Obama Slam-Duncans Dept. of Ed.

Never let it be said that I gave Obama a free pass.  A lot of his Cabinet choices have been moderate to conservative Democrats.  He's not going hard-left ideologically, at least not yet.  To my chagrin.  Some questionable choices in there.  Although I was heartened to see him choose a Nobel-winning scientist and alternative energy advocate for Energy Secretary, instead of a cigar-munching good ole boy from Big Oil or Big Coal. 

Obama Slam-Duncans Education: Foul Choice of B-ball Buddy for Education Secretary

By Greg Palast

December 16, 2008 

 

Hey, you Liberal Democrats. You may have won the election, but you're getting CREAMED in the transition.

 

Today, President-elect Barack Obama stuck it to you. He's chosen Arne Duncan as Secretary of Education.

 

Who? Duncan is most decidedly NOT an educator. He's a lawyer. But Duncan has this extraordinary qualification: He's Obama's pick-up basketball buddy from Hyde Park.

 

I can't make this up.

 

Not that Duncan hasn't mucked about in the educational system. Chicago Boss Richie Daley put this guy in charge of the horror show called Chicago Public Schools where Duncan turned a bad system into a REALLY bad system.

 

And Obama knows it. Indeed, although he plays roundball with Duncan (who was captain of the Harvard basketball team), State Senator Obama was one of the only local Chicago officials who refused to send his kids to Duncan's public schools. (The Obamas sent Sasha and Malia to the Laboratory School, where Duncan's methods are derided as dangerously ludicrous.)

 

So, if The One won't trust his kids to Duncan, why is he handing Duncan ours?

 

The answer: Duncan is supported by a coterie of teacher-union hating Republicans. The vocal cheerleader for the Duncan appointment was David Brooks, the New York Times columnist; the REPUBLICAN columnist.

 

Hey, didn't those guys LOSE?

 

The problem with Duncan is not party affiliation. The problem is education philosophy. And Duncan is a Bush baby through and through, a card-carrying supporter of the program best called, "No Child's Behind Left."

 

At the heart of the program is testing. And more testing. Testing instead of teaching. When tests go badly, the solution is to push the low-test-score kids to drop out of school. If triage isn't enough, then attack their teachers.

 

Here's how Duncan operates this Bush program in Chicago at Collins High in the Lawndale ghetto. Teachers there work with kids from homeless shelters from an economically devastated neighborhood. Believe it or not, the kids don't get high test scores. So Chicago fired the teachers, every one of them. Then they brought in new teachers and fired THEM too when, surprise!, test scores still didn't rise.

 

The reward for a teacher volunteering for a tough neighborhood is to get harassed, blamed and fired. Now THAT'S a brilliant program, Mr. Duncan. But Duncan's own failures have not gotten HIM fired. As long as his 20-foot jumpshot holds, he's Mr. Secretary.

 

In no other cabinet department is the lack of expertise, lack of accomplishment, lack of a degree in the field found acceptable but in Education.

 

But what horrifies me more than Duncan's lack of credentials is Obama's kowtowing to the right-wing clique crusading against the teachers' union and progressive education. The ill philosophy behind the Bush-brand education theories Duncan promotes, "Teach-to-the-Test," forces teachers to limit classroom time to pounding in rote low-end skills, easily measured on standardized tests. The transparent purpose is to create a future class of worker-drones. Add in some computer training and - voila! - millions of lower-income kids are trained on the cheap to function, not think.

 

Analytical thinking skills, creative skills, questioning skills are left exclusively to privileged little Bushes at Phillips Andover Academy or privileged little Obamas at the Laboratory School.

 

For the rest of America's children, instead of hope, we'll have hoops.

 

Greg Palast is the father of school-aged twins and the author of, "No Child's Behind Left," included in his New York Times bestseller, Armed Madhouse. Palast is a Nation Institute Puffin Foundation Fellow for investigative reporting.

Iraq war: $900 Billion and Counting

But it has been worth every penny, and every soldier's life lost!  Right??

$900 Billion and Counting

By Teagan Goddard

December 16, 2008  |  CNN.com

 

From a new report: "In real (inflation-adjusted) terms, the war in Iraq alone has already cost more than every past U.S. war but World War II."

Big Gov't does more than tax & spend

Baker's comments are worth keeping in mind when we debate taxes and the role of Big Gubument.

The Education of Robert Samuelson: Government Doesn't End With Taxes and Spending

By Dean Baker – "Beat the Press" blog

December 16, 2008  |  Prospect.org

 

Okay, someone has to take responsibility for educating the Washington Post's columnists. Mr. Samuelson is making the case that the rich don't have excessive power in the United States, because if they did, they would pay lower taxes.

 

While many rich people are in fact working quite hard to lower their tax burden (with considerable success), most of their benefits from government actually come on the before tax side of the equation. This should be especially obvious now, when the government is backing up trillions of dollars of questionable debt incurred by the wizards of Wall Street.

 

This is the story whereby Henry Paulson (in his Goldman Sachs days), Robert Rubin and other Wall Street luminaries made hundreds of millions of dollars trading on a free government insurance policy known as "too big to fail." These brave wizards of finance were able to get others to risk money with their banks because their investors rightly believed that the government would step in if the banks messed up too badly.

 

The financial shenanigans, that made so many of our richest people rich, would not have been possible without this free insurance policy from the government. Anyone doubting this should ask how many people would have invested with Goldman Sachs and Citigroup if they were told that there was an ironclad commitment from the government to let these institutions fail if they got into trouble?

 

Of course even wealthy people outside of the financial sector generally can trace their fortune to the hand of government. Bill Gates is one of the richest people in the world because the government gives him a monopoly on Windows. It will arrest anyone who sells the product without his permission. The patent protection that makes the pharmaceutical companies hugely profitable is also a gift from the government.

 

Copyrights and patents do serve a useful purpose beyond just making some people very rich, but where is the analysis that shows that these government granted monopolies are the most efficient mechanisms for supporting creative work and innovation? In fact, such analysis does not exist.

 

There are many other ways in which the government structures the market to redistribute income upward. Read my non-copyright protected book, The Conservative Nanny State: How the Wealthy Use the Government to Stay Rich and Get Richer to get more of the picture.

 

The basic story is that the government's tax and spending policy is just a small part of the distributional picture. Samuelson is wasting his readers' time when he implies that they are the whole story.

Bailout double standard

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Bailouts: The Ultimate Double Standard

By Robert Kuttner

December 15, 2008 |  Prospect.org       

Imagine if the automakers had been offered the same kind of government assistance as the banks. Detroit's Big Three would each get new government capital totaling many tens of billions to replace their lost equity, as well as government guarantees running into the hundreds of billions. And government, oddly, would ask almost nothing in return. There would be no "car czar" to supervise Detroit's management, no wage and benefit cuts for employees, no review of product lines, and no government-mandated restructuring plan. A pretty sweet deal.

But that's basically what the banks got. You might think that the banks had some friends in high places -- friends like Treasury Secretary Hank Paulson, former CEO of Goldman Sachs where Robert Rubin once was co-chairman; or Tim Geithner, president of the New York Federal Reserve Bank and treasury-secretary designate, a protégé of the same Robert Rubin who now is a senior executive of Citigroup.

The contrast between the proposed auto bailout and the bank bailout gives new meaning to the term "double standard." And the case of Citigroup is a very instructive place to begin.

Citigroup, once a trillion dollar behemoth, is one of America's largest three banks (the other two are JP Morgan Chase and Bank of America), and by any normal measure Citigroup is insolvent. Without the extraordinary infusions of government funds that Citigroup has received, it would be out of business.

Under the $750 billion bank bailout legislated by Congress at Paulson's urgent request, the initial idea was to buy up toxic securities clogging the balance sheets of banks, Paulson resisted the idea of giving the Treasury authority to aid the banks directly. In fact, the Democrats added this provision to the emergency law over Paulson's objection. Paulson, however, soon found that his half-baked plan to take securities off the banks' hands was unworkable. So he quickly reverted to the direct aid that he had opposed.

Citigroup got an initial $20 billion; then when its collapse seemed imminent it got another $25 billion in late November. Its stock price, which had been hammered, briefly doubled. The idea behind the bailout was to enable banks to resume normal lending, but so far the main beneficiaries have been bank stockholders and executives. In addition, Citigroup got another $306 billion in guarantees of those toxic securities. If they turn out to be worthless, the taxpayer pays.

What did the taxpayer get in return? Precious little. Citigroup has temporarily suspended paying dividends, and its executive compensation plan must be reviewed and approved by the Treasury. But there is no across-the-board pay cutting, no talk of top management giving up perks or working for a dollar a year, no government seats on Citigroup's board. And the Treasury is startlingly incurious about how Citigroup is running its business. There is to be no comprehensive review or restructuring along the lines of what is in store for automakers.

Citigroup will probably be back for more aid. But few commentators have been asking the question that is so widely posed when it comes to the auto industry: What if Citigroup went bust?

It would be a calamity if Citigroup just collapsed, the way the smaller Lehman Brothers did in September, triggering the stock market crash. But if the government were to conclude that Citigroup was insolvent rather than just throwing money at it, and sold off its healthy pieces to other banks while disposing of its devalued securities, the real world consequences would be fairly minor. Mainly, Citigroup's shareholders would be wiped out, but they have already lost most of their investment.

Indeed, one could make a good case that the effects of the auto industry collapsing would be far more serious than the orderly liquidation of Citigroup. In the case of Citigroup, other banks would simply pick up the business. But the auto industry is one of the two linchpins of American manufacturing, the other being aerospace. The spillover consequences to the economies of several states would be immense.

So why is the government indiscriminately throwing money at Citigroup while it is putting the auto industry through the wringer for a far smaller sum? The answer is that Wall Street enjoys far more political influence than any manufacturing industry. And as a consequence of that outsized influence, politicians, especially the crew currently running the Treasury (who come from Wall Street and will return to it), are largely passive when comes to insisting on changes in bank's business as usual. By contrast, most politicians will not give aid to automakers without a good hard look under the hood.

This saga suggests two policy conclusions. First, there needs to a single standard for all industries getting government aid, with plenty of accountability. Deciding just to let these wounded industries collapse may seem smart on the Wall Street Journal editorial page (which has now been proven utterly wrong in its extreme faith in markets) but it would be a disaster for the real economy. However with taxpayer aid must come greater accountability.

And that leads to the second conclusion. It's time for some serious public institution building. The Treasury has neither the will nor the competence to closely monitor and restructure Citigroup and other large banks now getting emergency aid because of the misfeasance of their executives. Not does the government have the capacity to help Detroit restructure the auto industry (An ad hoc "car czar" just won't do it, any more than Hank Paulson's ad hoc bank ubailouts have done it.)

We need something like the Reconstruction Finance Corporation of the 1930s, which did not just put money into failing corporations and banks, but actively managed turnarounds. And this, gentle reader, takes us into the long-forbidden territory of industrial policy -- a concept that both Republicans and Democrats, for thirty years, have been dismissing as a sin against free markets. How could the government possibly know enough to "pick winners"? That was the job of the free market, so the argument went.

Thanks to the general hostility to industrial policy, we have lost one industry after another and sent others offshore. And we are losing competitive races in industries like renewable energy where American technology was once the pioneer. Many of America's success stories, like aerospace and biotech and the internet, have in fact been the result of unacknowledged industrial policies; spinoffs of defense spending or biomedical research. These government policies did not pick winners; they created winners. But that result had to be incidental, because it was ideologically forbidden for industrial success to be the goal.

Lately the free market has been picking losers, big time. Worse, it has been creating losers, often out of once-sound enterprises. And the much maligned government has been picking winners. Actually it has been picking survivors in a helter-skelter process of triage, ever since Paulson and Fed Chairman Ben Bernanke began their spree of emergency interventions in the summer of 2007.

Bear Stearns going down the tubes? Yes, let that one live, but with a shotgun merger. Here's $29 billion. Lehman Brothers? Absolutely not, time to draw the line. Oops, better save A.I.G. before it takes the whole economy down Here's another $85 billion. Better make that $135 billion. Citigroup? Whatever it takes.

The problem is not that government, in an emergency, is picking winners. With the economy tottering on the edge of a depression, there's no good alternative. The problem is that Paulson and company, who do not really believe in government, have been doing a lousy job at it.

The new Obama administration has to create a lot of government capacity and competence if it is to save the private sector from its self-inflicted wounds. And it needs a single standard.

Tenn. against bailout, for subsidies to VW

Disgusting.  Whatever happened to Congress defending the national interest, instead of whoring up with taxpayer dollars to any foreign company promising to bring jobs to the Home State? 

Stunts like this lay bare the self-serving cynicism and hypocrisy of those "free market defenders" in the GOP.  The free market doesn't play favorites to foreign companies with our tax money.

Auto workers union head questions VW subsidies

December 12, 2008  |  Chattanooga Times Free Press

 

UAW President Ron Gettelfinger said today that U.S. automobile companies are being put at a disadvantage by government in competing against Volkswagen's new auto assembly plant in Chattanooga.

 

The union leader questioned why government leaders in Tennessee are willing to provide assistance to the German-based Volkswagen while the state's U.S. senators declined to back a federal loan to help the Big Three U.S. car makers.

 

Mr. Gettelfinger said that trying to equalize UAW pay with what foreign car makers pay in the United States, as urged by U.S. Sen. Bob Corker, R-Tenn., is like comparing apples to oranges. In its home country, Germany provides government-paid health care for Volkswagen workers, and VW is receiving $577.4 million in tax breaks and direct assistance from Tennessee governments to build an automobile plant in Chattanooga.

 

"They use taxpayer dollars to subsidize our competition," Mr. Gettelfinger said during a news conference. "It doesn't help our industry."