Volcker Rules

No issue is more critical to ensuring our nation’s long-term economic health than addressing America’s dysfunctional financial regulatory system. Unfortunately, like so much legislation lately, the Obama administration’s economic reform agenda has fallen victim to prolonged partisan gridlock in the Senate.

However, it looks like bank reform has finally found its champion: Former Federal Reserve chairman and current chief of the President’s Economic Recovery Advisory Board, Paul A. Volker.

Volcker deserves to be commended for his role in shaping legislation that, according to The New York Times, “Would ban banks that take federally insured deposits from investing in hedge funds or private equity funds and from making trades that are for the benefit of the banks, not their customers, a practice known as proprietary trading.”

As stated in the U.K.’s Telegraph, the act will also, “block banks from takeovers that would give them in excess of 10% market share.”

Modeled on the Depression era Glass-Steagall Act, the so-called Volcker Rule would play an essential part in preventing financial institutions from becoming “too big to fail” and prohibit them from engaging in the sort of risky trading practices that brought about the financial crisis in the first place.

President Obama voiced his approval for the measure in January and, as The Times reported, its supporters include, “five former Treasury secretaries, elder statesmen like William H. Donaldson and John S. Reed and prominent investors like George Soros.”

Testifying before the Congressional Oversight Panel on Thursday, Citigroup CEO Vikram Pandit also endorsed the rule, “Banks should operate as banks, focused completely on serving their clients.” Pandit also spoke up in favor of, “regulations that promote transparency, particularly in the derivatives markets.”

“We are selling 40 percent of the company…We are breaking it up…This is a different company,” Pandit continued. After offering this rare mea culpa, he also acknowledged that “Citi owes a large debt of gratitude to American taxpayers.”

Not only is this Wall Street CEO’s honesty refreshing, but his observations also demonstrate how vital the Volcker Rule is to ensuring that financial institutions don’t repeat the mistakes of the past.

Pandit concluded his testimony by backing improved safeguards for consumers of financial products, “Recent experience reinforces the truism that what is best for consumers is also best for the financial system and the economy. I strongly believe that consumer protection can and should be strengthened at the federal regulatory level.”

Unfortunately, Congressional Republicans don’t share Pandit’s view and they’re fighting the creation of an independent Consumer Financial Protection Agency with all their might.

As The New York Times observed, “Most Republicans object to a new freestanding regulator with broad authority, while most Democrats back proposals to create a regulator that can operate with substantial independence.”

As a compromise, Senate Banking Committee chairman Chris Dodd (D-CT) suggested burying the agency within the existing framework of the Federal Reserve.

However, even this major concession isn’t enough to satisfy Senator Richard Shelby (R-AL), the Banking Committee’s ranking Republican. “It doesn’t matter that much whether it’s housed in the F.D.I.C., housed at Treasury or housed at the Fed…I think it will be a no-go for the Republicans,” Shelby said.

The senior senator from Alabama’s stubborn refusal to adopt common sense consumer protections provides further evidence of the Republican Party’s prime directive: protecting the interests of large banks, corporations and the rich at everyday Americans’ expense.

Housing the proposed agency within the Federal Reserve is a watered down half-measure at best and even that’s not enough to satiate the GOP’s unquenchable thirst for obstruction.

After all, this is the same agency that turned a blind eye to the dubious derivatives trading that ultimately led to our recent financial collapse. There’s no evidence that the Fed would fair any better the second time around.

This sentiment was echoed by Senator Jeff Merkley (D-OR), who said on Wednesday, “I’d have to be convinced that the culture of the Fed has gone through some radical change,” before consenting to Dodd’s concession.

Perhaps Times columnist and Nobel laureate Paul Krugman said it best, “The only way consumers will be protected under future antiregulation administrations — and believe me, given the power of the financial lobby, there will be such administrations — is if there’s an agency whose whole reason for being is to police bank abuses.”

Passing a financial regulatory reform bill that includes both the Volcker Rule and an independent Consumer Financial Protection Agency is essential to securing our nation’s economic stability.

The statements of a former Federal Reserve chairmen, five former Treasury secretaries, a Wall Street CEO, at least one U.S. Senator and a Nobel prize winning economist all attest to this. Richard Shelby and his fellow Republicans owe the American people an explanation as to why they obtusely refuse to accept these crucial reforms.

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An Exercise in Rhetoric

Thursday’s health care summit was what it was: an exercise in rhetoric. Republicans reprised their familiar routine of propaganda and political theater. Democrats dug in, sticking mostly to the same talking points they’ve been repeating for over a year now. And the President persistently attempted to bridge the gaps and break the deadlock between them, to no avail.

The G.O.P.’s resident prop-comic, Rep. Eric Cantor (R-VA), sat perched behind a mountain of paperwork comprising the Senate health care bill; a hackneyed jibe that prompted President Obama to call Cantor out, “When we do props like this…these are the kinds of political things we do that prevent us from actually having a real conversation.”

Unfortunately, it was obvious from Senator Lamar Alexander’s (R-TN) opening remarks onward that Republicans never intended to have a real conversation about health care. Rather than focusing on areas of potential agreement, like medical malpractice reform, the senator chose instead to misrepresent the facts about health insurance premiums.

Alexander audaciously declared that, “for millions of Americans, premiums will go up.” However, his standpoint fails to account for the ample federal subsidies that will bring down overall costs for most Americans buying health insurance on the open market.

As New York Times columnist and Nobel laureate Paul Krugman observed, “The ‘price of a given amount of insurance coverage’ would fall, not rise — and the actual cost to many Americans would fall sharply thanks to federal aid.”

Senator Alexander wasn’t the only Republican stretching the truth, either. In the midst of the proceedings, Rep. John Boehner (R-OH) issued a statement insisting that, “Democrats’ job-killing health care proposals do not implement a single major GOP reform that would lower costs for families and small businesses.”

Boehner produced absolutely no evidence supporting his claim that the Democratic plan is “job-killing” and his assertion that Republican ideas have been excluded from reform proposals is utterly false. Monday, the White House released an eleven-page plan incorporating ideas from Rep. Mark Kirk (R-IL) and Rep. Peter Roskam (R-IL) as well as the Republican Study Committee.

It’s also worth noting that the Republican health care plan touted by Boehner covers only three million Americans over ten years at a cost of sixty-one billion dollars. That is a far cry from the comprehensive reform our nation desperately needs.

While his colleagues strutted and preened for the cameras, Senator Jim Bunning (R-KY) revealed the G.O.P.’s true colors. Yesterday, Bunning single-handedly obstructed an otherwise unanimous Senate vote on extending jobless benefits to thousands of unemployed workers nationwide.

When Senator Jeff Merkley (D-OR) implored Bunning to approve the measure, the Republican simply replied, “Tough shit.” If that behavior wasn’t shameless enough, Bunning then lamented that his own intransigence caused him to miss the Kentucky-South Carolina college basketball game.

Bunning’s callous indifference to the plight of everyday Americans struggling to make ends meet exposes the Republican Party’s prime directive: unwavering commitment to defending an unsustainable status quo that rewards and protects the rich at the expense of those less fortunate.

Behind a facade of phony fiscal fortitude, the G.O.P. blindly obstructs legislation essential to our economic recovery, hoping that this cynical strategy will return them to power.

Moreover, by repeatedly refusing to engage in a serious exchange of ideas, Congressional Republicans fail to acknowledge the fundamental truth behind health care reform: that it is an economic and social necessity.

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The Recovery Act is Working

A few weeks ago, in a statement typical of his party’s propensity for propaganda, newly-minted Senator Scott Brown (R-MA) forcefully asserted that the Obama administration’s economic stimulus package, “hasn’t created one new job.”

The problem with Brown’s declaration is that it’s objectively false. On Wednesday, the New York Times published a piece on the bill’s far-reaching impact. The results expose just how deceitful and irresponsible the senator’s remarks were.

According to Times columnist David Leonhardt, the world’s top economic research firms: IHS Global Insight, Macroeconomic Advisers and Moody’s Economy.com agree that, “the bill has added 1.6 million to 1.8 million jobs so far and that its ultimate impact will be roughly 2.5 million jobs.”

Leonhardt then added, “The Congressional Budget Office, an independent agency, considers these estimates to be conservative.”

Unless Senator Brown has a Ph.D in macroeconomics that he’s neglected to inform the public about, I’m inclined to believe these leading economic experts. I’d also challenge the senator to reveal his methodology for researching and subsequently condemning the stimulus.

I suspect the only facts Brown needed to reach his conclusion were that a Democratic Congress passed the bill and a Democratic President signed it into law. For Republicans, that’s enough to oppose any piece of legislation these days, regardless of its importance or effectiveness.

Critics of the bill, like Brown, often cite the fact that it hasn’t sparked a complete economic turnaround in the year since it took effect. However, this is an unreasonable expectation. As of October 2009, only 19% of the $787 billion stimulus fund had been spent and most of that amount came in the form of tax benefits.

As a matter of fact, the stimulus package was never meant to initiate a miraculous, immediate transformation of our entire economy. The Obama administration defines the bill’s purpose as threefold: “to create new jobs as well as save existing ones; to spur economic activity and invest in long-term growth;” and finally, “to foster unprecedented levels of accountability and transparency in government spending.”

In other words, the American Recovery and Reinvestment Act of 2009 is a time-release formula rather than an overnight remedy.

While unemployment remains high, the administration has clearly succeeded in saving and creating jobs, as demonstrated by the aforementioned Times data. According to the Economic Policy Institute, the stimulus bill also achieved its goal of cultivating genuine economic growth.

And, last year, the White House made a $27 billion down payment on overhauling our nation’s dilapidated infrastructure. Over the next few years, billions more will be paid out for this essential investment in our nation’s future.

Far from being a boondoggle, every additional dollar spent on improving infrastructure actually creates $1.57 in economic activity. This provides an added incentive to fix America’s pockmarked roads, crumbling bridges, leaking dams and levees as well as fund many other worthy projects.

On the issues of transparency and accountability, the administration suffered some small-scale setbacks. The most high-profile of these occurred early this year when conservative bloggers discovered that some funds recorded on Recovery.gov were attributed to congressional districts with incorrect or non-existent zip codes.

Recovery Board spokeswoman Cheryl Arvidson addressed the issue, “many recipients entered the wrong congressional district in their reports. This mistake caused us no end of headaches and confusion in the news media, as some reporters mistakenly believed that money had disappeared into “phantom’’ districts.”

Put simply, these errors were little more than glorified typos. But that doesn’t mean Arvidson takes them lightly, “We have now installed internal logic checks in FederalReporting.gov that will prevent such recipient mistakes. If a recipient’s district does not match the zip code entered into a report, the system will not allow the recipient to submit the report until the correct congressional district is entered.”

In addition to the zip code snafu, there were also a few, sporadic instances of Social Security fraud as well as the inevitable rash of sleazy, get-rich-quick-schemes advertising “free stimulus money.”

Despite these minor missteps, the fact that anyone with an internet connection can track the allocation and distribution of resources nationwide constitutes an exceptional degree of public access, especially compared to the previous administration’s penchant for secrecy.

Arvidson’s press release also demonstrates genuine commitment to the principles of “unprecedented transparency and accountability” that the bill aspires to.

So, there you have it. One year on, the Recovery Act is well on its way to accomplishing all of its stated objectives. Next time the junior senator from Massachusetts speaks out of turn, I suggest he do his homework beforehand.

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Biden Strikes Back

Yesterday, after suffering years of media portrayal as a gaffe-prone gaffe-machine and incessant lampooning by humor magazine The Onion (to hilarious effect), Vice President Joe Biden finally struck back.

This Sunday’s political talk show circuit revolved around the debate between Biden and his predecessor Dick Cheney. Their discussion spanned three networks, focusing mostly on the Iraq War and national security policy.

The current and former Vice Presidents squared off in separate segments on NBC’s Meet the Press and ABC This Week, respectively. Then Biden delivered his decisive rebuttal, live on CBS’s Face the Nation.

After almost seven years, the War in Iraq has cost over 4,000 American troops and nearly 100,000 Iraqi civilians their lives, not to mention the countless others scarred for life or the trillions of dollars squandered.

Despite those grim facts, Cheney still refuses to admit that invading and occupying a sovereign nation-state under false pretenses constituted poor judgment on the Bush administration’s part. On the contrary, he actually demanded a “thank you” from his successor.

As he often does, the former Vice President also cited the 2007 troop surge as an example of his administration’s “success” in Iraq. However, this is a half-truth at best.

While the surge was an integral part of our Iraq War policy, it was the Sunni Awakening movement in Al-Anbar province that turned the tide in our favor.

If anyone should get credit for this reversal of fortune, it’s General David Petreus, former Commanding General in Iraq, current chief of U.S. Central Command and architect of our military’s counter-insurgency strategy. He’s the one who deserves a “thank you,” not Bush or Cheney.

On the national security front, Cheney hammered the Obama Administration for prosecuting Umar Farouk Abdulmutallab, the alleged Christmas Day bomber, as a criminal terrorist instead of an enemy combatant.

This designation ensures that his case will be heard in civilian court rather than before a military tribunal. According to the former Vice President, trying suspects in this fashion will make America “less safe.”

Biden responded by exposing the obvious hypocrisy in Cheney’s accusation, pointing out that Abdulmutallab has been treated exactly the same way that convicted shoe bomber Richard Reid was back in 2001.

Then Biden went on the offensive, challenging the Bush administration’s dismal record of trying terror suspects in military court. Of the three defendants who were eventually brought before these tribunals, he noted, two went free and are currently “walking the streets.”

Meanwhile, over three hundred convicted terrorists are currently locked up in American prisons, having been found guilty in federal court during the Bush years. By comparing these results, the more effective strategy becomes obvious.

“He’s not entitled to rewrite history. He’s not entitled to his own facts,” Biden said of Cheney before declaring him to be “factually, substantively, wrong on the major criticisms he is asserting.”

As to what his predecessor’s motivations might be for obscuring the truth, Biden correctly concluded that, “He is either misinformed or misinforming.”

It’s refreshing to see a Democrat, especially one as high-profile as the Vice President, finally come out swinging in the fight against Republican propaganda. In doing so, Joe Biden also struck a forceful blow against those who seek to characterize him as bumbling and incompetent. Above all, he bolstered my belief that our current administration will soon make good on its promise of change.

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Tyranny in Tehran

At last weekend’s inaugural Tea Party Convention, there was much bloviating about “oppressed” Americans “suffering” under the Obama Administration’s “tyranny.” Judge Roy More, former Chief Justice of the Alabama Supreme Court, even delivered a rousing sermon comparing our President to King George III, the British ruler overthrown in the American Revolution.

Nothing better illustrates the utter absurdity of these delusions than contrasting the Tea Party with an actual, grassroots, democratic movement created to confront real, rather than imagined, tyranny.

Last June, protesters took to Tehran’s streets, showing their support for Mir Hussein Moussavi, an opposition candidate in Iran’s disputed presidential election. Allegedly, forces loyal to President Mahmoud Ahmadinejad engaged in widespread fraud at the polls, costing Moussavi his shot at the presidency.

Violent clashes ensued between demonstrators and the regime-sponsored Basij militia. Eventually, one of the Basiji opened fire on the crowd, killing an unarmed, 26 year-old woman named Neda Agha-Soltan. Instead of dispersing the masses, however, Agha-Soltan’s brutal killing galvanized them. Suddenly, the “Green Movement” was born.

More demonstrations followed, with the most recent spate of violence occurring late last year, during Shi’a Islam’s Ashura holiday. These clashes cost at least eight Iranians their lives, including Moussavi’s nephew, who was shot to death by security forces.

Today marks the 31st anniversary of Iran’s 1979 Islamic Revolution. Tensions are running high in Tehran and the government’s well-coordinated clampdown is already underway. Over the last few days, security officials have rounded up dozens of journalists, photographers and students as well as women’s and children’s rights advocates.

Moussavi himself compared this suppression to the worst abuses committed under the hated Shah, who was deposed by the 1979 revolution: “Stifling the media, filling the prisons, and brutally killing people who peacefully demand their rights in the streets indicate the roots of tyranny and dictatorship remain from the monarchist era.”

Despite these draconian measures, the Green Movement’s defiant legions remain undaunted. Daily Beast contributor Jason Shams defines the group’s motto as, “Each Iranian is a media outlet.” And they practice what they preach.

As Shams observes, “the computer students are all over the place with their backpacks filled with flash drives and proxy programs, always a step ahead of the bearded dinosaurs and their dying ideologies.”

Moreover, while Americans generally use Facebook and Twitter to pour over the excruciating minutae of modern life, the Greens employ these social networking websites to disseminate information, plan operations and mobilize their organization.

Armed with camera phones, laptops and an iron will, these courageous individuals communicate their message to the world even without the journalists imprisoned by Ahmadinejad’s repressive regime.

Censorship, harassment, intimidation, coercion, mass arrests, public beatings and de-facto executions by government-sponsored death squads. These are the harsh realities of living under tyranny. If the Tea Party movement’s petulant populists want to witness its horrors first-hand, I implore them to purchase a one-way ticket to Tehran. I suspect they’ll be in for a rude awakening.

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Despicable

I founded Armchair Firebrand as a direct response to Republican obstructionism in our government and the widespread proliferation of Right-wing misinformation throughout our media. In the weeks and months since this endeavor began, those nefarious forces have only grown stronger.

Washington D.C. shut down well before last weekend’s epic snowstorm descended upon our nation’s capitol. Thursday, Sen. Richard Shelby (R-AL) placed a “blanket hold” on nearly seventy Obama Administration nominees currently awaiting Senate approval.

Shelby’s objection has nothing to do with these qualified individuals themselves. Rather, it hinges upon a pair of earmarks, recently eliminated from our nation’s budget, that would benefit his home state of Alabama. Placing these narrow interests above filling so many vacant posts within our government is both irresponsible and inexcusable.

Shelby’s intransigence is also a sharp rebuke of President Obama’s recent request that the G.O.P. govern responsibly rather than blindly obstruct his agenda. If Senate Republicans insist on throwing such temper tantrums every time they don’t get their way, our country will soon become ungovernable.

Even more despicable is the venomous vitriol spewing forth from the Tea Party’s inaugural convention in Nashville, Tennessee. Friday, in his speech at the Gaylord Opryland Hotel, former Republican Rep. Tom Tancredo fervently denounced our President as “a committed socialist ideologue” elected by “people who cannot even spell the word ‘vote’ or say it in English.”

Then there was Sarah Palin, an unsuccessful G.O.P. Vice Presidential candidate and half-term former governor, who reportedly received $100,000 for delivering the convention’s keynote address Saturday night. Palin began with a stunning indictment of optimism and progress, rhetorically asking Obama voters, “How’s that hope-y, change-y stuff workin’ out for ya?”

Meanwhile, Palin’s political paradigm or, to employ her preferred populist parlance, presumably, “that fear-y, status quo thingy,” seems to be working out just fine, at least for her. This self-centered strategy has proven extremely effective in the short-term, upping Ms. Palin’s media profile while lining her pockets at the same time.

However, appealing to people’s irrational fear of change generally brings out the worst in them (a fact demonstrated by the many misguided and offensive slogans spouted at tea party events last summer).

And assuring voters that we can continue consuming resources at or above our current rate is as reckless as it is dishonest. To use a tired metaphor, at a time when Americans must get leaner, Palin is scoring political points by telling us we can eat ice cream every night for dinner and never gain weight or run out of milk.

Journalist Jacob Weisberg recently bemoaned this cheap brand of political charlatanism in his piece for Slate.com, “the politicians thriving at the moment are the ones who embody this live-for-the-today mentality, those best able to call for the impossible with a straight face…Middle-class Americans really don’t want to hear about sacrifices or trade-offs—except as flattering descriptions about how ready we, as a people, are, or used to be, to accept them.”

As Weisberg notes, in our democracy, the buck stops with us: the American People. We’re the ones enabling the despicable words and actions of cynical charlatans like Shelby, Tancredo and Palin by failing to expose the obvious flaws in their logic. Instead, we’re left with a public unwilling or unable to separate fact from fiction and make the tough choices necessary to bring our country back from the brink.

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Separate but Equal?

When Major Alan Rogers was killed by an Iraqi insurgent’s roadside bomb in 2008, the U.S. Army lost a gifted intelligence officer and dedicated soldier. Rogers made the ultimate sacrifice for his country, but the same military he devoted his life to also compelled him to live a lie for nearly twenty years. Just because he was gay.

Unlike their counterparts in Israel, Canada, and the United Kingdom, homosexuals are not allowed to serve openly in the United States Armed Forces. President Clinton attempted to rectify this inequity in 1993 but the backlash from the Right was so severe that he was forced to compromise, leading to the infamous “don’t ask, don’t tell” policy.

The time has come to repeal this insufficient half-measure and honor the contribution of courageous, gay Americans like Major Rogers by inviting them to come out of the closet.

Preparations for this breakthrough are currently underway. On Tuesday, Admiral Mike Mullen, Chairman of the Joint Chiefs of Staff, declared in his testimony before the Senate Armed Services Committee,

“I cannot escape being troubled by the fact that we have in place a policy which forces young men and women to lie about who they are in order to defend their fellow citizens…For me personally, it comes down to integrity — theirs as individuals and ours as an institution.”

It’s refreshing to hear this sentiment expressed by our nation’s top military brass, especially since not everyone shares Mullen’s broad-minded perspective. Earlier this week, the Weekly Standard’s William Kristol fiercely defended “don’t ask, don’t tell” in an editorial,

“There is no basic right to serve in the military. That’s why forms of discrimination we would ban in civilian life are permitted… Advocates of repeal will say sexual orientation is irrelevant to military performance… But this is not clearly true given the peculiar characteristics of military service.”

Not only is Kristol’s argument eerily similar to the rationale for defending segregation during the 1950’s, it’s also very misleading.

Brave men and women like Major Rogers, Marine-of-the-Year recipient Sgt. Justin Elzie and countless others have already proven him wrong with their exemplary service. On the contrary, “don’t ask, don’t tell” is clearly costing us some of our best and brightest soldiers.

Kristol goes on to claim that Democrats have, “No sense that not every part of society can be treated dogmatically according to certain simple propositions.”

He would do well to recall the certain, simple, self-evident proposition that, “all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.”

This idea, so eloquently expressed in our Declaration of Independence, forms the very cornerstone of our republic. Mr. Kristol is fond of using the term “American patriots” to describe his conservative colleagues. I suggest he examine what that term actually means.

For instance, contrast Kristol’s words with those of Leonard Matlovich, a decorated Vietnam veteran and Air Force sergeant who challenged the military’s stance on gays back in 1975, “It was just great pride to be an American, to know I’m oppressed but able to stand up there and say so.”

Now, you tell me, which one of these Americans is more patriotic?

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