Politics Now

Lee cuts new path by working with Democrats

 WASHINGTON — It wasn't often that you saw Bill Paxon or Tom Reynolds standing next to a Democratic congressman at a press conference — but their successor has done just that twice in the last two months.

   In other words, Rep. Chris Lee, the Clarence businessman turned Republican congressman, isn't exactly following the footsteps of his predecessors.

   Instead, he's forging his own path, teaming with Democratic Reps. Brian Higgins and Louise Slaughter on local initiatives and bucking the GOP on its budget plans and an important children's health care bill.

   It's hardly what we could have expected from a congressman who succeeds three consecutive right-wing superstars (including the late Jack Kemp, who tended to have better relations with his Democratic colleagues than Paxon or Reynolds).

   But then again, it was sort of hard to know what to expect from Lee, given that he had never before held public office.

   Now, though, it is becoming clear that Lee is his own man — which, of course, doesn't sit well with everybody. Some Republicans deride him as the country-club sort who's too quick to compromise and too reluctant to follow the party line.

   So, what do you think? How is Lee doing after four months in office?

   — Jerry Zremski

Obama faces 'mission creep' in Afghanistan

  WASHINGTON -  By keeping Defense Secretary Robert Gates, and most likely Gates' team, President-elect Barack Obama may be sliding into a situation similar to one that beleaguered President John F. Kennedy. Kennedy inherited his predecessor's military commitments to South Vietnam and the disastrous and abortive Bay of Pigs invasion of Cuba.

    While Obama has tacitly signed onto the agreement between the U.S. and Iraq for three more years of occupation, Obama has specifically called for an "effective strategic partnership" with Pakistan to help fight the Taliban and terrorists in its neighbor Afghanistan.

    Referring to Afghanistan, Obama has said, "if we combine effective development, more effective military work as well as more effective diplomacy, then I think that we can stabilize the situation."

    Obama has consistently called for shifting troops from Iraq to Afghanistan, and that transfer has already begun, sending troops and resources to a country that has never been conquered by a western military force in all of history. There has never been a formal declaration of war against Afghanistan, where an additional 20,000 American troops will soon be deployed.

    The troops are being sent in response to a request from Gen. David McKiernan, American commander in Afghanistan. Among them will be soldiers from the Third Mountain Brigade, who will be sent from Fort Drum, N.Y. There has been no congressional debate over these deployments, which will last at least 18 months. 

     Bush has used the congressional Authorization for the Use of Military Force passed in 2001 after the 9/11 attacks as his justification to punish enemies in Iraq and Afghanistan. Now, the war in Afghanistan is on automatic.

   Obama will be faced with having to pay for this unannounced Afghanistan "surge" while he is trying to refrain from drawing down too quickly the 140,000 U.S. troops fighting in Iraq.

     Michael Crowley, writing in The New Republic, estimates that it could take as many as 600,000 troops to quell all the tribal tensions in Afghanistan - roughly 10 times the number of soldiers in the multi-national force there now. Even with more troops, sprawling, mountainous Afganistan may not be winnable. 

    The Greek warlord Alexander couldn't conquer it, nor could Queen Victoria's Imperial forces, nor the Soviet Union in 1979. The upcoming budget for the Defense Department is estimated at $584 billion, not counting the increased commitments for Afghanistan. Reportedly, the U.S. expeditionary forces have enough money to last them through June 2009. But Obama and the Democratic Congress will have to face the consequences of mission creep before then.

-- Douglas Turner
    

      
   

Bush's magical, mystery money machine

WASHINGTON - Despite all the noise on the networks about President Bush's bailout, the people who will pay the bill for it, the taxpayers, will not get details until weeks from now, if ever.

However, a few scraps of information have fallen from the negotiating table. First, the tab isn't limited to $700 billion. The legislation really doesn't impose a ceiling on the price tag. It says the Treasury secretary's authority to buy "mortgage related" securities "shall not exceed $700 million at any one time."

The bill gives the Treasury secretary absolute power, according to the Washington Post. The legislation says "decisions by the secretary (of the Treasury) pursuant to the authority of this act are non-reviewable and committed to agency discretion, and may not be reviewed by any court or law or administrative agency," the Post reports.

While President Bush's Treasury secretary, Henry M. Paulson Jr., has warned Congress that credit markets are drying up on Wall Street, not all the bankers there agree with him. One prominent New York City money manager, who spoke only on promise of confidentiality, said Thursday that Paulson is not telling the truth about credit.

"No one here is not getting their money," said the Manhattan money manager. The White House plan is getting hit from left to right and center by spokespersons outside the Washington Beltway.

From the left, ACORN President Maude Hurd said President Bush in his Wednesday night speech neglected to take responsibility for the failure of his regulators to prevent the episode. Why trust a president who created this crisis to solve it? Hurd asked.

Conservative Richard Viguerie called the scheme "economic fascism."

"Conservatives must stand up and say, loud and clear, to their senators and representatives: We will not tolerate any bailout of Wall Street millionaires.

"This is going to be hard for almost every member of Congress, given the culture of corruption that prevails in Washington," said Viguerie, a prominent Republican direct mail entrepeneur.

"Since 2002, the financial industry has given more than $1.1 billion to congressional candidates. And that's not including the hundreds of millions spent on lobbying. Now Wall Street is saying: It's payback time.

"If John McCain supports this bailout," Viguerie said, "he will lose all of the goodwill and support he has gained from conservatives by picking Gov. (Sarah) Palin as his running mate."

A Marist survey reported that 68 percent of the voters polled say it is important for Congress and the president to act, but not right away, while 26 percent want Congress to act this week.

A new Los Angeles Times/Bloomberg poll finds that "most Americans don't believe the government has responsibility for bailing out financial firms with taxpayer money, a core part of the rescue plan Congress is considering to halt the near-meltdown of the nation's financial markets."

Asked whether "the government should use taxpayer dollars to rescue financial firms whose collapse could have adverse effects on the economy, 55% of the poll's respondents said they did not believe the government should be responsible for funding a bailout plan."

Comic Jay Leno had his own take on the controversy on Wednesday: "Oh, more bad news from President Bush. Remember those rebate checks from a few months ago? He wants them back. Yeah! We need to give that money to rich people on Wall Street. They need it more than you do!"

--- Douglas Turner

 

 

Can Congress be trusted to reform Wall Street?

WASHINGTON - Republican presidential nominee John McCain and his Democratic rival Barack Obama are promising to crack down on Wall Street greed if they are elected. But can either nominee or Congress be trusted to discipline the finance and insurance industries that have been so generous to federal candidates?

The nonpartisan Center for Responsive Politics says that donors from the financial/insurance industries have already given $47.4 million to presidential, congressional and Senate candidates in the 2007-2008 cycle. Sen. Obama, D-Ill., is the biggest recipient, the center says.

Finance/insurance is the third largest industry category. Ranking ninth is "miscellaneous finance" with $20 million in donations in this cycle so far. The largest recipient of this money is Obama.

These industries have been very generous to the Democratic chairs who are assigned to oversee the federal watchdog agencies. Senate Banking Chairman Chris Dodd, D-Conn., received $110,000 from finance and insurance donors to his campaigns. The amount comprised more than 90 percent of all the political action money Dodd got for his Senate campaign committee.

As chairman since January, 2007, Dodd has done little or nothing to question the behavior of the financial giants that have received or are asking for massive taxpayer bailouts. He ran for president instead.

In the House, Financial Services Chairman Barney Frank, D-Mass., has already received $476,000 in campaign gifts from the financial services and insurance industries for his 2008 campaign - representing two thirds of all his PAC contributions. Since 1980, Frank has received $1.8 million from this sector, according to Congressional Quarterly's MoneyLine, another nonpartisan tracking organization.

The Center said Obama's campaign treasury collected about $400,000 from employees of Lehman Brothers, which declared bankruptcy on Monday. McCain's campaign got $145,000 from Lehman employees.

Since 1998, the financial services industry has spent $3.2 billion on lobbyists whose job is is to persuade Congress not to increase regulation of the business, and talk the Clinton and George W. Bush administrations into looking the other way.

Because of Supreme Court rulings, very few limits can be placed on the amount of contributions these industries make to a candidate or the funds spent on lobbying Congress and the administration.

--- Douglas Turner

      

Beijing bars U.S. gold medalist for Darfur activism

    WASHINGTON - House Speaker Nancy Pelosi, D-Calif., has called on President Bush to persuade the Chinese government to reconsider its order barring from attending the Olympic Games a U.S. gold medalist who is an activist on the issue of genocide in Darfus.

        Joey Cheek, who won gold in speedskating in the 2006 Winter Games, said Wednesday the Chinese revoked his visa entitling him to take part in the opening ceremonies.

           Cheek is a co-founder of Team Darfur, an organization that calls attention to the plight of a Sudanese minority population in Sudan. He helped raise $1 million to help children in Darfur.

         Pelosi said, "In the coming days, President Bush will arrive in Beijing. I call on President Bush to secure the entry of Joey Cheek and other U.S. citizens who have been barred from attending the Olympics because of their beliefs, [and] advocacy for the people of Darfur and human rights in China and Tibet."

         "The Olympic Charter," Pelosi said, "states that "Any form of discrimination with regard to a country of a person on the grounds of race, religion, politics, gender, or otherwise is incompatible with belonging to the Olympic Movement.'  The International Olympic Committee is tolerating clear violations of both the Olympic ideals and the commitments the Chinese government made in order to host the Olympic Games."

      Bush's press secretary, Dana Perino, speaking aboard Air Force One today as Bush flew to Thailand, his final stop before reaching Beijing, said:

      "We were disturbed to learn that the Chinese had refused his visa. We are taking the matter very seriously.  We have sent in our embassy in Beijing to démarche the Chinese. That is where we go in and we say we are concerned about this, and we want you to reconsider your actions.  So we would hope that they would change their mind."

        The Cheek episode focuses attention on China's role in what many human rights observers call a holocaust. The New America Foundation said China has been an arms "supplier of last resort" to not only the brutal Sudanese government, but also to the junta in Myanmar, formerly Burma, and to Robert Mugage, the dictator of Zimbabwe. The full report may be found at www.newamericafoundation, under "press room."

  --Douglas Turner

 

 

 

Did Schumer spur a bank run?

Sen. Charles E. Schumer, D-N.Y., is defending himself against Bush administration charges that letters he sent to bank regulators spurred a depositors' run on the IndyMac bank, its collapse and seizure by the Federal Deposit Insurance Corporation.

The Pasadena, Calif., bank, which specialized in the riskiest types of mortgages, was seized by the FDIC on Friday. It is the largest regulated thrift institution ever taken over by the FDIC. Estimates of the cost of the federal takeover range from $4 billion to $8 billion.

On June 26, Schumer, a member of the Senate Banking Committee, wrote to four regulatory agencies saying, "I am writing to you out of concern for the safety and soundness risks posed by IndyMac. The regulatory community may not be prepared to take measures that would help prevent the collapse of IndyMac or minimize the damage should such a failure occur."

As it happened, depositors withdrew $1.3 billion from IndyMac in the 11 business days that followed Schumer's letter, according to the Associated Press.

On Friday, the director of one of the regulatory agencies blamed the bank's failure on the run that followed Schumer's letter. John M. Reich, head of the Office of Thrift Supervision, told the Washington Post that the run frustrated efforts to sell IndyMac  by spooking off potential investors.

However, when Schumer wrote to the four agencies, IndyMac had already lost 97 percent of its market value in a year.

Reich told a conference call "when a member of the U.S. Senate makes such a public statement, it doesn't take much to frighten the depositors of an institution. It was an unprecedented act on the senator's part and the result speaks for itself."

At a press conference Sunday, Schumer said "the regulator here was asleep at the switch. The (Bush) administration is doing what they always do, blaming the fire on the person who called 911."

Schumer said his June 26 letter provided "no new revelations" about IndyMac, but merely pointed out problems that had been accumulating for a long time. Schumer is the third-ranking leader of the Democratic majority and is chairman of the Senate Democratic Campaign Committee.

The effect of public statements on bank solvency has been debated for decades. CNBC, the cable financial network, briefly carried a sensational headline on Friday about the federally chartered mortgage backer, Fanny Mae, which is now the subject of a proposed federal bailout. The headline said falsely that Fanny Mae was conducting a "going out of business sale."

Today, the New York Times predicted that up to 150 banks out of 7,500 will fail in the U.S. in the next year to year and a half.

What to you think about the effect of such publicity on the health of these institutions?

--- Douglas Turner

      

Is Zogby slam on reporters valid?

     The polling organization Zogby International used data showing a growing number of Americans are getting their news from the Internet to say that "traditional" journalists are "out of touch" with their communities.

          "Two thirds of Americans, 67 percent," Zogby said, believe that traditional reporters, meaning those who work for radio and television stations, newspapers, and specialized Internet sites have sailed off on their own.

           The primary evidence for this indictment of professional journalists cited by Zobgy is a poll showing that nearly half of the respondents, 48 percent, said the Internet was their primary source of information and news, up from 40 percent a year ago.

           Fifty-five percent of respondents 18 to 29 years of age cited the Internet as their primary source.

            Nowhere in the Zogby press release does it mention that almost all of the news content generated by search engines such as Yahoo and Google is from the work of "traditional" journalists working for the Associated Press, newspapers, radio and television outlets or a dot-com sponsored by such magazines as Newsweek, or cable networks -- where all the news is prepared by "traditional" reporters.

         The survey also contained questions that looked like thinly veiled preachments about how "traditional" outlets need to professionalize and "get in touch" with their communities.

         Zogby spokesman Fritz Wenzel forwarded the complete text of the questions asked by the company's polltakers. Nowhere in the survey offered to the poll's subjects does Zogby note that traditional journalists are providing almost all the news put out by Internet search engines.

       The press release may be found at www.zogbynews.com.

   

    Was this survey a bit tilted?

-- Douglas Turner

Are the media pushing a recession?

   Standard economics holds that the nation is in a recession, which is a serious business slump, when it suffers negative growth for nine straight months, or three quarters if you prefer.

   In the final quarter of last year, the U.S. economy grew a miniscule six tenths of a percent. But it was still growth of the gross domestic product. Not "negative growth."

    Although the stock market rallied last week when the Federal Reserve cut interest rates from 3.75 to 3.00 in one fell swoop, the nation's coordinating bank cut the rate again to 2.50 percent on Wednesday.

      Peter Morici, the University of Maryland economist, said this latest cut won't make much difference because, to summarize, many lenders are scared. Which illustrates that most business climates ride to a certain extent on consumer and lender confidence. Morici said Federal Reserve Chairman Bernard Bernanke did this latest cut mainly because the markets expected it.

      But are the screaming commentaries by TV reporters on stock market and commodities floors driving this pessimism, and doing their own job of undermining lender confidence?

      Typical of his hyperactivity is a survey put out by Financial Times/Harris poll that "large majorities" in Europe and the U.S. believe that business will be worse this year than last. The "large majorities" cited by FT/Harris include 54 percent in the U.S. and 56 percent in France.

      At the same time, FT/Harris says that pluralities in the U.S. and the European nations feel their individual situations will be about the same this year as compared to 2007. Go figure.

        What's your expectation for the region, the nation, and personally in 2008?

       --Douglas Turner

China the next superpower?

     Some see the rise of Communist China at the expense of the U.S. played out every day. University of Maryland economist Peter Morici doesn't put it quite that way, but on Wednesday he reported that this country's overall trade deficit reached $57.8 billion in October. That's equivalent to one-twentieth of all the goods and services produced in this country for that month.

     A little more than half that deficit is with China, and it is rising almost every month. Our trade deficit with China has increased five-fold since 2001.

     The trade deficit weakens the purchasing power of the dollar worldwide, prods inflation, makes it harder for people to borrow money for houses and cars, and get credit generally. It also feeds pressure for a recession, which if it happened could double our trade deficit, Morici says.

      By concidence, a report was released almost the same day as Morici's report on what the Chinese think about themselves and us, and what we think about the Chinese. The survery was commissioned by The Committee of 100, a non-partisan group of Americans of Chinese descent.

       The Chinese themselves appear to be more conscious than Americans of who is going to win any struggle for supremacy between the two powers. More than half the Chinese surveyed -- 55 percent -- see China emerging as the number one global superpower in the next twenty years. By contrast, half of the Americans polled think that the U.S. will remain on top, with China ranked second after two decades.

         Americans and Chinese agree on who will be the major influence in the Pacific basin in 20 years--China. Americans said that after China, the U.S. will rank second in Asian influence, followed closely by Japan and South Korea. 

           In China, 74 percent Communist Party members polled think their regime will come out first in Asia in 20 years. Americans are more anxious than they were two years ago about China military aims. Younger Americans tend to view China more as a threat than as an ally.

            A majority of Americans -- 54 percent -- blame China for job losses in this country. But nearly three quarters of leaders polled in China disagreed their nation's practices are costing American jobs.

           China maintains its huge trade surplus with the U.S. by manipulating its currency. China deliberately undervalues its yuan so it can sell cheap goods to Americans. Borrowing from China is helping to pay for our war efforts in Iraq and Afganistan.

        The Chinese central bank is on track to purchase $450 billion in American and other foreign currencies this year. Morici says that and currency manipulation amounts to a Chinese subsidy of 45 percent on its exports. The games China plays with its money also raises barriers to imports from the U.S. and other countries.

          Morici said China routinely violates its treaty obligations under the World Trade Organization by providing subsidies and tax breaks to its manufacturers.   

          Will America's addiction to Chinese goods and our government's weakness in confronting China on its broken currency and treaty obligations break the American economy and reduce us to a second-rate power?

--Douglas Turner

      

Saudi rape update

Feeling the heat at the Annapolis, Md., Mideast Peace Conference, the Saudi Arabian foreign minister has announced that a sentence of 200 lashes against a Saudi woman who was raped will be reviewed. She was also sentenced to six months in prison.

  What Prince Saud al-Faisal, the foreign minister, said in Annapolis was 180 degrees from statements made over the weekend in which the kingdom's justice ministry condemned the woman, who had been gang raped by seven men, as a "loose woman."

The ministry, in an attempt to neutralize the outrage from Western nations over the sentence, had called the rape victim an adulteress who had purportedly admitted cheating on her husband. The ministry noted that she was in a car with a man who was not a relative, a crime under Saudi law.

President Bush did not ask King Abdullah to rescind sentence, as demanded by Democratic presidential hopeful Hillary Rodham Clinton. But Bush's press secretary, Dana Perino, condemned the sentence in unusually harsh language.

"I don't think it matters if you're a female or a male," Perino said. "I think that the situation is very discouraging and outrageous."

-- Douglas Turner