Soviet Socialist Republic of Wall Street

ILLUSTRATED: To explain how we'd handle Wall Street, just make the sports analogy: you need referees to play the game. Sports are still exciting with records broken.

What a ten day stretch! We have a federal takeover of the secondary mortgage market (Fannie Mae and Freddie Mac) and now the Federal Reserve has an 80% stake in A.I.G., the global insurance and re-insurance giant. Well it took over 28 years, but George H.W. Bush is vindicated: Voodoo economics is now exposed as pooh pooh economics.

Points to get across:
-75 years ago, FDR was called a socialist with his banking reforms. What he did was set up capitalism to be self-sustaining.
-The key to reducing government's bad influence on markets is not necessarily cutting regulation, is it cutting the deficit. Then the government doesn't compete with business for borrowed capital. Bill Clinton and Robert Rubin understood that.
-Democrats set up a process to properly allocate resources throughout the economy. Sure on April 15 the rich a bit more in taxes, but it is an investment in a lower deficit,...which leads to lower interest rates (Wall Street's tax, or the price of money). So pay more out of pocket to Uncle Sam, and we stop swiping the national credit card. By running deficits, we either pay more in taxes eventually or higher interest rates.

Meta-themes: Process and Resource Allocation

ILLUSTRATED: When the regulatory process breaks down, and when resources are concentrated in a few, disasterous financial meltdowns happen. This would not have happened, not as bad anyway, if Gore were president.

Sunday is supposed to be a day of rest. However the New York Times called September 14, 2008 "one of the most dramatic days in Wall Street’s history." Two of the largest investment banks, Lehman Brothers and Merrill Lynch disappeared. Lehman to liquidation, and Merrill to acquisition. Insurance giant A.I.G. is also in trouble. A week prior, the government took over Fannie Mae and Freddie Mac, effectively socializing the secondary mortgage market. Today, Alan Greenspan said this is "oh, by far" the worst financial crisis he has seen in his professional career.

Today is the confluence of two pathologies of the Bush Administration: the breakdown of process and the mis-allocation of resources.

First, a breakdown of process. The cult of deregulation continued as the financial sector securitized more and more types of contracts. The lack of regulation ranged from abstract derivates, and derivatives of derivatives, right down to the mortgage brokers who took commissions from clients who obviously could not afford their new homes. A regulatory process is cheaper and more efficient in the long run.
The theme of abrogating process goes to the internal decision making on invading Iraq, the flaunting of the Constitution, and the reneging on international agreements and statecraft.

Secondly, there is a mis-allocation of resources. The irresponsible tax cuts of 2001 and 2003 led to money and credit being concentrated in a few. A few breached securities contracts sent the whole system crashing. Housing is the root of the current crisis. The sub-prime meltdown amounts to a large distribution of wealth, upward.

Bring on the Culture War

ILLUSTRATED: Take issues that are purely social issues seriously, and discuss them seriously.

Susan Neiman wrote on the Huffington Post about how to win the Culture Wars. Now I know what you're thinking, as I have written here before, all economic policies are indeed values based. But there are some issues that may or may not involve government that are really all about values. And remember, voters vote for the candidate/party that best reflects their value system. That's the root of identity politics, or pandering politics.

My annotation of Neiman's piece:
1. Take "values issues" and "the culture war" seriously for its own sake. Neiman points out that conservatives talk about goodness and working toward such a society. Given the GOP platform those are empty promises, but at least on the campaign trail, voters can fill in the emptiness. Democrats need to talk about why are policies are "good and moral", not just "smart".

2. Don't be afraid to be corny talking about values. My definition of corniness is being honest about your feelings without any pretense. While framing, and metphors, and narratives, are important, Neiman says that non-verbally showing conviction is the best way to communicate to voters what you are about. While a lot of Americans are fooled by the GOP's slick communications apparatus, it doesn't take intellectual sophistication to spot a phony.

3. Use their metaphors against them. Such as life (innocents dying in war) and that even religious figures faces moral dillemas. Therefore talk about the root values discussed in religous text and apply them to public policy.

What I think the Obama-Biden message should be

ILLUSTRATED: Spell our our domestic agenda, criticize the damage to our force structure, call McCain a flip-flopper.

Three years ago this week I wrote about what I would do in a day for the party if I were Howard Dean.  Luckily, he's done most of what I hoped for building the party's GOTV operation.  It goes unreported on political talk shows and the like, but it will be worth one or two percentage points on election day.

Now I can pretend to be Robert Gibbs, the communication director for Obama-Biden.  Here are the three points I'd make: first and foremost, a concrete economic plan.  Work with Bill Clinton who can explain any policy to anyone. Second, the only thing that changes the favorable playing field for Obama is a national security crisis, foreign or domestic.  So inoculate ourselves by showing how Bush/McCain has failed us.  Lastly, attack what McCain is saying about himself by calling him a flip-flopper.

1. Make the Economy Work for You.  

-A $1,000 tax cut for the middle class, let's say it again, a $1,000 tax cut for the middle class.  As for the wealthy, they got richer during the Clinton years.  We're simply ending their 8 year tax holiday and returning their rate to that during the Clinton years.

-Get off oil. FDR's science project was splitting an atom. JFK's science project was going to the moon.  Ours will be getting off oil, not just imports, but oil altogether.  It saves the planet, creates new science jobs, and perhaps most importantly, gives us more leverage in foreign affairs.

-Cover all Americans.  Let people buy into an affordable health care risk pool.  We all know that bulk purchasing is cheaper, so the same goes for insurance pools and prescription drugs.  

-End all incentives in the tax code for outsourcing.  Enforce fair trade deals.  Support workforce development for kids and adults.

2. The Iraq War is broken our military and intelligence services

People can debate how much the Surge helped create the lull in violence in Iraq.  But there is no doubt that our force structure is seriously damaged.  Also, we had to take a lot of intelligence assets from Afghanistan and elsewhere to send them to this mistaken war in Iraq.  Who knows how many terror plots are undetected because of this.

3. John McCain is a political flip-flopper

-Taxes

-His own immigration plan

-Torture

-The type of judges he likes would overturn his campaign finance law.

Extra thoughts:

-Don't delve into the Palin dramas for now.  The media is doing that anyway, and it is a major distraction to McCain in getting his message out.

-Wrap up the domestic plan in the language of "reform" to water down the Republicans' patina as reformers.

-Ultimately, illustrate how we'll turn the country around in a few easy steps.

Our convention message, their convention mess

ILLUSTRATED: Democrats think that government is a public trust for the public interest, federal judges should interpret the constitution as if it is 2009 not 1789, and America is stronger working with the world community, not against it.

First, let me thank conservatives in the media for hyping the supposed Clinton-Obama feud and attracting more t.v. viewers to our convention. It is clear that our party is united in it's agenda, including: getting off oil, covering everyone, and getting our economy working for average people again. The American people know what we stand for.

As for the other side, I like the fact that Sarah Palin is on the cover of supermarket magazines. It is distracting frmo whatever message they had. On Wednesday, Palin painted herself as a populist reformer. The ext next McCain indicted his own party and asked the American people to simply vote for him, and ignore his party's policy and judicial agenda.

As I see it, we can defeat him by pointing out the flip flops of John McCain on taxes, torture, and immigration and claim that he makes sudden changes, but that he does them for political reasons. The "straight talk" patina is phony.

For the more sophisticated crowd, also point out that his judges would probably overturn his campaign finance bill.

Two disturbing ascpects of the Republican worldview

ILLUSTRATED: The GOP world view includes arbitrary use of government power as well as a stratified society.

As I will write in the next post, this week's Republican Convention was unsuccessful in putting out a consistent message. There was no coherent theme. McCain talked about how great he is, even though he admitted his party screwed up the last eight years. Palin, the speech everyone remembers, talked about reform. Besides the usual rhetoric about cutting taxes and accountability on capitalists, there was no central narrative of the week.

There were however, two very disturbing insights into the Republican value system. Two quotes from the Palin speech caught my attention. Both were major applause lines in the convention hall.

First, the following line about community organizers is getting a lot of backlash in the media and really offended lot of people:

I guess a small-town mayor is sort of like a "community organizer," except that you have actual responsibilities.

Now, one would think that a party that praises limited government would praise private community organizing. They certainly like outsourcing public duties and extolled incidences like the logistical help that corporations gave during Hurricane Katrina. But the fact that community organizing was mocked suggests that the GOP really sees a society where social capital is not created among the poor, and those people are kept in their place.

Also, there is more evidence to suggest that the rule of constitutional law is not respected. In a poetic line (assuming you agree with abdicating our Constitution in terror) Palin gave her view that we cannot protect the country and the Constitution:

Al Qaeda terrorists still plot to inflict catastrophic harm on America ... he's worried that someone won't read them their rights?

The battle lines are clear, and Democrats must stick to our principles and say them on the campaign trail.