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EJ
01-19-10, 11:37 PM
http://www.itulip.com/images2/itsalive300.gifWhy Scott Brown won

Here in Massachusetts, a state with three times as many registered Democrats as Republicans and half of voters are independent, the senate seat previously held by the nation’s most famous Liberal Democrat, Ted Kennedy, was tonight lost to a relatively unknown Republican, Scott Brown. He beat the supposed Democratic shoo-in Martha Coakley by a narrow margin.

Political analysis will chalk the loss up to Coackley's lack of charisma and her endorsement of the Obama health care plan. But Massachusetts has a long history of electing less than electrifying candidates to office, and it's not the health care plan itself but what it represents that puts voters off. There was more to this election than meets the eye.

What did Coakley do wrong and what did Brown do right, and what does it mean for the 2010 Congressional elections in November?

What Martha Coakley did wrong


Didn’t campaign hard from day one. Voters don’t want an entitled public servant to replace one of the nation’s most famously hard working, Ted Kennedy. Unemployment may be at 10%, but the other 90% still have jobs and are paddling hard just to stay in place, and many are drifting backwards no matter how hard they try. They want their representatives to work as hard as they do and show them how they can start to move forward again.
Over-used an association between Brown to Bush. Scott Brown is not GW Bush. Anyone who listened to him for one minute knew it, and the flimsy guilt-by-association tactic insulted every voter’s intelligence and reeked of small-minded party politics.
Vilified bankers and capitalists. Americans are capitalists. They don’t hate the rich, they hate those who gain by unfair advantage. They don't hate bankers for banking, they hate bankers of buying influence that produced great wealth at taxpayer expense, and excessive risk taking that resulted in an financial crisis that wrecked the economy. But they blame the bankers less for buying the favors than they do the politicians for selling them. As many Democrats and Republicans swam in that sewer. Red or blue, they came out smelling is just as bad. Making it a party issue was a mistake.
Over-played the role of government in solving economic problems. Americans fear excessive interference by the state in the one part of the economy that they know really can create jobs. No, not the government, the private sector. Coakley said she’d crack down on abuses by Wall Street and protect Main Street. She thought she was tapping into voter anger at the abuse of power by a financial elite but instead voters heard a promise cut off the lifeblood of the economy, the businesses that create jobs, with more taxes and regulation.
Over-played the traditional role of the Democratic Party as better representing the interests of the middle class than the Republican Party. If that is true, then why did Obama administration hire Goldman Sachs executives to rescue Wall Street and run the economy? The hypocrisy is not lost on voters.

In short, Coakley’s campaign treated Massachusetts voters as stupid and illiterate. Voters saw through the Coakley campaign’s lame and cynical attempts to exploit their anger and frustration over the mess that both the Republican and Democratic administrations created over decades. They do want heath care reform, but reform that helps them not the elected campaign contributors of their elected officials.

But it took more than blunders by the Coakley campaign to lose a race that was once considered over before it even started.

What Scott Brown did right


Confronted the worries that keep voters awake at night. How are we going to get the economy growing again without expanding the enormous government debt that threatens our and our children's future?
Addressed problems with basic, common sense solutions that cut across party lines.
Claimed independence from special interests. Obama ran on the same platform. Time will tell if Brown keeps the promise.

The Brown won because of his mostly non-ideological, practical, market-based solutions to our nation’s economic and social problems. He is fiscally conservative and socially liberal. He is by any other name a Libertarian but without the baggage that the Libertarian Party has collected over the years.

Lesson for Congress

The operative word for Brown is “independent.” Voters believe that both parties have been for sale for more than 30 years. Regardless of party, independence expressed as a clear and simple practical set of solutions that directly confront the greatest anxieties of voters is the key to winning in the 2010 Congressional elections.

Members of Congress with a strong, ideological party identity, and a voting record that can be clearly traced to campaign contributors through sites such as OpenSecrets.com (http://www.opensecrets.org/), who understand what this election means may now commence shitting bricks.

What I want you to do

If you are currently registered as either Republican or Democrat, re-register as an Independent. Why? This keeps the political machines on both parties guessing and forces the debate away from party lines and onto the issues that matter to you. It worked here in Massachusetts by accident. Maybe it can be made to work on purpose on a national scale.

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Slimprofits
01-19-10, 11:58 PM
If you are currently registered as either Republican or Democrat, re-register as an Independent.

Ah but what about voting in the primaries? how many states are open-party system?

BK
01-20-10, 12:48 AM
I agree with your analysis but, you ignored one critical analysis - Martha Coakley's lack of charisma or mass appeal.

Elections are often come down to who would you rather have a beer with -how many would believe a beer with Martha would be enjoyable? Perhaps you should have an itulip Poll....

Perhaps the Democrats might have won this one if they had persuaded Martha not to run and allowed Compuano (or another known Democrat Political person) or anyone with an ounce of charm to run. I know an 80 year old that voted for Martha in the Primary, as always voted for Democrats, but ultimately voted for Scott Brown. I suspect my 80 year old friend didn't fully like and ultimately didn't fully trust Martha - Image...Image ...Image.... Image.....Image...
Its a Night of HOPE for our Republic - I wonder if President Obama is feeling HOPEFUL?

Chris Coles
01-20-10, 05:33 AM
As an Englishman, living in the UK, it raises all sots of parallels with the expected incoming Conservative government in our General Elections to be held sometime this next six months. Perhaps the independent candidates will do much better than anyone thinks. Perhaps, neither conservative or labour will win. My, what a thought. Parliament filled with true independents. Now THAT is worth looking forward to. Same for the US..., WONDERFUL!

metalman
01-20-10, 07:04 AM
stocks tanking hard... off spx off 1.9%. gold off 1.5%. bonds up. dollar up.

shtf in europe?

BigBagel
01-20-10, 07:22 AM
I hope Scott Brown represents a resurgence of a fiscally conservative, socially liberal GOP here in the Northeast. Republican office holders are becoming as rare as hen's teeth in these parts.

c1ue
01-20-10, 07:33 AM
EJ,

Was any of Scott Brown's victory due to Coakley's role in the health care issue?

Specifically Coakley's fundraising with pharmaceutical and health insurance lobbyists:

http://www.washingtonexaminer.com/opinion/blogs/beltway-confidential/Coakley-in-trouble-Pharma-and-HMO-lobbyists-to-the-rescue-81067542.html



Here are some of Coakley fundraiser hosts with some of their current health care clients:

Thomas Boggs, Patton Boggs: Bristol-Myers Squibb
Chuck Brain, Capitol Hill Strategies: Amgen, BIO, Merck, PhRMA
Susan Brophy, Glover Park Group: Blue Cross, Pfizer
Steven Champlin, Duberstein Group: AHIP, Novartis, Sanofi-Aventis
Licy Do Canto, Raben Group: Amgen
Gerald Cassidy, Cassidy & Associates: U. Mass Memorial Health Care
David Castagnetti, Mehlman, Vogel, Castagnetti: Abbot Labs, AHIP, Astra-Zenaca, General Electric, Humana, Merck, PhRMA.
Steven Elmendorf, Elmendorf Strategies: Medicines Company, PhRMA, United Health
Shannon Finley, Capitol Counsel: Amgen, Astra-Zeneca, Blue Cross, GE, PhRMA, Sanofi-Aventis.
Heather Podesta, Heather Podesta & Partners: Cigna, Eli Lilly, HealthSouth
Tony Podesta, Podesta Group: Amgen, GE, Merck, Novartis.
Robert Raben, Raben Group: Amgen, GE.

Marek
01-20-10, 09:08 AM
As a Massachusetts voter registered Independent, I have to say its easy to over-analyze this election. I agree with EJ that it was more about Coakley and the Democrats than about Brown and the GOP. And the GOP would be well advised to think that through.

For a snapshot of how this is the case, go to the website of each candidate. Coakley's says nothing. Her platform is void of commitment and little anyone would disagree with. Brown's is direct and specific. And in the end I believe the voters failed to see Coakley as herself but as an extension of the Washington machine. You can look at it as a question of trust - we lost any sense we could trust what Coakley told us. But Brown, agree with him or not, is likely to do what he says. And isn't that part of what Americans feel is lacking in government?

I otherwise have to agree with EJ's summary with cautionary notes on #3 and #4. While Americans do not hate bankers, the recent public hubris of the financial sector has tainted the public view of the wealthy. When I hear annecdotes like that of conservative, mid-Atlantic, working class men professing no CEO should make more than 4x the salary of any worker in the company, I know the public view has shifted from 10 years ago. And on #4 I think EJ has walked into a realm where the American psyche is confused and in flux. While the value of the economy is still forefront in the American mind, we are also seeing an awakening to the idea that free markets are not a universal and total solution. I think Americans know the neo-liberalism of Clinton and Bush did not work but can not yet tell you why or how and certainly are not yet prepared to assimilate alternatives.

America is in flux (which I count as an exciting time of opportunity) and trying to characterize it in dogmatic terms falls short of the reality.

Marek
01-20-10, 09:24 AM
Ah but what about voting in the primaries? how many states are open-party system?

If you make a point of registering Independent to force the debate away from party lines, why are you concerned about voting in closed primaries which focus the debate along party lines?

metalman
01-20-10, 09:29 AM
If you make a point of registering Independent to force the debate away from party lines, why are you concerned about voting in closed primaries which focus the debate along party lines?

his point is not how they vote, it's how the voters look to the campaigns. if they look like an amorphous blob... not red vs blue... the campaign designers/opinion shapers/etc. are in the dark.

metalman
01-20-10, 09:44 AM
As a Massachusetts voter registered Independent, I have to say its easy to over-analyze this election. I agree with EJ that it was more about Coakley and the Democrats than about Brown and the GOP. And the GOP would be well advised to think that through.

For a snapshot of how this is the case, go to the website of each candidate. Coakley's says nothing. Her platform is void of commitment and little anyone would disagree with. Brown's is direct and specific. And in the end I believe the voters failed to see Coakley as herself but as an extension of the Washington machine. You can look at it as a question of trust - we lost any sense we could trust what Coakley told us. But Brown, agree with him or not, is likely to do what he says. And isn't that part of what Americans feel is lacking in government?

I otherwise have to agree with EJ's summary with cautionary notes on #3 and #4. While Americans do not hate bankers, the recent public hubris of the financial sector has tainted the public view of the wealthy. When I hear annecdotes like that of conservative, mid-Atlantic, working class men professing no CEO should make more than 4x the salary of any worker in the company, I know the public view has shifted from 10 years ago. And on #4 I think EJ has walked into a realm where the American psyche is confused and in flux. While the value of the economy is still forefront in the American mind, we are also seeing an awakening to the idea that free markets are not a universal and total solution. I think Americans know the neo-liberalism of Clinton and Bush did not work but can not yet tell you why or how and certainly are not yet prepared to assimilate alternatives.

America is in flux (which I count as an exciting time of opportunity) and trying to characterize it in dogmatic terms falls short of the reality.

my friends hate bankers... period... & so far as i can tell don't split hairs when it comes to how the rich got rich... they figure they stole the money.

but the main point holds... brown won for taking a firm position on the issues that mass voters care about, offered specific solutions, didn't scare them with right wing religious talk & takes independent positions. on the last item... he's new & unknown. voters assume he independent in fact not just word... after all, who can he do deals with? he doesn't know anyone. ;)

we_are_toast
01-20-10, 10:10 AM
I agree with your analysis but, you ignored one critical analysis - Martha Coakley's lack of charisma or mass appeal.

Elections are often come down to who would you rather have a beer with -how many would believe a beer with Martha would be enjoyable? Perhaps you should have an itulip Poll....



Yep! Elections are determined by the 25% of the voters who are swing voters. They typically won't be going to OpenSecrets.com, or the candidates websites, many can't even name their representatives. They are very susceptible to the 20 second negative ads during American Idol, and they have a memory span of 2 minutes.

But these same swing voters are very concerned that life hasn't returned to like it was before the depression started. I view this election as an anti party in power reaction.

It will be very interesting to see the reaction of the President and the Dems. The president has an opportunity to clean house and get a fresh start. We'll see if he lets this opportunity pass like he has many others.

I don't agree we should change our party affiliation in the hope of getting a responsive reaction from the parties. The problem is not the parties, it's the money in the process, and it will follow a 3rd or a 4th or a 5th party. Those 25% of uninformed swing voters are the cause of all this. They vote on emotions rather than informed opinion. They have neglected their responsibility to be informed voters and have made the power of money to move emotions to be the determinant factor in winning elections.

Nothing will change until elections are based on ideas, rather than the ability to twist emotions, and that won't happen until we remove the money problem from the process.

WDCRob
01-20-10, 10:11 AM
Here's a pretty good stab at apportioning the blame. (http://www.fivethirtyeight.com/2010/01/lets-play-blame-game.html) Coakley gets her fair share, but it's only part of the story.

bill
01-20-10, 10:14 AM
change

http://www.reuters.com/article/idUSTRE60J38W20100120


Obama's TSA pick withdraws after Republican roadblock

WASHINGTON
Wed Jan 20, 2010 9:07am EST


WASHINGTON (Reuters) - President Barack Obama's pick to head the Transportation Security Administration, Erroll Southers, withdrew from consideration on Wednesday amid Republican concerns that

http://thecaucus.blogs.nytimes.com/2010/01/20/brown-people-are-angry/

January 20, 2010, 9:28 am <!-- date updated --><!-- <abbr class="updated" title="2010-01-20T09:54:14-05:00">— Updated: 9:54 am</abbr> --><!-- Title -->
Brown: ‘People Are Angry’


<!-- Byline --><ADDRESS class="byline author vcard">By KATIE ZEZIMA (http://www.itulip.com/author/katie-zezima/)</ADDRESS><!-- The Content -->In an interview with NBC (http://topics.nytimes.com/top/news/business/companies/nbc_universal/index.html?inline=nyt-org)’s “Today” show this morning, Senator-elect Scott Brown (http://topics.nytimes.com/top/reference/timestopics/people/b/scott_p_brown/index.html?inline=nyt-per) was asked if his victory (http://www.nytimes.com/2010/01/20/us/politics/20election.html?hp)was a referendum on President Obama (http://topics.nytimes.com/top/reference/timestopics/people/o/barack_obama/index.html?inline=nyt-per).
“No, it’s bigger that that,” Mr. Brown said. “For us in our area, we have three speakers that were indicted, three senators that resigned in disgrace, we have out of control spending and taxation in Massachusetts, you couple that with what’s being proposed nationally, people are angry.
“They’re tired of the back room deals. They want transparency, they want good government, they want fairness and they want people to start working to solve their problems.”

Mr. Brown also said that voters would be angry if Senate leaders delay his swearing-in to push through health care overhaul.
“If they use political chicanery,” Mr. Brown said, “I think come the midterm elections, people will be very concerned and they will remember.”

don
01-20-10, 10:24 AM
It seems we have two trains a runnin'....

The Democracy Train: the first nationally-important election discloses, in spades, the widespread 'dissatisfaction' of the electorate. Many here on the 'Tulip put faith in a Throw the Bums Out movement and are rightfully encouraged by this election result.

Then there's the Oligarchy Train: See the post, Hudson: FIRE Power Grab, for details on the disenfranchised end around in process.

Rajiv
01-20-10, 10:34 AM
A good analysis below

Unsurprising Poll Results from Massachusetts: Voters Think Obama Sides With the Banks (http://agonist.org/numerian/20100119/unsurprising_poll_results_from_massachusetts_voter s_think_obama_sides_with_the_banks)




An interesting observation was made today by the pollster for Martha Coakley, the hapless Democratic candidate for the Massachusetts senate seat held almost forever by Ted Kennedy. It appears polls are showing that the voters, especially independents who would normally vote Democratic in a liberal blue state like Massachusetts, have instead run to support the Republican candidate as the agent of change. Wasn’t that supposed to be Barack Obama’s signature tune?

Massachusetts voters have given up on President Obama as an agent for anything but the status quo, and this is most evident in his willingness to dole out trillions of dollars in direct and indirect support to the banks. The Massachusetts polls show this issue to be foremost on the minds of the voters.

The White House was getting this message way too late to do any good. President Obama was in Massachusetts only in the last few days, trying to work his magic with crowds to revitalize a dying effort. He also announced last week a proposal to tax the banks on their profits, hoping to generate $90 billion dollars this decade in partial payment to the taxpayers for their bailout of the banking system. He promised that one way or another, the banks would pay back every dime of the money lent to them.

It is not clear that his oratory is working or that the public is listening to him; his actions this past year have been completely at variance with his rhetoric. He is, in fact, almost as completely addled as the bank executive cronies he appears to court and coddle. This past week also saw testimony from some of the top executives in the banking industry, including Lloyd Blankfein of Goldman Sachs, Jamie Dimon of JP Morgan Chase, and John Mack of Morgan Stanley. They were all very skilled at accepting regret for what happened without accepting responsibility.

It was clear, though, that not one of them expected to change their way of business to any great degree. They acted almost as if it were their God-given right to be Too Big To Fail, and to have unlimited access to the taxpayers’ wallets when they wanted and needed it. The most astounding revelation came from Jamie Dimon of JP Morgan Chase, who said no one in his bank even contemplated the possibility that housing values might go down.

Were he to say otherwise might expose the bank to all sorts of lawsuits. Still, taking him at his word, we have to accept that none of the top executives at Jamie Dimon’s bank foresaw a housing crash or even a bubble in the making. These are men making millions of dollars a year, and they couldn’t see the housing bubble of the century in front of their eyes? If Jamie Dimon had a soupçon of personal honor he would have already resigned over this failure, and fired all his top management to boot. We are left to conclude that bankers are as much bereft of personal honor as they are lacking in a sense of personal responsibility for their failures.

These are the people Barack Obama has chosen to cozen up to in a vainglorious attempt to revive the economy. We have come to the point of no return for this administration – either it charts a drastically different course when it comes to dealing with the financial industry, or it carries on siding with clueless, inept, and in many cases immoral bankers. Maybe the electoral situation will force President Obama to see the light, but if so, he is going to have to take dramatically different action to do anything serious about reforming the banking industry. Many of the ideas afoot, like a tax on banking profits or a consumer regulatory watchdog, are helpful but don’t constitute real reform. Here, then, is an insider’s view of what really is necessary.

Step One
Fire Timothy Geithner and Larry Summers, and replace them with people who are not integrally connected to the industry, particularly to Goldman Sachs. Withdraw the nomination of Ben Bernanke as Chairman of the Federal Reserve before it is too late. If possible, replace him with Paul Volcker or someone equally disgusted with the performance and attitudes of banking
executives. Fire John Dugan as Comptroller of the Currency. He has been captured by the big banks from the get-go and needs to be replaced by someone who is not afraid to stand up to the industry.

Step Two
Submit to Congress a bill to repeal last year’s instructions to the FASB to modify mark to market practices. The light of day needs to be shed on what the banks own in the way of mortgage backed securities and related derivatives, and public prices need to be applied to these assets. Instruct the GAO to conduct a complete audit of the Fed, not just the limited audit of the AIG transaction that Bernanke has approved.

Step Three
A tax on bank profits is well and good, but does not get to the source of the problem behind aggressive risk taking and obscene bonuses. The real problem is with bank expectations on their return on equity. Banks, especially the top 10 largest in the US, have ratcheted up their ROE targets year by year, so that now they are at least expected to be 15% p.a. or higher. These high targets lead to abuse of leverage, lax accounting, misleading products, and ultimately Ponzi finance, in which higher volumes and greater risk are needed every year to keep the ROE scheme going. To control this, bank regulators need to go straight to the heart of the system within banks that mandates these excessive ROE targets – the hurdle rate of return for transactions. This should be mandated to be no larger than 10% return on assigned capital. Deals which generate a return greater than 20% on assigned capital should no longer be welcomed with glee, but looked at suspiciously for the undue risks involved.

Step Four
Bankers love to say that if they don’t reward their best talent with fantastic bonuses, these people will leave for greener pastures. What this really means is that these people will leave for the hedge fund or leveraged buyout industries, and to a lesser extent the mutual fund industry, all of which pay extremely well. The reason these industries have thrived has been their access to cheap and unlimited credit that allows them to leverage anywhere from 2:1 up to 30:1 for some hedge funds. Without this leverage high ROEs are not possible, and therefore neither are high bonuses. There is no demonstrable economic benefit from hedge fund or leveraged buyout practices, therefore the access to capital for these industries needs to be significantly constrained. Regulators need to go to the source of this capital – the banking industry – and an ideal starting point would be to cap loans to these industries going forward at the levels set in 2009.

Step Five
Financial activities which constitute extraction of equity need to be outlawed. There are a number of examples of this, but two obvious examples include any home equity loan where the borrower is taking cash out from their property not directly related to the purpose of the borrowing or to be used to pay points or fees to the lender; and second leveraged buyout activity where the target is used as collateral for the buyout loan or where the buyer takes dividends out of the target’s retained earnings or pension plan.

Step Six
Get Eric Holder and the Justice Department to work on the many cases of fraud and securities or tax law violations that have piled up in recent years and are now getting stale. The mortgage industry is an obvious source of indictments, but don’t be afraid to look at all the top banking industry executives who ignored warnings from the federal government as early as 2004 that no-documentation loans were rife with fraud (as was the appraisal process). These executives, including CEOs, should have seen these warnings, yet they continued to issue securities to investors without alerting them to the potential problems with the underlying mortgages behind the securities. This is securities fraud, or at the very least negligence of the highest order.

Step Seven
Work closely with all the major international banking regulators and their governments to insure consistent standards on financial reform and tax policies. Regulators should not be allowed to game the system and deliberately put in place lax standards to attract banking business from other countries. This means you, Switzerland!

Step Eight
Prepare the federal government internally, and especially the FDIC, for the possible bankruptcy and collapse of any or all of the big banks, including Citigroup, Bank of America, JP Morgan Chase, and Wells Fargo. Have a well-thought-out emergency plan in place for such a contingency, especially for the FDIC to act as receiver-in-possession and guarantor of all qualifying deposits. Then, announce as clearly and forcibly as you can that Too Big To Fail is officially dead, and then henceforth any financial institution which gets into trouble will receive no bailout from the government but will instead be thrown into bankruptcy.

The important aspect of this eight point program is that all of these actions can be taken here and now. The Obama administration doesn’t need to wait for regulatory reform to work its way through years of legislation and court tests. All it needs is the right leadership in the regulatory bodies, and the right prodding from the administration.

Which means all it needs is for Barack Obama to decide that the financial industry is not his friend, is not doing anything to help revive the economy, and is in desperate need of reform that gets to the very root of its practices.

c1ue
01-20-10, 10:57 AM
Analysis of the 'solution' proposed by Numerian at agonist.org


Step One
Fire Timothy Geithner and Larry Summers, and replace them with people who are not integrally connected to the industry, particularly to Goldman Sachs. Withdraw the nomination of Ben Bernanke as Chairman of the Federal Reserve before it is too late. If possible, replace him with Paul Volcker or someone equally disgusted with the performance and attitudes of banking
executives. Fire John Dugan as Comptroller of the Currency. He has been captured by the big banks from the get-go and needs to be replaced by someone who is not afraid to stand up to the industry.

Firing one meat puppet and replacing it with another is worthless. Or put another way, is putting in Volcker with the mandate of raising interest rates to kill inflation really the answer? Volcker whacked inflation in 1985, but did not do anything from a regulatory standpoint.

More importantly, is a regulatory activist Fed even possible?

Lastly the assumption being made is that Geithner and Bernanke are doing something which the government (Obama and the Democratic party) don't want.

This is an incorrect assumption.


Step Two
Submit to Congress a bill to repeal last year’s instructions to the FASB to modify mark to market practices. The light of day needs to be shed on what the banks own in the way of mortgage backed securities and related derivatives, and public prices need to be applied to these assets. Instruct the GAO to conduct a complete audit of the Fed, not just the limited audit of the AIG transaction that Bernanke has approved.

Sounds nice. But to do so at this point would certainly mean the collapse of 2000 or more banks including the TBTF ones.

Is the Democratic party, much less Obama, prepared to crash the economy now that a 'recovery' is under way?

Are the above also willing to admit they were wrong? To say that the entire last year's work was false and wrongheaded?

I submit that this is a fantasy.


Step Three
A tax on bank profits is well and good, but does not get to the source of the problem behind aggressive risk taking and obscene bonuses. The real problem is with bank expectations on their return on equity. Banks, especially the top 10 largest in the US, have ratcheted up their ROE targets year by year, so that now they are at least expected to be 15% p.a. or higher. These high targets lead to abuse of leverage, lax accounting, misleading products, and ultimately Ponzi finance, in which higher volumes and greater risk are needed every year to keep the ROE scheme going. To control this, bank regulators need to go straight to the heart of the system within banks that mandates these excessive ROE targets – the hurdle rate of return for transactions. This should be mandated to be no larger than 10% return on assigned capital. Deals which generate a return greater than 20% on assigned capital should no longer be welcomed with glee, but looked at suspiciously for the undue risks involved.

Wrong. Wrong. Wrong.

The problem isn't ROE. The problem is leverage. If a bank can somehow achieve 1000% ROE without leverage, that's fine. But banks trying to achieve an extra 2% ROE via triple the leverage and thus incurring systemic risk, that is not fine.


Step Four
Bankers love to say that if they don’t reward their best talent with fantastic bonuses, these people will leave for greener pastures. What this really means is that these people will leave for the hedge fund or leveraged buyout industries, and to a lesser extent the mutual fund industry, all of which pay extremely well. The reason these industries have thrived has been their access to cheap and unlimited credit that allows them to leverage anywhere from 2:1 up to 30:1 for some hedge funds. Without this leverage high ROEs are not possible, and therefore neither are high bonuses. There is no demonstrable economic benefit from hedge fund or leveraged buyout practices, therefore the access to capital for these industries needs to be significantly constrained. Regulators need to go to the source of this capital – the banking industry – and an ideal starting point would be to cap loans to these industries going forward at the levels set in 2009.

Again, totally wrong headed. Ultimately it doesn't matter what the banks want to pay their people. For those banks which are beholden to the government, the government should have a say in how pay is apportioned much as theoretically any major shareholder should.

The real problem is tax based. The bonus system is result of an unholy confluence between lower 'carry' taxes and various tax deductability dodges. It is these distortions as well as the idiots willing to pay "2 & 20" which cause bank bonuses to rise.

Remove the tax dodges and see what happens before sticking the government hand in.


Step Five
Financial activities which constitute extraction of equity need to be outlawed. There are a number of examples of this, but two obvious examples include any home equity loan where the borrower is taking cash out from their property not directly related to the purpose of the borrowing or to be used to pay points or fees to the lender; and second leveraged buyout activity where the target is used as collateral for the buyout loan or where the buyer takes dividends out of the target’s retained earnings or pension plan.

These don't need to be outlawed. What needs to be examined closely is the mortgage subsidy; it is this which gives incentive to borrow more when buying real estate.

For that matter mortgage insurance is a well accepted phenomenon; what commonly happened during the bubble was to use a 2nd mortgage to 'escape' PMI costs as well as down payment issues.

All of these boiled down to the securitization scam. There are many and easy ways to fix those conflicts of interest - even assuming fixes are necessary now that everyone knows MBS's are extremely dangerous and MBS ratings are worthless.


Step Six
Get Eric Holder and the Justice Department to work on the many cases of fraud and securities or tax law violations that have piled up in recent years and are now getting stale. The mortgage industry is an obvious source of indictments, but don’t be afraid to look at all the top banking industry executives who ignored warnings from the federal government as early as 2004 that no-documentation loans were rife with fraud (as was the appraisal process). These executives, including CEOs, should have seen these warnings, yet they continued to issue securities to investors without alerting them to the potential problems with the underlying mortgages behind the securities. This is securities fraud, or at the very least negligence of the highest order.

Why does the AG need to be involved? the FBI already has a mandate to do this. Sounds more like a witch hunt than anything else.


Step Seven
Work closely with all the major international banking regulators and their governments to insure consistent standards on financial reform and tax policies. Regulators should not be allowed to game the system and deliberately put in place lax standards to attract banking business from other countries. This means you, Switzerland!

This again is pie in the sky crap. Tax laws in Switzerland have nothing to do with FASB vs. Basel differences. This writer clearly doesn't understand the difference between accounting, tax management, and tax reporting.


Step Eight
Prepare the federal government internally, and especially the FDIC, for the possible bankruptcy and collapse of any or all of the big banks, including Citigroup, Bank of America, JP Morgan Chase, and Wells Fargo. Have a well-thought-out emergency plan in place for such a contingency, especially for the FDIC to act as receiver-in-possession and guarantor of all qualifying deposits. Then, announce as clearly and forcibly as you can that Too Big To Fail is officially dead, and then henceforth any financial institution which gets into trouble will receive no bailout from the government but will instead be thrown into bankruptcy.

Sounds nice. If this had been undertaken before the 'financial crisis' was averted, it may have made some sense.

But at this juncture to go backwards is impossible.

Secondly the issue isn't the deposits. They have always been insured by the FDIC and the FDIC has an unlimited line of credit via US money printing.

The issue is lending to consumers and businesses.

While I certainly agree the TBTF banks aren't lending, it is unclear to me how closing them all down fixes this problem.

The real issue as has been spoken to at length by Dr. Michael Hudson is asset prices.

The real problem is a complete lack of leadership in both Congress and the White House.

Unlike Dubya, Obama doesn't have the excuse of being stupid.

Just cowardly.

Rantly McTirade
01-20-10, 12:23 PM
Scott Brown would be a 'mainstream Democrat' in at least 40 of the 50 states. To expect any substansive change because a Republicrat side
of the coin finally turns up after the Demopublican side has gotten 48 of the past 50 coin flips in this specific locale is delusional.
Neither Drunk 'n AWOL nor Obozo The Clown is stupid; both are cowardly.

Idiot Cramer projected 'melt-up rally' if Beige won; that was a 'get double short' signal with a 99.999% certainty of success.

metalman
01-20-10, 12:33 PM
Scott Brown would be a 'mainstream Democrat' in at least 40 of the 50 states. To expect any substansive change because a Republicrat side
of the coin finally turns up after the Demopublican side has gotten 48 of the past 50 coin flips in this specific locale is delusional.
Neither Drunk 'n AWOL nor Obozo The Clown is stupid; both are cowardly.

Idiot Cramer projected 'melt-up rally' if Beige won; that was a 'get double short' signal with a 99.999% certainty of success.

http://i46.tinypic.com/qosu44.gif

Slimprofits
01-20-10, 01:28 PM
If you make a point of registering Independent to force the debate away from party lines, why are you concerned about voting in closed primaries which focus the debate along party lines?

It's not that cut and dried.

Take this election as an example, Scott Brown may have run as an independent, but he did so on the Republican ticket.

Shakespear
01-20-10, 01:44 PM
After reading this I would have not voter for her or the other candiadate


Of all the men and women falsely convicted during the child molestation hysteria of the '80s, by 2001, only Gerald Amirault still sat in prison. Even his sister and mother had been released after serving eight years in prison for crimes that never occurred.
In July 2001, the notoriously tough Massachusetts parole board voted unanimously to grant Gerald Amirault clemency. Although the parole board is not permitted to consider guilt or innocence, its recommendation said: "(I)t is clearly a matter of public knowledge that, at the minimum, real and substantial doubt exists concerning petitioner's conviction."
Immediately after the board's recommendation, The Boston Globe reported that Gov. Jane Swift was leaning toward accepting the board's recommendation and freeing Amirault.
Enter Martha Coakley, Middlesex district attorney. Gerald Amirault had already spent 15 years in prison for crimes he no more committed than anyone reading this column did. But Coakley put on a full court press to keep Amirault in prison simply to further her political ambitions.
By then, every sentient person knew that Amirault was innocent. But instead of saying nothing, Coakley frantically lobbied Gov. Jane Swift to keep him in prison to show that she was a take-no-prisoners prosecutor, who stood up for "the children." As a result of Coakley's efforts -- and her contagious ambition -- Gov. Swift denied Amirault's clemency.
Thanks to Martha Coakley, Gerald Amirault sat in prison for another three years.
Remember all that talk about President Bush shredding constitutional rights? Overzealous liberal prosecutors and feminist do-gooders allowed Gerald Amirault to sit in prison for 18 years for crimes that didn't exist -- except in the imaginations of small children under the influence of incompetent child "therapists."
Martha Coakley allowed her ambition to trump basic human decency as she campaigned to keep a patently innocent man in prison.
Anyone with the smallest sense of justice cannot vote to put this woman in any office. If you absolutely cannot vote for a Republican on Jan. 19, 2010, write in the name "Gerald Amirault."


http://news-search.clusty.com:7205/cache?collection=yahoo-news&staging=0&cid=364

Marek
01-20-10, 03:29 PM
It's not that cut and dried.

Take this election as an example, Scott Brown may have run as an independent, but he did so on the Republican ticket.

And independents had the opportunity to vote for him in the general election; a fact well documented and reported (and unlikely to be overlooked by either party). That Independents decided this election is confirmation of EJ's suggestion that non-party politics is a way forward. But this confirmation is only possible because of the number of registered Independents in Massachusetts.

In the end it comes down to making a choice of whether you vote for the candidate of the moment (by registering to vote in closed-party elections) or vote for a better system by registering independent. You choose.

Slimprofits
01-20-10, 04:04 PM
Maybe I'm missing something here, but it appears that if independent voters ceased attempting to influence the primaries, the primaries would still go on and the incumbents would gain an even bigger overall advantage than they already enjoy in terms of constant media exposure, fundraising, etc.

The ratio of Open to closed primaries is just about even.


In the end it comes down to making a choice of whether you vote for the candidate of the moment (by registering to vote in closed-party elections) or vote for a better system by registering independent. You choose.

Calm down, I don't think you've figured it all out just yet.

Slimprofits
01-20-10, 04:10 PM
Shakespear, I think the Dems assumed we had all forgotten about the Amirault case.

goadam1
01-20-10, 06:20 PM
One would assume that you didn't vote for Kennedy (no relation).

Marek
01-20-10, 06:25 PM
One would assume that you didn't vote for Kennedy (no relation).

In some circles he became known as the "Fake Kennedy". In the end he didn't turn out to be the spoiler he was expected to be.

goadam1
01-20-10, 06:45 PM
In some circles he became known as the "Fake Kennedy". In the end he didn't turn out to be the spoiler he was expected to be.
I voted for kodos.
http://4.bp.blogspot.com/_j24uCNMZoG8/R6uHC8wL1dI/AAAAAAAADhA/RPeqUR7arYA/s400/iVotedForKodos.gif

markoboston
01-20-10, 09:49 PM
I don't disagree with any of Eric's points, except his claim that Scott Brown is a social liberal. Massachusetts is a state that has already legalized gay marriage, but Scott Brown supports a US constitutional amendment to ban gay marriage. That doesn't sound socially liberal to me.

audrey_girl
01-20-10, 10:00 PM
Analysis of the 'solution' proposed by Numerian at agonist.org



Firing one meat puppet and replacing it with another is worthless. Or put another way, is putting in Volcker with the mandate of raising interest rates to kill inflation really the answer? Volcker whacked inflation in 1985, but did not do anything from a regulatory standpoint.

More importantly, is a regulatory activist Fed even possible?

Lastly the assumption being made is that Geithner and Bernanke are doing something which the government (Obama and the Democratic party) don't want.

This is an incorrect assumption.



Sounds nice. But to do so at this point would certainly mean the collapse of 2000 or more banks including the TBTF ones.

Is the Democratic party, much less Obama, prepared to crash the economy now that a 'recovery' is under way?

Are the above also willing to admit they were wrong? To say that the entire last year's work was false and wrongheaded?

I submit that this is a fantasy.



Wrong. Wrong. Wrong.

The problem isn't ROE. The problem is leverage. If a bank can somehow achieve 1000% ROE without leverage, that's fine. But banks trying to achieve an extra 2% ROE via triple the leverage and thus incurring systemic risk, that is not fine.



Again, totally wrong headed. Ultimately it doesn't matter what the banks want to pay their people. For those banks which are beholden to the government, the government should have a say in how pay is apportioned much as theoretically any major shareholder should.

The real problem is tax based. The bonus system is result of an unholy confluence between lower 'carry' taxes and various tax deductability dodges. It is these distortions as well as the idiots willing to pay "2 & 20" which cause bank bonuses to rise.

Remove the tax dodges and see what happens before sticking the government hand in.



These don't need to be outlawed. What needs to be examined closely is the mortgage subsidy; it is this which gives incentive to borrow more when buying real estate.

For that matter mortgage insurance is a well accepted phenomenon; what commonly happened during the bubble was to use a 2nd mortgage to 'escape' PMI costs as well as down payment issues.

All of these boiled down to the securitization scam. There are many and easy ways to fix those conflicts of interest - even assuming fixes are necessary now that everyone knows MBS's are extremely dangerous and MBS ratings are worthless.



Why does the AG need to be involved? the FBI already has a mandate to do this. Sounds more like a witch hunt than anything else.



This again is pie in the sky crap. Tax laws in Switzerland have nothing to do with FASB vs. Basel differences. This writer clearly doesn't understand the difference between accounting, tax management, and tax reporting.



Sounds nice. If this had been undertaken before the 'financial crisis' was averted, it may have made some sense.

But at this juncture to go backwards is impossible.

Secondly the issue isn't the deposits. They have always been insured by the FDIC and the FDIC has an unlimited line of credit via US money printing.

The issue is lending to consumers and businesses.

While I certainly agree the TBTF banks aren't lending, it is unclear to me how closing them all down fixes this problem.

The real issue as has been spoken to at length by Dr. Michael Hudson is asset prices.

The real problem is a complete lack of leadership in both Congress and the White House.

Unlike Dubya, Obama doesn't have the excuse of being stupid.

Just cowardly.

you give Obama too much credit ...

"Obama sides with the banks".....

Obama is OWNED by the banks


<object width="425" height="344"><param name="movie" value="http://www.youtube.com/v/ZKLVPp7epC8&hl=en_US&fs=1&"></param><param name="allowFullScreen" value="true"></param><param name="allowscriptaccess" value="always"></param><embed src="http://www.youtube.com/v/ZKLVPp7epC8&hl=en_US&fs=1&" type="application/x-shockwave-flash" allowscriptaccess="always" allowfullscreen="true" width="425" height="344"></embed></object>

jtabeb
01-20-10, 10:06 PM
And the PERVERSE response from the democrats?

http://www.zerohedge.com/article/democrats-seek-stunning-19-trillion-increase-debt-ceiling-143-trillion


Democrats To Seek Stunning $1.9 Trillion Increase In Debt Ceiling To $14.3 Trillion


(Or F-U "little people" in America!)

http://www.zerohedge.com/sites/default/files/pictures/picture-5.jpg
Submitted by Tyler Durden (http://www.zerohedge.com/users/tyler-durden) on 01/20/2010 16:32 -0500



Barack Obama (http://www.zerohedge.com/taxonomy_vtn/term/9388)
Debt Ceiling (http://www.zerohedge.com/taxonomy_vtn/term/10761)
Kent Conrad (http://www.zerohedge.com/taxonomy_vtn/term/12102)
Nancy Pelosi (http://www.zerohedge.com/taxonomy_vtn/term/8620)
White House (http://www.zerohedge.com/taxonomy_vtn/term/223)



From Dow Jones:

Senate Democrats are to seek an increase to the federal government's borrowing limit by $1.9 trillion lifting the total amount the U.S. government can owe to $14.294 trillion, several congressional aides said Wednesday.
The increase is forecast to support the federal government's borrowing needs the end of 2010, one Senate Democratic aide said.
The borrowing hike comes fast on the heels of a $290 billion increase to the debt ceiling agreed to by lawmakers at the end of 2009.

<hr>Update: Reader Steak points out the following piece of debt ceiling management insight from Politico (http://www.politico.com/news/stories/0110/31691.html):


President Barack Obama is expected to appoint a special deficit reduction commission as part of a tentative agreement between Democrats and the White House—each trying to find the votes to raise the federal debt ceiling in the coming weeks.


With the Massachusetts loss facing them, Senate leaders appeared to back-pedal Tuesday from a pre-Christmas agreement that anticipated a rapid-fire set of roll calls beginning Wednesday on a debt ceiling bill and accompanying amendments. Instead, Democrats signaled that key votes could be postponed until next week, as the administration tries to get a final sign-off from two of the major players, Speaker Nancy Pelosi (D—Cal) and Senate Budget Committee Chairman Kent Conrad (D—N.D.)

Obama’s problem is that one person’s process can be another’s poison. In this case, Conrad’s scheme usurps the power of the two top Democrats in Congress, Majority Leader Harry Reid (D-Nev.) and even more, Pelosi.



The challenge for the White House has been to find an alternative path that offends fewer people but still holds some promise of forcing action in the future.
The lunacy continues
4.375





Your rating: None Average: 4.4 (8 votes)

raja
01-21-10, 12:01 AM
Analysis of the 'solution' proposed by Numerian at agonist.org

c1ue,

I'm working on a letter to my Representatives, and I'd like to include a list of "demands". This would be things I expect them to do if they want to get my vote, and that of my family and friends. I'm trying to develop a concise, easy-to-understand list. Examples would be things such as reinstating Glass-Steagall and closing the revolving door between Wall Street and government.

Could you help by listing some of the things you would demand if you were to write such a letter?

ThePythonicCow
01-21-10, 01:04 AM
Democrats To Seek Stunning $1.9 Trillion Increase In Debt Ceiling To $14.3 TrillionThis means that some bean counter has determined the U.S. government will need this much more debt between now and the evening of Tuesday, November 2, 2010 (the General Election date.) They don't want to raise the ceiling again until after the election.

MarkL
01-21-10, 01:20 AM
After reading this I would have not voter for her or the other candiadate
http://news-search.clusty.com:7205/cache?collection=yahoo-news&staging=0&cid=364

If this guy is so obviously innocent, the right solution is for him to appeal his conviction or get a new trial due to the availability of new evidence. He has tried both and been declined. This post bleeds the assumption the man is obviously innocent while tendering minimal evidence except for "the 80's." It ignores that the now-adult victims still stand by their initial claims of abuse. It also misstates that no physical evidence was found when actually the opposite is true.

I've only spent 20 minutes digging into this on Google... and have no idea whether he is innocent or or guilty, but with just this much effort I can see that there is a lot more to this story than this biased article implies. For another perspective, go here (http://eassurvey.wordpress.com/2010/01/10/fells-acres-%E2%80%93-amirault-case/)or just Google the guy.

I certainly don't know the truth, but I wouldn't be so quick to second guess the 3 judges and 3 jurys that all convicted multiple people in this trial over a year apart, the justices of the 5 appellate courts that reviewed the cases on appeal, and more recently the prosecutor and the governor that refused to free him after reviewing the evidence of the case.

c1ue
01-21-10, 02:49 AM
I'm working on a letter to my Representatives, and I'd like to include a list of "demands". This would be things I expect them to do if they want to get my vote, and that of my family and friends. I'm trying to develop a concise, easy-to-understand list. Examples would be things such as reinstating Glass-Steagall and closing the revolving door between Wall Street and government.

Could you help by listing some of the things you would demand if you were to write such a letter?

Raja,

As with many things, asking for too much is the same as getting nothing.

I personally believe there is simply too much that needs to be done - and which is fundamentally odious to those in power - that the normal process cannot fix.

But, in terms of the existing process, here's what I would like to see:

1) Reinstatement of Glass-Steagall - the separation between banking and investment banking operations. It worked for 5 decades post Depression but was repealed in 10 years ago.

2) A commission chartered to examine the financial meltdown and empowered to press criminal charges against and all who promulgated and illegally benefitted from the bubble(s) leading to the meltdown as well as issue a set of recommendations on how laws should be changed to prevent a repeat. In general I am against quotas, but in this case there should be a clear minimum tally.

Tax policy - such as re-examination of the mortgage interest tax deduction - is far too large a scope for any single or even group of Congress-people. This unfortunately will have to await the eruption of populist rage over declining services combined with increasing taxes.

Similarly the entire insidious campaign finance reform/revolving door/regulatory capture issue is far beyond the scope of any single or group of Congress-people.

Rajiv
01-21-10, 03:59 AM
Not to nit pick, but.......


supposed Democratic shoe-in

is not quite correct see - common errors in English - Shoe-In or Shoo-In (http://www.english-for-students.com/Shoe-In-1.html)

jpatter666
01-21-10, 06:50 AM
Raja,

As with many things, asking for too much is the same as getting nothing.

I personally believe there is simply too much that needs to be done - and which is fundamentally odious to those in power - that the normal process cannot fix.

But, in terms of the existing process, here's what I would like to see:

1) Reinstatement of Glass-Steagall - the separation between banking and investment banking operations. It worked for 5 decades post Depression but was repealed in 10 years ago.

2) A commission chartered to examine the financial meltdown and empowered to press criminal charges against and all who promulgated and illegally benefitted from the bubble(s) leading to the meltdown as well as issue a set of recommendations on how laws should be changed to prevent a repeat. In general I am against quotas, but in this case there should be a clear minimum tally.

Tax policy - such as re-examination of the mortgage interest tax deduction - is far too large a scope for any single or even group of Congress-people. This unfortunately will have to await the eruption of populist rage over declining services combined with increasing taxes.

Similarly the entire insidious campaign finance reform/revolving door/regulatory capture issue is far beyond the scope of any single or group of Congress-people.

End gerrymandering -- which IMO has greatly contributed to the polarizing political environment.

But I do love the question. If you were going to pick a Top 10 list of issues/priorities to run on for the 2010 elections, what would they be?

c1ue
01-21-10, 10:16 AM
End gerrymandering -- which IMO has greatly contributed to the polarizing political environment.


Gerrymandering is absolutely a big problem, but

1) Way out of scope for any single or group of Congress-people
2) Impossible to legislate out of existence. Districts do need to be redrawn as populations grow/shrink/shift - to remove the political calculation from this process is like doing transplants without organs.

To be clear - the reason there are 2 political parties is actually (to me) a very simple evolution of political game theory.

If you start with the assumption that politics is an exercise in gaining power, then it stands to reason that the political equation will devolve into only 2 parties if there are outside factors in the process - beyond principle.

An examination of political parties in other nations is instructive: corporatist Germany and UK are effectively 2 party systems; other nations have more and more parties until government basically is ineffectual (Italy).

jpatter666
01-21-10, 10:27 AM
Gerrymandering is absolutely a big problem, but

1) Way out of scope for any single or group of Congress-people
2) Impossible to legislate out of existence. Districts do need to be redrawn as populations grow/shrink/shift - to remove the political calculation from this process is like doing transplants without organs.

To be clear - the reason there are 2 political parties is actually (to me) a very simple evolution of political game theory.

If you start with the assumption that politics is an exercise in gaining power, then it stands to reason that the political equation will devolve into only 2 parties if there are outside factors in the process - beyond principle.

An examination of political parties in other nations is instructive: corporatist Germany and UK are effectively 2 party systems; other nations have more and more parties until government basically is ineffectual (Italy).

Hmmm....was not aware I'd been promoted to Lord of Darkness status! :eek:

I agree that gerrymandering would be very hard to undo since it would depend on career politician essentially putting their own careers at risk! I'm not sure if there is a legal precedent that could be used (i.e. use the courts to force the change)

c1ue
01-21-10, 10:47 AM
Well, how else should jpatter...666 be taken? Is that not the number of the beast?

;)

cjppjc
01-21-10, 10:53 AM
Whatever the reasons incumbents of both parties should be afraid. That's a good thing. Maybe more to come. Alot more of this would be a great thing. Now if we could get some real third party choices......

jpatter666
01-21-10, 11:26 AM
Well, how else should jpatter...666 be taken? Is that not the number of the beast?

;)

I was always of the opinion I had minor imp status..... ;)

dcarrigg
01-21-10, 12:25 PM
I agree with your analysis but, you ignored one critical analysis - Martha Coakley's lack of charisma or mass appeal.


Exactly. Any red-blooded person living inside the 495 belt around Boston cannot stomach her calling Curt Schilling a Yankee's fan on WBZ.

How out of touch can you be?!?!? Didn't she wonder what the near-riot conditions in the street were about when the Red Sox won in '04?

This is akin to Brutus' speech at Caesar's funeral. It is pathetic.

Chris Coles
01-21-10, 12:39 PM
If the debate falls to a single thing that needs changing more than anything else, then the best would be to impose true, free market rules on all financial instruments. I have for some months now been able to keep this point in view, on The Times, London web site as reader comments. This was one of my first posts there, last September:

From The Times, September 11, 2009


The man who fuelled Lord Turner’s attack on the City

Patrick Hosking


Paul Woolley is an unlikely revolutionary. With sober suit, silk tie and measured, thoughtful delivery, he looks and sounds like a retired City gent. Which is exactly what he also is. He was a banker with Barings years before that bank’s implosion and then founded the London arm of GMO, the American fund management group.

Now an academic, Dr Woolley is investing £4 million of his personal fortune to bankroll a London School of Economics unit whose research questions the very purpose of the City and challenges some of its most deep-rooted beliefs.

It was Dr Woolley’s research that underpinned the explosive assertion last month by Lord Turner of Ecchinswell, chairman of the Financial Services Authority, that some banking was “socially useless”, that the City had grown too big and needed to be cut down to size and that its profits and bonuses were excessive.

Chris Coles wrote:

The problem is simply we are not operating a true free market for finance. For a true free market to operate the seller of the goods must not 1. Control the purchaser and thus exert undue influence upon that purchase; the price paid at the moment of sale. 2. Retain ownership of that which was sold. 3. Be able to in any other way influence the progress of the competitive process downstream of the original purchase. Once you permit anyone else, outside of the true marketplace to come between the two parties to the trade to speculate simply for profit made in the trade itself, rather than as a primary producer or user, you open the door to the compete abuse of the free market; where a trade is not made to purchase for actual use, but simply as a way of influencing the price to the final user. If you permit perhaps millions of trades by anyone who is not either the original seller or the final user, you introduce complex distortions to the final market price; that are not predicated by the decisions of either the seller or the final user. The market is thus distorted by speculation.

A good example of where these rules must apply is to money loans termed for less than repayment, where it will take, say, 30 years to repay the loan in full, but the rate of interest paid changes downstream of the moment of the sale of the loan; after three or five years, the rate of interest changes to a higher rate; increasing the cost of the money loaned. Changing the interest rate downstream of the sale of the loan denies all the precepts of a free market by permitting the seller to change the deal to suit their market conditions downstream of the sale. Thus the seller exerts undue influence downstream of the sale to control the market against the interests of the wider society, in particular, introducing financial instability. This is not a free market. (Taken from: The Road Ahead from a Grass Roots perspective)

September 11, 2009 11:28 AM BST

http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article6829803.ece (http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article6829803.ece)

And this was today:


From The Times, January 21, 2010

Mortgage costs leap as Skipton Building Society lifts rate

James Charles

Tens of thousands of borrowers face a shock jump in mortgage payments after Skipton Building Society, Britain’s fifth-largest building society, confirmed plans to raise its standard variable rate from 3.5 per cent to 4.95 per cent.

The move, to take effect from March 1, will raise mortgage repayments by up to 40 per cent for some borrowers, adding almost £200 a month to repayments on a £150,000 interest-only loan.

Skipton, with 100,000 borrowers, previously had guaranteed that its variable rate would not rise while Bank of England base rate stayed at 0.5 per cent, but it has cited a clause in its loans’ small print allowing it to ignore the promise in “exceptional circumstances”.

Chris Coles wrote:

I’ve been waiting for this to restart; changing the deal, downstream of the moment of sale, to suite new market conditions. Traditionally, a sale takes place at a very specific time; at the moment the auctioneer’s hammer falls. Bang! Sold! Why is that point of sale so important? Why has it existed for so long? We see it in very ancient communities; sometimes varied. In older farming communities, even here in the UK, we see two farmers will spit on their hands and shake. Deal! Sold! More recently, a signature of the purchaser on a contract seals the deal. Sold! Write a cheque, sold! Punch in your four digit code for the purchase by your credit or debit card, Sold! What the moment of sale does is very profound; it creates a strict point of sale, the deal being finalised. That single, very simple mechanism, defines what we all call a free market. It is the free marketplace that underpins everything we believe in when we describe our free societies. Your possessions are yours simply because everyone knows and understands that very simple principle, that moment of sale. Nothing could be more profound as this simple mechanism; it underpins our entire free market civilisation.

Yet, somehow, without realising the dangers, we have allowed banks and other financial institutions to ignore the most fundamental principle of our free societies. They change the deal downstream of that moment of sale. They refuse to act within the most basic rule of a free society and expect to be able to change the deal, after that moment of sale, to suite their own market conditions.

It is time we put an absolute stop to this malpractice. It is time to take this matter into a Court of the Law to obtain an injunction against the abuse of free market principles; moreover, principles that underpin the most basic aspect of our free society. Will someone with the necessary funds step forward to set this action into motion?

January 21, 2010

http://www.timesonline.co.uk/tol/money/property_and_mortgages/article6995969.ece (http://www.timesonline.co.uk/tol/money/property_and_mortgages/article6995969.ece)


So, why not?

Raz
01-21-10, 12:44 PM
Whatever the reasons incumbents of both parties should be afraid. That's a good thing. Maybe more to come. Alot more of this would be a great thing. Now if we could get some real third party choices......

I don't see any way out of this mess without a Third Party.

The Red Party/Blue Party bull#*+t is so corrupt it's like an abscessed tooth that can't be saved.

We need a national root-canal.

Jim Nickerson
01-21-10, 12:59 PM
I don't see any way out of this mess without a Third Party.

The Red Party/Blue Party bull#*+t is so corrupt it's like an abscessed tooth that can't be saved.

We need a national root-canal.

If you have the money, then you organize a third party. It isn't going to happen.

What can happen is un-elect all incumbents time after time until the scroungy bastards get the message--I don't know who here is going to live long enough to see things change, but another party regardless of whatever it espouses only place another hurdles between what people want and what gets done.

Mashuri
01-21-10, 01:46 PM
[/URL][URL="http://www.amazon.com/Democracy-Economics-Politics-Monarchy-Natural/dp/0765808684/ref=sr_1_4?ie=UTF8&s=books&qid=1264099519&sr=1-4"]Suggested reading (http://Suggested%20reading) for EJ.

metalman
01-21-10, 02:44 PM
It seems we have two trains a runnin'....

The Democracy Train: the first nationally-important election discloses, in spades, the widespread 'dissatisfaction' of the electorate. Many here on the 'Tulip put faith in a Throw the Bums Out movement and are rightfully encouraged by this election result.

Then there's the Oligarchy Train: See the post, Hudson: FIRE Power Grab, for details on the disenfranchised end around in process.

http://i49.tinypic.com/5c120z.gif

necron99
01-21-10, 03:39 PM
EJ's post inspired me to ask a fundamental question which I have put over in the "Rant 'n Rave -- Political Abyss" section.

Fundamental Question (http://www.itulip.com/forums/showthread.php?p=144894): Why do Americans "blame the bankers less for buying the favors than they do the politicians for selling them" ?? I'm not disputing the fact, EJ is clearly correct. I'm just wondering, why do we think this way?

jtabeb
01-21-10, 06:37 PM
EJ's post inspired me to ask a fundamental question which I have put over in the "Rant 'n Rave -- Political Abyss" section.

Fundamental Question (http://www.itulip.com/forums/showthread.php?p=144894): Why do Americans "blame the bankers less for buying the favors than they do the politicians for selling them" ?? I'm not disputing the fact, EJ is clearly correct. I'm just wondering, why do we think this way?

Umm bankers get to create unlimited amounts of FIAT Credit maybe?

ThePythonicCow
01-21-10, 07:29 PM
I'm not sure if there is a legal precedent that could be used (i.e. use the courts to force the change)Wouldn't that just make the courts more politicized?

ThePythonicCow
01-21-10, 07:39 PM
If the debate falls to a single thing that needs changing more than anything else, then the best would be to impose true, free market rules on all financial instruments. I have for some months now been able to keep this point in view, on The Times, London web site as reader comments. This was one of my first posts there, last September:

From The Times, September 11, 2009

<o>:p</o>:p
The man who fuelled Lord Turner’s attack on the City<o>:p</o>:p

Sorry, Chris, but the formatting of your post renders it too difficult to attempt reading.

Two basic problems:


The :P paragraph markers (are these some Microsoft Word remnants) turn into dual smiley faces: <o>:p</o>:p
I can't tell whose quoting what and or responding to which.

P.S. -- I guess you were quoting an early post of yours, so perhaps chose not to fix the formatting in order to provide a faithful quote. Whatever, it's still "formatting challenged."

Marek
01-21-10, 07:59 PM
EJ's post inspired me to ask a fundamental question which I have put over in the "Rant 'n Rave -- Political Abyss" section.

Fundamental Question (http://www.itulip.com/forums/showthread.php?p=144894): Why do Americans "blame the bankers less for buying the favors than they do the politicians for selling them" ?? I'm not disputing the fact, EJ is clearly correct. I'm just wondering, why do we think this way?

Great question. Perhaps because we are very cynical about our government but idolize success in business?

Chomsky
01-21-10, 08:30 PM
EJ's post inspired me to ask a fundamental question which I have put over in the "Rant 'n Rave -- Political Abyss" section.

Fundamental Question (http://www.itulip.com/forums/showthread.php?p=144894): Why do Americans "blame the bankers less for buying the favors than they do the politicians for selling them" ?? I'm not disputing the fact, EJ is clearly correct. I'm just wondering, why do we think this way?

Couple reasons I can see right off the bat. The public has no control over the bankers, but it does elect the politicians, and thereby expects more from them and feels all the more spurned when they curry favor for special interests. Also, the politicians sell out for SO LITTLE compared to what the bankers get in return, which makes the sellout seem all the more craven.

doom&gloom
01-21-10, 11:48 PM
THIS artcile should be required reading for all politicians of all stripes...
http://online.wsj.com/article/SB10001424052748704320104575015010515688120.html?m od=WSJ_Opinion_BelowLEFTSecond
JANUARY 21, 2010, 2:00 P.M. ET.
The Fall of the House of Kennedy
The battle over who defines the work and institutions that make a nation thrive and grow.
By DANIEL HENNINGER..
.
Scott Brown's victory in Massachusetts will not endure unless Republicans clearly understand the meaning of "the machine" that he ran against and defeated.

Yes, it is about a general revulsion at government spending, what is sometimes called "the blob." But blobs are shapeless things, and in the days ahead we will see the Obama White House work hard to reshape the blob into a deficit hawk. Unless the facade is ripped away, the machine will survive.

The revolt against the machine began with voters' 2006 ouster of the Republican majority in Congress for making a mockery of fiscal rectitude. An angry electorate then swept Barack Obama into office. Now Mr. Obama is saying voters elected him on the same wave of anger that elected Scott Brown. Sorry, but Messrs. Obama and Brown are not surfing in the same political ocean.

The central battle in our time is over political primacy. It is a competition between the public sector and the private sector over who defines the work and the institutions that make a nation thrive and grow.
In 1962, President John F. Kennedy planted the seeds that grew the modern Democratic Party. That year, JFK signed executive order 10988 allowing the unionization of the federal work force. This changed everything in the American political system. Kennedy's order swung open the door for the inexorable rise of a unionized public work force in many states and cities.

This in turn led to the fantastic growth in membership of the public employee unions—The American Federation of State, County and Municipal Employees (AFSCME), the Service Employees International Union (SEIU) and the teachers' National Education Association.

They broke the public's bank. More than that, they entrenched a system of taking money from members' dues and spending it on political campaigns. Over time, this transformed the Democratic Party into a public-sector dependency.

They became different than the party of FDR, Truman, Meany and Reuther. That party was allied with the fading industrial unions, which in turn were tethered to a real world of profit and loss.
The states in the North and on the coasts turned blue because blue is the color of the public-sector unions. This tax-and-spend milieu became the training ground for their politicians.

Until the Obama exception, the only recent Democrats electable into the presidency had to be centrist Southerners little known to the country. Every post-Kennedy liberal who tried, failed, including Teddy.

What an irony it is that in the same week the Kennedy labor legacy hit the wall in Massachusetts, the NEA approved a $1 million donation from the union's contingency fund to the Edward M. Kennedy Institute for the United States Senate. It is this Kennedy legacy, the public union tax and spend machine, that drove blue Massachusetts into revolt Tuesday.

Yes, health care was ground zero, but Massachusetts—like New Jersey, like California, like New York—has been building toward this explosion for years.

According to a study done for the Massachusetts Institute for a New Commonwealth, spending in specific public categories there skyrocketed the past 20 years (1987 to 2007).

Public safety: up 139%; social services, 130%; education, 44%. And of course Medicaid Madness, up 163%, before MassCare kicked in more Medicaid obligations.

But here's the party's self-destroying kicker: Feeding the public unions' wage demands starved other government responsibilities. It ruined our ability to have a useful debate about any other public functions.
Massachusetts' spending fell for mental health, the environment, housing and higher education. The physical infrastructure in blue states is literally falling apart. But look at those public wage and pension-related outlays. Ever upward.

Enter the Obama administration, the first one born and raised inside this public bubble, with zero private-sector Cabinet members. Act one: a $787 billion stimulus bill, which they brag mainly saved state and local jobs. Then came the six-month odyssey for Obama's $1 trillion health-care bill, dripping with taxes. Independent voters felt like everything was being sucked into a public-sector vortex.

This is why New Jersey's Chris Christie won running on nothing. It's why in California Carly Fiorina is within three points of Sen. Barbara Boxer. It's why the party JFK enabled, "the machine," is hitting the wall.
.
There's no way out for these Democrats. They made a Faustian bargain 40 years ago with the public unions. For the outlays alone, they'll get some version of the Obama health-care bill. They'll also go to the same old "populist anger" well.

Scott Brown's victory has given the GOP a rare, narrow chance to align itself with an electorate that understands its anger. Now the GOP has to find a way to disconnect from a political legacy that smothered governments at all levels and is now smothering the Democratic Party

Chris Coles
01-22-10, 04:43 AM
Sorry, Chris, but the formatting of your post renders it too difficult to attempt reading.

Two basic problems:


The :P paragraph markers (are these some Microsoft Word remnants) turn into dual smiley faces: <O>:p</O>:p
I can't tell whose quoting what and or responding to which.
P.S. -- I guess you were quoting an early post of yours, so perhaps chose not to fix the formatting in order to provide a faithful quote. Whatever, it's still "formatting challenged."

Wriggly, you are correct to so comment. But I spotted my error immediately and went back and removed all the Word rubbish. I can see the post as I left it after revision. Is it at all possible you need to refresh the web page.

Chris.

Chris Coles
01-22-10, 04:57 AM
THIS artcile should be required reading for all politicians of all stripes...
http://online.wsj.com/article/SB10001424052748704320104575015010515688120.html?m od=WSJ_Opinion_BelowLEFTSecond
JANUARY 21, 2010, 2:00 P.M. ET.
The Fall of the House of Kennedy
The battle over who defines the work and institutions that make a nation thrive and grow.
By DANIEL HENNINGER..


What is most interesting about this is that we have seen the same thing here in the UK. If there is one aspect that stands out to my way of thinking, it is that these public "servants" cannot be fired. They seem, certainly here in the UK, to have created a working environment where they grow continuously. There is no inbuilt balance to control their size.

The whole thing is totally out of control.

But that leads to another part of this debate. The Republicans, as also the Conservatives here in the UK, are still closely aligned with the systematic rape of personal finances by the FIRE economy. In which case, everyone is trying their best to find an alternative, independent candidate and the existing "Party" structure is thus always suspect.

ThePythonicCow
01-22-10, 05:53 AM
Wriggly, you are correct to so comment. But I spotted my error immediately and went back and removed all the Word rubbish. I can see the post as I left it after revision. Is it at all possible you need to refresh the web page.

Chris.
The rubbish is still there, sorry. I'll respond further by private message with more details. No need for me to further derail this thread topic.

jk
01-22-10, 06:35 AM
EJ's post inspired me to ask a fundamental question which I have put over in the "Rant 'n Rave -- Political Abyss" section.

Fundamental Question (http://www.itulip.com/forums/showthread.php?p=144894): Why do Americans "blame the bankers less for buying the favors than they do the politicians for selling them" ?? I'm not disputing the fact, EJ is clearly correct. I'm just wondering, why do we think this way?
bankers are known profit seekers. politicians are supposed to be working for the public.

jpatter666
01-22-10, 09:06 AM
Wouldn't that just make the courts more politicized?

Ummmm.....more than they are now??? Figure they are already there, might as well try to use it for our benefit. :(

Chris Coles
01-22-10, 10:10 AM
Sorry, Chris, but the formatting of your post renders it too difficult to attempt reading.

Two basic problems:


The :P paragraph markers (are these some Microsoft Word remnants) turn into dual smiley faces: <O>:p</O>:p
I can't tell whose quoting what and or responding to which.
P.S. -- I guess you were quoting an early post of yours, so perhaps chose not to fix the formatting in order to provide a faithful quote. Whatever, it's still "formatting challenged."

Now I "Get it". Try it now. Apologies everyone.

ThePythonicCow
01-22-10, 10:22 AM
Now I "Get it". Try it now. Apologies everyone.
Much better - thanks.

Marek
01-22-10, 11:13 AM
The news this morning mentioned Brown spent $13M to Coakley's $4M. And that excludes all the PACs supporting him which, if the calls we received in the final two weeks are any indicator, clearly out-gunned the groups helping her. So how much of his success was tapped voter dissent versus raw marketing dollars?

joost
01-22-10, 02:38 PM
It is unfortunate that this election was polluted with spectre of the Healthcare Bill looming on the background. The Republicans have made it no secret that they see killing the bill as their ticket to controlling Congress again. There was every incentive for the party to make an all-out effort to shame the Democrats in MA, and they succeeded rather well. To my regret the flawed healthcare bill, although less flawed than the utterly broken healthcare system, will be the victim of the party's political games.

Although my inclinations towards the fiscally conservative, socially liberal side of things, I greatly regret that this important legislation has now come under threath. It is the citizenry which are going to loose out on this one.

The Democrats deserve this loss. With their almost Soviet / union way of thinking, they assigned this important candidacy to the person who's "turn" it was, rather than someone impassionate and dynamic. I can not blame Massachusetts for rejecting the aparatchnik choice and going with the charismatic former skin model. Good for them. They probably made a wise choice.


Unfortunatly, it will hurt what is likely the most important piece of legislation they will see this decade.

Brown, to garner the support of his own party's leader and gain funding, probably had no choice but to promise to vote against healthcare. I hope that he will turn into a true Senator, and vote what he really thinks.

So well done Massachusetts, meanwhile, Democrats, take a lesson from the Republicans, and wake the hell up. This loss is due to lazyness and lack of imagination, not because their this no support for the policies you so poorly try to promote

tombat1913
01-22-10, 03:05 PM
I agree with your analysis but, you ignored one critical analysis - Martha Coakley's lack of charisma or mass appeal.

That was one of the first things he addressed.

Political analysis will chalk the loss up to Coackley's lack of charisma and her endorsement of the Obama health care plan. But Massachusetts has a long history of electing less than electrifying candidates to office, and it's not the health care plan itself but what it represents that puts voters off. There was more to this election than meets the eye.

WDCRob
01-22-10, 03:54 PM
From a Massachusetts Research 2000 poll, which polled the 18% of Obama voters who returned to the polls and voted for Republican Scott Brown:

* On health care, they oppose the Senate bill because it "doesn't go far enough" and they overwhelmingly support the public option (82%).
* On the economy, by 2 to 1 they think Democrats have put special interests ahead of folks like them -- and by large margins think stronger regulation of Wall Street is more important that cutting spending.
* And 57% say Democrats are not "delivering enough on the change Obama promised."

In other words, Scott Brown won not because Republicans have suddenly won the heart of the working class - but because Obama and the Dems have been so completely pocketed and unwilling to fight for them that people are pissed.

c1ue
01-22-10, 05:26 PM
The news this morning mentioned Brown spent $13M to Coakley's $4M. And that excludes all the PACs supporting him which, if the calls we received in the final two weeks are any indicator, clearly out-gunned the groups helping her. So how much of his success was tapped voter dissent versus raw marketing dollars?

Where is the source of this information?

According to OpenSecrets, the spending was $5M Coakley vs. $1.2M Brown

http://www.opensecrets.org/races/election.php?state=MA

ggirod
01-22-10, 06:03 PM
Where is the source of this information?

According to OpenSecrets, the spending was $5M Coakley vs. $1.2M Brown

I believe the answer to that is a lot of funds have not been reported yet, since reports are historical and filed regularly. So, in a while the final tally will be available.

Serge_Tomiko
01-22-10, 06:18 PM
I don't disagree with any of Eric's points, except his claim that Scott Brown is a social liberal. Massachusetts is a state that has already legalized gay marriage, but Scott Brown supports a US constitutional amendment to ban gay marriage. That doesn't sound socially liberal to me.

This is a lie. Not only was he endorsed by the Log Cabin Republicans, they are wildly enthusiastic about him. But that might also be because he is hot.

I have quite a few friends in the organization, what can I say.

jtabeb
01-23-10, 02:40 AM
This is a lie. Not only was he endorsed by the Log Cabin Republicans, they are wildly enthusiastic about him. But that might also be because he is hot.

I have quite a few friends in the organization, what can I say.

So what are you saying?????

Are YOU a republican?!?!??!:rolleyes:

c1ue
01-23-10, 08:15 AM
The source is an unnamed "campaign official" - not clear which side but presumably Scott Brown's as reported by Boston.com

http://www.boston.com/news/local/massachusetts/articles/2010/01/20/voter_anger_caught_fire_in_final_days/

But the article also notes a last minute Coakley campaign - thus assuming the attribution is true, the campaign spending on both sides is likely to rise:


Brown skillfully made the election a referendum on the issue, nationalizing the race when he repeatedly said he would be the 41st vote in the Senate, enough for the GOP to block the Democrats’ bill. Money poured in from around the country. His campaign had an initial budget of $1.2 million but eventually spent $13 million, about $12 million of which came in via the Internet, a campaign official said last night.

...

In winning, Brown withstood the most blistering assault of late attack ads the state has ever seen. As Coakley began to collapse, her campaign, Democratic Party committees, outside organized labor, and environmental and abortion rights groups bankrolled a desperate multimillion-dollar carpet bombing ad campaign in an effort to halt Brown’s surge. It backfired. The ads, some of which distorted Brown’s record, created a blowback that scorched the Democrat. Coakley entered the campaign as a well-liked politician and ended with high negative poll ratings.

Marek
01-23-10, 01:55 PM
My source was a Morning Edition story on the local NPR station WBUR. I believe the interview was with a Coakley staffer.

Raz
01-23-10, 02:39 PM
If you have the money, then you organize a third party. It isn't going to happen.

What can happen is un-elect all incumbents time after time until the scroungy bastards get the message--I don't know who here is going to live long enough to see things change, but another party regardless of whatever it espouses only place another hurdles between what people want and what gets done.

I fear that you're correct about this.

I was hoping that maybe twenty or thirty members of Congress could see the impending disaster and rise to the level of statesmen by leaving the RepubliCrats and forming a small but principled Third Party. THAT would be mucho shocking to the political establishment!

But you're probably right - it's just another version of the "working-girl's dream".:(

Marek
01-23-10, 04:26 PM
I fear that you're correct about this.

I was hoping that maybe twenty or thirty members of Congress could see the impending disaster and rise to the level of statesmen by leaving the RepubliCrats and forming a small but principled Third Party. THAT would be mucho shocking to the political establishment!

But you're probably right - it's just another version of the "working-girl's dream".:(

The more likely scenario is that presaged by the political news this week even bigger than Brown's election: the Supreme Court decision that corporate donations are protected speech. Brown's election is a shift within the ebb and flow of recent politics. Unlimited corporate donations change the game.

I've been half-expecting a statement from EJ on this decision.

jpatter666
01-23-10, 05:17 PM
I fear that you're correct about this.

I was hoping that maybe twenty or thirty members of Congress could see the impending disaster and rise to the level of statesmen by leaving the RepubliCrats and forming a small but principled Third Party. THAT would be mucho shocking to the political establishment!

But you're probably right - it's just another version of the "working-girl's dream".:(

Ha...strangely my wife and I were just discussing the possibility of this during the morning. We both decided were a competent third-party try to come into being, we would feel obligated to give active (monetary and actual help) support.

SamAdams
01-23-10, 05:52 PM
The more likely scenario is that presaged by the political news this week even bigger than Brown's election: the Supreme Court decision that corporate donations are protected speech. Brown's election is a shift within the ebb and flow of recent politics. Unlimited corporate donations change the game.

I've been half-expecting a statement from EJ on this decision.

Agreed. This seems to strike down some of the restrictions on campaign promotions but there remain a lot of restrictions as I understand it. The problem is these rules are often arbitrarily only enforced against candidates from 3rd parties or those that are "outside the mainstream". You might recall difficulty for many candidates to get on the ballot in recent elections for example, because of insufficient or incorrectly completed forms in certain states. I think an argument could be made that the restrictions on money raising did not prevent Obama/McCain from raising nearly $2 billion between the two of them - but prevent large contributions from individuals supporting lesser exposed candidates who cannot as easily command attention from mainstream media sources. I mean even if you allowed McCain and Obama to raise $20billion - after a few billion you reach a point of diminishing returns and saturation. However for a 3rd party candidate to even reach a few $million is difficult when you are limited to a few $thousand per individual contribution as a small candidate.

Also see http://en.wikipedia.org/wiki/Campaign_finance_in_the_United_States

From 2005 - http://news.cnet.com/The-coming-crackdown-on-blogging/2008-1028_3-5597079.html



The coming crackdown on blogging
By Declan McCullagh
Staff Writer, CNET News
See all Newsmakers

Bradley Smith says that the freewheeling days of political blogging and online punditry are over.
In just a few months, he warns, bloggers and news organizations could risk the wrath of the federal government if they improperly link to a campaign's Web site. Even forwarding a political candidate's press release to a mailing list, depending on the details, could be punished by fines.
Smith should know. He's one of the six commissioners at the Federal Election Commission, which is beginning the perilous process of extending a controversial 2002 campaign finance law to the Internet.
In 2002, the FEC exempted the Internet by a 4-2 vote, but U.S. District Judge Colleen Kollar-Kotelly last fall overturned that decision. "The commission's exclusion of Internet communications from the coordinated communications regulation severely undermines" the campaign finance law's purposes, Kollar-Kotelly wrote.
Smith and the other two Republican commissioners wanted to appeal the Internet-related sections. But because they couldn't get the three Democrats to go along with them, what Smith describes as a "bizarre" regulatory process now is under way.
CNET News.com spoke with Smith about the Bipartisan Campaign Reform Act of 2002, better known as the McCain-Feingold law, and its forthcoming extrusion onto the Internet.
Q: What rules will apply to the Internet that did not before?
A: The commission has generally been hands-off on the Internet. We've said, "If you advertise on the Internet, that's an expenditure of money--much like if you were advertising on television or the newspaper."
Do we give bloggers the press exemption?
The real question is: Would a link to a candidate's page be a problem? If someone sets up a home page and links to their favorite politician, is that a contribution? This is a big deal, if someone has already contributed the legal maximum, or if they're at the disclosure threshold and additional expenditures have to be disclosed under federal law.
Certainly a lot of bloggers are very much out front. Do we give bloggers the press exemption? If we don't give bloggers the press exemption, we have the question of, do we extend this to online-only journals like CNET?
How can the government place a value on a blog that praises some politician?
How do we measure that? Design fees, that sort of thing? The FEC did an advisory opinion in the late 1990s (in the Leo Smith case) that I don't think we'd hold to today, saying that if you owned a computer, you'd have to calculate what percentage of the computer cost and electricity went to political advocacy.
It seems absurd, but that's what the commission did. And that's the direction Judge Kollar-Kotelly would have us move in. Line drawing is going to be an inherently very difficult task. And then we'll be pushed to go further. Why can this person do it, but not that person?
How about a hyperlink? Is it worth a penny, or a dollar, to a campaign?
I don't know. But I'll tell you this. One thing the commission has argued over, debated, wrestled with, is how to value assistance to a campaign.
Corporations aren't allowed to donate to campaigns. Suppose a corporation devotes 20 minutes of a secretary's time and $30 in postage to sending out letters for an executive. As a result, the campaign raises $35,000. Do we value the violation on the amount of corporate resources actually spent, maybe $40, or the $35,000 actually raised? The commission has usually taken the view that we value it by the amount raised. It's still going to be difficult to value the link, but the value of the link will go up very quickly.
Then what's the real impact of the judge's decision?
The judge's decision is in no way limited to ads. She says that any coordinated activity over the Internet would need to be regulated, as a minimum. The problem with coordinated activity over the Internet is that it will strike, as a minimum, Internet reporting services.
They're exempt from regulation only because of the press exemption. But people have been arguing that the Internet doesn't fit
under the press exemption. It becomes a really complex issue that would strike deep into the heart of the Internet and the bloggers who are writing out there today. (Editor's note: federal law limits the press exemption to a "broadcasting station, newspaper, magazine or other periodical publication." )
How do you see this playing out?
There's sensitivity in the commission on this. But remember the commission's decision to exempt the Internet only passed by a 4-2 vote.
This time, we couldn't muster enough votes to appeal the judge's decision. We appealed parts of her decision, but there were only three votes to appeal the Internet part (and we needed four). There seem to be at least three commissioners who like this.
Then this is a partisan issue?
Yes, it is at this time. But I always point out that partisan splits tend to reflect ideology rather than party. I don't think the Democratic commissioners are sitting around saying that the Internet is working to the advantage of the Republicans.
One of the reasons it's a good time to (fix this) now is you don't know who's benefiting. Both the Democrats and Republicans used the Internet very effectively in the last campaign.
What would you like to see happen?
I'd like someone to say that unpaid activity over the Internet is not an expenditure or contribution, or at least activity done by regular Internet journals, to cover sites like CNET, Slate and Salon. Otherwise, it's very likely that the Internet is going to be regulated, and the FEC and Congress will be inundated with e-mails saying, "How dare you do this!"
What happens next?
It's going to be a battle, and if nobody in Congress is willing to stand up and say, "Keep your hands off of this, and we'll change the statute to make it clear," then I think grassroots Internet activity is in danger. The impact would affect e-mail lists, especially if there's any sense that they're done in coordination with the campaign. If I forward something from the campaign to my personal list of several hundred people, which is a great grassroots activity, that's what we're talking about having to look at.
Senators McCain and Feingold have argued that we have to regulate the Internet, that we have to regulate e-mail. They sued us in court over this and they won.
If Congress doesn't change the law, what kind of activities will the FEC have to target?
We're talking about any decision by an individual to put a link (to a political candidate) on their home page, set up a blog, send out mass e-mails, any kind of activity that can be done on the Internet.
Again, blogging could also get us into issues about online journals and non-online journals. Why should CNET get an exemption but not an informal blog? Why should Salon or Slate get an exemption? Should Nytimes.com and Opinionjournal.com get an exemption but not online sites, just because the newspapers have a print edition as well?
Why wouldn't the news exemption cover bloggers and online media?
Because the statute refers to periodicals or broadcast, and it's not clear the Internet is either of those. Second, because there's no standard for being a blogger, anyone can claim to be one, and we're back to the deregulated Internet that the judge objected to. Also I think some of my colleagues on the commission would be uncomfortable with that kind of blanket exemption.
So if you're using text that the campaign sends you, and you're reproducing it on your blog or forwarding it to a mailing list, you could be in trouble?
Yes. In fact, the regulations are very specific that reproducing a campaign's material is a reproduction for purpose of triggering the law. That'll count as an expenditure that counts against campaign finance law.
This is an incredible thicket. If someone else doesn't take action, for instance in Congress, we're running a real possibility of serious Internet regulation. It's going to be bizarre.

Rajiv
01-25-10, 01:21 AM
Here was an article by John Walsh - Why I Voted for the Republican in Massachusetts (http://counterpunch.org/walsh01202010.html)

Interesting observation there



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.
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I began to understand that something was afoot in this campaign when I noticed many folks out in the traffic circles and on street corners in Central Massachusetts, in and about Worcester, holding signs for Brown, even in the snow and sleet. There was no such enthusiasm for Coakley – not a single sign holder did I see. Now let me explain the demographics a bit. Central Mass is blue collar country, suffering deeply from the unemployment of the current recession. It is not clueless about bailouts for the banksters but no job creation for the hoy polloi the policy of Bush/Obama. And it was Central Mass that delivered a very big margin for Republican Brown who posed as a populist and captured their vote.

I vote not in central Massachusetts but in overwhelmingly and conventionally liberal Cambridge, but even there little enthusiasm for Democrat Coakley was evident. She had only taken a position against the Obama wars in Afghanistan and Pakistan when forced to do so by a primary opponent. There were no signs for Coakley at my polling place very close to Harvard Square. The peace constituency of Cambridge, in the words of the venerable “Mumbles” Menino, was voting with its butt which remained quite inert.

After voting Republican with some satisfaction at having not wasted my protest vote, I told a young student coming out of the polling place with me that I was so angry with the Democrats and Obama that I had voted Republican, remaining a bit unsure whether I should have gone the Libertarian route. He said that he felt the same way but voted Democrat anyway. He confessed that he was now having voter’s remorse.
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WDCRob
01-25-10, 10:43 AM
I don't know if it's already been mentioned here or not, but Brown did exceptionally well in the same areas that voted for H Clinton in the Dem Primary.

Jay
01-25-10, 11:58 AM
But Massachusetts has a long history of electing less than electrifying candidates to office,
No way! This guy kicks ass! Just look at him!

http://images.politico.com/global/080804_ap_pres_leadership.jpg

rjwjr
01-26-10, 03:07 PM
I initiated my party affiliation change today from Republican to None.

(Suddenly I don't know what I believe in anymore?!?):eek:

flintlock
01-30-10, 07:39 PM
I initiated my party affiliation change today from Republican to None.

(Suddenly I don't know what I believe in anymore?!?):eek:

Welcome to the party.:D

Jay
01-30-10, 08:09 PM
I initiated my party affiliation change today from Republican to None.

(Suddenly I don't know what I believe in anymore?!?):eek:
It's easy. Leave the two parties behind. You already know enough to realize they are both full of crap and aren't out for your best interest. Believe in the truth. Believe in being sceptical of anything from the mainstream media. Believe in fostering an undercurrent of people who don't want to be cowed. Then just make choices that feel right.

Ghent12
02-13-10, 01:47 PM
I initiated my party affiliation change today from Republican to None.

(Suddenly I don't know what I believe in anymore?!?):eek:
Interesting. I will be registering in the coming weeks as a Republican for the first time specifically to vote in the Primaries for RJ Harris, a Constitutionalist Republican (and perhaps a bit of a drama queen, but beggars for freedom can't be choosers, I guess). I do, however, plan to remove myself from their roster as soon as is practicable after the general election. From time to time there will be an occasional super-underdog freedom candidate and most of the time they will appear in the Republican party. Just stay tuned and be on the look out for those that appear most to be the real deal.

markoboston
02-17-10, 08:36 PM
Jtabeb, my apologies, I was misinformed about Brown's position on a constitutional amendment to ban gay marriage. He opposes an amendment. However, according to the Washington Post, he supports the Defense of Marriage Act:

http://www.washingtonpost.com/wp-dyn/content/article/2010/01/08/AR2010010803591.html

It's kind of pathetic to support the guy because he's good-looking when he is opposed to equal treatment for you. I repeat that it is inaccurate to say that someone who supports discrimination against gay and lesbian people is a "social liberal".

Slimprofits
03-23-10, 04:14 PM
He is by any other name a Libertarian but without the baggage that the Libertarian Party has collected over the years.

The War on Drugs baggage or the National defense baggage?

The latter being one of the truly crucial factors to the whole small government thing. That's why social conservatives and most Republicans hated Ron Paul in 2008, and only pretend to like him now. This isn't small government, just because the Republicans passed a pass tax cut:
According to a Congressional Budget Office (CBO) report published in October 2007, the U.S. wars in Iraq and Afghanistan could cost taxpayers a total of $2.4 trillion dollars by 2017 when counting the huge interest costs because combat is being financed with borrowed money. The CBO estimated that of the $2.4 trillion long-term price tag for the war, about $1.9 trillion of that would be spent on Iraq


3.1 National Defense

We support the maintenance of a sufficient military to defend the United States against aggression. The United States should both abandon its attempts to act as policeman for the world and avoid entangling alliances. We oppose any form of compulsory national service.

That's not Scott Brown. He's neither a small l or big L libertarian. Scott Brown appears to be a classic New England Republican. The social conservative war party types call them RHINOs. Republican In Name Only. Susan Collins etc. Brown will vote the way he has to in order to continue his life as a career politician.


Lesson for Congress

The operative word for Brown is “independent.” Voters believe that both parties have been for sale for more than 30 years. Regardless of party, independence expressed as a clear and simple practical set of solutions that directly confront the greatest anxieties of voters is the key to winning in the 2010 Congressional elections.

Members of Congress with a strong, ideological party identity, and a voting record that can be clearly traced to campaign contributors through sites such as OpenSecrets.com (http://www.opensecrets.org/), who understand what this election means may now commence shitting bricks.

You give way too much credit to the American people here. Do you ever go out and pretend not to be a genius (I mean that seriously) and just talk to regular people about politics? There's not a lot of people out there, even really smart and successful people that don't just hear and regurgitate the party line nonsense.

Arrogant? Yes. I'm no genius, nor very successful, but I do know politics and in this country it's amazing to watch people so easily mesmerized by charismatic politicians.

Americans at large are still ignoring those great resources on the internet and are getting their information on the internet from blogs and websites that just regurgitate the same party line bullshit that you can find on the bullhorn screen every day.

The 2010 election is all about the Republicans in Congress and the pundits rediscovering the special brand of Republican economic conservatism with the last straw for Republican voters being the passing and backing the big bailout in 2008. The conservative voters, the tea partiers, they want their cake and to eat it too. Again, I refer to the war spending.

In Arizona for example we've got the likes of the ultimate career Washington politician insider and war party member, McCain (backed the first bailout, in fact postponed his campaign in order to fly to Washington to bust in on the negotiations), desperately calling on his very charismatic ex-running mate,Palin (backed the first bailout), for public support in a race against a former longtime member of Congress, Hayworth, that wants back in as a career politician presumably to resume his connections to people like Jack Abramoff. They're all accusing each other of being less conservative than the next. What is their definition of conservative? To oppose the Democrat party. Got your pompoms?

ThePythonicCow
03-23-10, 08:35 PM
Arrogant? Yes. I'm no genius, nor very successful, but I do know politics and in this country it's amazing to watch people so easily mesmerized by charismatic politicians.Heck, they don't even have to be charismatic.

I still have 3 fading Bush bumper stickers on my car.