buddhist temple” thing – which turned out to have no “there” there – and “the Love Story” thing – where Erich Segal acknowledged that Al and Tipper actually were models for characters in the book – and the “invented the Internet” thing — which he did not claim to have done, yet actually deserved a load of credit for having championed long before it was easy to understand or sexy . . . while a young George W. Bush was out partying, doing nothing for his country, not knowing who the President of Pakistan was. Which I didn’t know either; but I never imagined myself competent to run the world.
Gatsby May 16, 2013May 20, 2013 THE SEVEN-MINUTE GATSBY Here. (Bonus, if you have time: Catcher In The Rye.) Somehow, I had never even heard of John Green, who made these YouTubes, has written some best-sellers, and has a brother named Hank. IN THE NEWS Tim Couch (not the quarterback): “IRS/AP/Benghazi — my Republican wife wants to know why you haven’t commented on these.” ☞ Or on Minnesota marriage equality, while we’re at it. Hurray for that! We’re up to 12 states now, plus the District of Columbia. Illinois could shortly be next (neighboring Iowa has had it for four years, yet farmland prices remain strong), along with Brazil (not a state, but big) just after France last month (also not a state, but our major ally in the American Revolution), with California — which had it and then lost it — likely to follow next month when the Supreme Court rules. Progress! But I digress. IRS: Everyone agrees it is outrageous and indefensible for the IRS to target anyone on the basis of their political views. A thorough investigation is called for and underway; the President has already fired the acting head of the IRS; those found to have willfully exercised political prejudice should be prosecuted. My guess is that for many of those involved it may not have been political bias — just an ill-conceived attempt to find some time-saving shortcuts to sift through the huge influx of 501c-4 applicants. But that’s for prosecutors and, ultimately, juries to decide. AP: Here‘s a good story suggesting that the Justice Department tried everything it could before resorting to subpoenaing those phone-records. And here‘s one suggesting that Republican senators are not saying too much about this because it was they who pushed hardest for an aggressive probe. No question, subpoenas of this kind should be a last resort if a resort at all. But it’s also worth noting that this Administration — faced with the example of its predecessor’s meddling with the independence of the Justice Department — made a conscious decision to keep its distance. (You will recall the Bush White House pressuring Justice to prosecute cases of voter fraud — presumably to promote the “need” for voter-ID laws that disadvantage Democrats — and then ejecting several assistant U.S. attorneys for failing to find such cases.) So if the Justice Department was overzealous with these AP subpoenas, finding the wrong balance between national security and freedom of the press (something I don’t feel competent to conclude), that’s regrettable and a knock on the Justice Department . . . but only indirectly on the White House (even though, of course, ultimately, “the buck stops there”). Benghazi: Truly a tragedy. We failed adequately to protect the ambassador and his people; a thorough investigation led to I think 29 recommendations for corrective action, every one of which then-Secretary Clinton promptly endorsed and set into motion. If it took three days or even three weeks to get the story out, that may be clumsy — but how did that delay affect your life or your wife’s or anyone else’s? Watch the Gatsby thing. Fun.