A Sickening Sense of Entitlement

The former CEO of Merrill Lynch spends $1.22 million of the corporation's money on decorating his office, then on his way out dishes out $3 to $4 billion of federal bailout money in bonuses to upper management--despite the fact they had led the firm to a $15 billion dollar loss and absorption by Bank of America. AIG gets $85 billion in bailout money and sends the bigwigs to a swanky California seaside resort a week later at a cost of $440,000 for the weekend. The crash of Citigroup would probably implode the stock market. It gets $45 billion of federal rescue money. The next thing you know, they are signing up for a $50 million corporate jet.

What is wrong with these people? It would never even occur to me to ask my employer to shell out money to decorate my office, particularly in dire times for the bottom line. In ten years I have asked for one paint job and to replace a ceiling tile discolored by a leak in the roof. I hesitate to use too many of the district's pens and markers. How about you? Don't you try to watch the company's pennies too? Why are these clowns so different? Simple. It's because they are not like you and me. Their lives may as well have been lived in a parallel universe compared to ours.

Most of the top management at firms like Lehman Brothers, Goldman Sachs, Citicorp, Morgan Stanley Chase and so forth come from a tiny sliver of society whose lives are as far out of the norm as the Tsar's was to his serfs. These are the children of millionaires and billionaires. They went to private boarding schools and got into Ivy League business schools as legacies. I know plenty of scholarship students who saw their type at prestigious schools. They had $1,000 a week clothing allowances, scarcely went to class and somehow muddled through with a minimum of effort. They stepped into mid-upper management right out of school based on the extensive social and business network of their fellow aristocrats. They were immediately admitted to the most exclusive clubs and associations in the Big Apple and other major financial centers.

These people have no clue what it is like to actually have to work hard, save money, land a job or keep one based on their merits. John Thain left Goldman Sachs with $300 million in stock. Merrill hired him at $83 million a year. He couldn't afford to spruce up his own office? It likely never crossed his mind. Everything is an entitlement to people like him. In one of life's supreme ironies, the wealthiest are the class most apt to get practically everything in life gratis. Connections, many decades of gaming the system to cater to their whims and address their every interest, and a casually sickening sense of entitlement make it all so common and all so easy. Warren Buffett, a self-made billionaire, is one who recognizes the incongruity for what it is, complaining of the injustice of his paying a lower tax rate than his secretary.

The current administration appears to be getting a little fed up with this state of affairs. Vice President Biden said he wanted to throw such people "in the brig." President Obama called such a lack of responsibility "shameful." It might just be that some much tighter regulations will be attached to the second half of the TARP bailout money, the half under Obama's control. There is talk of salary limits, requirements for using the money and paying it back, and so forth. The word is that much of it will go this time to help mortgage payers rather than profligate and ungrateful financial houses, anyway.

It all just goes to show that these scions of the domestic noble class cannot be trusted to take care of the national or even their own corporate interest without the most stringent regulation. This is the real "good ole boy" network writ large. They have led lives of incredible privilege, having everything handed to them. In their experience, the rest of the human race exists to provide for their every whim. They are, in short, spoiled brats. Giving them free reign has wrecked property values, retirement prospects, and the housing, stock and job markets for untold millions. Enough. Either we take control of them or they will have control of us. If it is handled right, the economic crisis caused by their overreach may prove a blessing if it shocks the public out of compliant accession to their steady accretion of power and gives Obama the political wherewithal to act.

What About Bipartisanship?

There is much talk about President Obama's bipartisanship initiative and the House Republicans turning it down flat by voting unanimously against his stimulus package yesterday. Some excoriate the Republicans for ingratitude. Some say Obama is naively wasting his time and now he will have to turn to hardball tactics to muscle his agenda items through. Many believe full scale partisan battle is right around the corner, that it will be a return to business as usual in Washington before long. None of these are entirely on the mark.

People need to take a realistic view of developments. I foresee Obama continuing to be solicitous of Republican sensibilities. They have given him high marks for meeting with their House and Senate memberships and offering an ear and respect. The House Republicans are not so complimentary of the House Democratic leadership, whom they feel ignored them and failed to solicit any input from them.

The fact is that political parties exist for a reason. Republicans and Democrats fundamentally disagree about the roles government should play in society. Even if the president is being nice to them, Republicans are no more under obligation to support his $825 billion economic package than Democrats would have been to support President Bush's cutting the SCHIP Children's Health program had he said a few kind words about Nancy Pelosi and Harry Reid.

Make no mistake, on some matters positive relations will allow more compromises to be reached. Obama will keep working at it and will prod congressional Democrats to do likewise. But on many issues the fundamental beliefs of the two parties are simply too far apart. This is even more the case now, with Democrats enjoying an 80-vote lead in the House. Most of the competitive districts are now held by Democrats. Practically the only Republicans left are from rock-solid conservative districts. They have more to fear from primary challengers on their right if they stray from conservative orthodoxy than they do from losing to Democrats by not being liberal enough.

Will Obama have to abandon his charm offensive with the other party and turn mean to them? It's hard to see why. He has an 80-vote advantage in the House. Even if all the Republicans stick together and some Democrats defect, as happened this week, he can carry his policies easily there. The vote this week was 244-188 with the Republicans unanimous in opposition and 11 Democrats joining them. What does he have to gain by a war of sound bites with them? He advocates his views firmly, but takes the high ground of respect and civility with his "Republican colleagues," as he calls them. If they respond viciously they are the ones diminished in the eyes of moderate voters. They can throw all the red meat they want to their base. That does nothing but paint them into the corner McCain-Palin couldn't fight their way out of.

In the Senate deliberations to come, the Democrats' advantage is almost as strong. They currently lead 58 to 41, and this will probably increase to 59-41 once Minnesota is resolved in the courts and Al Franken likely takes the seat from Norm Coleman. That means even with Senate rules the Republicans probably cannot stop much of Obama's agenda. There are ten Republican Senators in vulnerable positions, holding seats in states where Obama won the presidential vote. This includes two in liberal Maine, one in such places as New Hampshire, Pennsylvania, Nevada and Florida, and one in Iowa where Obama is extremely popular. Unlike House members from conservative districts, Senators have to represent an entire state. When that state already supports the president they stridently oppose his initiatives at their peril.

Even if Senate Republican leader McConnell leads filibusters, the White House will need to find only one, or perhaps two defectors from pro-Obama states to move its bills through. The public mood is in favor of action, Obama and the Democrats hold the cards, and they can get what they want without need for recourse to undue mudslinging.

The Republicans are crippled because their policies and theories have not worked. Their greatest strength has always been their commitment to their views. Of course, their greatest weakness is that same commitment which engenders their famous inability to understand or admit that their policies are not working and to develop new ones. Obama can continue to smile and charm, to introduce transformative legislation and to answer the public's wishes by treating the opposing party with unruffled collegiality. The American people, by giving him solid majorities in both houses, have ensured he will win his votes either way.

The Republicans in congress can either go along with him and be "me too" Republicans, or they can oppose him and be partisan obstructionists against what the majority wants. If they do the former they risk being made superfluous; if they do the latter they risk looking out of touch. For the time being the House Republicans seem to have chosen to assert their independence. If they stay with that strategy they are betting that Obama's policies will fail and they can pick up the pieces. If he succeeds, however, they might be looking at a generation of Democratic dominance. They might eventually feel forced to cede some ground. At any rate, in the next two weeks we will likely see some Republican movement in the Senate.

Al Arabiya Interview

President Obama today set quite a precedent by granting the first exclusive television interview of his presidency to the Arabic-language satellite news network Al Arabiya. The session underscores the importance he ascribes to dealing with the combustible Middle East and represents a bold personal attempt to change the dynamic of America's relations with the region. You can read a summary and the entire transcript of Obama's interview with Hisham Mehlem here.

Obama's timing and message are meant to convey a new American face to a Muslim audience, a face etched with respect and goodwill. Obama made this clear by directly stating, "My job to the Muslim world is to communicate that the Americans are not your enemy." He made sure to speak of his Muslim father and middle name and his history of living in Muslim countries, including the largest (Indonesia).

He and Mehlem agreed that al Qaeda, by levelling political attacks against Obama even before he took office, showed they were "nervous" about him. When asked why, Obama responded by saying, "What that tells me is their ideas are bankrupt." He said they have never improved life for Muslim people anywhere, mentioning such things as "education and health care," and pointed out one of the messages of his Inaugural Address, "you will be judged on what you have built, not what you've destroyed. And what they have been doing is destroying things. And over time I think the Muslim world has recognized that that path is leading nowhere, except more death and destruction."

His specific peace idea: negotiations between Israel and the Palestinians to produce a two-state solution, is certainly nothing new. What he hopes is new is his ability to be seen as an honest broker the Arab side can trust. He said, "America was not born as an imperial power, and the same relationship of respect that we had as recently as twenty years ago, we want to reconstruct that."

There is no doubt Obama is seen more positively by Muslims than George W. Bush was. There is an identity factor there, and the absence of his predecessor's insensitivity (referring to a "Crusade") and belligerent swagger, combined with actions such as the prospective drawdown from Iraq, closing Guantanamo and pledging to follow humanitarian principles and international law should open some doors. Al Qaeda and similar extremists must indeed be concerned about Obama's enhanced credibility in their backyard and his potential for turning people away from recourse to their brand of fanaticism.

In the volatile Middle East, though, that is no guarantee that problems will be resolved. It could conceivably even rebound to strong resentment against Obama in the region if progress does not come as fast as some may hope. Still, given the ham-handed and ineffective course the U.S. has followed in recent years, the chances will improve. In the confounding Middle East, that is often the best one can do. The possibility of progress will have a chance to glimmer again, if "inshallah," the time is right.

Proffered Deal Delays AG Confirmation

Senator Sheldon Whitehouse (D-Rhode Island) is on the Senate Judiciary Committee. The committee, at the behest of Republicans, has kept putting off a vote on the confirmation of Obama Attorney General nominee Eric Holder. Whitehouse has now lost patience with the holdup and has released a statement revealing, to his understanding, what is behind this. He feels the Republicans are quite afraid Holder may wind up prosecuting people for breaking U.S. and international law by torturing people, and they do not want any investigations into such activities to take place.

On January 23 Whitehouse released the following statement. You can see the original on his website here.

"Republicans on the Judiciary Committee have asked Eric Holder to make a commitment, before he is even confirmed, that he will not prosecute any Bush Administration officials for their involvement in acts of torture during the last administration.

Anyone familiar with the criminal justice system - especially those with experience as prosecutors or judges - should know that a prosecutor should make no determination about who to prosecute before he or she has all the facts, and particularly in response to legislative pressure.

After all we have recently been through at the Department of Justice, I would hope and expect that upon calm reflection, no one on our Committee would expect the Attorney General of the United States to make prosecutorial decisions based on legislative pressure."

Or make deals promising that certain criminals will have nothing to fear as long as he is on the job. Hopefully, Mr. Holder will have the integrity to refuse to make any such deal. Some of the members of this committee seem not only to have missed the memo that they lost the election, they also seem to remain clueless as to some of the reasons why they lost.

Oh, Woe!

It's struck! The dreaded midlife metabolic slowdown has finally tapped me on the shoulder with its meaty hand. I managed to elude it until past 50, but no more.

When we moved to Visalia almost ten years ago I was 44 and could eat pretty much as much as I wanted. Ice cream three times a week was not unusual. I walked the golf course pretty much every week; that was my primary exercise. My weight had not varied much in many years.

All of a sudden I got on the scale about six months ago and had put on 15 pounds. I've not been golfing much for a few years now, but I've been running three times a week and lift weights three others. I could feel the paunch around my belly button and old pants didn't fit.

So it's been watch the diet very carefully since. It was a help to have our daughter Jeanette visit over Christmas for nearly a week. She's now a vegan and gave us some pointers. She also prepared some recipes that were pretty good.

So it's a lot more fruit, salad and exercise, a lot less starch, meat and dairy these days. Dessert? What's that? Still, the pounds are stubbornly hanging on and refusing to budge.

Whose idea was this wretched turn of events? I don't recall signing up for this! What do you mean meat loaf isn't on the list? There's got to be somebody to lodge a protest with about this. Hello? Hello?

Obama's Aid to States

One of the most important items in President Obama's stimulus package is his contemplated aid to states. This is an important component of heading off the "downward spiral" a strong recessionary economy sets in motion.

The spiral works like this. States have to balance their budgets. They cannot deficit spend like the federal government can. When the economy falters many individuals lose their jobs or earn less. Many companies make less profit or go out of business altogether. The tax contributions of these people and companies go down. With less money coming in, state governments suspend projects and lay people off. The laid off workers join the unemployed, spending less in the economy and paying less taxes. The companies who have lost their state contracts lay off more workers too. The more people without jobs, the weaker demand in the economy gets and the worse the recession gets. It's a classic catch-22.

In my city of Visalia, California a major street project on Mooney Boulevard, Visalia's main thoroughfare, has been suspended by the state budget crisis. The road remains torn up in many places, impeding access into local businesses; the contractors are without work. The phenomenon is nationwide. In Alabama, for example, the budget crunch has resulted in a 7.7% reduction in state jobs.

There is only one entity capable of reversing this contraction, the federal government in Washington. After meeting with the nation's governors in December, Obama appears ready to act. See the Wall Street Journal article on that here. California, with over 11% of the country's population, could be getting a bit more than $21 billion. That could erase about half the state's projected deficit and prevent the loss of many more jobs than would otherwise occur.

Will this recovery plan, designed to create or save now 4 million jobs, be expensive? Absolutely. But what is the cost of doing nothing? More than 2.6 million jobs have disappeared in the past year. What is the cost of that? If the dynamic goes on purchasing power will continue to decline and suck the entire economy down the maelstrom. The key is to make sure the funds, perhaps $850 billion in all, are actually spent on things that will help produce purchasing power that will circulate through the system. As Obama said in his Inaugural, the issue is not big or small government, but effective government.

In the bargain, as in the New Deal, we should also be getting some useful assets, such as modernized electrical and communications grids, restored roads and bridges, a jump on green energy production and current energy conservation, among many other long overdue infrastructure items.

As a friend of mine who is a leader in rural development in Oregon says, localities cannot act if they are offered loans. They are strapped and cannot take on more debt when they cannot even afford to meet current obligations. This is the kind of approach it is going to take to get the country moving again. We will see over the next three to four weeks whether congressional Democrats will have the discipline to stick to the essential priorities and whether congressional Republicans will decide to share credit for the recovery program as Obama is offering them or opt to reject it on the grounds they will be able to make hay if it fails. It should be interesting. In the meantime, however, the nation needs action, bold and swift.

Obama Hits the Ground Running

Barack Obama hasn't wasted any time getting to work on living up to his oath of office--you know, the part about protecting and defending the U.S. Constitution. First, to make sure there was no question about it, he asked Chief Justice John Roberts to the White House to administer the oath properly, to remove any uncertainly lingering from the jurist's mistake-filled performance at the U.S. Capitol on Inauguration Day. Then came the first repair work. Obama is getting busy with the glue and tape to put the Constitution back together after the shredding it took under the Bush-Cheney junta.

On the campaign trail Obama frequently promised to redress the wrongs initiated the past eight years. He spoke of restoring adherence to the Constitution and the rule of law. In the Inaugural Address he excoriated the "false choice" between our values and our defense.

Today he took four specific actions designed to restore government adherence to the U.S. constitution. This is most welcome. A government which does not respect and follow its constitution is a government on the way to dictatorship. The four actions were:

1) Ordered Guantanamo Bay shut down
2) Banned torture
3) Ordered a full review of detention policies and procedures
4) Suspended all military tribunal trials pending thorough examination of the history and propriety of the procedures involved.

He also followed new Secretary of State Hillary Clinton to the State Department. Hillary got a rock star reception from 1,000 State Department employees by telling them, among other things, that their professional expertise would be welcome once again, that this administration was serious about diplomacy and development and that she welcomed a good debate over honest analysis. After two terms of pressured analysis, imposed conclusions and forced compliance with official dogma our foreign service pros were ecstatic. If you saw this on television you can attest that the diplomats and analysts were rapturous.

This is all an exceedingly good sign of things to come. Honesty. Ethics. Principles. Free discussion. Legality. And all on the second full day in office. This is starting to sound like the United States of America again.