Sirota calls b.s. on public pension 'crisis'

Sirota argues that states' public pension shortfalls are a manufactured crisis by conservatives and big business, caused by years of states' chronic under-funding of pension funds while giving tax breaks and subsidies to business:

Public pensions face a 30-year shortfall of $1.38 trillion, or $46 billion on an annual basis. This is dwarfed by the $80 billion a year states and cities spend on corporate subsidies.

As usual, conservatives' go-to "solution" for a "crisis" is more cuts.

Sirota cites one state example that I've mentioned already:

Perhaps the most famous illustration of the pervasiveness of this deceptive argument comes from Detroit, Michigan. When the city recently declared bankruptcy, much of the media and political narrative around the fiasco simply assumed that public pension liabilities are the problem. Few noted that both Detroit and the state of Michigan have for years been spending hundreds of millions of dollars on wasteful corporate subsidies.13 Worse, the very same political leaders pleading poverty to demand cuts to municipal pensions were simultaneously promising to spend more than a quarter billion taxpayer dollars on a professional hockey arena.

And now conservative idealogues in the states are treating everywhere like Detroit:

But as outrageous as the blame-the-pensioners mythology from Detroit is, it is the same misleading mythology that is now driving public policy in states across America. In Rhode Island, the state government slashed guaranteed pension benefits while handing $75 million to a retired professional baseball player for his failed video game scheme. In Kentucky, the state government slashed pension benefits while continuing to spend $1.4 billion on tax expenditures. In Kansas, the state government slashed guaranteed pension benefits despite being lambasted by a watchdog group for its penchant for spending huge money on corporate welfare “megadeals.” 

Sirota reveals a devilish bait-and-switch is at work here:

The goals of the plot against pensions are both straightforward and deceptive. On the surface, the primary objective is to convert traditional defined-benefit pension funds that guarantee retirement income into riskier, costlier schemes that reduce benefits and income guarantees, and subject taxpayers and millions of workers’ retirement funds to Enron’s casino-style economics. At the same time, waging a high-profile fight for such an objective also simultaneously helps achieve the conservative movement’s larger goal of protecting profligate corporate subsidies. 

The bait-and-switch at work is simple: The plot forwards the illusion that state budget problems are driven by pension benefits rather than by the far more expensive and wasteful corporate subsidies that states have been doling out for years. That ends up 1) focusing state budget debates on benefit-slashing proposals and therefore 2) downplaying proposals that would raise revenue to shore up existing retirement systems. The result is that the Pew-Arnold initiative at once helps the right’s ideological crusade against traditional pensions and helps billionaires and the business lobby preserve corporations’ huge state tax subsidies. 

Kentucky offers a good example of the real problem, what this bait-and-switch is meant to protect by means of distraction:

... Kentucky’s $760 million annual pension shortfall is far less than the $1.4 billion a year Kentucky spends so-called “incentive programs” – much of them classic corporate welfare. These programs have included subsidies of $300 million to Ford Motor Company, $205 million to Weyerhauser and $110 million to United Parcel Service. They also include a $560 million subsidy to the mining industry. Meanwhile, thanks to Kentucky’s loophole-riddled tax code, profitable Kentucky-based Fortune 500 companies like Yum Brands and Ashland Inc. have during one of the last few years paid no state income tax whatsoever.

Thanks to corporate lobbying, Kentucky converted its defined-benefit public pension system into a cash balance hybrid system, while keeping corporate welfare.  

Privatizing Social Security is their next aim, trust me!  

The Plot Against Pensions

By David Sirota

Institute for America's Future

URL: http://ourfuture.org/wp-content/uploads/2013/09/Plot-Against-Pensions-final.pdf

The real decline and possible REBIRTH of Detroit

Joyce's article about the real Detroit, its "4 economies," and the hopeful developments there is worth reading in full.  

But I want to highlight the racial, or rather, racist elephant in the room that Joyce, a native Detroiter, points out while the MSM ignores it.  This might sound like the urban area near you:

And yes, race does have everything to do with it.  There are three counties that make up the political economy of Southeast Michigan.  Wayne County encompasses Detroit but also includes large suburbs such as Dearborn,  Livonia (the most segregated city of more than 200,000 residents in the entire country) and most of the affluent Grosse Pointes.  Oakland County immediately north of Detroit is the 4th most affluent county of its size in the United States.  Nearby Macomb County is predominately working class and the “birthplace” of “Reagan Democrats”.  

Much of the Detroit punditry one reads or hears conveniently ignores race altogether, concentrating instead on the decline of the domestic auto industry or macro economic trends.  Usually when race is included on a list of “causes for Detroit’s decline,”  it is described with weasel words such as “racial tensions” or “the racial divide.”  Nonsense. What it was and what it remains,  is white racism pure and simple.  Bloviators love to talk about the “unsustainable legacy” costs of pensions for city workers.  They never talk about the “legacy” costs of racism. 

By 1980,  African Americans out numbered whites within the city limits of Detroit.  Yes,  capital started leaving Detroit in the 1940’s. But the population disinvestment is just as important.  Make no mistake about it.  The extreme segregation that has long characterized Southeast Michigan was anything but accidental. 

For decades,  it was the policy of the Federal Housing Administration to deny loans to African Americans trying to buy houses in the suburbs.  To this day,  if you buy a suburban house that hasn’t changed hands in a long time,  the deed may well contain a “restrictive covenant” that explicitly prohibits the sale of the house to Negroes. 

That’s not all.  Twenty-three out of twenty-three attempts to create a tri-county transportation authority to improve region-wide public transit went down to defeat in the white controlled state legislature.  So,  not only was it impossible for African Americans to buy homes near where the jobs were moving,  it was difficult to get to suburban jobs that came along with suburban growth.

And just to add insult to injury,  the financial institutions that wouldn’t lend money to African Americans to move out of the city wouldn’t lend it for home improvement in the city either. But they would charge more,  far more,  for home and car insurance.  For those too young to remember,  that practice was called redlining.  It’s still prevalent today. 

One dramatic example of the cost of racism born by Detroit is this:  Detroit has an income tax on those who work within the city limits.  The two-tier tax is lower for those who work in the city but live in the suburbs.  In enacting the tax,  the state legislature required employers based in the city to collect the tax via payroll deduction as they do with federal and other taxes.  Suburban based employers are not required by the law to collect the tax. Most of them don’t.  The revenue lost to Detroit per year is estimated to be as much as $142 million.   

Zooming out our historical lens even further,  we see the unbroken pattern of white supremacy even more clearly.  The counterrevolution to the civil war was the Jim Crow system.  The counterrevolution to the end of Jim Crow is mass incarceration and other components of the institutionalized racism that perpetuate and in some ways intensify white privilege today.  Detroit’s history as the national leader in residential segregation and all that flows from it definitely underpins today’s Detroit crisis and that of Flint, Pontiac,  Benton Harbor and Muskegon as well. 

While observers sometimes notice that a majority of predominately African American cities in Michigan are under some form of emergency management.  The question they don’t ask is,  why are there predominately African American cities in the first place? 

The beauty of this “willful ignorance” for many whites is that as the quality of life declined in Detroit,  the decline itself became the moral justification for whites for the inequality itself.  It’s an old story.  Slave society did the very same thing.  Slaves were routinely portrayed as lazy and shiftless.  To put the meme in contemporary terms,  the slaves were demonized as the takers and the slave owners were the makers. 

The Real Story Behind the Decline of Detroit … And Yes, Great Things Are Happening There Too

By Frank Joyce

September 2, 2013 | Alternet

URL: http://www.alternet.org/economy/real-story-detroits-economy-good-things-are-really-happening-motown

Kuttner: It's not just Detroit

We bailed out the auto industry in 2008 and it was a roaring success, saving at least 1 million jobs.  We bailed out New York City in 1975 and it was well worth it. We shouldn't let Detroit go under either.

BTW, while Michigan Governor Rick Snyder is ready to let Detroit go down the tubes and cancel its pension commitments, he can somehow find at least $285 million to buy the Detroit Red Wings a new arena.  Snyder calls it a "catalyst project," and "something that is important to all of us."  As if paying city workers and rebuilding crumbling city infrastructure is not important to all Detroiters?  

This is the economic Bizarro world that conservative politicians live in, where sports socialism and bank payoffs are just dandy, yet they can't find the money to pay (already reduced) pensions as prescribed in the state's constitution.   

We Are All Detroit

By Robert Kuttner

August 11, 2013 | Huffington Post

Do you think the damage from the pending bankruptcy of the city of Detroit will be limited to Detroit? Think again.

Detroit is partly the victim of economic trends far beyond its control, the downsizing and outsourcing of the auto industry and the collapse of the sub-prime bubble, to name just two. And yes, the city has suffered from corrupt and inept local government. But leaving Detroit to a bankruptcy process that favors investment bankers over local pensioners will neither provide a fair outcome nor contain the damage.

In the past two weeks, other Michigan cities and counties, including Saginaw and Battle Creek, have had to postpone bond issues, as the damage from the Detroit bankruptcy spills over. Michigan Governor Rick Snyder, who hoped to whack both public employees and the heavily Democratic city of Detroit by promoting bankruptcy, could end up shooting himself and his state in the foot.

Those who hope to use the pain of cities to undermine public employee pensions are playing with fire. One of the striking government failures of the era since the collapse of 2008 is that the federal government has done so little to help municipalities whose revenues were doubly hit by the subprime collapse and the recession itself. In the absence of aid, we can expect a prolonged era of dwindling services and scapegoated public workers and retirees.

It is a travesty that the federal government and the Michigan state government are not sending Detroit a lifeline. Other cities and states stand to lose both public services and pension benefits as this trend spreads. Chicago, which just suffered three levels of bond-downgrading, looks to be next.

Some background: In 1975, New York City very nearly went bankrupt. It faced a financial crisis and was unable to roll over maturing bonds. When Mayor Abe Beame appealed to Washington for help, President Ford initially refused, prompting the famous headline in the New York Daily News, "Ford to City: Drop Dead."

But that was a different era and in the end, Ford did approve $2.3 billion in federal loans. The New York State government, through a hastily legislated Municipal Assistance Corporation, agreed to refinance the city's debt, subjecting it to a rigorous supervision process. The Big Apple avoided bankruptcy, its economy recovered -- and New York is now home to the wildly profitable financial industry that is destroying Detroit in order to protect bankers.

In contrast to President Ford and New York's then Democratic governor Hugh Carey, Michigan's Republican governor Rick Snyder was happy to collude with Wall Street by embracing a bankruptcy proceeding rigged in favor of investment banks. And President Obama, who successfully sponsored a recapitalizing of the auto industry, is staying far away from Detroit this time.

These policies are short-sighted as well as cruel. If you think about it, many of Detroit's citizens are getting screwed both as debtors and as creditors. With the city having lost tax revenues in the housing collapse and property values at rock bottom, most homeowners with mortgages -- debtors -- can't qualify for refinancing. But many of the same people are also creditors, the city owes them pensions.

In principle, a bankruptcy proceeding is a system for fairly allocating claims when a debtor can't service all of its debts. The Michigan state constitution guarantees that Detroit pensioners will be paid what they are owed. Even Michigan's Republican attorney general, Bill Schuette,agrees that the constitutional protection is binding.

But the most recent changes (2005) in the federal bankruptcy law, lobbied for by Wall Street, put bankers in line ahead of pensioners. As attorney, author and debt expert Ellen Brown explains, this special-interest provision gives credit default swaps held by banks priority over other forms of debt. So banks that speculated in Detroit's debt stand to get paid ahead of ordinary bondholders and pensioners.

As Brown writes:

Derivative claims are considered "secured" because the players must post collateral to play. They get not just priority but "super-priority" in bankruptcy, meaning they go first before all others, a deal pushed through by Wall Street in the Bankruptcy Reform Act of 2005. Meanwhile, the municipal workers, whose pensions are theoretically protected under the Michigan Constitution, are classified as "unsecured" claimants who will get the scraps after the secured creditors put in their claims. The banking casino, it seems, trumps even the state constitution. The banks win and the workers lose once again.

The average pension owed to Detroit municipal workers, incidentally, is just $1,900 a month, and only 4 percent of Detroit's general revenues go to pensions. According to AFSCME President Lee Saunders, Detroit's non-uniformed public workers have already had pensions cut by 40 percent.

As we saw in the Wisconsin assault on collective bargaining for public employees and most recently in the San Francisco area BART strike, all public workers are losing public sympathy because wages, pension and health benefits have declined even faster in the private sector, leaving regular people to conclude that government employees have it too good. In fact, a study by pension expert Alicia Munnell finds that average state and local employee pensions are well below level needed to maintain living standards in retirement. Wall Street must be chortling, as ordinary workers blame civil servants rather than bankers.

But the assault on public workers and pensioners will continue to spread until citizens generally start appreciating that the culprit is not "over paid" public employees but a banker-dominated system that undermines decent living standards for public and private workers alike.

Bennett: Why vote for Romney - WHY NOT!

I'll repeat myself a little here but it seems warranted, because Romney's main backer, Bill "The Gambler" Bennett, makes the case for Romney trotting out qual's that are actually disqualifications.

First, he holds up Romney's experience at Bain Capital as the primary reason that Romney could turn around the ailing U.S. economy (that has posted 25 straight months of job growth and 13 straight quarters of GDP growth, incidentally, after losing jobs for 25 straight months from February 2008.)  In October, Ronald Reagan's budget director, a private equity guy himself, destroyed Romney's Bain qual's better than anybody.  As he described in meticulous detail, deal by deal, Romney's experience at Bain of buying ailing companies, loading them up with debt, laying off workers and/or exporting jobs overseas, and making questionable mergers to achieve questionable "synergies" that never panned out but temporarily pumped up stock prices, all the while collecting huge fees for himself and his buddies before this businesses went bust, is the exact opposite of what America's economy needs right now.  

Here's how David Stockman summed up his analysis:

The Bain Capital investments here reviewed accounted for $1.4 billion or 60 percent of the fund’s profits over 15 years, by my calculations. Four of them ended in bankruptcy; one was an inside job and fast flip; one was essentially a massive M&A brokerage fee; and the seventh and largest gain—the Italian Job—amounted to a veritable freak of financial nature.

Only trouble is, there is nobody to whom Romney can pawn off this hot potato we call America in 4 years.  We can't take a 57 percent chance that America won't be a going concern post-Romney.  

Next, Bill Bennett cites Romney's experience turning around the Salt Lake City Winter Olympics.  OK, sure, he deserves some credit for that.  But so does Big Government, which bailed out Salt Lake City at Romney's request:  

"The $1.5 billion in taxpayer dollars that Congress is pouring into Utah is 1.5 times the amount spent by lawmakers to support all seven Olympic Games held in the U.S. since 1904 —combined," Donald Barlett and James Steele reported for Sports Illustrated in 2001.

But let's give Romney credit -- back then -- for giving Big Government credit where credit was due:

In his own 2004 book, Turnaround, Romney acknowledged the central role of the federal government in making the Olympics possible. "No matter how well we did cutting costs and raising revenue, we couldn't have Games without the support of the federal government."

Next, Bennett cites Romney's success as governor of Massachusetts.  Yet he curiously leaves out Romney's signature accomplishment: Romneycare.  That he alternately praises and disowns.  A health care plan based on plans by the Heritage Foundation and endorsed by Newt Gingrinch no less -- twice.  Can you say, "Media bias?"  

Next, Bennett cites Romney's moral character.  I don't need to dispute whether Romney cares about his friends and family, or humanity in the abstract.  He's not a monster.  But then again, neither is Obama, who is by all indications an extremely nice person with a lovely family, a guy who -- to his own detriment -- refuses to say bad things about his political opponents.  

Finally, Bennett cites Romney's "plans" if he is elected.  This gets back to the moral character issue.  How can we trust anything Romney says if he has flip-flopped so many times, from his $5 trillion tax cut plan (that he publicly disowned in the first 15 minutes of the first presidential debate when Obama challenged him on it) to Obama's saving the U.S. auto industry?  The guy simply cannot be honest about his own record.  "Etch A Sketch" will forever be etched into our political discourse thanks to Romney.  Some moral character!

So this is the best Romney's most eloquent spokesman could come up with.  Too bad.

In conclusion, I leave you with some of my favorite lines from Kingsley Amis's Lucky Jim, something I remember when I'm hiring somebody: 

However. I think you'll do the job all right, Dixon. It's not that you've got the qualifications, for this or any other work, but there are plenty who have. You haven't got the disqualifications, though, and that's much rarer. 

You may find that truth insufficiently inspiring.  I don't.  Any number of Democrats would make a better POTUS than Obama.  But those guys didn't make it this far.  Romney and Obama did.  Obama ain't perfect, not by a long shot. He's not nearly liberal enough; or, at least, he doesn't have the courage of his liberal convictions. But his lack of disqualifications makes him the clear choice.

(I suppose this quote could be turned on Obama if you think caring about the general welfare and believing "we're all in this together" is a disqualification. Vote your conscience.)

Why you should vote for Romney

By William J. Bennett

November 5, 2012 | CNN

URL: http://www.cnn.com/2012/10/03/opinion/bennett-reasons-for-romney/index.html?iid=article_sidebar

Dionne: No matter who wins, Tea Party already lost

It's a Wa-Po twofer today.

Here's the best line I've read in a while:  "Not to put too fine a point on it, but if the conservatives are forgiving Romney because they think he is lying [about his moderate stances], what should the rest of us think?"

Dionne points out that the Tea Party made election gains in an off-year when people were demoralized, distracted and too tired to show up.  It was no revolution.  Nobody wants to buy what the teabaggers are selling except that waning white sliver of conservative Republican "purity" that's shrinking visibly by the day.

The tea party is over

By E.J. Dionne Jr.

October 25, 2012 | Washington Post

The right wing has lost the election of 2012.

The evidence for this is overwhelming, yet it is the year’s best-kept secret. Mitt Romney would not be throwing virtually all of his past positions overboard if he thought the nation were ready to endorse the full-throated conservatism he embraced to win the Republican nomination.

If conservatism were winning, does anyone doubt that Romney would be running as a conservative? Yet unlike Ronald Reagan and Barry Goldwater, Romney is offering an echo, not a choice. His strategy at the end is to try to sneak into the White House on a chorus of me-too’s.

The right is going along because its partisans know Romney has no other option. This, too, is an acknowledgment of defeat, a recognition that the grand ideological experiment heralded by the rise of the tea party has gained no traction. It also means that conservatives don’t believe that Romney really believes the moderate mush he’s putting forward now. Not to put too fine a point on it, but if the conservatives are forgiving Romney because they think he is lying, what should the rest of us think?

Almost all of the analysis of Romney’s highly public burning of the right’s catechism focuses on such tactical issues as whether his betrayal of principle will help him win over middle-of-the-road women and carry Ohio. What should engage us more is that a movement that won the 2010 elections with a bang is trying to triumph just two years later on the basis of a whimper.

It turns out that there was no profound ideological conversion of the country two years ago. We remain the same moderate and practical country we have long been. In 2010, voters were upset about the economy, Democrats were demobilized, and President Obama wasn’t yet ready to fight. All the conservatives have left now is economic unease. So they don’t care what Romney says. They are happy to march under a false flag if that is the price of capturing power.

The total rout of the right’s ideology, particularly its neoconservative brand, was visible in Monday’s debate, in which Romney praised one Obama foreign policy initiative after another. He calmly abandoned much of what he had said during the previous 18 months. Gone were the hawkish assaults on Obama’s approach to Iraq, Iran, Afghanistan, Israel, China and nearly everywhere else. Romney was all about “peace.”

Romney’s most revealing line: “We don’t want another Iraq.” Thus did he bury without ceremony the great Bush-Cheney project. He renounced a war he had once supported with vehemence and enthusiasm.

Then there’s budget policy. If the Romney/Paul Ryan budget and tax ideas were so popular, why would the candidate and his sidekick, the one-time devotee of Ayn Rand, be investing so much energy in hiding the most important details of their plans? For that matter, why would Ryan feel obligated to forsake his love for Rand, the proud philosopher of “the virtue of selfishness” and the thinker he once said had inspired his public service?

Romney knows that, by substantial margins, the country favors raising taxes on the rich and opposes slashing many government programs, including Medicare and Social Security. Since Romney’s actual plan calls for cutting taxes on the rich, he has to disguise the fact. Where is the conviction?

The biggest sign that tea party thinking is dead is Romney’s straight-out deception about his past position on the rescue of the auto industry.

The bailout was the least popular policy Obama pursued — and, I’d argue, one of the most successful. It was Exhibit A for tea partyers who accused our moderately progressive president of being a socialist. In late 2008, one prominent Republican claimed that if the bailout the Detroit-based automakers sought went through, “you can kiss the American automotive industry good-bye.” The car companies, he said, would “seal their fate with a bailout check.” This would be the same Mitt Romney who tried to pretend on Monday that he never said what he said or thought what he thought. If the bailout is now good politics, and it is, then free-market fundamentalism has collapsed in a heap.

“Ideas have consequences” is one of the conservative movement’s most honored slogans. That the conservatives’ standard-bearer is now trying to escape the consequences of their ideas tells us all we need to know about who is winning the philosophical battle — and, because ideas do matter, who will win the election.

Chevy Volt is politically conservative?

"The Chevy Volt by far is the best way to bring all American energy -- not just renewable sources, which is terrific and great for the environment -- but our coal, our nuclear, our natural gas, which we have a prodigious amount of, to our automobiles. There is no other efficient way to do it other than electrifying automobiles," said Texan and "drill baby drill guy" Lee Spieckerman.  

Spieckerman called the Volt "the iPhone of the North American automobile industry;" noted it was the European and N. American car of the year in 2011; and it's the safest car of the road.  Yet there is a "fetish" against the Volt among conservatives because of, as FOX's Steve Doocy called it, "guilt by association" with Obama.

Spieckerman speculated that the price of the Volt has to come down only 20 percent to be comparable with the Chevy Cruz.  

FOX & friends also discussed how the Chevy Volt was in development 2 years before Obama was elected, and has been championed by ex-GM CEO Bob Lutz, who is an outspoken MMGW skeptic.  

In fact, this month Lutz wrote on his Forbes blog about the Volt: "I am, sadly, coming to the conclusion that all the icons of conservatism are (shock, horror!) deliberately not telling the truth!  This saddens me, because, to this writer, conservatism IS fundamental truth.  It only damages its inherent credibility with momentarily convenient fiction."

Can the Chevy Volt help win the War on Terror?

March 26, 2012 | FOXNews

URL:  http://video.foxnews.com/v/1529856944001/

U.S. bank profits hit 5-year high -- YAY BAILOUTS!

GM's profits are at an all-time high; and so are the TBTF Wall Street banks'. Connection? They were both bailed out by the U.S. Government!

In fact, the bailout for Wall Street continues indefinitely. It's now at over $29.6 trillion.

On the other hand, the bailout of GM, Chrysler and their suppliers (and by extension, Ford) saved 1 million jobs and an entire U.S. industry from extinction. Detroit has come back leaner, meaner and arguably with better products. Whereas Wall Street has come back with... the same old shit: huge bonuses; millions spent on bribing, er, lobbying our leaders; telling us 99 percenters to get "real" jobs; lecturing us how stupid and anti-business we are for questioning their judgment, etc.

U.S. Bank Profits Hit A Five-Year High In 2011

February 28, 2012 | AP

URL: http://n.pr/x0eqku

Romney a hypocrite, poor businessman in opposing auto rescue

I realize there is an election this year and Republicans have to say everything Obama has done or attempted to do has been a complete failure, blah, blah, blah... but come on, the Detroit bailout has been a huge success. And it was started by Dubya, not Obama, which gives Romney perfect cover to ignore it. But no. He can't help himself.

Mitt Romney, the GOP's nominee apparent, has foolishly picked a fight with Obama and the revitalized Detroit auto industry in his erstwhile home state of Michigan simply to stand apart from the Administration and look good in front of the far Right. He wrote in an op-ed in the Detroit News saying, "The president tells us that without his intervention things in Detroit would be worse."

He called the auto industry bailout, "crony capitalism on a grand scale," writing, "I believe that without his intervention things there would be better." This is Romney kicking Detroit after it has lifted itself off the mat; but he also kicked Detroit when it was down in 2008 when he wrote a piece for the New York Times titled "Let Detroit Go Bankrupt."

(For the record, GOP runner-up Rick Santorum also opposes the auto bailout -- but also criticized Romney for hypocritically supporting the Wall Street bailouts.)

To be fair, Romney called for a "managed bankruptcy" of GM and Chrysler, but this was a fantasy. With an auto industry collapse amidst a financial industry collapse, "No one — I repeat, no one — had the slightest interest in funding these companies on any terms," meaning the companies would have been sold off piece by piece, and all their suppliers would have gone belly up. It's shocking that Mr. Bain Capital did not recognize the facts then, and really calls into question Romney's judgment and financial acumen.

Thankfully, Obama did not listen to Romney, the U.S. did provide $85 billion in emergency loans to the auto industry, and as a result, in 4Q 2011, GM posted its largest profit in its 103-year history. Chrysler just posted its first profit since 1997. And most important, 1 million U.S. jobs have been saved. Let's not forget that even Ford, which did not accept bailout funds, lobbied Congress for the bailout of GM, Chrysler, and their suppliers, not to mention lobbied for "cash-for-clunkers," because if Ford's competitors had failed, the entire industry including Ford would have failed.

Re: Obama's failure to lead

What hypocrisy! Obama reacted almost identically to how Bush did after Richard Reid, the "shoe bomber": 6 days of silence, preceded by casual statements from his press sec. that Bush was monitoring the situation. Only, with Dubya it happened 4 months after 9/11, not 8 years after.

Gimme a break! "Leadership"?! Your side wanted "leadership" from Obama after the attempted Detroit bombing?! Don't tell me that you were cowering in fear in your home, just waiting for Pres. Obama to reassure you and the nation that everything was gonna be OK. You think he's a crypto-Marxist who hates America and wants to destroy it; and yet you wanted him to go on TV and reassure you?! Makes no sense! This is just a partisan swipe at Obama. It shows that politics trump national security, contrary to Republicans' assertions.

BTW, have all Americans turned into cowardly pu**ies, or just Republicans? Yeah, there are a few hundred nutjobs in the world who want to kill us and are willing to die trying. So what? We're the most powerful nation on Earth. We'll sweep up their charred remains and carry on. This is the price we pay for being the biggest guy on the block, and exerting our influence all over the globe, often clumsily so. Stop crying about it, stop cowering in fear, and reconcile with the fact that we're gonna take casualties at home, not just "over there." But those casualties will be relatively small and infrequent, hence there's no reason these one-off attacks should alter our way of life, as long as we don't collectively wet our pants and cry like hysterical little girls. Jeez.

On Mon, Jan 4, 2010 at 3:38 AM, ____ wrote:

Message from ____ : Obama displays less leadership than Bush. He can't spend his entire term saying everything is Bush's fault

Failure to Lead

By Salena Zito

January 3, 2010 | Townhall.com

URL: http://townhall.com/content/0e78c22d-b26f-4d99-9d1f-95c740fc6726

Here we go again: War on Yemen!

The neocons must be delighted with America's imminent war with Yemen. So must be al Qaeda. Funny how that goes.

Threats to Yemen prove America hasn't learned the lesson of history

Extraordinarily, the US is making exactly the same mistake as in Iraq and Afghanistan

By Patrick Cockburn
December 31, 2009 | The Independent

We are the Awaleq

Born of bitterness

We are the nails that go into the rock

We are the sparks of hell

He who defies us will be burned

This is the tribal chant of the powerful Awaleq tribe of Yemen, in which they bid defiance to the world. Its angry tone conveys the flavour of Yemeni life and it should give pause to those in the US who blithely suggest greater American involvement in Yemen in the wake of the attempt to destroy a US plane by a Nigerian student who says he received training there.

Yemen has always been a dangerous place. Wonderfully beautiful, the mountainous north of the country is guerrilla paradise. The Yemenis are exceptionally hospitable, though this has its limits. For instance, the Kazam tribe east of Aden are generous to passing strangers, but deem the laws of hospitality to lapse when the stranger leaves their tribal territory, at which time he becomes "a good back to shoot at".

The Awaleq and Kazam tribes are not exotic survivals on the margins of Yemeni society but are both politically important and influential. The strength of the central government in the capital, Sanaa, is limited and it generally avoids direct confrontations with tribal confederations, tribes, clans and powerful families. Almost everybody has a gun, usually at least an AK-47 assault rifle, but tribesmen often own heavier armament.

I have always loved the country. It is physically very beautiful with cut stone villages perched on mountain tops on the sides of which are cut hundreds of terraces, making the country look like an exaggerated Tuscan landscape. Yemenis are intelligent, humorous, sociable and democratic, infinitely preferable as company to the arrogant and ignorant playboys of the Arab oil states in the rest of the Arabian Peninsula.

It is very much a country of direct action. Once when I was there a Chinese engineer was kidnapped as he drove along the main road linking Sanaa to Aden. The motives of the kidnappers were peculiar. It turned out they came from a bee-keeping tribe (Yemen is famous for its honey) whose bees live in hives inside hollow logs placed on metal stilts to protect them from ants. The police had raided the tribe's village and had damaged hives for which the owners were demanding compensation. The government had been slow in paying up so the tribesmen had decided to draw attention to their grievance by kidnapping the next foreigner on the main road and this turned out to be the Chinese engineer.

Yemen is a mosaic of conflicting authorities, though this authority may be confined to a few villages. Larger communities include the Shia around Sanaa in the north of the country near Saada, with whom the government has been fighting a fierce little civil war. The unification of North and South Yemen in 1990 has never wholly gelled and the government is wary of southern secessionism. Its ability to buy off its opponents is also under threat as oil revenues fall, with the few oilfields beginning to run dry.

It is in this fascinating but dangerous land that President Barack Obama is planning to increase US political and military involvement. Joint operations will be carried out by the US and Yemeni military. There will be American drone attacks on hamlets where al-Qa'ida supposedly has its bases.

There is ominous use by American politicians and commentators of the phrase "failed state" in relation to Yemen, as if this some how legitimised foreign intervention. It is extraordinary that the US political elite has never taken on board that its greatest defeats have been in just such "failed states"', not least Lebanon in 1982, when 240 US Marines were blown up; Somalia in the early 1990s when the body of a US helicopter pilot was dragged through the streets; Iraq after the overthrow of Saddam Hussein; and Afghanistan after the supposed fall of the Taliban.

Yemen has all the explosive ingredients of Lebanon, Somalia, Iraq and Afghanistan. But the arch-hawk Senator Joe Lieberman, chairman of the Senate Committee on Homeland Security, was happily confirming this week that the Green Berets and the US Special Forces are already there. He cited with approval an American official in Sanaa as telling him that, "Iraq was yesterday's war. Afghanistan is today's war. If you don't act pre-emptively Yemen will be tomorrow's war." In practice pre-emptive strikes are likely to bring a US military entanglement in Yemen even closer.

The US will get entangled because the Yemeni government will want to manipulate US action in its own interests and to preserve its wilting authority. It has long been trying to portray the Shia rebels in north Yemen as Iranian cats-paws in order to secure American and Saudi support. Al-Qa'ida in the Arabian Peninsula (AQAP) probably only has a few hundred activists in Yemen, but the government of long time Yemeni President Ali Abdulah Salih will portray his diverse opponents as somehow linked to al-Qa'ida.

In Yemen the US will be intervening on one side in a country which is always in danger of sliding into a civil war. This has happened before. In Iraq the US was the supporter of the Shia Arabs and Kurds against the Sunni Arabs. In Afghanistan it is the ally of the Tajiks, Uzbeks and Hazara against the Pashtun community. Whatever the intentions of Washington, its participation in these civil conflicts destabilises the country because one side becomes labelled as the quisling supporter of a foreign invader. Communal and nationalist antipathies combine to create a lethal blend.

Despite sectarian, ethnic and tribal loyalties in the countries where the US has intervened in the Middle East, they usually have a strong sense of national identity. Yemenis are highly conscious of their own nationality and their identity as Arabs. One of the reasons the country is so miserably poor, with almost half its 22 million people trying to live on $2 a day, is that in 1990 Yemen refused to join the war against Iraq and Saudi Arabia consequently expelled 850,000 Yemeni workers.

It is extraordinary to see the US begin to make the same mistakes in Yemen as it previously made in Afghanistan and Iraq. What it is doing is much to al-Qa'ida's advantage. The real strength of al-Qa'ida is not that it can "train" a fanatical Nigerian student to sew explosives into his underpants, but that it can provoke an exaggerated US response to every botched attack. Al-Qa'ida leaders openly admitted at the time of 9/11 that the aim of such operations is to provoke the US into direct military intervention in Muslim countries.

In Yemen the US is walking into the al-Qa'ida trap. Once there it will face the same dilemma it faces in Iraq and Afghanistan. It became impossible to exit these conflicts because the loss of face would be too great. Just as Washington saved banks and insurance giants from bankruptcy in 2008 because they were "too big to fail," so these wars become too important to lose because to do so would damage the US claim to be the sole superpower.

In Iraq the US is getting out more easily than seemed likely at one stage because Washington has persuaded Americans that they won a non-existent success. The ultimate US exit from Afghanistan may eventually be along very similar lines. But the danger of claiming spurious victories is that such distortions of history make it impossible for the US to learn from past mistakes and instead it repeats them by fresh interventions in countries like Yemen.

Poll: Americans want to torture 'EunuchBomber'

Look, the answer is simple: pass a law. Take the burden off our Chief Executive to re-interpret the Constitution. Congress should pass a law denying normal Constitutional protections to terrorists who commit terroristic acts on U.S. soil. That would solve this whole problem. Sort of. Then we could torture this boy (an "amateur") to our hearts content to find out things that we already know, like this whole thing was planned in Yemen. [Note to self: Find pretext to invade and occupy Yemen. Then maybe re-invade Somalia, across the Gulf of Aden.] Indeed, more than half of the remaining prisoners at Guantanomo are from Yemen.

All this Monday-morning tough-guy talk is just what we came to expect from Bush-Cheney and their neocon coterie in the think tanks and MSM, but really, what good's it going to do us now? Just a thought, but maybe our biggest problem right now isn't to torture this kid, but to figure out how to prevent similar attacks in the future -- for instance, by installing reliable "puffer" detection machines in all points of entry to the USA? Naw, that's too easy. We need fireworks, baby! We need heads on a platter! Bring on the shock & awe! Yemen, your days are numbered! (If it weren't for all your tasty oil, that is.)

Rasmussen: 58% want underwear bomber waterboarded
By Muriel Kane
December 31, 2009 | Raw Story

The latest Rasmussen poll indicates that a majority of Americans support hard-line attitudes towards the would-be terrorist who attempted to blow up an airliner on Christmas day.

Of those polled, 71% would like to see the crime investigated by military rather than civilian authorities, and 58% believe that Umar Farouk Abdulmutallab should be subjected to "aggressive" interrogation techniques in order to gain information. Men, younger voters, and Republicans were most strongly in support of the use of harsh methods.

In addition, 79% expect another terrorist attack in the United States during the next year -- a huge jump from the 49% who held that opinion last August -- and 30% believe the terrorists are winning.

Hard-line sentiments were also reflected in the answers to questions about airport security -- 54% would like to see the United States take control of boarding procedures at foreign airports -- closing the prison at Guantanamo Bay, and probes of CIA torture during the Bush administration.

Liberal blogs have been skeptical all year about Rasmussen polls which show President Obama with an approval rating far lower than any other polling organization, and polling analyst Nate Silver in particular has recently subjected Rasmussen to fierce mockery. This latest poll is likely to only increase the controversy.

The results of the poll have already been proclaimed by conservative blogs. A blogger at Weasel Zippers exulted, "Obama's bleeding-heart liberal approach to national security issues is failing. The Left is pushing their insane agenda too far for most Americans."

Ed Morrissey at Hot Air headlined his version of the story "58% prefer the Cheney option on EunuchBomber," and explained, "I just call it the Cheney Option because it recalls a time when we treated terrorists as unlawful combatants rather than defendants. Apparently, a healthy majority of Americans agree with that approach."

Liberal blogger Greg Sargent, however, headlined his own reaction, "Cheney Camp Rejoices That Majority Wants To Torture Bombing Suspect"

Michael Goldfarb, presumably speaking for the Cheney camp, is really, really psyched about a new Rasmussen poll finding that a majority wants to torture the plane bombing suspect, Sargent writes. "The fact that the Cheney camp is grabbing onto this one poll as vindication says more about the degree to which Cheney has lost the overall national security argument than it does about anything else."

Security, opportunity costs, & 'puffer' machines

So it turns out that the explosive chemical powder PETN that Abdulmutallab used is easily detected by airport "puffer" machines during security screening. Only thing is, he never passed through one of those detectors in Nigeria, Holland, or the U.S.

You see, these puffer machines are expensive (about $160 K each), humidity and dirt make them break down often, and maintenance costs the TSA several $ million a year.

So about 100 of these puffer machines are sitting in storage, unused.

All I can say is... DWTF?!

The war in Afghanistan now costs us about $57,000 per minute. 3 minutes of fightin' evildoers over there could buy 1 "expensive" puffer machine; a minute more would easily pay for its annual maintenance. The money spent on 1 month of fighting in Iraq and Afghanistan could cover the world's airports and train stations in puffer machines. We could afford to put one in every entrance of every mall in America.

Besides Iraq and Afghanistan, the Pentagon is spending $ billions on laser weapons and space weapons -- really cool, high-tech stuff. And yet we can't develop an airport screening system that is fast, effective, and low-maintenance.

Can't, won't... or don't care? Or is it really what some have been arguing all along: the opportunity cost of "winning" over there is all the small, un-sexy but necessary things that keep us safe over here?

Hey, we're the freaking US of A, we can do anything we put our minds to! So, a rational person can only conclude that airport security -- and port and dam security, etc. -- are just not as important to our leaders as, say, faraway military adventures in godforsaken deserts. They -- Dubya, Obama, Congress -- pledged to keep us safe. So far, it seems that only al Qaeda's incompetence (and childish obsession with airplanes) and a strapping Dutch tourist are keeping us safe. In return for all the tax money and inconvenience we sacrifice for our supposed safety, our leaders owe us more.

Detroit explosive common, easily detectible

By Pamela Hess and Eileen Sullivan

December 28, 2009 | Associated Press

URL: http://news.yahoo.com/s/ap/20091228/ap_on_bi_ge/us_airliner_attack_explosive

Lessons from Abdulmutallab's foiled attack

Hmm... What to say about this almost-tragedy? A few observations and broadsides:

1) It's Dubya's fault.

2) This Nigerian kid fits the typical al Qaeda-in-America terrorist profile: well off, educated kid from not-very-religious Muslim family who turns to radical Islam in his 20s after living in a Western country and experiencing alienation and/or racism and resultant loss of self-identity.

UPDATE (Dec. 30, 2009): Looks like I was right. Poor little Farouk was just lonely.

3) It's Dubya's fault.

4) He probably acted alone. (Which would explain his shitty detonator).

UPDATE (Dec. 30, 2009): They now say Abdulmutallab was carrying out an al Qaeda operation. They've claimed responsibility, anyway.

What does it all add up to? Not much, except: as the world's biggest Occupier of Muslim Lands, we might as well get used to crap like this. If some privileged but disgruntled college nerd from Africa can almost take down a U.S. airliner all by himself, then, well... What good is the War on Terra? We're kidding ourselves, folks. Our leaders have no idea how to keep us safe.

Nigerian Umar Farouk Abdulmutallab poses for a picture at the International school , Lome, TogoPhoto: AP

Uninvestigated terrorism warning about Detroit suspect called not unusual

By Karen DeYoung and Michael Leahy
December 28, 2009 | Washington Post

URL: http://www.washingtonpost.com/wp-dyn/content/article/2009/12/27/AR2009122700279.html?nav=rss

Flying Dutchman puts U.S. passengers to shame

We Americans should be ashamed. While our compatriots were in a panic, it was a Dutch "eurofag" who immediately leapt across four other passengers, grabbed the explosive device, put out the fire with his bare hands, and secured the wannabe bomber with a choke hold. Damn, dude.

UPDATE (Dec. 30, 2009): CNN says the Dutch dude's name is Jasper Schuringa. Jasper's account of his own heroism HAS been independently confirmed.

Jasper: "Hey there, lovely American ladies. My arm really hurts from being such a hero. By the way, I'm Dutch but I'm not gay. Look for me on MySpace."

Dutch Passenger Hurls Into Action to Stop Alleged Terrorist on Plane
December 26, 2009 FOXNews

URL: http://www.foxnews.com/story/0,2933,581178,00.html

Now 63% of Americans back auto bailout

First they were against the auto bailout, now they're for it.  How to explain such a rapid turnaround in U.S. public opinion?  I mean, now 51 percent of Americans believe that the failure of U.S. automakers would cause "major problems" for the U.S. economy, and 15 percent think it would cause a "crisis," although, interestingly (and naively?), 82 percent don't think it would affect them personally.  We also see that Republicans are split down the middle on the bailout, 51 to 49 percent, while 70 percent of Dems predictably support it.

CNN's Bill Schneider offers up "fear" as the reason for the reversed poll numbers, but he doesn't explain why Americans are afraid now when they weren't two weeks ago.  Do we have Obama and the dastardly lib'rul media to thank for this rapid re-education of Americans?  Or have cooler heads simply prevailed, after seeing our Republican President announce that the auto bailout was a fait accompli?

Here's what hasn't changed in two weeks:  Nearly two-thirds of Americans are still reluctant to buy a car for an automaker in bankruptcy, meaning that bankruptcy would probably kill GM and Chrysler, because they can't survive cost cutting and restructuring while selling even fewer cars than now, when auto sales are down 25-30 percent from 2007. 



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Poll: Public OK with auto bailout, but no more aid

By Paul Steinhauser,

December 23, 2008  |  CNN.com

A new national poll Monday finds a majority of Americans approve of recent loans to big U.S. automakers, but less than 3 in 10 would support additional assistance.

Sixty-three percent of those questioned in a CNN/Opinion Research Corp. survey support the White House loaning more than $13 billion to American automakers Chrysler and General Motors, while 37 percent opposed the move.

In exchange for the loans, the deal calls for the auto companies to show by the end of March plans for viable new business models.

The poll numbers out Monday are drastically different from a similar poll from early December.

Sixty-one percent of those questioned in a CNN/Opinion Research Corp. survey out December 3 were against the federal government providing billions of dollars to the automakers, with 36 percent favoring such a bailout.  Video: Watch why six in 10 support the bailout

Monday's poll shows 53 percent of Americans don't think government assistance for the automakers will help the U.S. economy.

But just 28 percent said they would approve providing the automakers with more money, while 70 percent said they would prefer to let them go bankrupt.

"The opposition to any additional assistance may be a reluctance to spend more money that they think the government may never see again," Holland added. "Only 28 percent say the auto companies involved in the current program will be able to pay all or most of the $13 billion back; one in five say they will not be able to pay any of it back to the government.

"This perceived lack of ability to pay taxpayers back may be one reason why the poll indicates auto executives are not very popular with Americans. Eighty-two percent of those questioned have a negative view of auto executives."

Union leaders don't fare well either: Sixty-one percent of those polled have a negative view of them.

Two-thirds of those polled said they would be less likely to buy a car from an auto company in bankruptcy.

The CNN/Opinion Research poll was conducted Friday through Sunday, with 1,013 adult Americans questioned by telephone. The survey's sampling error is plus or minus 3 percentage points.

Greedy Wall St.: What did you expect?

http://news.yahoo.com/s/ap/20081222/ap_on_bi_ge/meltdown_secrets

No accountability.  Those greedy, amoral Wall Street banks are not even bothering to track the $ billions in our tax money that they received to "save" them.   

Meanwhile, GM and Chrysler got put through the ringer and were ultimately rejected over a fraction of the $700 billion handed out -- no strings attached -- to Wall Street, with demands on Detroit to restructure and put government minders on their executive boards. 

Where's the consistency?  What's the explanation?  Simple: greedy ex-Wall Street f-----s run the Fed and Treasury; but the Big 3 have no similar representation in the U.S. Government.

I love this quote from Rep. Scott Garrett, (R-NJ), it puts it all in perspective:  "A year or two ago, when we talked about spending $100 million for a bridge to nowhere, that was considered a scandal."  My, my, my, how times have changed.

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.