Palin and Bush speak in the same tongue. It's a very special language that only national conservative politicians (and toddlers) speak. It's called "gibberish" and there's something about it that certain people in our country find very reassuring to hear in the mouths of those who are running for the most powerful job in the world.Now go read the post...
Most of the commentators, again, seemed to get it wrong, mainly because they were grading on a curve. Palin did “better than expected.” On the other hand, she had been expected to do so poorly that she could hardly fail to do better than expected, i.e., she was expected to do better than expected, which means that she did about as well as expected. But according to the insta-polls, the electorate, as opposed to what I once called the expectorate, seems to have concluded fairly clearly that Biden “won,” possibly because what the electorate was expecting was a debate between two candidates for Vice-President, not the raw materials for some arcane calculation of who exceeded whose expectations. Biden succeeded in making a case for the Obama-Biden ticket. Palin succeeded mainly in making a case that she, Palin, is a person of near-normal intelligence and great superior adorability.Read the whole thing after expansion...
October 3, 2008
Nudge Nudge Wink Wink
Well, if what we want is a perky President (actuarial probabilities being what they are), the choice is clear: go whalin’ with Palin! No doubt about it, she’s as cute as a Goldwater button. And if by some chance she doesn’t put McCain over the top, her next career move is obvious: co-hosting the perennially last-place CBS morning program. She could ace the cooking and celebrity segments, and by the time this campaign is over she’ll even know enough about legislation and foreign policy and stuff like that to banter with Jeff Greenfield and handle serious interviews with people like Richard Holbrooke and Michael Beschloss. “The Early Show,” with Harry Smith and Sarah Palin.
Did she “win” last night? In a way. She stanched the bleeding. If her activities for the next month can be limited to charming the “base” at rallies, chatting with right-wing talk-radio and Fox News hosts, and granting interviews to dim, carefully vetted “Eyewitness News” local anchors, she probably will do no further damage to the Republican ticket. Given the disasters of the last couple of weeks, that counts as victory. Maybe not Trafalgar-type victory, but Iraq-type. The surge has succeeded.
The choppy format, which discouraged follow-ups, saved her, along with Gwen Ifill’s tendency to ask questions (Does the financial crisis show the best of Washington or the worst of Washington? What’s scarier, a nuclear Iran or an unstable Afghanistan?) that could be answered with the word “both.” Beyond the “Animal Farm” certainties—taxes bad, victory good—and the hockey-mom patter, Palin had nothing to say, but she said it without too much of the usual syntactical chaos. The talking points and the buzzwords (maverick, the people’s side) got her through.
Most of the commentators, again, seemed to get it wrong, mainly because they were grading on a curve. Palin did “better than expected.” On the other hand, she had been expected to do so poorly that she could hardly fail to do better than expected, i.e., she was expected to do better than expected, which means that she did about as well as expected. But according to the insta-polls, the electorate, as opposed to what I once called the expectorate, seems to have concluded fairly clearly that Biden “won,” possibly because what the electorate was expecting was a debate between two candidates for Vice-President, not the raw materials for some arcane calculation of who exceeded whose expectations. Biden succeeded in making a case for the Obama-Biden ticket. Palin succeeded mainly in making a case that she, Palin, is a person of near-normal intelligence and great superior adorability.
I think Obama will win this thing.
An Open Letter to Sarah Palin
By TAC Editors
To: Gov. Sarah Palin
From: TAC Editors
Re: What Your Tutors Aren’t Telling You
Congratulations on being chosen as John McCain’s running mate. It’s an honor, if a dubious one. As you know, conservatives have reservations about McCain. To your credit, they have few such concerns about you.
You’ve given new life to a party whose brand was bankrupt. You’ve energized a campaign that was embarrassing its own partisans. Across America, crowds flock to see you—not that old man who barely wheezed his way through the primaries. If John McCain wins, he will owe you, as the guy in the undisclosed location says, “Big time.”
Wonder why Middle America finds you irresistible? Maybe they’re big Tina Fey fans. More likely, you remind them of the conservative values they feared lost: faith, family, independence. This impression owes more to who you are than what you’ve done. But at least you keep Obama from cornering the market on hope. Conservatives have faith in you. Don’t fail them as George W. Bush has.
You see what happened: the president’s entire domestic agenda collapsed under the weight of his failed foreign policy. Social Security reform stalled. Pro-lifers became political orphans. And whatever gains Bush’s tax cuts secured were wiped out by record spending. Everything was subordinated to the war on terror.
Conservatives grasping for something to commend give the president points for his judicial picks. But he would have much preferred justices like Alberto Gonzales and Harriet Miers—toadies whose top qualification was their willingness to give the executive more power.
The party that championed the things you prize—individual liberty, fiscal restraint, and a strong defense—has trampled civil rights, pushed us to the brink of insolvency, and broken our Armed Forces. After eight years of Bush, even diehard Republicans are glad to see him go. You might have noticed the elephant not in the room in St. Paul.
There’s a better way. In fact, you figured it out in the 1996 presidential primary when you sported the flair of the leading pro-life candidate. (Your minders would prefer that we not mention his name. It triggers their Tourette’s.) As you surely know, even beyond social issues, he represents a strain of conservatism that offers a consistent ethic of life and philosophy of limited government. It was not a coincidence that the most pro-life candidate in ’96 was also passionately noninterventionist.
It’s also no coincidence that those who want you to heed the siren call of global democratization care little for traditionalist causes. Recall that second night of the Republican Convention when you were told to blow off a reception in your honor hosted by Phyllis Schlafly so Joe Lieberman could chaperone your debut before the directors of AIPAC. Neoconservatives pay lip service to life, but, as their enthusiasm for Lieberman shows, they have higher priorities. Now they plan to make them yours.
You’ll find the new friends conducting your foreign-policy crash course pleasant enough, if a little dogmatic and a lot condescending. They call you “Project Sarah.” We saw that one staffer at AEI—that mystery monogram on all your briefing books—said you’re “a blank slate.” He added, “She’s going places, and it’s worth going there with her.” That’s how they operate. They don’t implement their agenda themselves. Rather, they impose it on rising star. If things don’t work out, it’s because the Project wasn’t sufficiently committed. (Just ask President Bush.)
Now you’re the latest object of their attention, and you’re probably finding the program a bit confusing. They tell you that the U.S. is fighting “World War IV,” a struggle against “Islamofascism.” We can win, they say, as long as we’re prepared to bomb Iran and build up the national-security establishment at home, just like Reagan did.
Trouble is, your tutors also believe we’re still engaged in “World War III,” the Cold War with Russia. So maybe the Gipper didn’t win that one after all. In fact, neoconservatives like Norman Podhoretz chided Reagan for appeasing Moscow. And when terrorists struck the Marine barracks in Lebanon in 1983, Reagan, instead of “staying the course,” withdrew our troops. Your Beltway suitors prescribe the opposite of Reagan’s strategy.
And as they would have it, we’re not only waging World Wars III and IV, we’re still fighting World War II. At least, that’s the way it sounds when Robert Kagan opens a Washington Post op-ed by likening Russia’s conflict with Georgia to Hitler’s invasion of Czechoslovakia.
But Russia is not Germany, Georgia is no innocent Czechoslovakia, and Vladimir Putin is not Adolf Hitler—no matter what your guru Randy Scheunemann says. (He probably forgot to tell you that he used to lobby for the government of Georgia.)
Here’s a hint: don’t believe everything you read in the papers, especially if the byline is Kristol or Krauthammer. Russia is not an expansionist, ideological empire. It’s a traditional, semi-authoritarian great power intent on preserving its influence in its own backyard and its prestige on the world stage. That’s why Russia intercedes in the domestic disputes of unruly states on its periphery. Putin balks at Poland hosting our antimissile systems for the same reason we would bristle at Cuba or Mexico receiving Chinese antitank missiles.
With more validity, some of the people whispering in your ear tell you that Moscow wants to corner the European markets for oil and natural gas. And what nefarious end does Putin have in mind? Raising prices and reinforcing Moscow’s political clout, not with nuclear blackmail but with good, old-fashioned economic power. We have plenty of that ourselves (or at least we used to). Putin, far from being a totalitarian ideologue, is an economic nationalist, as the leaders of great powers traditionally have been.
Then there’s the Middle East, where only American arms (and lives) can prevent little Israel from being swept into the sea by Muslim hordes. Surely that’s what AIPAC told you that night you left Phyllis cooling her heels. But again, it isn’t true. Israel has nuclear weapons, for one thing, and can outfight her neighbors even without resort to atom bombs. Israel’s problem isn’t external threat so much as internal security and demographics. When the Jewish state was founded, tens of thousands of Palestinians—Christians as well as Muslims—lost their homes. Palestine was no wide-open Alaskan frontier: when the newcomers moved in, Arabs were moved out, often by force. Terrorism didn’t come to the region with Hamas or Hezbollah; decades earlier groups like the Stern Gang and Irgun used violence to clear the way for Israel’s creation. Nor was Palestinian Authority leader Yassar Arafat the first terrorist to lead a state in the Holy Land. Israeli Prime Ministers Menachem Begin and Yitzhak Shamir had unclean hands as well.
While your minders probably don’t put much stock in his work, University of Chicago political scientist Robert Pape has shown that suicide terrorism develops almost always among occupied peoples. The task before the Israelis is not to defend themselves against aggressive neighbors but to give justice to the Palestinians already in their midst—to suppress terrorism without suppressing civil liberties and human rights, which only leads to more bloodshed. The most helpful role the United States can play is that of impartial mediator in the conflict. There is injustice and suffering on both sides.
No doubt you’ve been told (again and again) that Iran wants to “wipe Israel off the map.” Here’s something to keep in mind: Iran does not have nuclear weapons and is far from attaining them. Ironically, the Bush Doctrine’s pledge that “America is committed to keeping the world’s most dangerous weapons out of the hands of the most dangerous regimes” makes rogue states like Iran more likely to seek nuclear devices, as a deterrent against pre-emptive U.S. strikes. This is a vicious circle. Instead of boxing Iran into a corner, we should engage with Ahmadinejad, unsavory fellow though he is. Even with nuclear weapons, Iran would not pose an existential threat to Israel, let alone America.
Since you had some difficulties in your oral exam with Charlie Gibson, your new friends will no doubt ramp up their lessons. (For the record, you can scarcely be blamed for fumbling the answer about the Bush Doctrine. Your tutors were clearly reluctant to bring it up, even though the whole scheme was theirs, not Project George’s.)
They may even start assigning you book reports. It will feel like the third grade, except the subjects won’t be charming orphans. Now it’s rogue states against America the Benevolent. Near the top of the list will be An End to Evil by Richard Perle and David Frum. They’d have you think that Muslims will impose Islamic law on America if we don’t go to war with 18 different countries. But you know that a bunch of Muslims can’t make red-blooded, moose-hunting Americans wear burqas. Think what happens if you try to get a book pulled out of the library.
That’s only the beginning of the curriculum. You’ll be handed titles like Present Dangers and The Return of History. Thankfully, just like third grade, you don’t really have to read them. If they ask, just say, “The enemies of freedom won’t be appeased. We must stand firm, like Churchill.”
Meanwhile, we suggest sneaking a look at The Limits of Power by Andrew Bacevich. It’s stern stuff, but he gets to the point: America can’t spend money it doesn’t have, beat everyone up, and expect to stay healthy, wealthy, and wise. If you want a good book on how America screwed up in Iraq, there is Fiasco by Thomas Ricks. You said some nice things about Ron Paul during the primary. He gave Giuliani a list of books that might be worth your time.
You’ll have to keep your extracurriculars quiet. We know how these things work. Since he helped you break into the big leagues, you have to toe McCain’s line. But the outgoing administration has shown us how powerful a veep can be. If you go all the way, President McCain will be in your debt. (If he forgets, ask him how many rallies he held while you were home in Alaska. He wisely opted not to deliver speeches in phone booths.) Don’t leave your maverick spirit on the campaign trail.
Despite all the briefing books being thrown at you, you know your own mind—and you realize that the neoconservative agenda doesn’t square with your worldview. You prize localism, their vision is grandiose. You value fiscal discipline, neocons will ruin the country to finance endless war. You honor life, and they think nothing of killing hundreds of thousands in the service of ideology. But they’ll tell you this alien vision—imported from the Left—is coherent and conservative.
It is neither, but your supporters are both. They’ve turned against this war and definitely don’t want another. Yet your running mate does. Perhaps you’ve noticed that his interest in domestic policy pales alongside his foreign-policy ambitions. Or maybe you caught his virtuoso performance of “Bomb, bomb, bomb, bomb, bomb Iran.”
You surely see that the Bush policies have come to a dead end. If the millions poised to vote for you wanted four more years, the president’s approval rating wouldn’t be 25 percent. This isn’t because Republicans dislike Bush personally or disagree with his positions on energy and taxes. It’s because they know that his main legacy—the Iraq War—is a disaster.
Thankfully, they don’t think you’re like him. They see in you someone like themselves—a patriot and a mother. The Middle Americans waiting hours to hear you speak don’t want the United States to be defeated, and they don’t want Iraq to be a haven for al-Qaeda—something it never was before the invasion. They are pleased that the surge has made it more possible to leave because they don’t want to send their boys back for a third or fourth tour. They want America to come home—not because she’s weak but because she’s wise. They hope that you are, too.
Samuel Augustus Maverick (July 23, 1803–September 2, 1870) was a Texas lawyer, politician, land baron and signer of the Texas Declaration of Independence. From his name comes the term "maverick", first cited in 1867, which means independent minded. Maverick was considered independent minded by his fellow ranchers because he refused to brand his cattle. In fact, Maverick's failure to brand his cattle had little to do with independent mindedness, but reflected his lack of interest in ranching... Maverick's stated reason for not branding his cattle was that he didn't want to inflict pain on them. Other ranchers however, suspected that his true motivation was that it allowed him to collect any unbranded cattle and claim them as his own.
Richard Stern is a novelist and emeritus professor of English at the University of Chicago.Ouch!
It's 50 minutes after the vice presidential debate between Sarah Palin and Joe Biden. The losers were David Brooks, Mark Shields, and other commentators supposedly hired by television executives for intelligence, sensitivity, and ability to articulate clear-eyed responses and titillate viewers with their amusing and thoughtful reactions to political events. That these two regulars on PBS's "The NewsHour" failed to see that Sarah Palin's brassy, blind narcissism, chirpy ignorance, evasiveness, broken syntax, self-vaunting folksiness, and robotic falsity disqualified her for important public office should be their end as commentators. That they did not commend the essentially thoughtful, well- and widely-informed performance of Joe Biden should cancel their television contracts. The contrast between his intelligence and her stupidity, yes, stupidity, was too clear to be missed by all but blazing partisans.
Yes, this writer is partisan, but makes some attempt to accurately appraise what he sees and hears. That is more important than most causes. Otherwise, value systems will disintegrate and the boundaries between right and wrong, vice and virtue, truth and falsity will be destroyed. Brooks and Shields abandoned the standard to which they've given more than lip service. If their failure should help lead to the elevation of a foolish, almost willfully ignorant person and the defeat of a thoughtful, humane, and articulate public servant, I hope they marinate for years in what oozed from them tonight.
I've been proud that Brooks had been a student of mine at the University of Chicago. That pride has turned to ashes. As for Shields, it has been a minor pleasure to hear political insights he'd gathered over years of reportorial work.
No more. Working such special streets of punditry as "Who came up to expectations?" "Would Biden gaffe his way into headlines?" or "Would Palin again reveal the ignorance she showed on the Katie Couric interview?" this Tweedledum and Tweedledee of savvy politics failed to distinguish what was basic, namely which of these two candidates could head the American government. May they rot in Commentator Hell.
I want to assure you that John McCain and I, we're going to fight for America. We're going to fight for the middle-class, average, everyday American family like mine.The Palins make $250,000 a year. They are rich!
Sarah Palin, closing statment in VP debate
I think Palin was at her best when she stared into the camera earnestly, dropped the snark, and tied key words, objects, subjects, and predicates together as she adressed the public as adults. But this only came out in the glinting of very few moments. The majority of her split narrative smacked of snark, a character that comes off sounding like a waitress at a neo-Wymoing suburban steakhouse. Perhaps Longhorn's. This downhome folksiness, of course, is Bushian, and belies any attempts she made to distinguish McCain/Palin from Bush/Cheney. That Steve Schmidt thinks it is adventageous to have Palin employ such snark when the subject is about something as grave as say, the Iraq War or the illiquidity of "toxic" assets, it is more than cliche and disingenuous; it is macabre. Perhaps addressing the public as a winking trophy-wife curries favor among evangelical types, but it probably pisses off everyone else they were hoping to influence.
This is all fine with me, though. I am losing five bucks in watching her stay in the race, which is a small price to pay (knocks on wood) in exchange for a Democrat landslide.
Biden/Palin was a pure sequel of Obama/McCain: one person substantive, calm, polite; the other screeching platitudes while attacking the opponent.
It boggles my mind that the McCain camp is so incompetent that they said, "Hey, that tactic was a total loser in the Presidential debate--let's use it again in the Veep debate!" In both cases independents didn't fall for it and punished the perps, as they should have.
In the next debate it wouldn't surprise me if McCain pulls off his shoe and sock, takes out a nail puller and yanks out one of his toenails. "Whaddaya think of THAT, America?" he'll say, waving the bloody toenail high overhead. Then after a few minutes of stunned silence from everyone else in the room, he says, "Nothing, huh? Okay, you leave me no alternative" and pulls out another one.
Meanwhile they should trot out Palin to every media outlet they can find to make the claim that Obama is the Anti-Christ. "Do you know what happens when a plague of frogs descends on your son's hockey game?" she'll ask, pausing to lick a fresh gleam around her tattooed lip liner.
Desperate times call for desperate actions. Or, to quote Goldwater, extremism in the defense of liberty is no vice.
Oliver Wendell Holmes Jr. famously said of Franklin Roosevelt that he had a "second-class intellect, but a first-class temperament." Obama has shown that he is a man of limited experience, questionable convictions, deeply troubling associations (Jeremiah Wright, William Ayers, Tony Rezko) and an alarming lack of self- definition -- do you really know who he is and what he believes? Nonetheless, he's got both a first-class intellect and a first-class temperament. That will likely be enough to make him president.
Say it ain't so, Joe, there you go again pointing backwards again. You preferenced [sic] your whole comment with the Bush administration. Now doggone it, let's look ahead and tell Americans what we have to plan to do for them in the future. You mentioned education and I’m glad you did. I know education you are passionate about with your wife being a teacher for 30 years, and god bless her. Her reward is in heaven, right? I say, too, with education, America needs to be putting a lot more focus on that and our schools have got to be really ramped up in terms of the funding that they are deserving. Teachers needed to be paid more. I come from a house full of school teachers. My grandma was, my dad who is in the audience today, he’s a schoolteacher, had been for many years. My brother, who I think is the best schoolteacher in the year, and here’s a shout-out to all those third graders at Gladys Wood Elementary School, you get extra credit for watching the debate.My reward is in Heaven. Good to know, though I'd rather have my reward while I'm alive so I can send my kid to college!
Education credit in American has been in some sense in some of our states just accepted to be a little bit lax and we have got to increase the standards. No Child Left Behind was implemented. It’s not doing the job though. We need flexibility in No Child Left Behind. We need to put more of an emphasis on the profession of teaching. We need to make sure that education in either one of our agendas, I think, absolute top of the line. My kids as public school participants right now, it’s near and dear to my heart. I’m very, very concerned about where we’re going with education and we have got to ramp it up and put more attention in that arena.
And is it too much to ask that a VP candidate speak English?
Update: Added the best part (first sentence)
Bailout Redux: The Real Choice Ahead
If the choice is between a lousy bailout bill and economic Armageddon, I'd vote for the lousy bailout bill.
But make no mistake: This is a lousy bill. It doesn't do the most important thing -- help distressed homeowners avoid foreclosure (that role is given to the Treasury Department, which is the equivalent of putting it into the permanent circular file). It doesn't make Wall Street more transparent (there's almost no word in it about improved transparency and capital requirements, or avoiding conflicts of interest and market manipulation). It doesn't control the most egregious aspects of executive salaries (the bill contains a contorted detour for controlling certain golden parachutes when the government has made direct equity purchases of financial companies rather than taken their bad paper through an auction). It does have provisions designed to protect taxpayers should the bad securities continue to be bad, but the responsibility for acting on this is left up to the next President. And the Senate version has lots of additional stuff -- some good (extending deposit insurance), some unnecessary (extending certain tax credits), but most of which should never have been added.
And while the bailout bill may avoid economic Armageddon, it won't avoid a severe deterioration of the American economy in the months ahead. The bailout will help keep credit markets functioning. But ask yourself: what's the point of keeping credit markets functioning if most Americans can't afford to go deeper into debt anyway? And why does anyone suppose that businesses will continue to borrow from credit markets when their customers have stopped buying?
Wall Street and its creditors are not at the core of the American economy. Main Street and consumers are at the core. So even if the bailout bill keeps Wall Street going and prevents the sort of massive defaults that would freeze global credit markets, it does virtually nothing to help the vast majority of American consumers who are already at the end of their ropes -- who right now need extended unemployment insurance, affordable health coverage, and assistance in meeting their mortgage payments and fuel bills. And as long as Americans remain at the end of their ropes, the American economy will continue to decline.
So the real choice isn't between a lousy bailout bill or economic Armageddon. It's between taking prompt action to help average Americans or watching the nation fall into a deeper and deeper recession. Wall Street will be bailed out. The bigger question is whether Congress and the next administration do what's needed to rescue the rest of America, and the overall economy.
I admit: unedited transcripts make everyone sound like an idiot. However, so does sounding like an idiot.
history and current events | by SEK
Tonight the Republican Party outed itself as the proud parent of a C- student:Well, our founding fathers were very wise there in allowing through the Constitution much flexibility there in the office of the vice president. And we will do what is best for the American people in tapping into that position and ushering in an agenda that is supportive and cooperative with the president’s agenda in that position. Yeah, so I do agree with him that we have a lot of flexibility in there, and we’ll do what we have to do to administer very appropriately the plans that are needed for this nation.
I admit: unedited transcripts make everyone sound like an idiot. However, so does sounding like an idiot. I’m with Burke and Bérubé on this one: she sounded like a student bluffing her way through an exam she crammed for three hours earlier. At times she was passable — but only barely. She tacked back to her charted course five seconds into every answer, irrespective of the question, because she could only fit so much on those notecards the cameras didn’t once catch her repeatedly shuffling through — did I just call them notecards?
I meant cheat sheets. Please, America, I beg of you: be as smart as the squiggly lines CNN had representing your core convictions are accurate. Live up to the ideals embodied by
those squiggly linesour Founding Fathers.
Palin sounded uninformed despite changing the rules of the debate by declaring she may not answer the questions as asked because she wants to talk to the American People. Um, hey! American People! She thinks you don't want to hear her answer questions! Be insulted!
Anyway, Biden was boring in the beginning, but wonky and right. Then he got kinda hot, rollin' the McCain fuckups like an auctioneer. He countered all her fabrications and misrepresentations without being impolite; he was respectful and gave his all.
She held up visually, and remained so happy! She said a few things many times, especially when she couldn't respond to the question.
And what about the Achilles Heel thing. Did she ignore it, or is she unaware of it?
Bailing Out the Foes of Public Eduction
By TODD ALAN PRICE
We live in dubious times when staunch deregulators howl for vigorous and immediate regulation.
Lessons from the past
In 1983, the release by the Reagan administration of the report A Nation at Risk, launched over two decades of attacks on public education by right wing foundations and corporate pundits. Teachers and students were ill equipped to defend against the Heritage Foundation, the Hoover Institution, and the American Enterprise Institute, just a few of the many shock troops aiming their sights on the public schools.
The document stated that we were losing the battle against economic powers such as Japan, "unilaterally disarming ourselves" by miseducating youth.
In a previous Fighting Bob article, Demolition Reauthorization, it was described how
"some of the loudest critics of public education, the Hoover Institution, the Fordham Foundation, the Aspen Institute, Bill Gates, Eli Broad, Milwaukee's Bradley Foundation and Fortune 500 corporations everywhere have partnered with the federal government in an effort to, they claim, save our public schools."
The strategy employed so successfully in this all out blitz of the media by supposedly august foundations and think tanks is to attack the public schools, try and drain them of funds through tax payer vouchers to private schools, then to 'save' the remaining public schools, placing them under increased regulation, and when they fail, restructure them and reopen them as newly reconstituted charter schools.
The collapse of the banking, investment and housing industry draws similar parallels.
Some of the same critics of public education have also roundly criticized government. . . until this last week.
As the feds buy up bad loans and "toxic" securities, the critics have found new hope in big government. Republicans and Democrats band together in a newly minted bi-partisanship. The current proposed buyout of the reckless speculation in the collapsed housing finance bubble dwarfs any previous efforts of big government to rescue finance capitalism from its worst tendencies. Indeed big government is under way, in an unprecedented scale of intervention with the Federal Reserve, not only to rein in the floundering "quasi-governmental" agencies of Freddie Mac and Fannie Mae, but also to throw a life-line to the Mortgage insurance/security agency, (AIG).
Naomi Klein explains this phenomenon when she writes of a pernicious "disaster capitalism" in the prescient document, The Shock Doctrine. Disasters, it seem, breed opportunity. There are only too many financial predators ready to take advantage of others' tragedy, be it war, lack of affordable housing or a decent education. They strike during the shock, quoting Friedman all the way.
In the case of New Orleans, the aftershock is truly tragic; the city, (as well as much of the Gulf Coast, lest we forget) devastated by flood, was truly doubly shocked when thousands of teachers were fired and hundreds of housing units were leveled. Ushered in with new force were "school choice" or vouchers by Bush and Congress, and a latent "Recovery School District" management style, based largely on the philosophy that a newly fashioned and deregulated system of Charter schools would work best.
With the recent demise of several investment banks, insurance companies, and "quasi-governmental" agencies, the nation and the world's financial markets left spinning, the obvious question would be (and following upon The Shock Doctrine's formula): how soon before the wealthy and connected benefit from the current economic meltdown and how much will the taxpayer have to pay to foot the bill?
Fannie Mae, Lehman Brothers, and AIG: Foes of Public Education
The Bush administration saved Fannie Mae, but Treasury Secretary Henry Paulson and Federal Reserve Chairman Ed Bernanke sat on their hands while the Lehman Brothers' stock went south. Then they became nervous and bought up AIG.
Fannie Mae survives, barely. Fannie Mae is also fond of charter schools. The Fannie Mae Foundation, the World Bank, and the Washington Regional Association of Grant makers have set up a Public Education Partnership Fund to implement 'reform' in DC Public Schools and to "develop charter school capacity."
Lehman is a notorious privatizer. As noted by educational statistician and writer Gerald Bracey (2003), they sponsored a conference in 1996 with the Center for Education Reform where they boasted: "we've taken over the health care system; we've taken over the prison system; our next big target is the education system. We will privatize it and make a lot of money." Lehman worked to set up a front group called Fight for Children which received, as noted by writer Basav Sen, Walton Family Foundation funding, and support from "Anheuser Busch, Bank of America, Citigroup, The Gap's Donald Fisher, Lockheed Martin, the Marriott Foundation, Microsoft, Exxon Mobil, the New York Times, Northwest Airlines, former Secretary of State Colin Powell, the U.S. Chamber of Commerce, Verizon, Wachovia, and the Washington Post." Lehman's CEO made $17,000 an hour while the one hundred and fifty year old company tanked. Even the President's brother Jeb, brought in as a last minute advisor couldn't save the company.
AIG has close links to Los Angeles billionaire Eli Broad and his Broad Foundation. Broad is the long-time chairman of AIG Retirement. Eli Broad is the most outspoken advocate of the business model for education-treat school district like corporations, schools like "profit centers", students as "revenue sources". Broad's disciples now control or heavily influence public education in dozens of large urban centers, including New York, Philadelphia, Chicago and Oakland. Broad has poured hundreds of millions of dollars into charter schools-through direct donations to charter school chains like KIPP, Green Dot and Aspire, as well as by funneling money through the Silicon Valley-based New Schools Venture Fund. Eli Broad, and his close collaborator, disgraced former AIG chief executive officer Maurice "Hank" Greenberg (who was forced to resign as AIG CEO when he was caught fraudulently inflating the value of AIG stock a few years ago), are upset with the federal bailout of AIG. They want an even bigger bailout from taxpayers. Public schools that aren't "profitable" should be closed, says Broad-but AIG investors losses must be subsidized! Truly, privatization of profit, socialization of loss!
The deregulation agenda is occurring in the school districts in not only Washington D.C., and New Orleans, Louisiana, but in Chicago and elsewhere in Ohio, and despite tepid results (where those results are even released), Charters continue to gain support.
Charter Schools to the Rescue
In Chicago, where we work with teachers sharpening their knowledge and craft in graduate school and preparing for National Board Certification, teachers are overburdened and discouraged by the relentless before, during and after school preparation for standardized testing. They are told to not worry about social studies, and in many cases, to not even teach science as mathematics and reading consume the bulk of their curriculum. More and more teachers we work with have been handed scripted curriculum written by outside private contractors. When their schools fail to meet Annual Year Progress under NCLB, they face declining enrollment as students are recruited for the burgeoning charter schools growing in Chicago.
Last spring, despite vociferous community resistance, eighteen public schools in Chicago were permanently closed, reorganized with the complete replacement of building principals and teachers or reconstituted as new charter schools. These trends go forward with the substantial political and financial support from the Chicago corporate and banking leaders who typically live in the suburbs or don't send their own children to the schools they have come to control behind the scenes.
Meanwhile, the continuing expansion of charter schools undermines the teacher union movement as charters by law exclude unions. And in the past year the Daley run school system appears to have moved to silence community involvement in school operation by increasing the number of appointed local school leaders and attacking the integrity of school councils across the city. In this brave new world of alternatives to public schools, teachers become lone entrepreneurs in the spirit of the free market advocates who push for the replacement of public education in the United States. And all of this moves forward with Chicago school operations dictated by the mayor's office in alliance with the corporate school agenda of the Commercial Club of Chicago.
But finally, and beyond the merit of Charter schools versus Public schools is the question: why can't we find the will to fix public schools? To fund them properly?
As stated by a Chicago group, Teachers for Social Justice, Charters are being used to replace public schools. Cited verbatim from their blog is the following assertion:
Renaissance 2010 is not just a school plan. It is part of a much larger plan for gentrification and for moving out low-income African Americans and some Latinos from prime real estate areas, in fact from the city altogether. These are the areas where the proposed school closings are concentrated. Gentrification is a central source of profit for developers, banks, and investors and a key element in making Chicago a global city of increasing inequality in housing, income, quality of life, and use of urban space.
Unfortunately, both major party candidates seem intent on expanding charter schools with Obama calling for a doubling of federal money for subsidizing charter expansion. And this support comes in the face of the 2006 Department of Education large scale study which showed public schools outperform charters on the limited, but mandated, measures being used to determine student learning and school success.
This is not to say that Charter schools or their advocates are all the same. Nor does this suggest that everyone who supports charters, supports deregulation, or supports in turn the dismantling of the public school system. As Joe Nathan pointed out for the magazine Rethinking Schools when the charter movement kicked into gear in the mid 90's, charter schools can serve as creative responses to needs unmet by the larger school system, and can offer alternatives that may inform and guide the larger public education system "to empower the powerless and to help encourage a bureaucratic system to be more responsive and more effective." Unfortunately, from the beginning of charter schools free market ideologues have sought to privatize and repackage large swaths of public education into another consumer choice option joined at the hip to the pervasive inequalities of market capitalism.
Much of the thrust of the current charter school movement, and certainly of the last twenty years of vouchers is clearly indicative of those educational policy makers who, with their corporate and foundation backers, see no problem in steering public funds to private and for-profit corporations. And it is those same foundations and corporations today, hat in hand, begging for handouts, who are responsible for the proposed and current deregulation and privatization of our commons. With the current track record comes the even more obvious question:
Why do we let them get away with it?
In this so far victorious war of the soon to be rescued finance industry super-powers against the public schools, disaster capitalism has made an impressive debut. The scenario of wrecking institutions in the public sector in order to save them with intervention by private capital has now spread like a wildfire that can only take hold in the rest of the public sector -- health, housing, and Social Security retirement income provision. Too bad for Lehman that they won't be around to share the rewards from this coming Golden Age of privatization and deregulation for which they can claim such a key share of authorship.
Todd Alan Price, author of The Myth and Reality of NCLB: Public Education and High Stakes Assessment & John Duffy, author and contributor to Democracy and Education, are professors of education at the National College of Education in Chicago, Illinois.
October 2, 2008
Teachers to Be Measured Based on Students’ Standardized Test Scores
By JENNIFER MEDINA
New York City is beginning to measure the performance of thousands of elementary and middle school teachers based on how much their students improve on annual state math and reading tests.
To avoid a contentious fight with the teachers’ union, the New York City Department of Education has agreed not to make public the reports — which described teachers as average, below average or above average with various types of students — nor let them influence formal job evaluations, pay and promotions.
Rather, according to a memo to principals from Chancellor Joel I. Klein and Randi Weingarten, the president of the United Federation of Teachers, sent on Wednesday night, the reports are designed to be guides for the teachers themselves to better understand their achievements and shortcomings.
“They won’t be used in tenure determinations or the annual rating process,” the memo said. “Many of you have told us how useful it would be to better understand how your efforts are influencing student progress.”
Still, even without formal consequences for teachers, the plan is likely to anger teachers and parents who are already critical of the increasing emphasis on standardized test scores as a substitute for judging school quality. It follows the city’s much-debated issuance of report cards labeling individual schools A through F largely on the basis of student improvement on state exams.
The State Legislature this spring prohibited the use of student test scores in teacher tenure decisions. The new measurement system — called “teacher data reports” — is an expansion of a pilot program that the city began in January involving about 2,500 teachers at 140 schools. The pilot program was so controversial that several participating principals did not tell teachers they were being monitored.
Christopher Cerf, the deputy chancellor overseeing the program, said it was important to get teachers “comfortable with the data, in a positive, affirming way.”
“The information in here is a really, really important way to foster change and improvement,” he said. “We don’t want people to be threatened by this.”
In introducing the pilot program, Mr. Cerf said it would be a “powerful step forward” to have the teacher measurements made public, arguing, “If you know as a parent what’s the deal, I think that whole aspect will change behavior.” But this week, he said that for now the reports will be treated as personnel records not subject to public-records laws.
Principals interviewing prospective teachers from other schools would be permitted to ask candidates for their reports, but the candidates would not have to provide them.
Ms. Weingarten said that the assurance that there would not be a public airing of individual teachers’ information made her more comfortable with the idea of the reports, which she said could help teachers identify their strengths and weaknesses.
“This can be used to inform instruction and advance it,” she said in an interview. “If this is something that becomes a ranking facility, opinions will be very, very different. That door has now been closed.”
Still, Ms. Weingarten said the reports answer only “a very narrow question” of how a particular teacher’s students do on tests. She and others have long argued that there are many other criteria on which teachers should be evaluated.
The new reports are part of a broader bid by the city to improve the ways teachers are recruited, trained and measured. Last year, the Education Department began a push to get rid of subpar teachers before they earned tenure, forming a team of lawyers and consultants to help principals amass enough information to oust those who are deemed deficient and do not show signs of improvement.
There have been similar efforts across the country, as politicians and academic experts say that teachers are the most important element in improving student performance and closing the gap in achievement between white and minority students. School systems in Texas and Tennessee, for example, have used student performance and improvement as a tool to evaluate teachers.
New York City plans to generate reports for roughly 18,000 teachers — every math and English teacher in fourth through eighth grades.
Amy McIntosh, the Education Department’s chief talent officer, who helped develop the system, said that her team would continue to explore ways to monitor the effectiveness of the city’s nearly 60,000 other public school teachers, but that for now the state tests were the only data on which to reliably base evaluations of them.
The teacher data report balances the progress students make on state tests and their absences with factors that include whether they receive special-education services or qualify for free lunch, as well as the size, race and gender breakdown of the teacher’s class.
Using a complicated statistical formula, the report computes a “predicted gain” for each teacher’s class, then compares it to the students’ actual improvements on the test. The result is a snapshot analysis of how much the teacher contributed to student growth.
The reports classify each teacher as average, above average or below average in effectiveness with different categories of students, like those who score in the top third or the lowest third on the test, and those still learning English or enrolled in special-education programs. It also contains separate measurements on effectiveness in teaching boys and girls, though it does not distinguish performance by students’ race or income level. Teachers will also be given a percentile ranking indicating how their performance compares to those who teach similar students and to a citywide pool.
“When we have talked to teachers about this, there is real insight about the students,” Ms. McIntosh said. “They will say, ‘I didn’t realize I was teaching to the bottom,’ or, ‘I am really great with boys, and less so with girls.’ ”
Last year’s pilot program also attempted to measure how well a principal’s perception of teachers aligned with the student test score data. According to the Education Department, about 69 percent of the teachers whom principals rated “exceptional” were in the top half on the reports. And 73 percent of those whom principals called “fair, poor or very poor” were in the bottom half.
Frank Cimino, the principal of Public School 193 in Brooklyn, which participated in the pilot program, said he was still uncertain about how useful the reports were.
“I would like to make a comparison to see what it shows this year to what it showed last year,” he said. “I don’t think anything can replace getting into the classroom.”
I have, one of my absolute best friends for the last 30 years who happens to be gay. And I love her dearly. And she is not my “gay friend.” She is one of my best friends who happens to have made a choice that isn’t a choice that I have made. But I am not gonna judge people. And I love America where we are more tolerant than other countries are. And are more accepting of some of these choices that sometimes people want to believe reflects solely on an individual’s values or not. Homosexuality, I am not gonna judge people.That's right; homosexuality is a choice!
SCARBOROUGH: Why did these items have to be in this critical bill?Yeah. He voted for it, then suggested Bush veto it. What is up with the Old Man?
MCCAIN: Well that’s just the way the system is working in Washington and the reason why it’s got to be fixed, and it’s got to be changed. And no matter what the stakes are, you’ve got to stop this by starting to veto bills that come across the president’s desk. … It’s insanity and it’s obscenity, because it’s a waste of taxpayers’ dollars and it goes on, and until we stop it, until we get frankly a president who will say, I’m gonna veto these bills, I’m gonna make the people famous that put them on there, uh, famous.
Kill the Bailout
By Robert Tracinski
The House of Representatives deserves praise for taking swift action to avert a growing economic crisis--by not approving the trillion-dollar financial bailout plan.
The bailout bill was blocked Monday by a rebellion among House Republicans, who voted two-to-one against a plan they consider a step down the "slippery slope to socialism," in the words of Texas Representative Jeb Hensarling.
They are absolutely correct, and the 133 Republicans who voted to stop this coup against the financial markets--not to mention some of the 95 Democrats who may have balked for similar reasons--need to find the courage to stand firm. That's especially true since the Senate has voted to approve the bailout.
The Senate is supposed to serve, in James Madison's analogy, as the "cooling saucer" for the hot tea served up by the House--but in this case, it is the House that has remained cool and refused to panic. That's because the hysterical demand for a bailout didn't come up from the people; it came down from the elites in Washington and Manhattan. The House is reflecting the sensible skepticism coming up from the folks on Main Street who don't want to pay the bills for bailing out Hank Paulson's former colleagues on Wall Street.
Some cold, realistic scrutiny of the bailout is desperately needed because this plan is not just an attack on the free market. It is an attack on reality. The financial crisis was caused by more than a decade of using government power to rewrite the facts of reality and override the judgment of the market, and the bailout just offers more of the same fantasy economics.
Congress wanted everyone to be able to get a mortgage to buy a home, regardless of income, credit history, or ability to save for a down payment. The name for this contradiction was "affordable housing," an initiative aimed at providing the benefits of home ownership to those who could not, in fact, afford it. So when the market concluded that low-income borrowers could not meet the credit requirements for mortgages, the Clinton administration invoked trumped-up charges of racism to expand enforcement of the Community Reinvestment Act, bullying banks into dropping as "arbitrary" such old-fashioned credit standards as proof of income. And when the market balked at the increased credit risk created by these loans, Congress backed the expansion of Fannie Mae and Freddie Mac, government-sponsored enterprises that used federally guaranteed money to buy up the increasingly risky mortgages.
At every point, when the market sent the message that reality would not support the higher level of risk being taken on by mortgage lenders, the government used its power to override this message.
The vigorous government-created market for riskier "sub-prime" loans masked the real dangers, creating the illusion that increased profits could be obtained without increased risk--an illusion that encouraged some private lenders to follow Fannie and Freddie's lead. To be sure, some of this private risk-taking was part of the normal process of failure in a capitalist economy. A large part of the current financial upheaval originated with high-risk investment banks and hedge funds that held large amounts of mortgage-backed securities. These securities were carefully balanced against one another according to mathematical formulas that were calculated to cancel out their risks. But the mathematical formulas were new and hadn't been tested in a bear market. When the downturn came, they failed.
This is a normal part of the rough and tumble of capitalism. All of the current talk about the "failure" of the free market ignores the fact that the process of failure is a crucial benefit of the free market. In a capitalist system, high-risk firms are always trying out new and untested ideas, and failure is the messenger that tells the market which strategies work and which strategies don't. It is also an indispensable corrective mechanism that moves capital from enterprises with failing strategies to those with successful strategies.
But the Treasury Department and the Federal Reserve have repeatedly short-circuited this mechanism by trying to outlaw failure. When the market sent the message that too many bad loans had been made and that this needed to be corrected by a contraction in the amount of available credit, the government wanted to avoid the unpleasant consequences of such a contraction. So the Federal Reserve papered over the facts--with a flurry of paper money--by artificially reducing interest rates and loosening up credit just when it needed to be tightened.
But that didn't change the underlying facts, and the bad investments still went bad. Yet as the market has sent the message that some firms have become over-extended and are no longer solvent, the government has still tried to avoid letting the market face the facts. The Treasury and the Fed kept trying to rewrite reality by orchestrating a series of government-backed bailouts.
Over at RealClearMarkets, Joseph Calhoun points out a crucial part of this assault on facts:There has always been a stigma attached to borrowing directly from the Fed and for good reason. If a bank can't get other banks to lend it money, that tells the market something about the condition of the bank in question. Last August, Bernanke convinced three large banks to borrow at the discount window in an effort to remove that stigma. When that didn't work, he concocted a scheme to allow banks to borrow from the Fed in anonymity via a mechanism he called the Term Auction Facility. When Bear Stearns blew up, he added the Term Securities Lending Facility for investment banks. By removing the stigma of borrowing from the Fed and hiding the identity of the borrowers, Bernanke removed important information from the market.
So the Fed's approach to potential bank failures was to try to help failing banks pretend that they weren't failing.
Or consider the SEC's ban on short sales for a list of about 700 stocks--with more companies lobbying to get themselves put on the list. Again, the whole approach of the SEC is not to prevent companies from failing, but to help them pretend that they are not failing, by outlawing trades that would tend to drive their stock prices down.
In fact, all that this sort of policy has achieved is to expand business failures. When Lehman Brothers went bankrupt, for example, it had been in negotiations with several major financial institutions who were considering investing billions in a private buy-out of the firm. But they balked at making the deal because they were waiting for the Fed to offer incentives and guarantees. Thus, the Fed's yelping about how each bankruptcy of a Wall Street firm poses a risk of "systemic failure" turns out to be a self-fulfilling prophecy, because the prospect of an open-ended series of bailouts is blocking all of the mechanisms by which a free market actually prevents widespread failure.
The bailout package would have the government buy out up to $700 billion worth of bad loans. But this is merely delaying the re-pricing of those loans to their proper value. Left to themselves, the holders of these loans would eventually find it necessary to sell them at pennies on the dollar; Merrill Lynch sold its bad loans at 22 cents on the dollar. Private companies could then recognize the magnitude of the loss and start to rebuild their businesses with the remaining assets they possess. But now no firm has an incentive to sell off its bad loans. Why dump them for 22 cents on the dollar when the government might buy them, a few weeks later, at 50 or 80 cents?
So instead what is going to happen is that the federal government is going to go into the financial markets and dictate which securities are worth how much. It is still unclear exactly which loans the government will buy or how much it will pay for them, so no private investor can say whether an investment will pay off or not. This is how the prospect of a government bailout blocks the private buyouts that would actually clean all of the bad debt out of the system.
Instead, this plan transforms the US Treasury into a trillion-dollar hedge fund, making investments in securities whose proper market value is unknown and promising its shareholders--us--that unlike the best Wall Street investment banks, Treasury bureaucrats really know how to make a profit on sub-prime mortgage loans. That's why probably the best comment on the bailout is an e-mail making the rounds on Capitol Hill presenting Paulson's pitch for the bailout deal--in the style of a Nigerian banking scam. "I need to ask you to support an urgent secret business relationship with a transfer of funds of great magnitude," it begins. Time to hit the "delete" button.
The bailout represents more of the same problems that got us here because it is backed by all of the same people who created those problems. And I'm not just talking about Treasury Secretary Hank Paulson and Fed Chairman Ben Bernanke, who organized the series of ad hoc bailouts that spread uncertainty through the financial industry. Much worse is the fact that a chief negotiator for the bailout is House Financial Services Committee Chairman Barney Frank, the chief sponsor of the "affordable housing" scam. And as for Barack Obama, Stanley Kurtz exposes the role played by ACORN, Obama's former employer as a "community organizer." It turns out that a big part of ACORN's "community organizing" was to use thug tactics and the threat of government regulation to intimidate banks into making high-risk mortgage loans.
Fortunately, the public has the good sense to smell that something is rotten. I just got an e-mail recounting what Virginia Representative Jim Moran told Fox News: that calls from constituents commenting on the bailout were running 50-50--50% "no" and 50% "hell, no."
The House should not simply delay the bailout bill or mitigate its worst features; that will prolong the uncertainty in the financial markets. Instead, they need to make sure that the bailout meets with firm and repeated rejection over the next week, preferably by a growing margin of votes.
It is time for the House to kill the bailout and kill it decisively.
It is time for Congress to stop the government from rewriting reality, so that the market can be free to recognize the facts, pick up the pieces of failing firms, and begin rebuilding.
Robert Tracinski writes daily commentary at TIADaily.com. He is the editor of The Intellectual Activist and TIADaily.com.
On Olbermann a few minutes ago (that basement classroom with the heavy paper over the windows and camera sure has come in handy lately!) a phrase popped out of my mouth: “Stockholm Syndrome”, with regard to the bailout rescue.
Here’s the thing: it’s very hard for Congress to originate complex financial rescues, so it’s normally up to the executive to put things together. Unfortunately, Paulson came up with an awful plan. Ideally, the Dems would have ripped the thing up and started over, but that was never realistic. So instead they made it significantly better, but still building on the original, misconceived structure; it became better than nothing, but not good.
And then it failed in the House, so the Senate has larded it up, with stuff like SEC. 503. EXEMPTION FROM EXCISE TAX FOR CERTAIN WOODEN ARROWS DESIGNED FOR USE BY CHILDREN.
I think that Congressional leaders know that it’s a bad bill, but feel compelled to defend it, because they’re (rightly) scared of the financial consequences of a second rejection. And to some extent economists like myself are in the same position; I think I called it the “hold your nose caucus.”
So am I for the bill? Yuk, phooey, I guess so. And I’m very angry at Paulson for putting us in this position.
Here are some links for you.
Wednesday, October 01, 2008
The New Deal, and the Era of Angry PopulismThe Senate will vote tonight; the House is scheduled to vote tomorrow morning. Will the deal fly? Probably. Wall Street's gyrations since Monday have scared the hell out of a number of holdouts, notwithstanding all the negative emails and phone calls they continue to receive from constituents.
An important distinction here. While more Americans are coming around to "supporting" the bailout bill, the vast majority still hate the idea of bailing out Wall Street. They're for the bailout bill now only because they fear that a failure to pass it will have worse consequences -- drying up credit at a time when Main Street is struggling. But make no mistake: America is mad as hell. They resent what they perceive as extortion by the Masters of the Universe.
Angry populism has always been a potent force in American politics. And now, with wages dropping, jobs insecure, fuel and food and health-insurance costs soaring, and millions of homes in jeopardy -- and what's perceived to be a massive tax-payer bailout of some of the richest people in the land -- angry populism is about to explode. McCain has already tried to cast himself as an angry populist, even though he still wants to give the very rich a bigger tax cut than George W. gave them, and cut taxes on big corporations (oil companies alone would reap $1.2 billion a year under McCain's plan). Barack Obama, whose plans for middle-class tax relief and afforable health care will genuinely help America's middle and working classes, has been expressing more indignation lately on behalf of them. But anger doesn't come as easily to Obama as it does to McCain -- even though McCain seems quite ready to aim his anger anywhere and everywhere.
Democrats should be angry populists, given their traditional role of protecting and championing the underdogs in American politics, and especially considering the absurdly wide gap that's opened up between the rich and everyone else. But in recent years Democrats have ceded the mantle to Republicans, who now mimic the faux populism of Sean Hannity and other right-wing talk show demagogues. (The recent maneuvering in the House over the bailout bill is really over this. House Democrats are getting the same angry mail that House Republicans are receiving, and don't want to be seen as lending their support to this ugly bill without Republicans signing on.)
In fact, the bailout bill isn't really taxpayer supported. It will be funded by additional federal debt, issued mostly to foreign governments -- especially the Chinese and in the Middle East. And, strictly speaking, it's not even a bailout. The Treasury will buy and hold mortgage-backed securities whose value is now unknown because there's no market for them, until housing prices start rising again, by which time the securities should be worth something -- perhaps even more than the Treasury pays for them. (Note that there continues to be great confusion about the extent to which the Treasury will hold a reverse auction, paying banks the minimum price at which they're willing to sell the securities -- perhaps 20 cents on the dollar -- or whether the Treasury will buy the securities outright for their face values and take warrants or shares of stock in return.)
But whatever it's called and however it's financed, it's still an outrage. America's foreign policy is made no more flexible by going into deeper hock to the Chinese and the Middle East. And the deal still subjects American taxpayers to some risk, especially if the housing market doesn't bounce back for many years. Worse, the bill can't help but prop up the earnings many Wall Street executives whose malfeasance, greed, and stupidity got us into this mess in the first place. And it does nothing for average Americans except avoid economic calamity. (The provision ostensibly helping distressed homeowners is to be used at the discretion of the Treasury Department, so it's mostly a sham.)
The larger economic outlook is not encouraging. All signs point to the economy worsening, bailout or no bailout. Unemployment will continue to rise. Median earnings will continue to drop, adjusted for inflation. More Americans will lose their health insurance.
The Era of Angry Populism has only just begun. Let's hope Obama wins, and is able to mobilize the anger into fierce pressure on Congress to get his agenda enacted, as well as reform Wall Street and Washington.
The U.S. Senate Thinks America Is Stupid
by: David Sirota
Wed Oct 01, 2008 at 13:19
In case you thought this whole debate over the bailout wasn't an insult to your intelligence, I have news from the U.S. Senate: While Bernie Sanders' amendment taxing millionaires to pay for the bailout will be allowed up for a vote tonight, it will ONLY be allowed up for an anonymous voice vote - that is, the unanimous consent agreement allowing the amendment to be voted on requires it to be voted on in a way that allows senators to not take a public position on it. Because of this, the outcome of the "vote" is already decided - it won't pass.
This is a perfect symbol of how this whole thing is a disgusting travesty designed to fool the country. They pretend to allow a simple vote on whether to make the wealthy pay for this - but they will only allow such a vote in a way that no U.S. Senator actually has to take a position, and therefore in a way that the presiding officer can simply say "the nays have it" and that's it. They can PRETEND to have a vote on something responsible, even though the vote is RIGGED FROM THE START.
Whether you support this amendment or not, it is the process that should insult you. This is the behavior of a politburo - pretend to the cameras that the government is acting on behalf of "the people" while the only vote that is about people is one that is already decided - and decided negatively.
The U.S. Senate thinks Americans are idiots.
Conservatives Cited Affordable Housing Goals as Trigger for Meltdown. House GOP Concurred.Did poor and minority borrowers cause the housing crisis?
That seemed to be the consensus from the fight over the failed $700 billion bailout bill. As Congress and the Treasury Dept. debated how to fix the mortgage mess, the battle over what caused it took hold.
A prime suspect soon emerged: The government forced banks, lenders and Fannie Mae and Freddie Mac to make loans in poor neighborhoods to meet affordable housing goals and regulations. The loans went bad, setting off the market meltdown.
Illustration by: Matt Mahurin
As a measure of how widespread that idea became, House Republicans revolted at an plan to give 20 percent of any government profits from the sale of toxic mortgage securities to affordable housing groups — asserting that ACORN and others like it caused the problem in the first place.
On Sunday, as it reported on the bailout bill negotiations in Congress, Fox News continually explained that ACORN and other community groups pushed for government regulations that caused the foreclosure crisis, citing this Wall Street Journal editorial as a source.
In the end, the proposal for money for housing groups was dropped, confirming that most lawmakers probably agreed with that theory — which has taken hold on the Internet, in conservative circles and in the business press. Last week, Investor’s Business Daily ran a front page story: “How a Clinton-era Rule Rewrite Made Subprime Crisis Inevitable.”
The only problem with all this: it’s completely wrong.
Neither the Community Reinvestment Act — the law most cited as the culprit — nor other affordable housing goals set by the government forced Fannie, Freddie or any other lender to make loans they didn’t want to. The lure of the subprime market was high yields and healthy profit margins — it’s as simple as that.
“The rest is a lie — and it’s industry propaganda,” said William Brennan, director of the Home Defense Program of the Atlanta Legal Aid Society, who, in 1991, began raising the alarm over predatory lending in poor neighborhoods. “It’s also racist.”
Popular belief now holds that government regulators ordered Fannie and Freddie to buy more loans made to low-income borrowers, and that housing advocates applauded the agencies’ move to enter the subprime market. In fact, the exact opposite is true, Brennan said.
He was among many advocates, back in 2000, who warned that subprime loans were dangerous and decried Fannie and Freddie’s decisions. By purchasing subprime mortgage-backed securities, the two agencies ended up providing capital to predatory lenders — leading to the foreclosures of borrowers Brennan and others saw in increasing numbers coming to them for help.
It makes no sense that housing advocates would have pressured the agencies. They were stuck with cleaning up Fannie and Freddie’s mess.
“They weren’t forced to do it,” Brennan said of Fannie and Freddie’s entry into subprime. “They wanted to do it. They were looking at raising their profit margins; and they wanted to please their shareholders.”
Everyone’s pointing fingers at Fannie and Freddie now because it’s convenient — they are down and out, seized by the government and they can’t defend themselves, said Guy Cecala, publisher of Inside Mortgage Finance, which follows the subprime industry. It’s all part of larger search for villains in a saga where everyone is guilty, he said.
“Basically, everybody’s rewriting history now,” Cecala said. “One thing that’s difficult is that there is no villain when everyone can be blamed.”
To Gregory Squires, a sociologist at George Washington University who studies banking practices, the motivation in the blame game is more nefarious. “My guess is that there are some observers out there who view any targeted effort to serve under-served communities as problematic,” Squires said, “and are quick to point to such initiatives today to try to explain away our problems. Better to point to low-income blacks than high-income [white] executives, perhaps.”
The main initiative usually cited is the Community Reinvestment Act, a 1977 law that required banks to provide credit to the communities they served. The law was an attempt to offset years of redlining in poor neighborhoods and in minority communities, some of which were middle-to-high income, that had been cut off from conventional credit. In the late 1980s and mid-1990s, the law was strengthened so that banks pursuing mergers or takeovers had to show their compliance with the CRA to get federal approval.
In recent months, the idea that the CRA caused the housing crisis took hold, as proponents of the theory argued that lenders were forced to make bad loans to poor borrowers to meet their CRA requirements. That expanded into blaming the poor and minority borrowers, and the community organizers who helped them:
“I always listen to Mark Levin while making Friday night dinner … Funnily enough, he has explained just what it is community organizers do. Advocating, for instance, for affordable housing for the poor — the poor who traditionally rent, because they are bad loan risks. The day that reasoning by banks was junked as “racist,” was the day this crisis became a possibility.,” - Lisa Schiffren, NRO.
But despite its current portrayal as a burdensome regulation, CRA rules were always viewed as loose guidelines within the industry, said Cecala, of Inside Mortgage Finance. Banks were routinely found in compliance with the CRA, and an insider joke among bankers was that you’d have to mug a disabled, elderly, minority homeowner to lose your outstanding CRA rating, Cecala said.
Beyond that, as the housing boom grew, so did the number of unregulated mortgage lenders, who made the bulk of subprime loans and who didn’t even have to comply with CRA rules, said John Taylor, president of the National Community Reinvestment Coalition, which represents housing and community development groups. Some 75 percent of subprime loans were made by independent mortgage banks and lenders not covered by the CRA, he said.
Taylor’s group met with Federal Reserve Chairman Ben Bernanke last week, and he was “aghast” that the CRA was being fingered as a culprit, Taylor said.
“People see an opportunity here, because the economy’s in trouble,” Taylor said. ” The easiest thing to say is, ‘Oh, it was all those poor people.’ It’s easier to try to shift the focus, and to blame the victims and blame the government.”
Banks that were making CRA loans profited from them, and they had few complaints, said Squires of George Washington. If they had tried to sell high-rate subprime loans and count them toward their CRA goals, it wouldn’t have worked.
“The CRA explicitly calls for safe and sound lending,” Squires said. “It does not call for lenders to engage in riskier lending than they would normally practice. A few years ago, both the Fed and Treasury conducted studies which found that CRA-related lending was profitable. If a lender is making bad loans, or a compliance officer is encouraging a lender to do so, neither party understands the CRA. That is not the fault of the legislation — but of those who do not understand it.”
When it comes to Fannie and Freddie, there’s also a lot that’s been misunderstood.
The two agencies were created by Congress but privately run, until their takeover. They’ve always had dual missions — to serve their shareholders and increase homeownership.
Like the CRA rules, requirements for either agency to provide affordable housing were pretty loose, Cecala said. At the end of the year, both agencies usually would meet their goals by purchasing some loans for multi-family dwellings, he said. In 2004, the agency that regulated their housing efforts, the U.S. Dept. of Housing and Urban Development, informed both entities they needed to increase affordable housing efforts, with the mortgage market so strong.
But HUD never told Fannie and Freddie to jump into the subprime market. Both chose to dive into subprime mortgage securities, and the purpose wasn’t to satisfy regulators — it was to increase market share, Cecala said. Afterward, they asked HUD if some of the securities they purchased could count toward their affordable housing goals. HUD agreed.
Fannie and Freddie were huge players in the subprime market, buying 48 percent of all subprime-mortgage-backed securities offered in 2004 — way above anything they would ever need to meet affordable housing goals. They continued to buy loans made to multi-family dwellings, as in the past, to satisfy regulators.
Despite claims to the contrary, the two did not rely, for the most part, on subprime securities to meet their regulator’s goals. In any case, the majority of subprime loans were refinancings, which wouldn’t have counted anyway.
“Everybody and their dog had refinanced their prime-rate mortgage” by 2003, Cecala said. And there was no way to make money except by aggressively moving into subprime — meaning it was a business decision by Fannie and Freddie, not a government-mandated one.
The arguments over who caused the crisis go beyond politics alone.
In the last two decades, non-profit community development groups across the country have been making strides in helping increase home ownership among under-served populations - but not through subprime lending. Groups like Manna, Inc. in Washington counseled homeowners through Homebuyer’s Clubs, a support group for borrowers that helped them to clean up credit problems, save for a downpayment and prepare for homeownership.
The default rate on Manna’s prime, fixed-rate loans is zero. There are streets in Washington’s tough Anacostia neighborhood, once abandoned and dangerous, that have been rebuilt entirely by Manna, one house at a time. Banks like working with these groups because it’s profitable for them while it increases homeownership.
That all this success could become sullied by partisanship and finger-pointing worries many housing advocates. “The facts don’t support the people who are trying to undermine fair lending,” NCRC’s Taylor said.
But in the bitter politics of bailing out, the search for a scapegoat is only likely to continue.
I just want to make a comment about the obvious issue and that is the failure of Congress to act yesterday. Its just not acceptable. […] This is just a not acceptable situation. I’m not saying this is the perfect answer. If I were dictator, which I always aspire to be, I would write it a little bit differently.
There seem to be two prevailing narratives about the bailout plan(s). Both have elements of truth, but are fundamentally wrong.
One narrative is that of the Wise Men and the Destructive Yahoos. According to this narrative, men who Understand What Needs to be Done put together a plan to save the world, but they did a bad job of communicating, and a mob of ignorant people stands in their way.
The other narrative is that of the Evil Plotters and the Righteous Uprising. According to this narrative, the same people who sold us the Iraq war have tried to bully Congress into adopting a plan that is, in essence, a cynical ripoff — a scheme to transfer vast wealth to the rich and cripple the next administration.
As I said, there’s some truth to both narratives. Many of those opposing the bailout are indeed destructive yahoos — read some of the speeches during the House debate. And yes, there were Iraq echoes in the way Paulson tried to ram his original plan through.
But both narratives are mostly wrong.
There’s a reason Paulson et al had such a hard time communicating the case for their plan — they didn’t have a very good case. To this day they’ve never been able to explain clearly why buying up bad mortgage assets at market prices will solve the credit crunch. The Wise Men, as far as I can tell, have never had a clear idea of what they’re doing.
My view, which I think is now shared by many economists, is that Paulson grabbed hold of the wrong end of the stick — he should have been seeking to expand bank capital, taking an ownership share in compensation, rather than trying to push up the value of toxic paper. In the end, that’s what we’ll probably do.
On the other hand, the way that Paulson et al have been blundering around puts the lie, I think, to the idea that this is a cynical ploy. Ideology certainly played a role — it’s probably a lingering distaste for Evil Socialism that made Treasury go for buying toxic waste rather than injecting capital. And if the Bush years have taught us anything, it is that sometimes conspiracy theories are right. But in this case the performance has been more Keystone Kops than Star Chamber.
So now what? Like Jamie Galbraith, I’d rather see Dodd-Frank-Paulson, which is much better than the original plan, pass than not. The true cost to taxpayers will probably be close to zero, and it would buy some time. But I’m not passionate about this. The real financial rescue still lies in the future, probably under the Obama administration.
Here's an idea.
Biden should cancel the debate. He should say he refuses to debate her because it is an insult. He should offer to debate McCain instead. He is at least less incoherent than she.
Salvaging AccountabilityBy Thomas Toch & Douglas N. Harris
George W. Bush rode to the White House pledging high standards for all students. He’ll leave Washington with the nation’s public education system focused on teaching basic skills to disadvantaged student populations, with the United States lagging in international comparisons of educational attainment, and with his signature education law plagued by so many problems and mired in so much controversy that it has put at serious risk two decades of work to improve public schooling by making educators accountable for their students’ success.
The most important thing Barack Obama or John McCain could do quickly to salvage the accountability movement is change the way that the federal No Child Left Behind Act judges schools. Not by abandoning NCLB’s focus on students’ meeting standards, a move that would be unwise on both policy and political grounds, but by making the law a more legitimate report card of school performance, one that provides a fair and accurate gauge of educators’ contribution to their students’ achievement. Since its inception, NCLB has instead held schools responsible for factors they can’t control and perversely encouraged states to set standards low.
It’s critical in any accountability system that the metrics used to judge performance reflect accurately the contributions of those being judged. In education, that means measuring how much progress a school’s students make during the school year, a “value added” approach that accounts for the disadvantages (or advantages) students may bring to school because of the quality of prior instruction or their family backgrounds. It’s a strategy that pressures schools working with disadvantaged students to work hard in their students’ behalf without penalizing educators for taking on tough assignments. And it’s a strategy that doesn’t reward rich schools merely for having privileged students.
Yet NCLB currently demands a different system of rating schools, one that gauges their contribution to learning much less accurately and far less fairly—a system that has given the law’s many opponents an easy avenue of attack. Rather than measure how much a school’s students learn in a year, NCLB requires that school ratings be based on how many students in several groups (white, Asian, black, and Latino students and English-language learners, for example) pass state tests that are given once a year. Civil rights groups argue that this is the best way to get educators to finally pay attention to traditionally underserved students.
As a measure of school performance, however, this snapshot strategy is flawed. Because student populations vary greatly from school to school, and because family income, parental education, and a host of other non-school-related factors have a major influence on students’ learning, some schools have to improve student achievement a lot more than others to get their students up to state standards. The federal law is unforgiving of such schools. As a result, it gives an unfair advantage to schools with students from privileged backgrounds, and it fails to measure what matters most: how much students learn during the school year.
The consequences have been severe. While the No Child Left Behind law’s accountability system has undeniably cast light into some dark corners of American public education, it has labeled as failures many high-performing schools serving very disadvantaged students, demoralizing their teachers and administrators and turning them against the law, while giving an undeserved seal of approval to thousands of middling schools with more affluent students. In Dallas, one of the few places to rate its schools using both value-added and NCLB metrics, researchers found that schools ranked 94th, 77th, 83rd, and 107th among the city’s 206 schools under NCLB placed second, fifth, eighth, and 16th under the city’s value-added ratings, where achievement gains are most important.
NCLB’s failure to credit schools for improving student achievement has led many states to abandon the law’s pursuit of high standards to avoid the political embarrassment of having large numbers of failing schools. In effect, NCLB has placed a glass ceiling on the public education system and the students it serves: By incentivizing states to lower their sights, the law has created an environment that encourages schools to focus simply on getting enough students over the achievement hurdles. But there are vast numbers of students who clear state standards without difficulty and who could and should be educated to higher levels than they are today. At the same time, there’s evidence that the law has caused schools to pay little attention to very low-achieving students who have scant chance of meeting state standards. Ironically, the low bar in many states has led some NCLB defenders to reframe the law’s purpose. NCLB, they now say, is about ensuring students’ basic proficiency.
The law’s flawed school ratings have contributed to a related but broader problem. National education policy can focus on disadvantaged students or high achievers, some argue, but we can’t do both, and focusing on those who traditionally have been left behind is a defensible educational and social strategy, they say. But it’s a false choice. A number of other industrialized nations have fewer low achievers and more high achievers, and thus our schools should be able to produce stronger results across the achievement spectrum, if we give them the right incentives.
The architects of the No Child Left Behind Act were aware of the shortcomings of the law’s school ratings. The Bush administration’s point person on NCLB, Sandy Kress, had led the development of the Dallas value-added system a decade earlier, and told a writer in 2001 that it was “a whole lot fairer” to schools than the rating system of the legislation Congress was about to approve. But the value-added model was too little known and required testing and data systems available in too few states to impose it nationally under NCLB, Kress and others reasoned. Still other voices in the debate opposed it on philosophical grounds.
Only in 2005 did U.S. Secretary of Education Margaret Spellings, under pressure to address the weaknesses of NCLB’s accountability system, institute rules that have allowed 11 states to include measures of learning gains in their school ratings. But, as researchers like Michael J. Weiss at mdrc have pointed out, the states’ new “growth models” don’t improve on the law’s rating system very much. (See The ‘Growth Model’ Pilot Isn’t What You Think It Is, June 18, 2008.)
That’s because Spellings requires states using growth models to judge schools on whether they produce enough yearly achievement gains to get their students up to state standards within several years—a so-called growth-to-proficiency requirement. A school with students a year below grade level and a typical three-year window to get them to state standards would get a thumbs-up rating only if it produced one-and-a-third year’s worth of growth in its students annually. But this still requires schools with disadvantaged students to make greater gains than schools with affluent kids, perpetuating the problems that plague states using the NCLB proficiency model. Weiss’ research reveals that most schools fare the same under the growth-to-proficiency models as they do under the NCLB system.
A wiser strategy would be to rate schools using both the NCLB how-many-kids-are-meeting-state-standards model and a value-added, how-big-are-the-school’s-achievement-gains approach. Holding schools accountable for both types of performance would preserve the law’s commitment to getting low performers up to proficiency, while giving schools meaningful incentives to improve the achievement of all students.
There’s more than one way to combine the proficiency and value-added strategies. One would be to reserve the toughest sanctions for those schools that fail on both metrics, and reward schools that earn high marks in each category. Schools in the middle tiers, with either high value-added scores or high proficiency scores, would still be required to address their shortcomings, but would face less-stringent sanctions.
A second strategy, already in use in Florida as part of a state accountability system that predates NCLB, combines proficiency and value-added ratings by awarding schools points for reaching achievement targets and for learning gains, especially among low-achieving students. And, unlike NCLB, it includes rewards as well as sanctions. Studies have shown that the Florida approach has lifted achievement among low performers and encouraged educators, who tend to trust the system much more than NCLB’s, to embrace school improvement. Former Gov. Jeb Bush urged his brother’s administration to incorporate the Florida model into NCLB, without success. New York City launched a combined rating system in 2006.
Value-added calculations have larger margins of error than NCLB’s proficiency ratings, but because they measure what’s most important in judging schools—student learning gains—their statistical shortcomings are more than worth tolerating. And combining value-added and proficiency metrics would both improve error margins and ensure that schools remain committed to helping 100 percent of students achieve state standards (at least in the mostly elementary and middle school grades where the law requires student testing), without encouraging them to focus only on students near the standards, as NCLB does now.
To help promote higher standards, schools would only get passing grades on the value-added portion of this combined annual rating system if they achieved at least a year’s worth of learning. The proficiency portion of the rating system would give schools with very low-achieving students incentives to make even larger gains. And while most states lacked the technology required for value-added ratings when Congress drafted NCLB seven years ago and the law didn’t require them to create the necessary capacity, building both data systems and statistical safeguards today wouldn’t be unduly difficult.
It’s clear in the face of a deepening backlash against the No Child Left Behind Act that its survival—and perhaps the prospects of the accountability movement in public education—hinge on making the law’s measurement of school performance a fairer and more effective enterprise. With so much at stake, the next administration shouldn’t wait for the reauthorization of the law to act. It should begin to introduce value-added measures in NCLB’s school ratings the same way Secretary Spellings introduced her inadequate growth-to-proficiency models—through regulations.