An Insight Into Why Democrats Have Soured On Obama

Maureen Dowd, a smug lefty New York Times hack, wrote an interesting article this weekend. It was interesting because it shows us two perspectives on why the Democrats have soured on Obama. Those perspectives are from the left wing of her party and the liberal wing (they are different). Commentarama readers will find her reasoning strangely familiar.

The article begins with Dowd’s own views on Obama. Dowd represents the left wing of the Democratic Party, as her views are in lockstep with Markos Moulitsas of the Daily Kos et al. These are the party shock troops and opinion makers. Without them, the liberal wing would meander around cluelessly looking for something to whine about. Indeed, losing these people will sap the party of its energy, its financial strength, and the people it needs to get the sheep to the polls. And lose them Obama has.

How do we know? Well, Dowd’s tone more than anything. Indeed, the article is snotty if not downright nasty about Obama. For example, Dowd begins by taking digs at his race: “How did the first president of color become so colorless?” and by slipping in a basketball metaphor about him being in “buzzer-beating mode.” To you and me, these comments may not sound like a big deal, but to a leftist like Dowd, these would normally be considered “racists” comments if made by a conservative, and I think her use of them is no accident. I think she’s looking for a way to insult Obama on a personal level, and she’s opting to begin her article with a “you were supposed to be exotic, a noble savage, but you turned out to be just like everyone else,” and the basketball reference is usually considered an attempt to denigrate a black target as stupid.

I think this is Dowd’s intent because of what she writes next. Check out this quote:

“‘You know, are there, you know, things that I might have done during the course of 18 months that would, you know, at the margins have improved some of the tone in Washington?’ Obama asked. ‘Probably.’ Uncharacteristically valley girl, the usually eloquent president must have, you know, had a hard time acknowledging that.”

Note that not only does she not clean up his quote, as she and the rest of the MSM usually do, but she actively points out how poorly he speaks. Indeed, she mocks him by equating him to a valley girl, another object of derision for feminists and a way to attack his manhood -- just like her first comment was a way to attack his “blackhood” (see Spike’s Lees’ comment on Obama needing “to act like a black man.”). She even throws in her own “you know” for good measure, indicating that she thinks she’s a superior speaker.

She then attacks his strategy in a very dismissive and condescending way. First, she frames the problem: “Obama has been bleeding independents.” She then makes him sound stupid by creating a disconnect by saying that Obama’s plan for dealing with the independent problem is to ignore independents so he can focus on the base. In other words, she’s saying “he doesn’t get it” without actually using those words. Then she presents Obama’s reasoning: he thinks he has time to recapture female independents after the election because of his support for abortion rights and health care reform. But she dismisses this by telling us about her sister Peggy, who Dowd identifies as one of those independents, and by giving us a quote from Peggy that contradicts every one of Obama’s assumptions. Finally, she finishes with a blanket statement that Obama better rethink his plans: “While Obama’s out in the country trying to save Congressional Democrats, he should also think about how he’s going to save himself.” In other words, his plan stinks.

But even more interesting is Dowd’s story about her sister, Peggy. Peggy supposedly is one of the “independents” that Dowd thinks Obama needs. In truth, Peggy is your standard liberal Democrat who likes to think of herself as an independent despite her consistent liberal/left views. Indeed, Peggy claims that she was a Republican who fell out of love with Bush. But check out her reasons: she hated Donald Rumsfeld and Dick Cheney, and she hated Bush’s “disdain for bipartisanship.” Moreover, she was a fan of Teddy Kennedy, and she has nothing but disdain for the Republicans and for how ObamaCare was “watered down.” Also, “she lights up at the mention of his vice president, Joe Biden.” Those views are entirely consistent with a liberal Democrat who has deluded themselves into thinking that they’re an independent. That’s the sheep portion of the Democratic base. These are the people the wolves like Dowd push around.

And what does Peggy think of Obama now?

Peggy believed that Obama was a "dazzling young newcomer who could change Washington." Now she’s considering voting for Mitt Romney. She thinks Obama has done a good job of “managing W’s messes in Iraq and Afghanistan,” but this hasn’t swayed her to stay with him. And what’s really bothering her? Let’s let Peggy tell you herself:

“He promised us everything, saying he would turn the country around, and he did nothing the first year. He piddled around when he had 60 votes. He could have pushed through the health care bill but spent months haggling on it because he wanted to bring some Republicans on board. He was trying too hard to compromise when he didn’t need the Republicans and they were never going to like him. Any idiot could see that. . . and then the bill was watered down.”

Sounds like little Markos from the Daily Kos doesn’t it. . . “he was too bipartisan!” (And here I thought she hated Bush for disdaining bipartisanship?) And wait a minute, haven't we been told by the MSM that Obama has accomplished more than any other president ever? Doesn't she realize how much he's done? And to compare the smartest man ever to "any idiot"? Hmmm. She continues:

“He hasn’t saved the economy, and now he’s admitting he’s made very little progress. You can’t for four years blame the person who used to be president. Obama tries to compromise too much, and he doesn’t look like a strong leader. I don’t watch him anymore. I’m turned off by him. I think he’s an elitist. He went down to the gulf, telling everyone to take a vacation down there, and then he goes to Martha’s Vineyard. He does what he wants but then he tells us to do other things.”

So what does this tell us about liberals, i.e. the center-left? They have stopped listening to Obama, as I’ve said several times. They no longer see him as “cool,” they see him as elitist, aloof, stupid and weak. The vacation issue struck a chord, even with them. They do blame him for not fixing the economy and they no longer buy the “it’s Bush’s fault” line or the “it would have been so much worse” argument. Moreover, they don’t credit him with health care reform, they see it as a betrayal. There is no mention of financial regulation, any jobs bills, his attempts to give back-door amnesty to illegals, his appointments of women to the Supreme Court, or anything else the Democrats have tried in vain to tout as achievements. . . as we predicted. Nor is there any distinction between “good Democrats” and “bad Democrats,” or any credit for “trying.”

For Dowd to get this snotty and dismissive at Obama and to treat his assertions with such disdain is a clear sign of a relationship that’s entered the final phase of the breakup stage, and is evidence the Democrats have lost the far-left. For Peggy to tell us that she sees him as a failure and that she's now turned off by him, tells us she’s already broken up with him and is looking to move on to her next crush, and is evidence the Democrats have lost the center-left.

What a shame.


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Your Untrusted Source For News

As you may or may not have heard, a Pew Research poll just revealed that the public’s trust in the media hit a record low in July of this year. Imagine mah suhprise. Let’s discuss. . .

The Survey

According Pew Research, 63% of Americans believe that the information they get from the media is not accurate. That’s six in ten! Only 29% thought the media was generally accurate. That’s not even an “F” on a standardized test, that’s a not to your parents and a good grounding.

Moreover, this isn’t some ingrained distrust of the press by the American people. This distrust was earned. In 1985, when this poll was first conducted, a full 55% of the American public thought the media generally got things right.

But that was then, when a lot of the old-schoolers still roamed the hallways of our journalistic institutions. Soon the numbers began to slide. By 1997, only 37% of the public felt that journalists were reliable. By July of this year, that number was down to 29%. That’s a loss of 26% in twenty-four years.

The Excuses

So what’s causing this? It couldn’t be the things I ranted about the other day, could it? Let’s see what the media has to say. . .

Bill Keller, the executive editor of The New York Times, which we all know has never engaged in open and obvious bias, has never sold its sold for the all mighty peso, and has never been caught with an obvious plagiarist on staff for oh so long, contends that budget cuts are at the root of the problem.

Well, actually, that’s not entirely true. Keller identifies budget cuts as a potential problem. According to Keller, the budget squeeze “means facts don’t get checked as carefully as they should.”

But then he quickly assures us that this really is not a problem. Indeed, he goes on to claim that “many media outlets” still go to great lengths to get the facts right and own up their mistakes. (I wonder if that includes the Times?)

In any event, he soon fingers the real culprit -- everybody else:

“The great flood that goes under the heading ‘news media’ has been poisoned by junk blogs, gossip sheets, shout radio and cable-TV partisans that don't deserve to be trusted.”

That’s the irresponsible NYT we’ve come to know and dismiss.

So what does he think should be done about this? Nothing really, he doesn’t think there is a real problem. See, while you all complain about the media, you really do love your media:

“Just as polls routinely show that people hold Congress in low esteem but tend to like their own congressman, I think the public is suspicious of the media in general but tends to trust the particular news organization they turn to for news.”

So don’t expect any changes from the NYT.

But surely, the Associated Press has something more intelligent to say, right? Nope. Kathleen Carroll, the executive editor of the AP, blames the internet. Apparently, the problem is that the internet is full of misinformation, which gets passed around on discussion boards. And that causes people to view the media with such disfavor. Tisk tisk.

Journalists at large agree. They blame the poor reputation of journalism on cable talk shows (63%), the 24 hour news cycle (42%) and the internet (57%).

Of course, both Carroll, Keller, and their journalistic friends ignore the fact that the public’s trust began to deteriorate long before the industry began to cut costs, long before cable news became so prominent, and long before the internet become so ubiquitous. Indeed, in 1999 -- by which time much of the damage was already done -- only 6% of respondents said they relied on the internet for news. The vast majority (82%) reported relying on the nightly news, and 42% said they also relied on newspapers.

So What Is Really Going On?

The reality is that journalists have lost touch with the public, and they don’t get it. Let’s compare how the public sees journalism against how journalists see journalism.

As we note above, 63% of Americans believe that journalists make too many factual errors. But only 45% of journalists agree.

And while 75% of journalists agree that media bias is a bad thing, only 26% of the public think that journalists make any attempt to avoid bias.

And how about that bias? Let’s compare the attitudes of the public with journalists at large. First, take a look at the following chart, which compares the self-described political leanings of journalists against those of the public.


As you can see, journalists are 14 percentage points more liberal than the public and 26 percentage points less conservative. But does that mean anything? Absolutely. Look at the difference between journalists and the general public on various “wedge” issues:

• When asked whether a belief in God is required for a person to be considered moral, 60% of the general public agrees with that statement, but 91% of journalists disagree.

• When asked whether homosexuality should be accepted or discouraged, 51% of the general public said “accepted” and 42% said “discouraged.” By comparison 88% of journalists said “accepted” and only 5% said “discouraged.”

• Only 25% of the public felt that abortion should be legal under any circumstances, compared to 40% of journalists.

• Fifty percent of the public felt that stricter gun control laws were needed, compared to 65% of journalists.

• Only 34% of the public believe that the government should guarantee that no one is in need, compared to 42% of journalists. And 60% of the public want less government interference, as compared to only 49% of journalists.

Whether you agree with these propositions or not, it certainly shows a significant divergence of beliefs between journalists and the public on wedge issues.

This translates into significant differences in how journalists and the public view events. Consider the difference in how the public and the media viewed the treatment of Bush:


As you can see, the public thought the media was too hard on Bush by a ratio of three to two. The media, by comparison, felt the media was too soft on Bush by a ration of seven to one.

And if you look only at the self-described “liberals” and “moderates” in the media, these number become even starker:

Moreover, these numbers are all the more skewed because when the media talks about “bias,” it is talking about “conservative” bias. Indeed, when asked if they could name a news organization that has an “especially conservative bias”, 82% of journalists said they could -- and most pointed their fingers at Fox News. But when asked if they could name a news organization that has an “especially liberal bias”, only 38% of journalists said that they could name such an organization. Further, only 26% of self-described liberals could name a liberally biased news organization. Ridiculous.

So is the reason the public has lost faith in the media really the invent of the internet or cable television or budge cuts that happened long after that faith began to erode? Or could the reason be that journalists suffer from obvious bias and, even worse, are largely oblivious to their own bias?

Seems kind of obvious doesn’t it. . . unless you’re a journalist.

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Journalism Is Dead

With Glenn Beck, not the mainstream media, exposing Van Jones for the rest of us, it might be the appropriate time for a little rant against the state of modern journalism. How to put this: “Journalism Is Dead.” Yep, that about sums it up. And I have particular anger for Fox News.

Modern journalism is in a bad state. Though, to be fair, most of what ails modern journalism has ailed it since journalism first began:

• Modern journalists are biased. True enough, and when I get the chance, I will put together an article showing you just how biased. But journalistic bias is nothing new. Indeed, at one time, journalists were openly biased. When you pick up the Arkansas Democrat-Gazette, for example, you’re looking at a paper that was founded as a mouthpiece for the Democratic Party.

So even though the New York Times is a mouthpiece for the Democratic Party, that’s nothing new -- they’re just less honest about it. Same thing with the Associate Press announcing just prior to the election that they would no longer present all views “uncritically,” but will instead put their own spin “on the news”. And while this may represent a change of official policy, it certainly won’t change the practice, which has involved spinning for as long as I can remember.

• Charges of being co-opted are nothing new either. The Founders called for a free press. But other countries have not been so noble. Pravda means “truth” in Russian, but you would have been hard pressed to find much truth coming from Pravda during the cold war. The Pentagon periodically gets caught paying journalists to present favorable opinions on its behalf. And while corporations now dominate journalists, this is not so different than the days when Randolph Hearst ran his newspaper empire with an iron fist.

Modern journalists are also an easily co-opted group. The Washington Post tried to use its connections to sell “off the record” private meetings between the rich and powerful and those with too much money. White Houses have learned to manipulate the press corp as well by granting special access. . . hello ABC. The NFL, a master at manipulating journalists, dispenses tickets, interviews, and access to keep its journalists in line -- when they don’t outright hire them. Corporations have gotten very good at using journalists for their purposes as well. Maria Bartiromo of CNBC got in trouble when it was revealed that she accepted favors (like flights on private jets) from the same people she reported on. And CNBC has started pimping for sponsors, unless you want to believe their repeated “spontaneous” sales pitches for Gap jeans are actually news.

At this point, modern journalists are little more than press agents for the people they cover.

• Charges of sensationalism are not new either. Sure modern journalists try to create crises and false urgency to sell their work and they often trade in salacious details rather than relevant fact, but that’s all been done before. The phrase “yellow press journalism,” which fanned the flames or populist resentment to begin the Spanish American war, was hardly meant as a compliment.

The Real Problem Is Journalistic Laziness

So what is different today? Frankly, journalists have gotten lazy. How else do you explain the media, with its vast resources and supposed training and drive for the truth, being scooped repeatedly by bloggers? How else do you explain allowing plagiarized work to appear in a paper like the NYT day after day for so long without any editor noticing? How do you explain journalists who don’t know what they are talking about and don’t take the time to inform themselves?

You do know that you really can’t trust anything they tell you, right? As anyone who has ever been involved in an incident that ended up getting press coverage can attest, the journalist is often the least knowledgeable person in the room, both when they arrive on scene and when they leave. And few facts survive the journey through the journalist’s mind to reach the work itself, if they ever made it into the mind in the first place. Indeed, in my experiences with journalists, I have been shocked to see how poorly the journalists understood the events about which they reported and opined, and how little they cared.

And frankly, modern journalists are a strangely uninquisitive lot. They don’t know and they don’t want to know. Why? Maybe because the more you know about something, the more you realize just how much more you don’t know. Perhaps, it’s easier to remain ignorant of our ignorance. After all, ignorance is bliss.

So how does this manifest itself? It manifests itself in many ways. Stories are shallow and often wrong on fundamental levels. Journalists do little work to cultivate contacts, which used to be the lifeblood of journalism. Instead, they read the AP wire or scan the net. Place a quick mid-night phone call that won’t be returned in two rings, and bamo, you have a story and a failure to deny the story: good to go! Journalists no longer even wait to confirm their stories with a second source, which used to be the fundamental rule of journalism. Instead, they just add the magic words “is being reported” to let you know that this news is really only rumor. And when was the last time you heard of real investigate journalism?

When I look at modern journalism, the writing is poor, the research is worse or non-existent, and the reasoning is laughable. Not a week goes by that I can’t find some article that contains such obvious logical inconsistencies that the journalist should have realized their “facts” were impossible. Even when I read a “reputable” magazine like the Economist, I marvel at how easily I can rip up article after article without even researching a single fact. Your names are wrong, your dates are wrong, your numbers don’t add up. You just claimed an average rate that exceeds the population size. You claim that no one raised and objection, right before quoting someone who objected. Think people.

My Problem With Fox “News”

So what bothers me about Fox News? Fox News had a unique opportunity and they blew it. When Fox burst onto the scene, conservatives flocked to Fox in drove because they were sick of hearing their views ridiculed on each of the other channels. At that point, Fox had a chance to re-define journalism.

Fox could have changed the face of modern journalism. Fox could have forced journalists everywhere to start dusting off their sense of journalistic integrity and to stop being so damn lazy. But they didn’t.

Fox could have teamed up with a good reporting unit like the Washington Times and started to give us hard hitting news. They could have easily drawn in people like John Stossel and asked him to perform the kind of investigative journalism that he has done so well throughout the years -- hard facts, gathered through traditional means and verified, fairly presented, with logic and reasoning and without political bias. But they didn’t.

Did you wonder what life was really like on the streets of Baghdad when all that CNN would show you was Marines being killed? How about an investigation into what caused the banking crisis? Who was responsible? What is China doing in Africa (future article coming up on that one)? Did you even know they were in Africa? How about the Saudis? Does ethanol make sense?

Well, Fox didn't investigate (though their anchors happily gave you their opinions). Fox does not produce its own news, it just reads wire service reports. You can get those on-line a lot quicker and a lot more accurately (Fox shortens the reports to keep them simple). Fox does not do investigative journalism -- other than puff pieces. They will never uncover a government fraud or expose a defective missile system, because they just don’t do that kind of work. And they barely know other countries exist.

Fox doesn’t bring in experts to enlighten you, it brings in combatants to snipe at each other for thirty seconds before the segment ends. Fox News is news for those with attention deficit disorder. It is for people who want to hear someone argue for their side, it is not for people who are looking to learn the truth. It is talk radio, done on television by well-endowed anchors and anchorettes. And we conservatives accept this because there is no alternative.

Now, I'm not saying that the other networks are better, they're not. But that doesn't change the fact that Fox is offering very shallow product to us. It also doesn’t change the fact that Fox is squandering a golden opportunity here. If they tried harder, they could redefine news and give the words "journalistic integrity" some meaning again. They could give us the free press that a democracy needs. They could enlighten us about the world around us, about our politics, about each other. They could tell us the things we need to know to make good decisions. And most importantly, they could give us a source of news that we could trust. But that would be hard.

* end of rant *

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United States of America™, Property of Goldman Sachs

In 1873, Mark Twain co-authored a book called The Gilded Age: A Tale of Today, and thereby gave a name to era between Reconstruction and the Progressive Era. Were Twain alive today, he would likely name our present era “The Second Gilded Age.” And nothing illustrates this more than the many-tentacled creature known as Goldman Sachs.

The Gilded Age

Events today read like a repeat of the Gilded Age.

The Gilded Age is generally considered to have begun under the Grant administration. It was an era noted for massive corruption, dramatic social and economic upheaval, and a shocking incestuousness between big business and government. These two became so intertwined that the public came to see government action as nothing more than favoritism, bribery, kickbacks, inefficiency, waste, and corruption. Smart people.

The Gilded Age was the age of robber barons, like Andrew Carnegie, John Rockefeller, Cornelius Vanderbilt, and John Pierpont Morgan -- names that continue to mark our most powerful corporations today. It was the time of Tammany Hall and Boss Tweed, of corrupt local politics and election fraud, of Republican Mugwumps calling for an end to the spoils system in the civil service, of Bourbon Democrats calling for free market reforms, and of national parties ignoring all the cries for reform. And in 1889, this Age gave us the Billion Dollar Congress, an outrage that seems quaint compared to this year’s trillion dollar deficit.

The Gilded Age also gave us waves of immigrants to keep factory costs down, Chinese labor to build the nation’s railroads, and the birth of labor unions. The media too was changing, with the introduction of yellow press journalism, and the abandonment of factual news for sensationalism and sentimental stories. And the economy endured two depressions, the Panic of 1873, caused by the manipulation of the gold market by Jay Gould and James Fisk (“Black Friday”), and the Panic of 1893, a deep depression that ushered in the Progressive Era.

Sound familiar? Try substituting Goldman Sachs, ACORN, Tea Party, Mexicans, infrastructure, Madoff, Stafford, and reading this again.

By the 1890s, the Gilded Age was ending. Spurred on by reformers, the government imposed new regulations in response to corporate excesses, dangerous workplace and consumer conditions, exploitive labor practices, and anti-competitive behaviors. Many of those regulations remain with us today.

Goldman Sachs: The Corruption of the Revolving Door

It seems we are doomed to repeat the Gilded Age. And as history loves irony, the company at the center of this Second Gilded Age is a company formed at the tail end of the first Gilded Age: Goldman Sachs.

Goldman Sachs was founded as Marcus Goldman & Co. in 1869. It was renamed Goldman Sachs in 1882. The company made a name for itself in its pioneering use of commercial paper and it joined the New York Stock Exchange in 1896. Over the next 100+ years, it would grow to become one of the most influential companies in the world.

Now before I continue, let me be clear, I do not believe in conspiracies. There is no small group of illuminati that meet regularly to decide our fates and control the world. That said, I am not fool enough to believe that our government acts in the best interests of its citizens. It should be painfully clear to all of us that the government responds to those who have the most access to it. Thus, where we find access, and we find favored treatment for those with access, we must wonder whether the system is working or not. That is the point to this article.

Nor, is this article an attack on Goldman Sachs per se. Goldman is simply one of dozens of groups with too much influence. I have picked Goldman from the crowd only because they’ve made it very easy lately to see how they use their influence to help themselves at our expense.

How Much Influence Does Goldman Have?

How powerful is Goldman? Said one recent commenter: “It’s Goldman’s world, folks. We just live in it (at Goldman's discretion, of course).” Consider these facts. In October of last year, the New York Times reported that thirteen Goldman employees worked in senior positions with the George W. Bush administration. This included Treasury Secretary Hank Paulson, White House Chief of Staff Joshua Bolten, and the man who would oversee the TARP, Neel Kashkari. The Times called this “Government Sachs.”

The Clinton administration too was staffed with Goldman employees, including Treasure Secretary Robert Rubin. Obama, who received $918,000 from Goldman employees for his campaign, also has hired his share of Goldman alumni. Indeed, in a rather controversial move, Timothy Geithner hired former Goldman employee Mark Patterson to be the Treasury Department Chief of Staff, in direct violation of Obama’s “no lobbyists” policy.

But Goldman employees aren't just in the administration. Goldman employee Robert Zoellick is president of the World Bank. Mario Drahi is the governor of the Bank of Italy. Romano Prodi is the former Prime Minister of Italy. Mark Carney is the governor of the Bank of Canada. Michael Cohrs is the Head of Global Banking at Deutsche Bank. Malcolm Turnbull is the leader of Australia’s Liberal Party. Jim Cramer spends his days talking up Goldman Sachs on his show on CNBC, along with former Goldman alum Erin Burnett. Edward Lampert bought K-Mart in 2003. Ashwin Navin is President of BitTorrent. John Corzine, the former head of Goldman Sachs became a United States Senator and then governor of New Jersey. And there are many more.

Some are in key positions that regulate Goldman itself. Goldman alumnus Stephen Friedman and current Goldman board member, became an economic advisor to President Bush and Chairman of the Foreign Intelligence Advisory Board, before leaving the administration to become Chairman of the New York Federal Reserve Bank’s Board of Directors. . . the agency that regulates Goldman Sachs and which has a significant role in setting interest rates, which affect Goldman directly. Even worse, Friedman received a waiver, allowing him to remain on Goldman’s board during his time on the New York Fed. However, when it was learned in May 2009 that he purchased 52,000 shares of Goldman Sachs in January, he resigned from the Fed “to avoid the appearance of a conflict of interest.” Wouldn’t want that.

William Dudley, a former Goldman economist, was appointed as president of the New York Fed to replace Tim Geithner, who was mentored by former Goldman CEO and Treasury Secretary Robert Rubin. Rubin has been an economic advisor to President Obama.

Goldman executive Gary Gensler became the head of the Commodity Futures Trading Commission, replacing Brooksely Born, who was criticized for failing to regulate the derivatives market. Gensler himself stated that Born, “should have done more to reign in exotic financial instruments that have battered global markets.” What went unmentioned, however, was that Born’s efforts to regulate derivatives were blocked by Goldman alum Robert Rubin, who recommended to Congress in 1999 that the Congress strip the CFTC of its regulatory authority over derivatives. More on Goldman’s role in the derivative issue in a moment.

Goldman's Influence Equals Power

So what has Goldman gotten from all this influence? Remember cap and trade? Goldman Sachs, which gave $4,452,585 to the Democratic Party, has been pushing cap and trade because Goldman dominates the new carbon-credit market. Matt Tabbi of Rolling Stone notes that this

“is a virtual repeat of the commodities-market casino that’s been kind to Goldman, except it has one delicious new wrinkle: If the plan goes forward as expected, the rise in prices will be government-mandated. Goldman won’t even have to rig the game. It will be rigged in advance.”

In an interview in July 2009, former Assistant Secretary of Treasury Paul Craig Roberts was asked “Does the US Secretary of the Treasury work for the people or does he work for the banking system on Wall Street?” He replied: “He works for Goldman Sachs.”

Do you remember the bailout? The bailout was designed by former Goldman leader Hank Paulson. Here’s what you might not know:

• Paulson let Goldman competitor Lehman Brothers go bankrupt. The very next day, Paulson established the bailout program.

• Paulson put Goldman employee Neel Kashkari in charge of administering the bailout (TARP) funds.

• Paulson gave $300 billion in taxpayer money to Citigroup, which was run by ex-Goldman head Robert Rubin.

• Paulson gave $138 billion to help Bank of America buy, and thus bailout, Merrill Lynch, then run by former Goldman employee John Thain. According to recent testimony by Bank of American president Ken Lucas, Paulson threatened Lucas to go through with the deal and to pay off bonuses to Thain and others. Thain, by the way, was rumored to be John McCain’s choice for Treasury Secretary had he won the election.

• Goldman/Treasury employee Robert Steel was put in charge of Wachovia, which he turned around and sold to Wells Fargo after a few months, triggering $225 million in golden parachutes that went to a handful of Wachovia executives, including Steel.

Now consider the AIG shell game. As we noted above, Goldman alumnus Robert Rubin stood in the way of the CFTC regulating derivatives. A derivative is basically insurance against a bond defaulting. When the derivatives market took off, AIG became heavily involved. Goldman was the first group to realize that AIG had underestimated the risks in issuing these derivatives and it bought lustily from AIG.

When the market turned and it became clear that AIG had over extended itself and likely could not pay off these derivatives (in fact, the company appeared ready to fail), Paulson stepped in. He not only agreed to bail out AIG to the tune of $85 billion, but he put former Goldman employee Ed Liddy in charge of AIG. Liddy paid $13 billion of these moneys over to Goldman, paying off 100% of AIG’s debt to Goldman. No other institution received 100 cents on the dollar from AIG.

But this is nothing new for Goldman. According to Matt Tabbi, Goldman has been heavily involved in inflating every bubble and then profiting from the bailouts that follow the busting of those bubbles.

Nor is Goldman’s influence limited to the national level. Do you remember Goldman head John Corzine? He’s now the governor of New Jersey. Guess what company floats bonds for New Jersey? More interestingly, in November 2008, it was revealed that at the same time that Goldman was selling bonds for New Jersey, it was telling its wealthiest customers that they should short those bonds. This advice would make those bonds appear riskier than they actually were and would increase the interest rates the state needed to pay on future bonds (and Goldman profits).

At the same time, the Los Angeles Times accused Goldman of doing the same thing in California.

Conclusion

This is not an issue of Republicans or Democrats. Both sides are equally guilty. Nor is this an issue of Goldman Sachs being evil or running the world. Goldman is simply taking advantage of a system that lets people move between government and industry with amazing easy, that lets people profit from conflicts of interest, and that converts our government from a referee into a cash machine. It is time for serious ethics reform to prevent the types of arrangements that make the above possible.


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Federal Power Grab: Executive Pay

Virtually unnoticed, on Friday, the House of Representatives passed a bill giving the federal government the power to regulate executive compensation at public companies. This bill, sponsored by Comrade Barney Frank, passed 237 to 185, largely along party lines.

Not only is this an amazing seizure of power by the federal government, but the bill’s proponents have been misleading the public about what the bill does. They have sought to give the impression that the bill only requires non-binding votes by shareholders and that it applies only to TARP recipients. Neither contention is true.

What The Bill Does

The bill in question is called the Corporate and Financial Institution Compensation Fairness Act of 2009 (H.R. 3269). According to the introduction to the bill, the bill amends the Securities Exchange Act of 1934:

to provide shareholders with an advisory vote on executive compensation and to prevent perverse incentives in the compensation practices of financial institutions.

Note the second clause, after the word “and,” this is the part of the bill the supporters want you to ignore.

Whenever the bill has been discussed, its supports address only the first part of the bill, and in those discussions they make the claim that the bill “only” requires (1) that shareholders be advised of executive pay arrangements and so-called golden-parachutes, and (2) that shareholders be allowed to vote, in a non-binding vote, on whether or not to approve those compensation agreements. And that is exactly what Section 2 does. So what’s the problem?

The problem is Section 4, which they always fail to mention. Section 4 contains the following legalese:

The appropriate Federal regulators . . . shall prescribe regulations that prohibit any compensation structure or incentive-based payment arrangement . . . that the regulators determine encourages inappropriate risks by financial institutions or officers or employees of covered financial institutions that

(1) could threaten the safety and soundness of covered financial institutions; or

(2) could have serious adverse effects on economic conditions or financial stability.

Let’s put that into English. The Federal government can prohibit any pay practice that the government thinks could harm the company, the economy or the financial markets.

And to whom does this bill apply? It applies to any bank that participates with the FDIC, any credit union, any broker-dealer registered under the SEC, any investment advisor, and “any other financial institution that the appropriate Federal regulators. . . determine should be treated as a covered financial institution.” In other words, the “appropriate federal regulators” will figure out who is covered -- and if the TARP and TALF are any indication, a great many non-financial companies will be surprised to learn they are now financial companies.

So who are the appropriate federal regulators: (1) The Federal Reserve, (2) the Office of the Comptroller of the Currency, (3) the FDIC, (4) Office of Thrift Supervision, (5) the National Credit Union Administration Board, and (6) the Securities and Exchange Commission. Together, these agencies regulate virtually every large company in the country.

And for the record, nothing in this bill limits its application to TARP recipients, as Rep. Jeb Hensarling (R-TX) made clear during a CNBC interview.

What The Public Was Told

So what has the public been told? The Chicago Tribune mindlessly echoed the bills supporters, when it stated:

Say-on-pay votes would be non-binding, would take place months after compensation is handed out and wouldn't force companies to alter the payouts.

They failed to mention Section 4.

The New York Times, on the other hand, grasped the second part of the bill, but only after the bill was passed:

The bill, introduced by Representative Barney Frank, Democrat of Massachusetts, enables regulators to ban payments that give workers what the legislation calls “perverse incentives” to take risks that could hurt the nation’s financial system.

The bill gives the Securities and Exchange Commission, among other federal regulators, nine months to propose rules for regulating compensation packages at institutions whose assets total more than $1 billion.

Before the bill was passed, the Times was a good deal less clear on this point, though they did mention it. That article began:

The bill does not set pay limits. Instead, it gives shareholders the right to vote on pay and requires that independent directors from outside of management serve on compensation committees. The shareholder votes would not be binding on company management.

And then way down the page, they added:

The measure also gives regulators the authority to prohibit inappropriate or risky compensation practices for banks and other regulated financial institutions.

Close. But then they added:

Democrats led by Mr. Frank also agreed to . . . reduce[] the authority of regulators by giving them power to restrict only incentive-based pay arrangements instead of any kind of compensation.

This is a stretch. Section 4 states that the regulators may “prohibit any compensation structure OR incentive-based payment arrangement.” An “or” generally means multiple choices, and rarely means “only.” Thus, claiming that only incentive-based pay arrangements could be restricted was not exactly accurate. Also the use of the word "inappropriate" implies that such practices were already improper, not that they would be made improper by the new regulation. Indeed, reading this article, it's not clear that much of anything would be done by the regulation.

In any event, the real lying was left to Democratic Congressmen like Rep. Gregory Meek, D-NY. Meeks told CNBC prior to the vote that all the bill did was to require disclosure of pay schemes to shareholders and require “non-binding” votes by shareholders. . . it does not cap pay or prohibit the use of incentive-based pay in any way, he assured viewers. And he managed to maintain this lie for some time during the interview, until the anchors confronted him with the wording of the legislation itself.

At that point, he dissembled and rephrased his answer to state that the point of the bill was not to cap executive pay or to take away incentive-based pay, and that “most of the votes is [sic] non-binding.” But then, the point of communism was to make a better world, not to kill a hundred million people, as the practice turned out.

So Does Obama Support This Bill?

You would think there would be no mystery about whether or not Obama supports this bill. But on August 1, the New York Times reported that while Obama has advocated nonbinding votes for shareholders, “the White House has not suggested that federal regulators curb incentive-based pay for risk-taking.”

Of course, this contradicts the New York Times’ July 29th report, which stated that the legislation “closely resembled an Obama administration proposal seeking to impose new restraints on executive pay.”

But it played along nicely with the “we haven’t decided” game played by White House spokesman Robert Gibbs, who stated that no decision has been made yet whether the President will support this bill or not. . . apparently he is “not familiar” with the whole bill.

Sadly for Gibbs, Tim Geithner did not get the obfuscation memo, and he rushed out to issue a statement that said of the legislation:

This is a positive step forward to increase accountability and transparency in executive compensation, and to help ensure that pay encourages long-term performance, not excessive risk-taking.

That sounds like support. It also sounds a bit like central planning. . . comrades.

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Tell Me About Yur Mozzer. . .

Dear reader, there has been an outrage in the psychiatric community. I read about it in an obscure regional journal called the New York Times, and since likely none of you have heard of this journal, I thought I should fill you in. Apparently, a Dr. James Heilman from Moose Jaw, Canada has destroyed the Rorschach test. Of course, in his defense, what else are you going to do in Moose Jaw during the summer. . . without hockey.

The Rorschach test was created by Swiss psychologist Hermann Rorschach after he wrote his 1921 book “Pyschodiagnostik” -- a real page turner. Rorschach died a year after writing the book, when he misinterpreted some signs that warned of approaching danger.

For those of you who don’t know, the Rorschach test involves showing a series of ink blots to crazy people and using what they claim to see in the ink blots to determine their inner motivations. If you see your mom, you have mommy issues. If you see your dad, you have daddy issues. If you see your sister, you live in West Virginia. To put this in technical terms, a “real” doctor would tell you: “the underlying assumption is that an individual will class external stimuli based on person-specific perceptual sets, including needs, base motive, and conflicts, and it’s covered by insurance.”

Many skeptics consider the Rorschach test to be pseudoscience and they suggest that it is akin to cold reading.

[Which reminds me, we want to send a shout out to a certain reader who has an "a", an "s", or an "e" somewhere in their name, who works in a thankless but important profession, and works harder than everyone else in their office, but who doesn't get the recognition they deserve. . . you're our favorite reader. . . but let's keep that between us -- we wouldn't want the others to get jealous. ;-)]

So let’s get back to Dr. Heilman. Several months ago, Dr. Heilman, an emergency room physician, infuriated the psychological community when he posted all 10 original Rorschach plates, along with some common responses to each image, onto the Wikipedia (a division of Wikimedia, a wholly-owned subsidiary of The Intelligence Suppression Group, Inc.).

According to Gottfried Nussjob, of the Psychological Analysis Normalization Integration Center (PANIC), a trade group, posting these images on the Wikipedia is the equivalent to posting an answer sheet to next year’s SAT, something recently suggested by Joe Biden to raise student performance. Nussjob, thinks this is bad.

Dr. James Heilman
-- Worse than Hilter?

Nussjob initially stated, “The more test materials are promulgated widely, the more possibility there is to game it.” But he then backtracked, when he realized this implied that psychologists could not see through obviously fake answers. He thus stated, “forget I said that.” His attorney later wrote, “The process of making sense of one’s experience is gratifying. To take Rorschach’s test is to make sense of ambiguity in the context of someone who is interested in how you do that. It is dangerous to use these materials without proper guidance. . . like using a Ouija Board alone on Halloween.”

Dr. Heilman responded that posting these plates was no worse than posting the Snellen eye chart: “Yeah, eh. You can go to the car people and you could recount the chart from memory, sure, and you could get into an accident. . . what was your point again?”

Well the point is that we at Commentarama are all about helping our readers cheat on tests. So with that in mind, we’ve taken the liberty of reproducing the offending images below and providing you with a few, good safe answers which will help you fool any court-ordered psychologist.

Let us begin. Take a look at each image and then memorize our explanation below. . .


Bad Answer: Bat, Butterfly, Moth

Good Answer: This test throws you a real curve ball right out of the gate. They want you to answer Bat, Butterfly or Moth -- all caught with nets. See the problem? In reality, this image is an electromagnetic depiction of the human soul, after being crushed by a bus. Tell the reviewer, “I see dead souls.”


Bad Answer: Two Humans

Good Answer: Humans? Like, two hairdressers playing patticakes? Not likely. This image in fact represents three distinct personalities, buried deep within one mind, desperately struggling not to surrender to their urge to kill again. Just repeat that to the reviewer.


Bad Answer: Two Humans

Good Answer: Do you see two waiters with both male and female genitalia? Really? Seriously? Wow. . . how’s that whole crossdressing thing working out for ya? Listen, whatever you do, don’t mention genitalia and don't mention the waiters. Do you remember those silver, perpetual motion birds, with the top hats -- the ones you tip over and they would bob up and down, pecking the ground over and over? That’s what this is. . . just two silver peckers.


Bad Answer: Animal Skin, Massive Animal

Good Answer: This image shows the despondence of being unable to reconcile the relationship you had with your mother with the need to develop a fully mature super ego. . . or it’s a troll riding a motorbike, either answer is acceptable.


Bad Answer: Bat, Butterfly, Moth

Good Answer: This one probably is a bat or a butterfly, but if you tell them that, they will write: “patient lacks imagination, possibly bed wetter.” The better answer, according to the Psych Manual, is to tell them you see your mother. . . in a wig. . . holding a beer.


Bad Answer: Animal Hide, Rug

Good Answer: Don’t fall for this one either, there are no animals hiding here. This is a flattened violin. Your best answer, “It’s the day the music died.”


Bad Answer: Human Heads, Faces (or was that ‘feces’? I’m too lazy to check.)

Good Answer: Some will tell you that this is two dancing American Indians who have bumped buttockses. And you can probably see that, can’t you, you sick pervert! What it really is. . . actually, it does kind of look like that. Ok, run with it.


Bad Answer: Pink Animal

Good Answer: Just tell ‘em its pink. . . only pink. . . and that makes you kind of angry.


Bad Answer: Orange Human

Good Answer: Orange Human? Like orange beef? Don’t tell them that. . . that road leads to thorazine city. This is two dragons, riding on hippos, crushing a herd of pigs.


Bad Answer: Blue Crab, Red Lobster, Spider

Good Answer: Blue crabs? Red Lobsters? Yellow stars? Forget the lucky charms. This is two gay British cops in Paris, near the Eiffel Tower, and they have crabs.


There you go. Follow our plan and they are sure to declare you unbelievably sane. Just remember don’t let them make you change your answers. . . it’s what they want you to do.


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