A Very Short Rant On This “Redistribution of Wealth” Nonsense

Ken AshfordElection 2008Leave a Comment

Obama correctly points out that, over the past 8 years, the wealthy in this country have been getting increasingly wealthy, while the incomes of the middle class and lower class have remained a constant (or gone down).  He seeks to rectify that.

Some have come to call this notion "redistribution of wealth", which becomes equated with "socialism" (and from socialism, many take the added leap to "communism").  Hence, "redistribution of wealth" is a baaaaaaad thing (and Obama is a "socialist").

But aren't ALL Americans in favor of "redistribution of wealth", on at least some level?  Social security is a "redistribution of wealth".  Federal law mandating a minimum wage is a "redistribution of wealth".  Aside from the most ignorant wingnuts, who is prepared to call these programs "socialist"? 

If you think about it (and I suspect few do), any "safety net" federal program which seeks to help those in need — whether it be health, housing, education, or wages — is necessarily funded by those who don't have the need.  That represents a "redistribution of wealth".

Even the progressive tax system we have had in places for decades is, by its very nature, a "redistribution of wealth" scheme.  We don't THINK of it that way, but that's what it is.  Democrats and Republicans quibble about the amount that each income bracket is taxed, but the fundamental progressive tax system is accepted.

Yet, with Obama's policies, we hear cries of "socialism".  Well, where were all those people last spring, when Bush decided to send out $600 checks to individuals making less than $70,000 (or households making under $150,000)?  Isn't that a blatent example of "redistribution of wealth"?  Who was decrying Bush as a "socialist" then?

Fortunately, the "socialism" boogeyman simply isn't working this election cycle.  If it was working, if it had any merit to it, then Obama wouldn't be getting the endorsements of The Financial Times and The Economist.

Downticket Gay Fearmongering In NC

Ken AshfordElection 2008, Local Interest, Sex/Morality/Family ValuesLeave a Comment

TPMCafe looks at some of the downticket GOP ads, and how the GOP resorting to the same tactics as 2004 and 2006.

The post references a mailer being sent out in North Carolina, attacking the Democratic candidate for U.S. Senate, Kay Hagan:

Libhagan 

I'm struck by the graphic.  The guy kneeling.  Is he proposing, or getting ready to do something else?  Maybe he's receiving the holy sacrament from the preacher.

And if they're going to go with figureines, why not the two-men-wedding-cake figurines?

The text is cute, too.  You see, in North Carolina, as in most states, it is unconstitutional to ban gay marriages.  The text of the ad admits this: state laws are not enough; that's why a constitutional amendment is quote — "needed" – unquote.  And it's "needed" because the obstacle to banning gay marriages is this little tidbit within the NC Constitition:

Section 1. The equality and rights of persons.

We hold it to be self-evident that all persons are created equal; that they are endowed by their Creator with certain inalienable rights; that among these are life, liberty, the enjoyment of the fruits of their own labor, and the pursuit of happiness.

You see, that language makes it hard to discriminate against gays.  Poor homophobic bigots.

So really — who is doing the "imposing"?  If social conservatives have to change the NC Constitution, as they admit they need to do, isn't that "imposing"?

Hagan 

Ooga-booga-ooga-booga!

The mailer goes on to suggest that Hagan wants to eliiminate "uder God" from the Pledge of Allegiance, and eliminate Christmas.

Neither, of course, is true, but it just shows the desparation and insincerity of the local and national GOP.  (Hagan, by the way, is an elder at the First Presbyterian Church in Greensboro).

Jane The Pooper-Scooper

Ken AshfordElection 2008Leave a Comment

I understand that candidates try to get the electorate to understand that they, too, are just regular people…. but a campaign ad featuring the candidate scooping up dog poop?

Of course, it's Alaska politics, so go figure….

The Latest Drudge-Driven Attack

Ken AshfordConstitution, Courts/Law, Economy & Jobs & Deficit, Election 2008Leave a Comment

Hyped by a Drudge article, the conservative websites and the McCain campaign are attacking Obama over this, a radio interview on September 6, 2001, by then state legislator Barack Obama.  You can hear a heavily edited version on Youtube (this is what the conservatives are drooling over, but if you click on my first link, you'll see access to the entire interview).

According to the conservative spin, Obama said that it was a "tragedy" that the Warren Court didn't engage in redistribution of wealth.  Of course, Obama said no such thing.  Here is what he said — and I apologize if it is dry reading — but Obama was clearly in law professor/wonk mode:

You know, if you look at the victories and failures of the civil-rights movement, and its litigation strategy in the court, I think where it succeeded was to vest formal rights in previously dispossessed peoples. So that I would now have the right to vote, I would now be able to sit at a lunch counter and order and as long as I could pay for it, I’d be okay, but the Supreme Court never entered into the issues of redistribution of wealth, and sort of more basic issues of political and economic justice in this society.

And uh, to that extent, as radical as I think people tried to characterize the Warren Court, it wasn’t that radical. It didn’t break free from the essential constraints that were placed by the Founding Fathers in the Constitution — at least as it’s been interpreted, and Warren Court interpreted it in the same way, that generally the Constitution is a charter of negative liberties: [It] says what the states can’t do to you, says what the federal government can’t do to you, but it doesn’t say what the federal government or the state government must do on your behalf.

And that hasn’t shifted, and one of the, I think, the tragedies of the civil-rights movement was because the civil-rights movement became so court-focused, uh, I think that there was a tendency to lose track of the political and community organizing and activities on the ground that are able to put together the actual coalitions of power through which you bring about redistributive change. And in some ways we still suffer from that.

A caller then asks: “The gentleman made the point that the Warren Court wasn’t terribly radical. My question is (with economic changes)… my question is, is it too late for that kind of reparative work, economically, and is that the appropriate place for reparative economic work to change place?”

Obama replies:

You know, I’m not optimistic about bringing about major redistributive change through the courts. The institution just isn’t structured that way. [snip] You start getting into all sorts of separation of powers issues, you know, in terms of the court monitoring or engaging in a process that essentially is administrative and takes a lot of time. You know, the court is just not very good at it, and politically, it’s just very hard to legitimize opinions from the court in that regard.

So I think that, although you can craft theoretical justifications for it, legally, you know, I think any three of us sitting here could come up with a rationale for bringing about economic change through the courts.”

Now, I've highlighted some hey parts of the interview.  They are the same parts that conservatives are focusing on.  The thing is, in no way did Obama say that it was a tragedy the Supreme Court under Earl Warren never engaged in "resdistribution of wealth" changes.

What Obama said was a fact — that the Warren Court never entered into the issues of redistribution of wealth.

He then followed it with an opinion about the civil rights movement — i.e., that it was a tragedy that the civil rights movement became so court-focused.  It's a tragedy because that's not where you go to address economic disparity issues.

Obama reinforces that point again in response to the caller, saying (again) that he's not optimistic about trying to bring redistributive changes through the courts because it violates separation of powers, etc.

The bottom line?  Obama was saying that redistribution of wealth cannot — constitutionally — be brought about through the judicial system.  And it is wrong (indeed, "tragic", in the case of the civil rights movement) to even try.

In other words, hHe's saying that judges will not — and should not — legislate economic redistibrution from the bench.

What's so controversial about that?

Nothing. 

As Obama campaign spokesman Bill Burton says:

Make no mistake, this has nothing to do with Obama’s economic plan or his plan to give the middle class a tax cut. It’s just another distraction from an increasingly desperate McCain campaign…. In the interview, Obama went into extensive detail to explain why the courts should not get into that business of 'redistributing' wealth. Obama’s point – and what he called a tragedy – was that legal victories in the Civil Rights led too many people to rely on the courts to change society for the better. That view is shared by conservative judges and legal scholars across the country.

But if you cherry-pick the interview, and match of the word "tragic" with other points Obama was making, then (so the Republicans hope) you've ginned up a controversy.

That's how desparate the McCain campaign is.  Manufacturing fake controversies from an interview given (which speaks for itself) eight years ago.

UPDATE:  Professor Bernstein summarizes the entire Obama interview, and explains (as I tried to do) that Obama was actually articulating judicial conservativsm as a proper dead-end avenue to social change/wealth redistribution. bernstein's bottom line: this is hardly anything for conservatives to get breathless about.

Google Street Me

Ken AshfordPersonalLeave a Comment

For those interested, the Google Street View people must have swung through my neighborhood this summer.

Check out the Google map of my home address, and then click "Street View".  Then click on the little "yellow man" icon to see the view from my street.  You will see this:

Googleme 

I know, you can't make it out.  The sun was behind my house that day.  The mailbox is barely visible (I replaced that mailbox in August), and the driveway (between the mailbox and the phone utility box thingee) is barely visible.  My house itself is totally obscured by the tree in the center of the photo.

On Google Maps, you can drag the little man around to try to change the view, but the other views aren't any better.

I guess I'm surprised, because there are quite a few areas of the country haven't been Google Street Viewed yet. (See map of the east coast below -covered areas are in blue)

Streetmapcover  

The Financial Crisis Explained

Ken AshfordEconomy & Jobs & DeficitLeave a Comment

For those who missed it, 60 Minutes did a nice job 3 weeks ago explaining how we got into the financial mess we're in.  It's more than just "the housing bubble burst". 

This 12 minute segment is well worth the watch….

What turned the collapse of the housing and mortage industry into a worldwide economic disaster was this — uh — thing created in 2000, as the result of a rather obscure piece of legislation known The Commodities Futures Modernization Act of 2000.  It was an amendment tacked on to an omnibus budget.  Nobody (including Democrats, or Bill Clinton, who signed it into law) complained about it.

But what that law did was create this thing called credit derivatives or credit default swaps.  What are they?  CBS explains:

[E]ssentially they are side bets on the performance of the U.S. mortgage markets and the solvency on some of the biggest financial institutions in the world. It's a form of legalized gambling that allows you to wager on financial outcomes without ever having to actually buy the stocks and bonds and mortgages.

***

Ask to explain what a derivative is, Partnoy [Frank Partnoy, a law professor at the University of San Diego, who has written a couple of books on the subject] says, "A derivative is a financial instrument whose value is based on something else. It's basically a side bet."

Think of it for a moment as a football game. Every week, the New York Giants take the field with hopes of getting back to the Super Bowl. If they do, they will get more money and glory for the team and its owners. They have a direct investment in the game. But the people in the stands may also have a financial stake in the ouctome, in the form of a bet with a friend or a bookie.

"We could call that a derivative. It's a side bet. We don't own the teams. But we have a bet based on the outcome. And a lot of derivatives are bets based on the outcome of games of a sort. Not football games, but games in the markets," Partnoy explains.

Partnoy says the bet was whether interest rates were going to go up or down. "And the new bet that arose over the last several years is a bet based on whether people will default on their mortgages."

And that was the bet that blew up Wall Street. The TNT was the collapse of the housing market and the failure of complicated mortgage securities that the big investment houses created and sold around the world.

But the rocket fuel was the trillions of dollars in side bets on those mortgage securities, called "credit default swaps." They were essentially private insurance contracts that paid off if the investment went bad, but you didn't have to actually own the investment to collect on the insurance.

"If I thought certain mortgage securities were gonna fail, I could go out and buy insurance on them without actually owning them?" Kroft asks Eric Dinallo, the insurance superintendent for the state of New York.

"Yeah," Dinallo says. "The irony is, though, you're not really buying insurance at that point. You're just placing the bet."

Dinallo says credit default swaps were totally unregulated and that the big banks and investment houses that sold them didn't have to set aside any money to cover their potential losses and pay off their bets.

"As the market began to seize up and as the market for the underlying obligations began to perform poorly, everybody wanted to get paid, had a right to get paid on those credit default swaps. And there was no 'there' there. There was no money behind the commitments. And people came up short. And so that's to a large extent what happened to Bear Sterns, Lehman Brothers, and the holding company of AIG," he explains.

In other words, three of the nation's largest financial institutions had made more bad bets than they could afford to pay off. Bear Stearns was sold to J.P. Morgan for pennies on the dollar, Lehman Brothers was allowed to go belly up, and AIG, considered too big to let fail, is on life support to thanks to a $123 billion investment by U.S. taxpayers.

"It's legalized gambling. It was illegal gambling. And we made it legal gambling…with absolutely no regulatory controls. Zero, as far as I can tell," Dinallo says.
Ask to explain what a derivative is, Partnoy says, "A derivative is a financial instrument whose value is based on something else. It's basically a side bet."

Think of it for a moment as a football game. Every week, the New York Giants take the field with hopes of getting back to the Super Bowl. If they do, they will get more money and glory for the team and its owners. They have a direct investment in the game. But the people in the stands may also have a financial stake in the ouctome, in the form of a bet with a friend or a bookie.

"We could call that a derivative. It's a side bet. We don't own the teams. But we have a bet based on the outcome. And a lot of derivatives are bets based on the outcome of games of a sort. Not football games, but games in the markets," Partnoy explains.

Partnoy says the bet was whether interest rates were going to go up or down. "And the new bet that arose over the last several years is a bet based on whether people will default on their mortgages."

And that was the bet that blew up Wall Street. The TNT was the collapse of the housing market and the failure of complicated mortgage securities that the big investment houses created and sold around the world.

But the rocket fuel was the trillions of dollars in side bets on those mortgage securities, called "credit default swaps." They were essentially private insurance contracts that paid off if the investment went bad, but you didn't have to actually own the investment to collect on the insurance.

"If I thought certain mortgage securities were gonna fail, I could go out and buy insurance on them without actually owning them?" Kroft asks Eric Dinallo, the insurance superintendent for the state of New York.

"Yeah," Dinallo says. "The irony is, though, you're not really buying insurance at that point. You're just placing the bet."

Dinallo says credit default swaps were totally unregulated and that the big banks and investment houses that sold them didn't have to set aside any money to cover their potential losses and pay off their bets.

"As the market began to seize up and as the market for the underlying obligations began to perform poorly, everybody wanted to get paid, had a right to get paid on those credit default swaps. And there was no 'there' there. There was no money behind the commitments. And people came up short. And so that's to a large extent what happened to Bear Sterns, Lehman Brothers, and the holding company of AIG," he explains.

In other words, three of the nation's largest financial institutions had made more bad bets than they could afford to pay off. Bear Stearns was sold to J.P. Morgan for pennies on the dollar, Lehman Brothers was allowed to go belly up, and AIG, considered too big to let fail, is on life support to thanks to a $123 billion investment by U.S. taxpayers.

"It's legalized gambling. It was illegal gambling. And we made it legal gambling…with absolutely no regulatory controls. Zero, as far as I can tell," Dinallo says.

Warren Buffet called credit default swaps a "ticking time bomb".  Boy, was he right.

RELATED:  The housing crisis, and bad bank lending practices are detailed in this "Exhibit A" article focusing on Cleveland housing.  In one area, houses that should have been valued at $20,000 to $30,000 became, as a result of "toxic loans", overvalued as high as $80,000 to $90,000.  Now, they are worth about $6,000.

Come Again?

Ken AshfordGodstuff, Sex/Morality/Family ValuesLeave a Comment

“This vote on whether we stop the gay-marriage juggernaut in California is Armageddon,” said Charles W. Colson, the founder of Prison Fellowship Ministries and an eminent evangelical voice, speaking to pastors in a video promoting Proposition 8. “We lose this, we are going to lose in a lot of other ways, including freedom of religion.”

Source

Can someone tell me how — even theoretically — gay marriage in California in any way threatens the constitutional guarantee of "freedom of religion"?

That statement only makes sense if one equates "religion" with "oppression".  Which I do not, and I don't think anybody else does either.

Educational Resumes

Ken AshfordElection 2008Leave a Comment

From Pharyngula:

Barack Obama:
Columbia University – B.A.
Political Science with a Specialization in
International Relations.
Harvard – Juris Doctor (J.D.) Magna Cum Laude


Joseph Biden:
University of Delaware – B.A. in History and B.A. in Political Science.
Syracuse University College of Law – Juris Doctor (J.D.)


vs.


John McCain:
United States Naval Academy – Class rank: 894 of 899


Sarah Palin:
Hawaii Pacific University – 1 semester
North Idaho College – 2 semesters – general study
University of Idaho – 2 semesters – journalism
Matanuska-Susitna College – 1 semester
University of Idaho – 3 semesters – B.A. in Journalism

Just, you know, FYI…..

The Anchorage Daily News, The Largest Paper In Palin’s Home State Of Alaska, Endorses….

Ken AshfordElection 2008Leave a Comment

Obama:

Gov. Palin's nomination clearly alters the landscape for Alaskans as we survey this race for the presidency — but it does not overwhelm all other judgment. The election, after all is said and done, is not about Sarah Palin, and our sober view is that her running mate, Sen. John McCain, is the wrong choice for president at this critical time for our nation.


Sen. Barack Obama, the Democratic nominee, brings far more promise to the office. In a time of grave economic crisis, he displays thoughtful analysis, enlists wise counsel and operates with a cool, steady hand. The same cannot be said of Sen. McCain.


This has been the latest in "Endorsements That Embarrass McCain"….

Palin Really Screwing Things Up For The GOP

Ken AshfordElection 20083 Comments

Remarkable story:

Four Republicans close to Palin said she has decided increasingly to disregard the advice of the former Bush aides tasked to handle her, creating occasionally tense situations as she travels the country with them. Those Palin supporters, inside the campaign and out, said Palin blames her handlers for a botched rollout and a tarnished public image — even as others in McCain's camp blame the pick of the relatively inexperienced Alaska governor, and her public performance, for McCain's decline. 

"She's lost confidence in most of the people on the plane," said a senior Republican who speaks to Palin, referring to her campaign jet. He said Palin had begun to "go rogue" in some of her public pronouncements and decisions. 

"I think she'd like to go more rogue," he said. 

Sarah palin wink Now, I've been quite critical of McCain's handlers for the terrible campaign being run on the GOP side.  But Palin going it on her own is ridiculous.

First of all, "Palin blames her handlers for a botched rollout…"?!?

Palin's rollout was great!  The convention speech?  Come on!  I mean, I wasn't impressed, but it I wasn't going to be.  But it certainly helped the McCain campaign for a few weeks.

As for Palin's "tarnished public image", that can only be blamed on Palin herself, not her handlers.  That is, unless her handlers told her to give non-answers in the debate, and screw up her interviews with Katie Couric and others.

In fact, I'm willing to bet that this gaffe was probably Palin's doing, and not that of her handlers.

Finally, it says something unseemly about Palin if this is in fact true.  Clearly, she's gearing up for 2012, and trying to save her hide.  So much for helping McCain.  Or even "country first".

A McCain campaign source unloads on Palin in an interview with CNN:

“She is a diva. She takes no advice from anyone,” said this McCain adviser, “she does not have any relationships of trust with any of us, her family or anyone else. Also she is playing for her own future and sees herself as the next leader of the party. Remember: divas trust only unto themselves as they see themselves as the beginning and end of all wisdom.”