Heidi Li's Potpourri

No wonder everybody thinks all politicians turn out to be crooks and liars

As various chapters in the Roland Burris saga unfold, all I keep thinking is how totally unsurprising it is that there are all sorts of problems with his various testimony to various tribunals, all adding up to the fact that Burris is not a person of good character, at least if being of good character includes not dissembling to the public when you want to serve in a position of public trust. The latest is that Burris, an attorney, lied to the Illinois Supreme Court, putting his law license at risk. Call me formalistic if you like, but the bottom line is that lawyers' codes of professional responsibility require them to be candid with tribunals, particularly courts. Candid. Not just honest, but forthcoming and open. Whatever else Roland Burris has or has not been, he most definitely has not been candid throughout the process of finagling his way into the U.S. Senate. He has dissembled, race-baited, played the victim: you name it, if it served his goal he did it. He even tried to pay to play, but just happened not to succeed.

Coming on the heels of tax evader Timothy Geithner and just generally evasive Bill Richardson and slippery Tom Daschle, it is a miracle that anybody in the country ever gets behind any politician. But the Burris situation is one of those that really makes an ordinary citizen shake her or his head in wonder. Why did anybody - including Reid and Barack Obama - bother saying anything positive about Burris when the obvious thing to do would be to say nothing at all, given the odds that somebody who would accept an appointment to the U.S. Senate from somebody as apparently corrupt as Rod Blagojevich, would be unlikely to be a particularly truthful person?

Meanwhile, some federal legislators are trying to force more candor from the executive with legislation meant to limit the "state secrets doctrine." Learn more here.

Tim Geithner; Herbert Hoover - Depression revisited (bumped and updated)

I am not an economist, and do not purport to have expertise in the field. I offer this post based on the claims of Paul Krugman and Barack Obama that the fiscal crisis facing the United States and its citizens today is more comparable to the conditions of the Great Depression than any other crisis faced since then. If that is true, no wonder I find the details of whiz-kid tax evader Tim Geithner's newly renamed Financial Stability Act personally depressing. So, by the way, does Wall Street.

Treasury Secretary Timothy F. Geithner announced a vast new rescue plan for the financial sector. Stocks plunged following the unveiling of the program to use $1.5 trillion or more in public and private funds to bail out banks and financial institutions and thaw frozen credit markets. The plan would create a $500 billion fund to buy up toxic bank assets such as bad real estate loans and commit up to $1 trillion to reopen lending markets for consumer, student, small business, auto and commercial loans.

The Dow Jones industrial average was down 383 points in afternoon trading. The tech-heavy Nasdaq plummeted 63 points, and the Standard & Poor's 500-stock index dropped 43 points.

(source)

Here are the highlights of the Geithner plan, according to The New York Times:

Now, read these excerpts from an overview of the Hoover administration's approach to the Great Depression, which set in 6 to 8 years before Franklin Delano Roosevelt was first elected.

A) "The slump in automobile sales was paralleled by the decline in the construction of new housing, causing unemployment in the building trades. Fewer suburban houses meant fewer markets for appliances, wall coverings, and other activities related to home building."

B) "The economy was in trouble but people, dazzled by a surging stock market, ignored it.
The consumer economy was slowing as incomes skewed to the rich. In 1929, the richest 10% of families received 39% of disposal personal income while the bottom 10% only got 2%."

C) "People seemed to be forgetting that capitalism needs to expand, that demand for housing, clothes, automobiles, stoves, and many other consumer goods generates demand in other sectors of the economy. But mass production necessitates mass consumption. Mass consumption necessitates an income distribution that allows consumers to buy. Without the appropriate income distribution, warehouses will burst at their seams and production lines will clog."

D) "Many of the wealthy, as well as others, joined the speculative stock market sending stock prices to greater and greater without regard to company performance; In October, 1929, the bubble burst. The crash meant the tremendous loss of capital as prices declined $74 billion from 1929 to 1932 and the repatriation of much of US investment abroad."

E) "As historians Peter N. Carroll and David W. Noble note, Hoover feared that the collapse of the large corporations would bring down the entire US capitalist system. After all, one percent of the banks held 50% of banking assets. Three corporations—Ford, Chrysler, General Motors—manufactured 85% of the automobiles sold in the US. Chain stores dominated retail sales and their difficulties had national repercussions.

Business and industry met the crisis as they had always done—they cut production, lowered wages, reduced working hours, and fired workers. Unemployment rose from 1.5 million in 1929 to 13 million in 1933, a figure which represented 25% of the labor force. Even such a high percentage hid the dimensions of the problem because it did not what percentage had been forced the part-time work. Industrial wages fell from $425 a week to $17 a week, a decline of 32%."

F) "To help the situation, the Hoover administration sept close to a billion dollars in public works programs but he would not go further. Nor would he argue for direct relief to the unemployed and starving because he feared that doing so would corrupt them."

G) "Hoover and the Republicans saw aid to corporations as being different. Whereas they believed that helping the individual citizen weather the Depression would corrupt him or her, aiding corporations and other business was different. To many, it appeared that the Republicans were only interested in the rich. The newly-created Reconstruction Finance Corporation aided only the large corporations.

Hoover broke precedent because the national government assumed some responsibility for what happens during an economic depression but he was not willing to go far enough. He believed that the depression was part of the normal business cycle and had been caused by international factors and not US ones. to him, 'prosperity was just around the corner.' The best thing for the country to do would be to wait the crisis out."

I am in no position to know just how deeply or robustly FDR's New Deal reforms have insulated us from a new Great Depression. But with a Nobel Laureate and the President of the United States telling me that we are in a state of disaster, I find it depressing that the Treasury Secretary's plan sounds much more Hooverian than FDR-like.

I know the economy is not going to do an about face on a dime. I do not need Secretary Geithner or President Obama to tell me that. But with trillions of dollars going to banking corporations and relatively little aid going to those who are rapidly falling into more dire straits than they imagined possible, I cannot help but feel as so many of us did when George W. Bush whisked us into war in Iraq. In the words of author Anne Lamott: "I don't know who on the left can lead us away from the craziness and the barbarity: I've very confused now."

Lamott wrote those words when she was criticizing George W. Bush for deceiving the American people. Sauce for Bush should be sauce for Obama. One problem with the Geithner plan is "lack of transparency". Deception: a post-partisan kind of thing.

Oh, about that double standard when it comes to tax evaders...

About that double standard (discussed at the end of previous post)...the news speaks for itself:

• Obama's Choice for Chief Performance Officer Withdraws Name
• Performance Czar Killefer Withdraws Candidacy

• Commentary here.

The point is NOT that Killefer should have been appointed; the point is that Daschle should not be; and Geithner should resign.

The trouble with appointing tax evaders to high positions in government: its a rule of law thing

I wish people would stop telling me to be relieved that President Obama is not President Bush. I detested President Bush, and I detested him from the moment he arrived on the national scene, from the way he ran his campaign which led us to the debacle of an election stolen in Florida (decided by 547 votes in the state George's brother was then Governor; and a long-time Bush supporter designed a confusing ballot and refused to go through the sort of recount that Al Franken is now having to endure); a campaign filled with bait and switch promises (viz: local control over schools, only to be followed by the No Child Left Behind Act: one of the greatest federal government takeovers of local affairs in recent memory.) But these bad-faith measures were just the prelude to an administration that pursued an agenda of putting the President and the executive branch above the law: George W. Bush personally committed war crimes, had his administration engage in illegal surveillance of American citizens, directed his Justice department to come up with justifications for U.S. violations of international law, tolerated or encouraged a host of troubling cronyistic contacts and relationships between his vice-president and members of the energy industries, tolerated or encouraged his justice department to go after government lawyers for their political positions, encouraged the expansion of executive privilege to cover the the office of the vice-president in unprecedented ways, and used various suspect methods (e.g. substituting executive regulation for legislation) to flout the separation of powers and checks and balances built in to the structure of the U.S. Constitution. George W. Bush was shady and underhanded, rivaled in recent times only by Richard M. Nixon, who was literally a crook.

I have no idea whether Barack H. Obama will turn out to be more or less unscrupulous than George W. Bush, more or less interested in the rule of law, and the place of the executive branch in American constitutional democracy. But less than a month into the new administration and, sure, I'm relieved that Obama isn't Bush, but I am not at all persuaded that he is going to be qualitatively more honest, in better faith, and more sensitive to the ideal of a government of laws rather than persons.

Coming into his presidency, Barack H. Obama showed a willingness to bend rules to gain office, and not just when he accepted 20 delegates from a state in which he never even ran, but going all the way back to Chicago. ("As a community organizer, he had helped register thousands of voters. But when it came time to run for office, he employed Chicago rules to invalidate the voting petition signatures of three of his challengers." (source)) So far, his vetting failed to catch problems with at least three high level appointments (Bill Richardson, Tim Geithner, Tom Daschle) and even when ethical concerns have arisen about others (Jon Favreau) he's done nothing.

Obama's treatment of Geithner and Daschle particularly distresses me. Both are sophisticated, well-educated people, people who know when to get tax advice, people who understand the distinction between legal tax avoidance and illegal tax evasion and presumably how to work with an accountant to make sure that they are erring, if err they must, on the side of an abundance of law-abidingness. Both have had held fiscal policy-making positions. Each was found to have broken the tax laws. The Geithner strategy  - apologize, act contrite, claim embarrassment, apologize some more - is now being used by Daschle (go here for a round-up  of media reaction), who we are assured has not only the solid backing of Senate Democrats but enjoys President Obama's absolute support, as of today, Monday, February 2.

Now, I am happy to remark that the Obama administration has taken steps to bring the U.S. more in line with international law. But President Obama's consistent support for would-be office-holders who engage in inappropriate, unethical, illegal conduct does not bode well for those of us who really did want a different kind of politics in this country. I simply do not believe that there is nobody else who could head the Department of Health and Human Services other than somebody who evaded paying over $100,000 in taxes.

Oh, and yes, I do think there is a double standard at work here. Secretary of State Clinton was incredibly wise and politically adept to start early in working out disclosure arrangements regarding President Clinton's Foundation and the Clinton Global Initiative. But note: she anticipated the problems and questions and dealt with them beforehand, knowing that the boys' club was unlikely to close ranks around her had she not handled the issues forthrightly and adroitly. Meanwhile, for Daschle and Geithner the treatment is like that of small boys caught with their hand in the cookie jar: the men of Washington - and note the it is the men of the Senate, especially Harry Reid, and the man who is President, Barack Obama - who are quick to say of Geithner and Daschle the equivalent of "boys will be boys":  these guys are good guys. Yes, tax evasion is bad (Reid and Obama cannot seem to quite bring themselves to say "illegal") but as long as Geithner and Daschle know how to act contrite and express embarrassment, they really ought to get the jobs they want. But this is no way to create a sense of respect for the rule of law, that respect that George W. Bush never displayed. To restore respect is a tough task and it requires demonstrating little tolerance for those who break laws directly relevant to the responsibilities of the offices they seek.