Brother Keith Explains It All

Keith references a report ("Sold Out: How Wall Street and Washington Betrayed America" [.pdf here, 3 MB]) by Los Angeles consumer advocate Harvey Rosenfield's group, Wall Street Watch.

"Sold Out" details a dozen key steps to financial meltdown, revealing how industry pressure led to these deregulatory moves and their consequences:

1. In 1999, Congress repealed the Glass-Steagall Act, which had prohibited the merger of commercial banking and investment banking.
2. Regulatory rules permitted off-balance sheet accounting -- tricks that enabled banks to hide their liabilities.
3. The Clinton administration blocked the Commodity Futures Trading Commission from regulating financial derivatives -- which became the basis for massive speculation.
4. Congress in 2000 prohibited regulation of financial derivatives when it passed the Commodity Futures Modernization Act.
5. The Securities and Exchange Commission in 2004 adopted a voluntary regulation scheme for investment banks that enabled them to incur much higher levels of debt.
6. Rules adopted by global regulators at the behest of the financial industry would enable commercial banks to determine their own capital reserve requirements, based on their internal "risk-assessment models."
7. Federal regulators refused to block widespread predatory lending practices earlier in this decade, failing to either issue appropriate regulations or even enforce existing ones.
8. Federal bank regulators claimed the power to supersede state consumer protection laws that could have diminished predatory lending and other abusive practices.
9. Federal rules prevent victims of abusive loans from suing firms that bought their loans from the banks that issued the original loan.
10. Fannie Mae and Freddie Mac expanded beyond their traditional scope of business and entered the subprime market, ultimately costing taxpayers hundreds of billions of dollars.
11. The abandonment of antitrust and related regulatory principles enabled the creation of too-big-to-fail megabanks, which engaged in much riskier practices than smaller banks.
12. Beset by conflicts of interest, private credit rating companies incorrectly assessed the quality of mortgage-backed securities; a 2006 law handcuffed the SEC from properly regulating the firms.

Financial Sector Political Money and 3000 Lobbyists Dictated Washington Policy

During the period 1998-2008:

• Commercial banks spent more than $154 million on campaign contributions, while investing $363 million in officially registered lobbying:
• Accounting firms spent $68 million on campaign contributions and $115 million on lobbying;
• Insurance companies donated more than $218 million and spent more than $1.1 billion on lobbying;
• Securities firms invested more than $504 million in campaign contributions, and an additional $576 million in lobbying. Included in this total: private equity firms contributed $56 million to federal candidates and spent $33 million on lobbying; and hedge funds spent $32 million on campaign contributions (about half in the 2008 election cycle).
• The betrayal was bipartisan: about 55 percent of the political donations went to Republicans and 45 percent to Democrats, primarily reflecting the balance of power over the decade. Democrats took just more than half of the financial sector's 2008 election cycle contributions.
• The financial sector buttressed its political strength by placing Wall Street expatriates in top regulatory positions, including the post of Treasury Secretary held by two former Goldman Sachs chairs, Robert Rubin and Henry Paulson.
• Financial firms employed a legion of lobbyists, maintaining nearly 3,000 separate lobbyists in 2007 alone.
• These companies drew heavily from government in choosing their lobbyists. Surveying 20 leading financial firms, "Sold Out" finds 142 of the lobbyists they employed from 1998-2008 were previously high-ranking officials or employees in the Executive Branch or Congress.

What's the solution?

U.S. House Fails to Overturn Bush's Veto On Kid's Health

Keith Olbermann and Rachel Maddow discuss Democrats' failure to override Bush's veto:

Reuters reports:

The Democratic-led U.S. Congress on Thursday challenged President George W. Bush on children's health care and lost, setting the stage for an emotionally charged confrontation with Republicans in the 2008 elections.

The U.S. House of Representatives, in a 273-156 vote, failed to overturn Bush's veto of a plan to expand a popular health program to cover an additional 10 million children.

The vote fell 13 short of the two-thirds majority needed to overturn a presidential veto, giving Bush a victory but one Democrats are likely to use against his Republicans, even though many supported the bill, as they try to solidify their congressional majority.

"In the coming days, Democrats will not back down and we will insist on providing health care coverage to these 10 million children," said Rep. Rahm Emanuel, an Illinois Democrat.

House Speaker Nancy Pelosi, a California Democrat, after the vote said Congress intends to send Bush another bill in the next two weeks that covers the same number of youngsters.

Health and Human Services Secretary Mike Leavitt said in an interview he was "optimistic" the administration and Congress could work out their differences. The administration's goal is to sign-up 500,000 more eligible low-income children, he said.

The bill vetoed by Bush would have raised tobacco taxes to provide an extra $35 billion dollars over five years to provide health care for as many as 10 million children, compared to the 6.6 million currently enrolled.

Backers of the bill said the current $25 billion, five-year funding level and Bush's proposal to provide an extra $5 billion would not be enough even to cover the current number of children.

The battle over the program, which provides health coverage to children of families unable to afford insurance but who earn too much to qualify for the Medicaid health care program for the poor, has been intense and sometimes emotional.

"It's too bad that they are voting to harm children for really a bunch of petty grievances," Rep. Pete Stark, a California Democrat, said of Republicans who voted to sustain Bush's veto.

The bill is support by medical groups, including the American Medical Association and the American Academy of Pediatrics.

But Republicans have said the legislation was a stepping stone to government-run health care and that they also want to be sure that the program's benefits are not extended to higher income families and illegal immigrants.

The bill's backers had complained that many of the administration's arguments were misleading because the legislation did not allow coverage to illegal immigrants and discouraged states from including higher income families.

The administration accused Democrats of playing politics.

"As it is clear that this legislation lacks sufficient support to become law, now is the time for Congress to stop playing politics and to join the president in finding common ground to reauthorize this vital program," White House spokeswoman Dana Perino said in a statement.

Health care is becoming a major issue in campaigns for next year's presidential election and Republicans who voted with Bush have been pummeled by television and radio ads sponsored by unions and liberal advocacy groups.

MoveOn.org, the liberal online political action group, announced a new ad campaign targeting six Republicans who voted to sustain Bush's veto.

The bill represented a compromise between Democrats and a group of Senate Republicans.

Sen. Charles Grassley, an Iowa Republican who helped write the compromise, said in a statement that he would work with Democrats and Republicans in the House and Senate to get a bill "that can do one of two things, either get a presidential signature or enough votes in the House of Representatives."

Dick Cheney, Exposed

Melanie Morgan, Living Proof of the Need for the Return of the Fairness Doctrine

Bubbleheaded, 'hit and run' artist Melanie Morgan

Keith Olbermann's pick for Worst Person in the World, August 15, 2007

Keith Olbermann's pick for Worst Person in the World, August 17, 2007

Hardball with Chris Matthews, Part 1, August 17, 2007

Hardball with Chris Matthews, Part 2, August 17, 2007

Unable to stay on point and debate an issue, Morgan (predictably) shifted to the rightwing talk radio personalities' modus operandi: Changing the subject with an ad hominem attack. Out of nowhere, she accused Chris Matthews of "having a gleam" in his eye and a "great time trying to make Dick Cheney look like a hypocrite." Irrelevant, but surprisingly, Chris Matthews fell for it. He allowed himself to be distracted by her taunt and got defensive. By the end of the segment, Matthews was justifying himself to Morgan with "I hate this war, it's left me very sad."

It was a truly pathetic display.

Getting To Know You Through Wikipedia Scanner

Instead of looking to see what the CIA and Diebold (or Fox) are editing on Wikipedia, I ran some of the IPs of visitors to The Constant American through Wiki-Scanner.

What a kick. I love you guys.

Overall, visitors to this blogsite are knowledgeable, erudite, responsible and active editors of and contributors to Wikipedia. I'm damned proud to know that you stop here.

Taxes, Huh Yeah, What Are They Good For, Positively Everything

Sing it again!

The Minnesota bridge collapse may force the nation to address years of neglect of transportation system. The New York Times reports:

In the past two years, Gov. Tim Pawlenty of Minnesota twice vetoed legislation to raise the state’s gas tax to pay for transportation needs.

Now, with at least five people dead in the collapse of the Interstate 35W bridge here, Mr. Pawlenty, a Republican, appears to have had a change of heart.

“He’s open to that,” Brian McClung, a spokesman for the governor, said Monday of a higher gas tax. “He believes we need to do everything we can to address this situation and the extraordinary costs.”

Even as the cause of the bridge disaster here remains under investigation, the collapse is changing a lot of minds about spending priorities. It has focused national attention on the crumbling condition of America’s roadways and bridges — and on the financial and political neglect they have received in Washington and many state capitals.

Despite historic highs in transportation spending, the political muscle of lawmakers, rather than dire need, has typically driven where much of the money goes. That has often meant construction of new, politically popular roads and transit projects rather than the mundane work of maintaining the worn-out ones.

Further, transportation and engineering experts said, lawmakers have financed a boom in rail construction that, while politically popular, has resulted in expensive transit systems that are not used by a vast majority of American commuters.

Representative James L. Oberstar, Democrat of Minnesota and the chairman of the Committee on Transportation and Infrastructure, sent out a news release last month boasting about Minnesota’s share of a recent transportation and housing appropriations bill.

Of the $12 million secured for the state, $10 million is slated for a new 40-mile commuter rail line to Minneapolis, called the Northstar. The remaining $2 million is divided among a new bike and walking path and a few other projects, including highway work and interchange reconstruction.

The $286 billion federal transportation legislation passed by Congress in 2005 included more than 6,000 earmarks, which amounted to blatant gifts to chosen districts, including the so-called Bridge to Nowhere in rural Alaska (that earmark was later removed after a political uproar).

Senator Charles E. Schumer, Democrat of New York, said in a telephone interview Monday that earmarks for transportation in federal legislation were “almost always new construction and not maintenance.” Earlier, Mr. Schumer said that he would introduce legislation next month to double a proposed federal transportation bill appropriation, with a focus on upkeep to $10 billion.

“The bottom line,” Mr. Schumer said, “is that routine but important things like maintenance always get shortchanged because it’s nice for somebody to cut a ribbon for a new structure.”

Last week, Representative John L. Mica of Florida, the ranking Republican on the Transportation and Infrastructure Committee, met with advisers to the Bush administration to urge a nationwide plan to address transportation needs. Rebuilding the I-35W bridge would be only “a Band-Aid” Mr. Mica said, “to a much more serious problem.”

“We don’t have any kind of strategic plan to deal with infrastructure, and we’re falling behind,” he said.

In statehouses across the country, legislators tried this past session to fill some of the void by passing bond acts or allocating money to improve roads, bridges and other pieces of the transportation system.

In Arkansas, lawmakers set aside $80 million, 15 percent of which will be used to repair county roads, 15 percent for city byways and the rest for its highways. New Mexico approved a $200 million plan for local and tribal road projects, and in Texas, $700 million was allotted for state transportation projects over the next two years.

Voters in California this year authorized nearly $20 billion in transportation bonds to pay for repairs and make other improvements to its taxed system.

“We still barely scratched the surface,” said Adam Mendelsohn, the communications director for Gov. Arnold Schwarzenegger, a Republican. “The governor is very concerned about the lack of attention that the federal government has given to infrastructure. It is probably no more acute than in California because of the tremendous strains from population growth.”

The federal budget for transportation comes largely from excise taxes, particularly on gasoline, set by Congress at 18.4 cents in 1993 and eroded over time by inflation and fuel efficiency. As such, over the last decade, state legislatures in 14 states have voted to raise the state gas tax 19 times. And several states are looking at toll roads and congestion pricing initiatives to help shore up the roads.

The National Conference of State Legislatures, a group with members from all 50 states, is calling for a 3-cents per gallon increase in the federal gas tax.

C. Michael Walton, a professor of civil engineering at the University of Texas, Austin, helped write a series of reports issued by the American Society of Civil Engineers that have repeatedly found the nation’s highway system with insufficient money. “Continually falling short of the actual needs,” Professor Walton said, results largely from “our backlash to increases in taxes.”

Professor Walton said states had been looking to the federal government for leadership. “I am not sure transportation falls to the top of the priorities as it should barring a catastrophic failure,” he said in reference to state government spending.

A study released in May by the Urban Land Institute and Ernst & Young found that 83 percent of the nation’s transportation infrastructure was not capable of meeting the country’s needs over the next 10 years. The American Society of Civil Engineers, in its latest national report card, gave transportation infrastructure a D.

Meanwhile, there are urgent needs. The Interstate highway system turned 50 last year and is showing signs of age and inadequate upkeep. Around St. Louis, for instance, old bridges, rocky roads and tight ramp loops have led to a shutdown of parts of Interstate 64/Highway 40 — one of the most important corridors in the state — until late 2009.

“It’s so easy to let this stuff slip,” said Robert Dunphy, a senior resident fellow at the Urban Land Institute.

The national highway system, originally called the National System of Interstate and Defense Highways, came into being under the Eisenhower administration. (The country’s population was 169 million then, and there were about 54 million registered vehicles on the roads.) It was spurred by fears that Americans would have a mobility crisis if the country were attacked in a nuclear war. By the 1970s much of the system was completed.

But since then, the nation’s highways have eroded with age and use, especially in areas like the Southwest where population booms have far outweighed the ability of roads to carry the new drivers.

Typically financing for capital transportation projects comes from the federal government matched with funds from states, which are then charged with maintaining the roads and bridges. But the federal government and states operate trust funds, filled with revenues from various excise taxes, which have been unable to maintain existing roadways adequately or finance capital expenditures.

But it may often be less the amount allocated for transportation than how it is doled out that leads to eroding highways, some critics say.

“Highway funding is supposed to be on the basis of need,” said Raymond Helmer, a transportation consultant in Houston who has worked on transportation projects for over 50 years. “There is supposed to be cost-benefit analysis, and every state does a study as required by federal government and comes up with needs, but then politicians say, ‘I don’t want that road here, I want it here.’ ”

Some transportation experts also said that though light rail and other public transportation projects made sense in cities, investing in them in sprawling suburban regions might not, even if the systems were supported, in theory, by the public.

“Too many American cities are spending far too much money on expensive rail transit projects, which are used for only 1 to 2 percent of local travel, and far too little on highway projects which are used for 95 to 99 percent of local travel,” Randal O’Toole, a senior fellow with the Cato Institute, said in an e-mail interview.

There has also been more emphasis nationwide on building new roads than on the maintenance and upkeep of old ones. Steve Ellis, the vice president of Taxpayers for Common Sense, a group that monitors federal spending, said that might help move traffic in some places, but it left many others with the equivalent of a leaky roof.

“It would be irresponsible of me to go out to dinner if I couldn’t fix a leak in my roof,” Mr. Ellis said. “But that’s essentially what we do. We don’t take care of what we’ve got, but we talk a lot about building more and new.”

Conservatives will balk at raising taxes, and argue that the only people who should have to pay for their building and upkeep are the people who use them. Conservatives conveniently ignore the benefits that they derive from roads and bridges. Goods and services that Conservatives consume and enjoy are transported on those same roads and bridges. Privatizing America's roads, bridges and everything, is what the forces behind globalization have in store for us.

To Bush-Cheney, Republican-Loyalty Is A One-Way Street . . . .

. . . . All Republicans are to bow, scrape and cave-in to the Neo-Cons.

The Bush administration won't oppose rescinding U.S. attorney hiring changes slipped into the Patriot Act Reauthorization bill passed last year, but first the legislation has to reach his desk, and certain Senate Republicans are blocking the way.

On Wednesday's Countdown with Keith Olbermann, Alison Stewart talks with George Washington University law professor Jonathan Turley about yet another crisis the Bush administration has created in government. Turley had some choice words about the provision that enabled Bush to bypass oversight and our elected officials who let them get away with it:

The AP's report:

The Bush administration, bowing to an uproar over its firing of eight federal prosecutors, won't oppose legislation changing the rules for replacing them, senators said Thursday.

"The administration would not object to the bill," said Sen. Chuck Schumer, D-N.Y., referring to legislation to remove the administration's power to fill the vacancies without Senate confirmation. He spoke with reporters after a meeting involving Judiciary Committee senators and Attorney General Alberto Gonzales.

Schumer, Committee Chairman Patrick Leahy, D-Vt., and Pennsylvania Sen. Arlen Specter, the panel's senior Republican, said Gonzales also agreed to let five of his top aides involved in the firings talk with the committee.

The committee was prepared to authorize subpoenas for the officials.
Six of the eight ousted prosecutors told House and Senate committees on Tuesday they were dismissed without explanation. Some said the dismissals followed calls from members of Congress concerning sensitive political corruption investigations.

Others said they feared the Justice Department would retaliate against them for talking with reporters and giving lawmakers information about their dismissals.

The meeting with Gonzales occurred a few hours after Leahy's committee agreed to postpone a vote on subpoenas that would have compelled five of Gonzales' aides who were involved in the firings to testify about the details, publicly and under oath.

Tuesday's eight hours of hearings by the Senate panel and the House Judiciary Committee turned into a display of mudslinging. The fired prosecutors insisted they had stellar records and didn't deserve the Justice Department saying most of them were replaced for poor performance.

At the House hearing, a Justice Department official recited before TV cameras the shortcomings of each of the ousted U.S. attorneys.

Gonzales came under harsh criticism during Thursday's Senate committee meeting, even from senators of his own party. Specter suggested Gonzales might suffer a similar professional fate as the fired prosecutors.

"One day there will be a new attorney general, maybe sooner rather than later," Specter said.

In private, Specter offered Gonzales some stiff advice: Acknowledge that the matter is serious.

"And that he take the next step and realize that there is a significant blemish on the records of these individuals," Specter told reporters, referring to the prosecutors. Further, "That he acknowledge that the problem arose because he failed to state the reasons why these people were asked to resign."

Gonzales refused to comment as he exited the private meeting.

Democrats felt the administration had taken advantage of a change in the Patriot Act that took effect a year ago, which lets the attorney general appoint federal prosecutors indefinitely, without Senate confirmation.

Gonzales has denied that was his intent and said he will submit the names of all appointees to the Senate approval process.

Nonetheless, he told senators at Thursday's meeting that the administration would not try to block legislation designed to reverse the change in the law. Sponsored by Sen. Dianne Feinstein, D-Calif., the bill would impose a 120-day deadline on attorneys general for the nomination and Senate confirmation of appointees to any of the nation's 94 federal prosecutors' posts. After 120 days, appointment authority would go to federal district courts.

Previously, the administration said 120 was an unreasonably short time.

Apparently, it's not as done a deal as the AP is reporting.

The Washington Post reports:

Under the previous system, the local federal district court would appoint a temporary replacement until a permanent candidate was named and confirmed by the Senate.

Democrats and some Republicans said they were concerned the Justice Department was attempting to use the new provision to appoint political cronies without Senate oversight and that the firings were a means to that end. Gonzales and other Justice officials have argued that the old replacement system was inefficient and unconstitutional.

Democrats have attempted to attach to several pieces of legislation language to remove the provision, but they have been blocked repeatedly by Kyl. Senate aides cautioned that Gonzales's assertion that the administration will stand down did not guarantee passage, as Senate Republicans could still block the measure.

But after their meeting, Leahy said Gonzales assured him Bush will sign the bill if it reaches his desk. "My understanding is the president would," Leahy said.

For the next two years of the Bush administration and the upcoming elections, we can expect all Republicans to fight tooth-and-nail against everything and anything that they think could be perceived as favoring Democrats. Republicans have been successful at getting everything that they've gone after by overreaching and never backing down. By wearing down all opposition, which hasn't been all that much when it's been from the Democrats, who play by Queensbury rules.

Democrats have got to push for the rescission of the entire Patriot Act, and every last anti-populist piece of legislation that Bush and the GOP has gotten passed these last years. Canada has rescinded their version of the Patriot Act, enacted in the days after 9/11/01, but our abominable assault on civil rights and our Constitution remains. Democrats enable Bush and Republicans to remain in power when they allow the fear-mongering that has paralyzed Americans' good sense. Democrats have got to learn 21st century street-fighting, how to stir more than one pot at a time, and start putting in more than 3 days a week working.