It’s easy to overlook the many accomplishments of the Obama administration in their first year because so many of them were relatively low profile, or were little more than course corrections. But it will be very hard to overlook what the administration accomplishes this year. Whatever its shortcomings (and they are considerable), the health care bill was the most significant progressive legislation passed in this country since the passage of Medicare in July 1965. This will be followed by the most significant financial reforms since Franklin Delano Roosevelt grappled with the Great Depression. Before September, we should see a second lifetime appointment to the Supreme Court confirmed. If the administration accomplishes nothing else, it will still have assured itself of being in a league with the administrations of both FDR and LBJ for enduring consequence and progressive change. But the administration will accomplish more.
I’ve taken more criticism for questioning the decision to take up immigration reform this year than on anything else I’ve written in the last five years, but I didn’t say anything different from what the president said yesterday. Basically, I didn’t see the political will to pass immigration reform this year in the Democratic Caucus, and so I thought it would not pass and would create political problems without accomplishing anything. Harry Reid has had to walk back his promise to tackle immigration reform next after the financial reforms, and he will be introducing an energy bill instead. This makes sense for a couple of reasons. First, the House has already passed their version of the bill and the Senate has done their work in committee. In other words, the Senate is ready to debate an energy bill, but the same cannot be said about any immigration bill. Second, Obama has a three-pronged approach to fixing our economy. The three prongs are fixing our health care system, enacting financial reforms, and converting us to a green economy. Those priorities should pass in that order so that Obama can say that he has succeeded in implementing his economic plan. Only when his vision for fixing our economy is complete should he move on to other pressing issues.
The need to focus on the economy and jobs, combined with unprecedented Republican stalling tactics, means that the administration is behind schedule on keeping their promises to some of their most important constituencies: including the LGBT community and Labor. I will never tell the gay community to be patient because they are in the right to demand action now. But the proof of Obama’s commitment will be in what he delivers before November 2012. I expect that his record will be mixed. At a minimum, I think he will have eliminated the Don’t Ask, Don’t Tell policy be then. I think there is a decent chance that the Employment Non-Discrimination Act will be law by then, too, but I am more doubtful that anything will be done to fix the Defense of Marriage Act. Some form of the Employee Free Choice Act should be passed by 2012, but if they don’t get to it this year it might not happen because of diminished majorities in Congress.
Keeping the long view, things are on track for an unbelievably successful and progressive presidency, but the big problem is still Afghanistan, which threatens to be Obama’s Vietnam if he doesn’t come to grips with reality. Our policy there is not working and has almost no prospect of working, even if the policy is changed.
Oh BooMan! Please tell me we won’t have to wait till November 2012 to get rid of Don’t Ask Don’t Tell!!
I think they will do it in 2011.
From what I can tell, the Pentagon will issue a report in November that explains how the policy change will be implemented. Depending on the timing of the Defense Appropriations Act, the change will either be included at the end of this year or in next year’s appropriation act. Normally, Defense is the first appropriation bill to pass, so it would be done before the Pentagon report. But they can tinker with that if they want. Pressure should be applied to pass it this year. But I don’t think they want to pass it prior to the midterms. That could be okay, provided that they still pass it this year.
Are you eager to join the military? Relative to population size and immediate urgencies facing this country, I have yet to hear a compelling argument for why Don’t Ask Don’t Tell should have precedence over other issues and other communities far larger in size.
Why look at it that way?
It’s a policy change that can be folded into the must-pass Defense Appropriations bill. It doesn’t take up any legislative time. It doesn’t push off other priorities. It’s not an either/or situation like major stand-alone legislation.
But it would still exhaust substantial political capital to benefit a very small minority, no? Your argument against moving on immigration reform is based purely on political prioritizing not morality or justice. I get that. So, why shouldn’t we do the same when it comes to Don’t Ask Don’t Tell? Latinos are the largest racial minority in this country; the fastest growing demographic; and arguably the one true swing vote. Certainly if their interests can be put on hold,the LGBT community, which represents less than 5% ofthe population, can wait for the right to join a military they are never going to join anyway.
I don’t think it will exhaust all that much of the president’s political capital. Almost none, I think. But it’s a vote that many endangered Democrats will not relish on the eve of election day.
And you’re being deliberately obnoxious when you say that gays do not and will not serve in the military.
Tell that to this guy. Or this guy. Or these guys.
Thanks for the intelligent response, BooMan. You are the best.
I’m not sure about Diamond, but it looks like Obama made some solid nominations to the Federal Reserve board.
I wrote something about this earlier on my own facebook page. This was when I first heard rumors about their appointments. Here’s my thoughts:
When it came time for the Fed Chairman nomination, I didn’t have much of an opinion. I didn’t care if Bernanke was reappointed, and I didn’t care if he wasn’t. The fact was that he would still be on the Fed Board no matter what, and I have liked most of the Fed’s policy since the crash happened in 2008. What really mattered to me was who Obama would nominate to fill in the Fed Board of Governors chairs. These nominations are like nominations for the Supreme Court, except for control of monetary policy instead of our judicial system. They will be Obama’s chance to leave his mark. You will be pleased to hear that Obama’s choices are, well, stunning, and out of the park.
Thanks seabe. This is not something most of us have gotten into, so it’s a relief to see a well-informed positive take on the nominations.
Of course there are contrarians, you see. So take with this what you will:
http://cunningrealist.blogspot.com/2010/03/status-quo-continues.html
I’m not sure what this guy’s political views are or who he wants instead. However, he voted for Obama.
Ew, but I did just read this:
http://cunningrealist.blogspot.com/2010/04/shitty-deal.html
I’m not sure what he wants accomplished here, or anything. In fact, what he’s arguing for here is absolutely atrocious. No bailouts if this were to happen again? Does he expect us to just let them all collapse? Does he want some method for receivership? I don’t know what he’s advocating for.
Great post, BooMan. I think it’s always important to remember what’s been accomplished.
I don’t mean to nitpick, but didn’t you say the HCR bill was shit a few days ago, and how is that reconciled with “the health care bill was the most significant progressive legislation passed in this country since the passage of Medicare in July 1965?”
All I’m trying to point out is that when people on the left describe the bill, they really shouldn’t refer to it as ‘shit’. Caveats are fine, but there’s no need to degrade this incredible accomplishment.
The irony is that both statements are true.
That may be so to you, but I think it’s more accurate and better politics to frame it like Sherrod Brown or Bernie Sanders and say it’s a good bill, but just a start.
See the difference?
I’d rather call it as I see it. It’s a piece of shit bill. But if you’re uninsured, it’s the most important bill passed in 45 years.
” But if you’re uninsured, it’s the most important bill passed in 45 years.”
Wasn’t that pretty much the goal?
that was the minimum goal. I think nearly all progressives wanted to begin a process of winding down employer-based private for-profit insurance. That did not happen, and it was a major lost opportunity.
thanks for the explanation.
Do you just try to be weird?
Me? How so?
Booman.
you think it’s weird that the greatest political accomplishment of our lifetimes was a piece of crap bill?
Okay.
Doesn’t make me weird though.
Read it again:
“the greatest political accomplishment of our lifetimes was a piece of crap bill.”
Deeply tragic or just weird. You choose.
Neither, just realism.
Our liberal-socialist agenda took a small step forward. Let’s not exaggerate. If we don’t move medical care reform towards the social democracy model of the European democracies, the single-payer (government run) or Medicare for All model, we will have lost, because corporate medicine will have retained its power and laughed at us on its way to the bank.
All else is meaningless, because I’m not certain average Americans in this day and age, who are still deep into the Reagan-Bush greed philosophy, care about the Afganistanians. Only a few appreciate the plight of the Afganistanians.
Most people call them ‘Afghanis.’
From a strictly partisan viewpoint, seems to me it still makes sense to stand up for immigration reform this year by introducing a bill. Whether it passes or not or is filibustered to death is irrelevant to what it will do for the Dems’ profile as fighters for the values of democracy, compassion, and justice.
I disagree with you on the healthcare bill being “shit”, and the financial bill may be a decent progressive move depending on its final form, but reports on the energy bill so far suggest that it’s going to be a big disappointment from the start and not the decisive move away from the dead dinosaur economy some of us hoped for. We’ll see, but I suspect an immigration bill would be more ready for prime time than the energy one.
A week ago I thought doing IR this year was a bridge too far. But watching the insanity of the last few days, I may change my mind.
It’s almost spooky how events have handed Dems golden opportunities to stand up for real progressive policy. The AZ loonies for immigration and the devastating oil spill for energy. Both provide vivid lessons in the non-value of tiny tweaks to the status quo.
Immigration reform will be an election issue. It will be taken up some time in the summer and the debate will likely be still going in November. Democrats are betting that the folks that are for draconian reform are already going to be voting Republican and that the issue will turn out Hispanics and even cause some Hispanic Republicans to vote for Democrats.
If Democrats carry the day in November, it likely will be passed in the lame duck session. Otherwise, all bets are off.
What is apparent is that Hispanics are already getting highly mobilized because of the Arizona immigration law. How mobilized will be shown on May 1.
The problem w/ liberals like you is you ar eprepared to accept the legisaltion as the be all and end all for financial reform. You accept the idea that the legislation is actually good.
A week ago in order to find one Republican vote the President offered to do away w/ the fund to close ailing financial institutions. That’s fucked up because the fund was going to take assets away from the firms, lock it up and not let them use it for leverage. It was like a prepaid life insurance policy. It would act not as an incentive to moral hazard but a check because it was designed to reflect a firms financial assets. As such large firms where going to watch small ones like a fox because if they blew up they were going to lose real money and then would have to re-up to replenish the fund. Small ones would be watching the large ones because the loss to them would be a substantial hindrance to their operations especially when they had to re-up and they wee leveraged up.
In addition it doesn’t reflect the problems cited here by Nomi Prins:
Speculating Banks Still Rule — Ten Ways Dems and Dodd Are Failing on Financial Reform
None of this is reform. We are better off with nada than vapid promises and a false sense of security.
April 14, 2010 |
As we wind up for another dramatic bipartisan squabble over all the crap Wall Street flung at us, things are getting back to normal – for the wealthy. The top 25 hedge fund managers made a record $25.3 billion dollars in 2009. And despite all those dramatic congressional hearings, average compensation of Wall Street bankers rose by 27 percent in 2009. Meanwhile, banks are hiding their debt with the same old balance sheet magic they’ve been deploying for years and posting record new trading revenues–putting the economy at risk while creating no perceptible economic benefits.
On the other side of humanity, more sobering numbers include a record 2.8 million properties in foreclosure for 2009, a 21 percent increase over 2008’s astonishingly high figure, with another 4.5 million foreclosures projected for 2010. Federal mortgage modification plans have not stemmed this tide, because lenders aren’t required to particiapte; and lenders, in the words of Herman Melville’s Bartleby, “would prefer not to” renegotiate a mortgage for which they’d then have to book a loss. As foreclosures continued to climb, so did bankruptcies, rising 35 percent in 2009 over 2008 levels.
Banks — shockingly — aren’t helping. They posted their lowest lending rates since 1942; despite all the subsidies and cheap money they received from, well, us, including exceedingly low Federal Reserve loan rates (zero to 0.25 percent interest).
That brings us to Bubble Lesson 101, Greenspan and Bernanke edition:
Cheap Money + Intensified Trading = Disaster Waiting to Happen.
Banks are incentivized not to lend. When the Emergency Economic Stabilization Act (which included TARP) was passed in October 2008, it included some fine print allowing the Fed to pay banks interest on reserves (money, or capital, banks are obligated to park with the Fed to back their businesses), and on extra reserves (money they aren’t obligated to park). In September 2008, the top banks were required to keep $43 billion dollars in reserve at the Fed, and placed $59 billion in extra reserves. Today, banks are required to keep $63 billion in reserves, but parked an extra $1.2 trillion at the Fed.
Meanwhile, banks are using other federal funds to bolster speculative operations. The biggest banks, such as Bank of America, J.P. Morgan Chase and Wells Fargo, are on a dangerous cycle of higher trading profits and mounting losses in their consumer businesses. In other words, banking businesses that are tied to the real economy are dying, but raw gambling disguised as finance is doing fine. Wall Street is making money by rolling the dice – again. All this risky activity seems to be going unnoticed in Washington. Without major reforms, the next crisis is going to be worse than the last. Because if you pump enough money into anything, it’ll look good temporarily, and that seems to be all politicians in either party really care about. But without major reforms, the next crisis is going to be worse than the last.
Today’s juvenile partisan antics guarantee no meaningful reform bill will be produced, and mock our own history of bipartisan bank reform. In 1932, Senate investigations into the behavior of banks that precipitated the 1929 stock market crash were commissioned by a Republican Congress under Republican President Herbert Hoover. They continued under Democrat President Franklin Delano Roosevelt and substantive reform was passed, including the Glass-Steagall Act that decisively separated speculative from consumer oriented banks. Equivalent investigations this year are a joke.
Senate Banking Committee Chairman Christopher Dodd’s financial “reform” proposal (Barney Frank’s wasn’t much better) won’t change the nature of anything Wall Street does. Dodd’s needless watering down of a proposal to create a new Consumer Financial Protection Agency has been well-documented, so here is a list of 10 other problems Dodd’s bill will not fix:
a) Banks that claim they trade on behalf of their customers (which they all say they do) escape the rule.
b) Banks that trade for “market-making” purposes (i.e. Goldman Sachs betting against its own clients) are home-free.
c) Banks aren’t required to itemize their trading operations to regulators, so they get to decide what they consider trading for their customers and what they consider proprietary. I wonder how that will work out.
If the Fed does funnel money to these entities, the Fed must report the details of this assistance to Congress within seven days, unless the Fed believes it would “compromise the program or financial stability.” It then can delay disclosure of the recipients as well as the size of the loan and collateral pledged under the facility for a full year. If, after one year, the Fed still feels disclosing this information would be “counterproductive,” then the Fed “must” provide a report to Congress explaining why within 30 days, and report on a yearly basis until the “disclosure is complete.” There is no time limit for this ridiculous process. It could literally go on for decades. Should the Fed decide not to make the required disclosures– drum roll please–the Comptroller General should issue a report to “evaluate whether that determination is reasonable.” And, there we are, back to square one, with big, secret bailouts.
10) It won’t prevent bank failures by separating speculative banking from deposit-insured commercial banking a la Glass Steagall, but instead contains plans for resolving them, after the fact. The funeral plans include asking large companies to submit “living wills,” and to be penalized with higher capital requirements and growth restrictions if they don’t submit acceptable plans. The scary reasoning for this funeral blueprint is that, “Plans will help regulators understand the structure of the companies they oversee and serve as a roadmap for shutting them down if the company fails.”
Ostensibly, this confirms that regulators don’t understand how these banks operate now. But these living wills won’t help shut down big banks. They conduct millions of dollars worth of trading operations, including complex derivatives trades, every single day. The living will would be out of date hours after it was authored.
None of this is reform. We’re actually better off with no legislation than we are with this vapid 1,336-page opus–the false sense of security it creates will only encourage greater risk-taking. If the Dodd bill passes in its current version, we absolutely, unequivocally will see another system-wide crash that will invoke greater hardships on the country than the last collapse
You have to understand it is not simply a matter of following the money. It is what the mone is allowed to do.
Here’s the bill summary (pdf).