--Mori Dinauer

National Journal: What's going on with financial regulatory reform? I know that Dodd has a new plan and that Frank is expected to move his plan out of committee soon, but I still can't tell what the administration's plan is. Why so many plans? Well, for starters, this re-regulation of finance is huge, so it is natural that everyone would want to drive the train. Primarily, though, the many approaches reflect a strategic decision by the Obama administration. Rather than come out with a fully formed plan and guide the negotiations, the president's advisers decided to let Congress work out the details.

HFSC: This is 100% false. President Obama’s team did indeed produce a plan. They delivered to the House Financial Services Committee and to the Senate Banking Committee a 13 title bill totaling several hundred pages, complete with legislative language, and that language is serving as the base text for our deliberations.

...National Journal: It sounds like I should bet on this taking a lot more time. With big reforms, that's usually a good bet.

HFSC: We certainly wish the National Journal would take its time to do some quality reporting.

I can't link to the original article because it is subscription only, but you get a pretty good flavor from the excerpts in the release. This kind of response to a piece from a communications shop isn't the norm outside of campaigns, but National Journal represents a kind of distillation of bland conventional wisdom and is thus quite influential among members of Congress and staff, which no doubt motivated Adamske's to go after the article head on. National Journal does occasionally do in-depth reported pieces on esoteric issues like financial regulatory reform, but this isn't one of those pieces. The article entirely predicated on procedural nonsense -- Adamske's fact-checks are, on the whole, correct -- while ignoring the many substantial critiques of the bill. It's ultimate conclusion that Congress should take more time on the bill is just a silly regurgitation of Republican talking points. The problems faced by the committee can't be solved with more time, they'll be solved with negotiations and votes.

-- Tim Fernholz ]]> MORE...]]> http://www.prospect.org/csnc/blogs/tapped_archive?month=11&year=2009&base_name=friday_afternoon_oh_snap http://www.prospect.org/csnc/blogs/tapped_archive?month=11&year=2009&base_name=friday_afternoon_oh_snap Economy Fri, 20 Nov 2009 16:47:28 -0500 Terence Samuel explains why Democrats need to focus on jobs:

Senate Majority Leader Harry Reid will win his motion to proceed on a health-care reform package that should shave $127 billion off the federal budget deficit over the next decade -- the legislation will come to the floor of the Senate before Thanksgiving. In practical terms, that means the Obama administration will likely get to mark its first year in office with a remarkable set of legislative triumphs that, in addition to health care, could include some kind of financial reform legislation and maybe even a climate change bill.

These are big wins that will change our way of life significantly and constitute an admirable record of campaign promises kept. So it is no small irony that all this success may be of limited political value to Democrats as they go into the next election season: 2010 could be the year of the American job.

KEEP READING ...

But outside of the political sideshow, the much-hyped Chinese ownership of U.S. debt and the controversy over exchange rates (which has led some Americans to accuse the Chinese of currency manipulation) isn't likely to change in the near future.

"The truth is … China really has no choice," Michael Pettis, a professor at the Guanghua School of Management in Beijing, says in an e-mail. "China does not want to hurt its export sector (on the contrary, it is trying to prop it up), and since no one else besides the United States can run such large trade deficits, China has no choice but to keep buying dollars."

What's more interesting about the fuss isn't what China could do to the U.S. economy, but what they're doing about their own -- the current Chinese economic policy greatly advantages coastal elites over rural interests, and economic inequality is a big issue. Pettis, whose blog, "China Financial Markets," is really a must-read on these issues, thinks the larger concern is that the Chinese won't heed international advice to about balancing global trade (now, China is saving/investing too much, and the U.S. is overconsuming) because that would require greater household income growth in China, which obviously involves redistribution of income and probably increasingly broad political awareness.

But the insistence of the Chinese government that exports and investment are the way out of the global recession means that China's recovery is weaker than many realize, and could lead to more trade disputes as the Chinese continue to pursue their pro-export policy at the expense of the rest of the world. Ironically, the rebalancing policy that the Obama administration supports -- which would lead to less reliance on U.S. consumption -- is more broadly in the interest of the Chinese people than what Chinese leaders want, which is maintaining the current status quo between the two economies.

-- Tim Fernholz ]]> http://www.prospect.org/csnc/blogs/tapped_archive?month=11&year=2009&base_name=what_can_the_chinese_do_to_our http://www.prospect.org/csnc/blogs/tapped_archive?month=11&year=2009&base_name=what_can_the_chinese_do_to_our China Fri, 20 Nov 2009 15:05:42 -0500 With the unemployment rate the highest it's been in 25 years, The Roosevelt Institute asked historians, economists and other public thinkers to reflect on the lessons of the New Deal and explore new, big ideas for how to get America back to work. TAPPED will be cross-posting the 10-part series with the New Deal 2.0 blog. In this installment, James Carr argues for targeting hardest-hit communities with job training and access.

As this month’s unemployment numbers confirm, the nation’s economy continues to suffer despite recent positive and relatively impressive productivity numbers. Unemployment now exceeds 10 percent for the general population. Unemployment for African Americans and Latinos exceeds 15.5 percent and 13 percent respectively. For Native Americans living on reservations, it is just below the fabled and feared 25 percent of the Great Depression. For all families out of work, the economy is in a depression. Unable to find a suitable job, more than a third of those out of work are classified as long-term unemployed. The longer they remain out of the labor market, the more difficult it will be for them to reenter the workforce. It also makes them less likely to regain a job paying the same or higher wages than the job they have lost, and more likely to run out of unemployment insurance and potentially end up on the streets with few, if any, options. In fact, prior to the recent extension of unemployment benefits, roughly 7,000 people per day were losing their benefits.

Many economists dismiss the bad news on the employment front arguing that unemployment is merely a lagging indicator. But a recovery without jobs is meaningless for families worried about paying their mortgages, purchasing food, affording health care, sending their kids to college, and saving for a decent retirement. And, a recovery without jobs presents the prospect for further damage to the financial system as growing numbers of households are unable to pay their debts. Most concerning, continued significant job losses open the door for a possible “double-dip recession” given the key role played by consumer spending.

More after the jump.

--James Carr

Roosevelt Institute Braintruster James H. Carr is Chief Operating Officer of the National Community Reinvestment Coalition.

The "war on terror" was pretty great for Iran's hardliners. The Bush administration's 2002 inclusion of Iran in the "Axis of Evil" was a major blow to Iranian moderates, discrediting their calls for U.S.-Iran rapprochement and supporting the claims of Iran's hard-liners that engagement with America was pointless. The invasion of Iraq removed Iran's greatest enemy, Saddam Hussein, against whom Iran had fought a staggeringly destructive eight-year war. Iraq's postwar government included a significant number of Iran's former clients -- including eventual Prime Minister Nouri al-Maliki of Iraq -- in top leadership positions.

The perceived success of Iran's Lebanese ally Hezbollah against Israel in 2006 -- in a devastating month-long combination of bombing and ground combat hailed by U.S. Secretary of State Condoleezza Rice as "the birth pangs of a new Middle East" -- also proved a huge boost to Iranian hawks. A 2007 poll of Egyptians placed Ahmadinejad and Hezbollah chief Sayyed Hassan Nasrallah as the two most admired leaders in the region. The fact that two Shiite leaders topped an Egyptian poll, even as Iraq's sectarian civil war raged and Arab leaders like Jordan's King Abdullah warned of Shiite inroads into Sunni Arab lands, is a testament to Iran and Hezbollah's success in defying the West.

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Especially given the problems with the administration's mortgage modification plan, this isn't welcome news. If anything, it should be another argument for using TARP funds to deal with unemployment rather than deficit reduction, as House Speaker Nancy Pelosi and other congressional Democrats, frustrated by the pace of real economic improvement, are urging Treasury Secretary Tim Geithner.

-- Tim Fernholz ]]> http://www.prospect.org/csnc/blogs/tapped_archive?month=11&year=2009&base_name=foreclosures_arent_going_anywh http://www.prospect.org/csnc/blogs/tapped_archive?month=11&year=2009&base_name=foreclosures_arent_going_anywh Housing Fri, 20 Nov 2009 12:52:01 -0500 Both the American Civil Liberties Union and Human Rights First were at Guantanamo this week to observe the commencement of the new, revised military commissions. Both were present for the pre-trial hearing of Mohammed Kamin, and both organizations had similar takes on the proceedings.

ACLU:

Continuing the military commission proceedings against Kamin meant more of the same of what we've seen in other proceedings here: uncertainty about the rules, which the government is making up as we go along (even now, the Department of Defense is preparing new rules for the military commissions), and a judge frustrated by delays in the prosecution's failure to hand over fundamental evidence to the defense.

The usual chaos was compounded by uncertainty over where Kamin's case will ultimately be tried. Kamin is accused of a single crime, providing material support for terrorism—an offense that should have been prosecuted in established federal courts. While a military commission conviction for material support for terrorism could possibly be overturned on appeal because such a crime is not a traditional war crime, the offense is covered by the federal criminal law. And federal courts have a proven track record of obtaining convictions for material support for terrorism in numerous cases since 2001.

There is a making-it-up-as-we-go feel to these proceedings which is inevitable for a system of trials for which the Congress, courts and executive keep changing the rules. For example, there was discussion today of a new pre-trial hearing date in December in the Kamin case.

But officials said that the new rules for the military commission proceedings - which the Department of Defense needs to alter to conform with reforms passed by Congress on October 29 - have yet to be released by the Department of Defense. Officials with the Office of Military Commissions at Guantanamo acknowledged today that they have not even seen a draft set of the new rules.

I think most Americans aren't actually privy to how haphazard the military commissions are--they're essentially a new legal system invented from scratch to try detainees against whom we have dubious evidence or only intelligence information. The adjective "military" may give them a certain sense of authority for those who are unaware just how poorly the process has worked so far compared to federal courts, but this is misleading since the DoJ's civilian lawyers are actually more experienced in trying terrorism cases.

Not to belabor the point, but from a practical point of view, why would you want to put Khalid Sheik Mohammed through this kind of shaky process rather than a civilian trial in the Southern District of New York, which has already handled plenty of these types of cases? A civilian trial is still far less of a roll of the dice than the military commissions, even after the revisions.

-- A. Serwer

Year after year, Republicans try to pass legislation that would limit medical malpractice awards. Fix the tort system, they argue, and we fix rising health-care costs. And year after year, Democrats resist placing arbitrary caps on awards to people who may have suffered from an egregious medical error. The fight plays out like a predictable old Western -- good guys versus bad guys. Depending on your politics, the villain is either the greedy doctor or the greedy trial lawyer.

Health reform invites a fresh look at malpractice. The Republican tort-reform agenda hasn't magically fixed what ails American health care in states that have tried it. But progressives can test new models of medical malpractice reform because -- done right -- they may lead to a more consistent, more timely, and more equitable approach to compensating people who have been harmed.

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At a CBC dinner on Wednesday night, the famed civil rights leader denounced Davis's vote, saying, "We even have blacks voting against the health care bill from Alabama. You can't vote against health care and call yourself a black man."

Days after insisting it was impossible to be both black (which Davis is) and vote against health care reform (which Davis did), Jackson said he called the Alabama gubernatorial candidate to "assure him of my abiding admiration."

It's a good sign that even someone who has been associated with civil rights as long as Jesse Jackson can't get away with publicly questioning someone's ethnic loyalties based on their politics without embarrassing himself and having to apologize. If only we could somehow get this dynamic going within the American Jewish community.

-- A. Serwer

Goldsmith and Comey don't go as far as the Constitution Project in pushing against preventive detention, and they're fine with the two-tiered system of justice for suspected terrorists. In fact, they're painfully honest about it:

It is more likely that Holder decided to use a commission system still learning to walk because the Cole case is relatively weak and will benefit from the marginal advantages the commission system offers the government. It is also likely that the Justice Department will decide that many other terrorists at Guantanamo Bay will not be tried in civilian or military court but, rather, will be held under a military detention rationale more suitable to the circumstances of their cases.

Krauthammer also fears, like other conservatives, the unhinged rants of KSM. There's really nothing more self-implicating than the chattering teeth of Republicans in the face of a terrorists' rants -- in a military commissions trial, KSM's indictment of the United States might have some resonance, particularly in the Middle East. Placing him in a civilian courtroom is a propaganda coup for the U.S., not the other way around. When people get hysterical over what KSM might say, it makes me wonder how much of what they think he might say is actually true. Spencer Ackerman has another theory: Seeing Al Qaeda terrorists being brought low before a court of law demystifies them for a fearful public, diminishing the political currency of terrorism-based fearmongering.

I can see why the GOP would be afraid of that.

-- A. Serwer

So the compromise was to give all Americans the option of buying into a "Medicare-like plan" that competed with private insurers. Who could be against freedom of choice? Fully 70 percent of Americans polled supported the idea. Open to all Americans, such a plan would have the scale and authority to negotiate low prices with drug companies and other providers, and force private insurers to provide better service at lower costs. But private insurers and Big Pharma wouldn't hear of it, and Republicans and "centrists" thought it would end up too much like what they have up in Canada.

So the compromise was to give the public option only to Americans who wouldn't be covered either by their employers or by Medicaid. And give them coverage pegged to Medicare rates. But private insurers and ... you know the rest.

So the compromise that ended up in the House bill is to have a mere public option, open only to the 6 million Americans not otherwise covered. The Congressional Budget Office warns this shrunken public option will have no real bargaining leverage and would attract mainly people who need lots of medical care to begin with. So it will actually cost more than it saves.

But even the House's shrunken and costly little public option is too much for private insurers, Big Pharma, Republicans, and "centrists" in the Senate. So Harry Reid has proposed an even tinier public option, which states can decide not to offer their citizens. According to the CBO, it would attract no more than 4 million Americans.

More after the jump.

--Robert Reich

But instead of revisiting old disputes, Karzai brought in several cabinet ministers to talk about development and security. He explained details of a new effort to address graft. And halfway through a meal of lamb stew, chicken and rice, he looked across the table and said he had decided that the United States would be a "critical partner" in his second term, according to a senior U.S. official familiar with the meeting.

I'm glad he's decided that the U.S. is a "critical partner," but that's not exactly his decision, is it, given the whole U.S.-military-keeps-him-in-power thing? While Rajiv Chandrasekaran's piece suggests that Karzai's efforts are a result of "top diplomats and generals ... abandoning for now their get-tough tactics with Karzai and attempting to forge a far warmer relationship," I just don't think the chronology adds up. It was only a week ago that Ambassador Karl Eikenberry was arguing that the U.S. shouldn't send more troops specifically to have more leverage over Karzai, leading the president to reject all of his staff's proposals. I doubt that things have since turned around dramatically since then.

Reading on, the change in dynamic seems to be this: The new approach "will entail more engagement with members of Karzai's cabinet and provincial governors, officials said, because they have concluded that the Afghan president lacks the political clout in his highly decentralized nation to purge corrupt local warlords and power brokers." Essentially, U.S. officials have realized Karzai is inept and are bypassing him, which is much better explanation of why he's suddenly decided the U.S. ought to be his critical partner.

That's not to say there is no merit in Chrasekaran's analysis, which does show that the U.S. has pushed Karzai pretty hard throughout the election cycle, and made some diplomatic missteps that led Karzai to seek unsavory allies. But the article concludes with a quote from a senior official saying that Karzai isn't obstructionist, just inept, and with mention that at Clinton's feel-good meeting, she also delivered the news that further U.S. aid would be contingent on the Afghan government hitting certain benchmarks, not exactly a message Karzai wants to hear. Maybe the U.S. is taking a warmer tone with Karzai, but that's because they've realized how ineffectual he is, which in turn has led him to emphasize his value to the American project. The combination of the U.S. dealing with the facts on the ground and Karzai being cooperative might be a very good outcome indeed.

-- Tim Fernholz

--Mori Dinauer

It’s difficult for most Americans to accept data indicating an end to the recession for a simple reason – they don’t see the light at the end of the tunnel. Despite a quarter of growth, the unemployment rate has topped 10 percent, the highest it has been since 1983. Among people of color, the rates are even higher, with Latino unemployment exceeding 13 percent, and unemployment in the African-American community just shy of 16 percent. Economic growth does not mean that Americans experience economic relief; without stable jobs for everyday Americans, this cannot be considered a recovery. Recovery necessitates that jobs be created – jobs that provide stable employment for years, not months.

Green shoots of an employment recovery are showing through the investments made under President Obama's Recovery Act, which is already producing impressive innovation and the beginnings of job and wealth creation in green industries. Clean-energy sectors, which hold the promise of being major engines of job growth, are creating opportunities for those communities hit hardest by the recession: low-income communities and communities of color.

Portland, Oregon, for example, is using Recovery Act investments to launch a revolving loan fund that will help residents pay for energy-efficiency improvements to their homes. This program will save energy, save money and create 10,000 local jobs. A groundbreaking Community Workforce Agreement will further ensure that those jobs are available to workers from low-income and other disadvantaged communities.

In New York City, Recovery Act investments are helping the Community Environmental Center (CEC) hire more workers and weatherize more buildings. The largest Weatherization Assistance Program provider in the state, CEC is a union shop providing good wages and benefits. And thanks to a partnership between the union (the Laborers Local 10) and Non-Traditional Employment for Women, women and historically disadvantaged workers have the opportunity to win those jobs.

These local examples reinforce what larger, national investigations have shown. In our report Green Prosperity, Green For All, the Political Economy Research Institute and the Natural Resources Defense Council showed that clean-energy investment creates roughly three to four times as many jobs as comparable investment in fossil fuel industries. The report estimates that investing $150 billion (public and private) in clean energy will create a net gain of 1.7 million jobs. Renewable energy and energy efficiency replace the damage done to our environment by fossil fuels with good, sustainable jobs for American workers. Building a green economy involves more than a shift to clean energy – it will provide a shift to a more skilled and labor-intensive economy.

More after the jump.

-- Phaedra Ellis-Lamkins

Phaedra Ellis-Lamkins is the CEO of Green For All, a national organization working to build an inclusive green economy strong enough to lift people out of poverty.]]> MORE...]]> http://www.prospect.org/csnc/blogs/tapped_archive?month=11&year=2009&base_name=clean_energy_and_good_jobs_go http://www.prospect.org/csnc/blogs/tapped_archive?month=11&year=2009&base_name=clean_energy_and_good_jobs_go Thu, 19 Nov 2009 17:27:11 -0500