Geithner: Wrong on Everything

“At every turn on housing — on mass refinancing, on principal reduction, on leverage for homeowners in the bankruptcy process, on forcing banks to write down mortgages, on a modern-day HOLC–the evidence points to Tim Geithner preferring whatever option put the least pressure on banks, rather than actually helping ordinary people. He made far more excuses to do nothing than any effort to make a difference…In fact, the programs were never meant to help homeowners, designed only to ‘foam the runway’ for the banks, to spread out foreclosures and allow banks to absorb them.”

In the wake of Tim Geithner’s new rehab book tour — currently being aided and abetted by Wall Street’s usual court stenographer, Andrew Ross Sorkin — Dave Dayen says not so fast. “I don’t have to just focus on housing; this is indicative of Geithner’s worldview, which sees protecting the financial system at all costs as the only thing that matters.”

Yves Smith has also ably eviscerated Geithner’s game of “Three Card Monte”: “The entire edifice of the piece is a sleight of hand…The focus on TARP (and to a lesser degree, Lehman) allows Sorkin to omit mention of actions that were clearly Geithner’s doing…The bigger point, which is not lost on the public, was there were plenty of other options for saving the system. The one chosen, that left the banks largely unreformed and no one of any consequence punished, was clearly just about the worst of the available options, unless, of course, you are, like Geithner, a banker.”

And here’re economics and finance professors Atif Mian and Amir Sufi: “Whatever reasons he had for opposing assistance to underwater homeowners, a careful evaluation of the policy effects was not among them. The evidence is pretty clear: an aggressive bold attack on household debt would have significantly reduced the horrible impact of the Great Recession on Americans. The fact that Secretary Geithner and the Obama administration did not push for debt write-downs more aggressively remains the biggest policy mistake of the Great Recession.”

Noam Scheiber has his say in TNR: “[The article] inadvertently highlights something deeper about Geithner, which is the shocking extent to which he’s accepted financialization of the economy as a benign, even admirable, development. The people who spend their days shuffling trillions of dollars around the globe are really just like you and me, except with nicer offices. They deserve the same sympathy and respect, notwithstanding their abysmal track record. That blinkered view colors pretty much every one of Geithner’s utterances as he makes the rounds hawking books.”

Also of note: Geithner doesn’t seem to understand how Social Security works, and, in classic #ThisTown fashion, he — the Secretary of the Treasury! — just parrots the same ignorant Beltway line about zomg out-of-control entitlements as all Very Serious People™ do. To wit, from Geithner’s book:

“I remember during one Roosevelt Room prep session before I appeared on the Sunday shows, I objected when Dan Pfeiffer [a senior advisor to the Obama White House] wanted me to say Social Security didn’t contribute to the deficit. It wasn’t a main driver of our future deficits, but it did contribute. Pfeiffer said the line was a ‘dog whistle’ to the left…code to the Democratic base, signaling that we intended to protect Social Security.”

And here’s the LA Times’ Michael Hiltzik: “But let’s get to the nub. Does Social Security ‘contribute to the deficit’? The answer is, bluntly, no. By law, it can’t contribute to the federal deficit, because Social Security isn’t allowed to spend more than it takes in. Those who claim — as Geithner has at one point or another — both that the program contributes to the deficit yet will be forced to reduce benefits to retirees once its trust fund is depleted are trying to have things both ways: The reasoning behind the threat of reduced benefits is that Social Security can’t engage in spending money it doesn’t have, i.e., deficit spending. Pick one, fellas. If it can contribute to the deficit, then there’s no reason to cut benefits.”

So is there’s anything positive about Geithner’s rewriting of history here? Well, the Sorkin piece does include this telling anecdote: “At another point, [Geithner] cheerfully relayed a story that also appears in his book about the time he sought advice from Bill Clinton on how to pursue a more populist strategy: ‘You could take Lloyd Blankfein into a dark alley,’ Clinton said, ‘and slit his throat, and it would satisfy them for about two days. Then the blood lust would rise again.'”

Could somebody please tell me again why I should be excited about Hillary 2016?

Update: Sheila Bair offers her take. “On his book tour, to explain the need for bailouts, Tim has used a clever analogy of a pilot trying to land a plane that is on fire and in the back, sit the terrorists who started it. He argues that the pilot can’t leave the cockpit to put them in handcuffs. He first has to land the plane. The problem with this analogy is that the plane landed at the end of 2008. And let’s face it, instead of handcuffing the terrorists, we escorted them to the executive lounge.”

Forward Unto Zion.

“Particularly in the younger generations, fewer and fewer American Jewish liberals are Zionists; fewer and fewer American Jewish Zionists are liberal. One reason is that the leading institutions of American Jewry have refused to foster — indeed, have actively opposed — a Zionism that challenges Israel’s behavior in the West Bank and Gaza Strip and toward its own Arab citizens. For several decades, the Jewish establishment has asked American Jews to check their liberalism at Zionism’s door, and now, to their horror, they are finding that many young Jews have checked their Zionism instead.“

Making the rounds this week, and making a break from his former boss Marty Peretz, former TNR editor Peter Beinart laments the “failure [re: conservatizing] of the American Jewish establishment.” (See also the follow-up interview.) An interesting piece, but Beinart — who, by the way, is wrong often — seems to have neglected to mention the very welcome formation of J Steet. They seem to be way ahead of him on this.

Hacker: Still Alive.

“In short, it’s no time to be despondent about the fate of the public insurance option. For sure, pegging rates to Medicare and obligating Medicare providers to accept these rates would be far preferable, and a public plan with negotiated rates may do less to keep the insurers honest and drive down costs. But it’s still immensely valuable to give Americans an out — another choice — to let the insurers feel the heat of not being the only game in town. The fierce and continuing opposition of the insurance industry suggests that they think that a public option will prove a serious counterweight in an increasingly consolidated private market.”

In TNR, Jacob Hacker and Diane Archer make the case anew for a public option, specifically the one that made it into H.R. 3962. If all goes well, the House bill — recently endorsed by the AARP and the AMA — will get a vote tomorrow. (Yep, it’s a work day.) Update: Or later. Here’s the hold-up.

Rosen: Stop me before I blog again!

“How absurd is that? Let us count the ways. First, even when the most establishment ‘journalists’ such as Rosen get caught engaging in patently irresponsible behavior, they still find a way to blame blogs rather than themselves (I thought I was just blogging, and reckless gossip is what bloggers do.) It wasn’t blogs that “reported” Saddam Hussein’s acquisition of scary aluminum tubes for nuclear weapons or that Iraq was behind the anthrax attacks; it wasn’t blogs that glorified Jessica Lynch’s nonexistent heroic firefight with Iraqi goons; it wasn’t blogs that turned John Edwards into The Breck Girl and John Kerry into a “French-looking” weakling; and it wasn’t blogs that presented retired military generals who were participating in a Pentagon propaganda program and saddled with countless undisclosed conflicts as ‘independent analysts.’“

Call it the State of Play fallacy: After TNR’s Jeffrey Rosen blames “blogging” for the obviously poor quality of his recent Sotomayor hit piece — and vows never to blog again — Salon‘s inimitable Glenn Greenwald sets the record straight about what can and can’t be pinned on bloggers. “Despite his efforts to blame ‘blogging’ for what he did, Rosen didn’t use journalistically reckless methods to smear Sotomayor’s intellect because of some inherent attribute of the medium. Instead, he did that because…that’s how the establishment media typically functions: ‘background reporting from people with various axes to grind, i.e. standard Washington reporting.’” (And, for what it’s worth, Rosen’s original article was hardly what you’d call blogging anyway — it was just a lengthy piece that ran online.)

Roberts et al, meet Sotomayor.

“I chose to be a lawyer and ultimately a judge because I find endless challenge in the complexities of the law. I firmly believe in the rule of law as the foundation for all of our basic rights…Mr. President, I greatly appreciate the honor you are giving me, and I look forward to working with the Senate in the confirmation process.” Hearkening back to the pragmatists once again — “For as Supreme Court Justice Oliver Wendell Holmes once said, the life of the law has not been logic, it has been experience” — President Obama chooses Judge Sonia Sotomayor as Souter’s replacement on the Court. [Wiki]

Naturally, conservatives are getting their opposition ducks in a row (with some help from Jeffrey Rosen’s recent dubious hit piece in TNR.) “But some Senate GOP officials privately conceded that, barring a major stumble, the judge will probably be confirmed with relative ease. ‘You don’t have to be a rocket scientist to figure out that we need to tread very carefully,’ said John Weaver, a Republican political consultant who advised Sen. John McCain (R-Ariz.) for years. ‘The only way we’ll find ourselves in a political predicament is if we don’t treat her with the same respect that other nominees received.’” Yeah, good luck with that.

In any case, early word on Judge Sotomayor is that she is very far from the liberal activist of right-wing nightmare, but rather a “highly capable technocrat,” and exactly the sort of hypercompetent and moderate — perhaps to a fault — pick one would expect from this president. “‘She’s a lawyer’s lawyer,’ said Paul Smith, a partner at Jenner & Block who participated in the call…She’s a cautious lawyer…who was a corporate lawyer herself…She reads statutes narrowly.”

A Rose By Any Other Name.

So I take it y’all have been following the recent outrage in Empire State politics: A woman who’s never held any kind of elected office but happens to have a big, important surname just up and decides she’d like to be the Senator from New York. To accommodate this sudden quasi-royal prerogative, other deserving candidates in the Democratic party are completely shunted aside, including some who’ve spent their entire careers in public service. And, here’s the real kicker: At the end of the day, despite having very little to show for her legislative career, this well-named woman is for some reason made Secretary of State.

Ok, I’m partly kidding. Nonetheless, I find the recent furor over Caroline Kennedy’s possible two-year appointment to the New York Senate to be a bit willfully obtuse about both recent events and the former occupants of that Senate seat. Even the obvious Clinton analogy notwithstanding, lest we forget: Longtime Massachusetts resident Bobby Kennedy was only tangentially qualified for a New York Senate seat in 1964, and even his brother Teddy was basically appointed the first time ’round. And, besides, if Clinton’s perch doesn’t go to Mrs. Kennedy, who then is waiting in the wings? Well, most likely, Andrew Cuomo. A real bootstrapper, that one.

Don’t get me wrong: In principle, I’m dead set against the idea of Senate seats being doled out on the basis of familial connections. It’s an ugly, monarchical habit, and if the seat ends up going to a relatively unknown pol who’s paid their dues (a la Nita Lowey, who got pushed out for Clinton in 2000), all the better. Still, I’m inclined to think charitably of Caroline Kennedy for several reasons other than her name and historic lineage: her early advocacy of Sen. Obama and the good work she’s done for my sister’s organization over the years, to name just two. And, if Gov. Patterson were to end up choosing her…well, ok. I can think of more egregious injustices in this world. To watch the TNR gang throw an extended fit about it, or read Salon hackmeister Joan Walsh (who, by the way, penned an extraordinarily self-serving 2008 retrospective this past week) put down her Clinton pom-poms for a second to tsk-tsk the Kennedy “celebrity” candidacy is, in a word, irritating.

The Constitution Made Whole.

“Not one lawyer in 100 can identify Ohio congressman John Bingham as the main drafter of the 14th Amendment. Yet Bingham is a fascinating historical figure: he served in Congress in the 1850s as the country was torn apart and in the 1860s as it was stitched back together. He was a federal judge and the nation’s minister to Japan. As a prosecutor, he convicted John Wilkes Booth’s co-conspirators, and as a member of Congress he gave closing arguments in President Andrew Johnson impeachment trial. All that, plus he drafted Section 1 of the 14th Amendment, which is perhaps the single most important paragraph of our Constitution.” Over at TNR, Doug Kendall pleas with Obama and others to remember the Reconstruction amendments.

Giddyup, Cowboy State.

The math just got even harder. Sen. Obama wins the Wyoming caucuses 61%-38%, meaning he’s picked up three more delegates on Clinton (7-5 + 1 add-on UAD), i.e. 75% of her ostensibly game-changing 4-delegate victory last Tuesday. Next stop, Mississippi on Tuesday.

Wilentz Jumps the Shark.

“The Obama campaign has yet to reach bottom in its race-baiter accusations…They promise to continue until they win the nomination, by any means necessary.” Taylor Marsh, Ph.D? A Clinton supporter from Day One, he at first dismissed Obama as merely the newest in a long tradition of “beautiful losers,” like Adlai Stevenson and Bill Bradley. (If you come ’round here often, you can probably guess that didn’t sit too well with me. In fact, it’s basically the same argument recently made by friend and colleague David Greenberg, before he went the way of the Great White Hope.) Well, if today’s TNR piece is any indication, historian Sean Wilentz only knows how to lose ugly. Despite the fact that Wilentz has been ranting worse than Krugman for most of this election cycle, I’ve been inclined to give him a pass, partly as a professional courtesy of sorts to a well-esteemed historian of whom I once thought quite highly, and partly because of his well-publicized Dylan fandom. Well, no more. Wilentz has been writing increasingly blatant pro-Clinton spin pieces throughout the campaign, which is his wont as a Clinton supporter, I suppose. But here he’s penned a shrill and intemperate screed which, frankly, is more embarrassing than anything else. It’s the type of angry, weirdly conspiratorial rant you’d expect to be written by an anonymous, and possibly drunk, Salon poster, not one of the more venerable American historians in the profession.

Am I overstating the case? Well, let’s take a look at some of the spleen-venting on display here: “After several weeks of swooning, news reports are finally being filed about the gap between Senator Barack Obama’s promises of a pure, soul-cleansing ‘new’ politics and the calculated, deeply dishonest conduct of his actually-existing campaign. But it remains to be seen whether the latest ploy by the Obama camp–over allegations about the circulation of a photograph of Obama in ceremonial Somali dress–will be exposed by the press as the manipulative illusion that it is.” Calculated, deeply dishonest conduct? Ploy? Manipulative illusion? Tell us what you really think, Prof. Wilentz.

And that’s just the first paragraph. It gets worse. Check out this unsightly sentence: “As insidious as these tactics are, though, the Obama campaign’s most effective gambits have been far more egregious and dangerous than the hypocritical deployment of deceptive and disingenuous attack ads.” Riiight. I really started to buy your case after that fifth negative adjective or so.

I’d spend time refuting Wilentz point for point if I thought he was trying to make a reasonable case here. But he spends most of the article just shrieking “race baiter race baiter race baiter!“, punctuated with occasional whiny, Clintonesque accusations of pro-Obama media bias. (One of the many targets of Wilentz’s wrath, Frank Rich, has recently pointed out the problems with that line of argument.) But, in general terms, in order to buy what Wilentz is selling here, you’d have to believe all of the following:

That there’d be no conceivable political advantage whatsoever for the Clinton campaign to paint Barack Obama as solely “the black candidate” (“It has never been satisfactorily explained why the pro-Clinton camp would want to racialize the primary and caucus campaign.“) Hmm. Anyone have a theory on this? Dick Morris? Hitch? I can’t for the life of me imagine how such a tack might’ve helped the Clintons, here in our post-racial America.

That there were no racial overtones whatsoever to Billy Shaheen and Mark Penn et al, just sorta accidentally invoking drug hysteria, even once the campaign got explicitly Willie Horton with it and called Obama weak on mandatory minimums.

That, similarly, there were no racial overtones whatsoever to Bill Clinton comparing Obama’s huge Carolina victory to that of Jesse Jackson, something that bothered even ostensibly neutral observers such as Josh Marshall and Glenn Greenwald.

That people (such as myself) who at first wondered in shock if a Bradley effect had anything to do with the fifteen-point New Hampshire turnaround were actually operating on orders from the Obama campaign.

That African-Americans unaffiliated with the Obama campaign such as Jim Clyburn and Donna Brazile, among countless others, who took umbrage at the dismissive tone of the LBJ/fairy tale remarks (which I’ve said were not racist, just tone-deaf) were also “deep undercover,” at the sinister behest of Obama’s race-baiting shock troops.

That the Clinton campaign has been the unfairly aggrieved party throughout this election cycle, and would never dream of indulging in “outrageously deceptive advertisements.”

That rather than trying to defuse racial controversies as they’ve emerged during the race, Sen. Obama has personally sought to exploit them for nefarious purposes.

That Clinton staffers just innocuously sent out the Somaligate photo to Drudge, having no earthly idea at all that it might play to the whispering campaign about Sen. Obama’s religion. I mean, who woulda thunk it?

And so on. Meanwhile, in between the purging of bile (Obama’s “cutthroat, fraudulent politics,” “the most outrageous deployment of racial politics since Willie Horton, “the most insidious” since Reagan in Philadelphia), Wilentz trots out stale and rather sad race-conspiracy talking points from pro-Clinton hives like TalkLeft, such as Jesse Jackson Jr. chiding superdelegate Emanuel Cleaver for standing in the way of a black president. (Please. As if female superdelegates weren’t receiving similar calls from the Clinton camp. Clinton even made the explicit gender case — again — in the debate tonight.) I dunno, perhaps this is what you should expect from a thinker who cites Philip Roth as an expert on black-white relations. (Although, fwiw, Roth’s voting Obama.) Nevertheless, Wilentz has crossed over the line here from politically-minded historian to unhinged demagogue, and made himself to look absolutely ridiculous in the process. It’ll be hard to read his historical work in the future without this hyperbolic and ill-conceived polemic in mind.

The Money Pit.

“Hillary Clinton ended January with $7.6 million in debt – not including the $5 million personal loan she gave to her campaign in the run-up to the critical Super Tuesday elections, according to financial reports released Wednesday.” With the January FEC reports filed, Politico takes a look at the sinking fiscal ship that is the Clinton campaign. The key graphs: “According to the reports, Clinton raised about $20 million in January, including her loan. She spent nearly $29 million during the month. She reported a cash balance of $29 million. But more than $20 million of that is money dedicated to the general election. Her personal loan accounts for more than half of the remaining approximately $9 million, leaving just about $4 million in cash raised from donors. But even that money is illusionary when measured against the reported $7.6 million in debts.” So add that all up and you get: no money. (Hence, the fatcat 527.) But the silver lining for Sen. Clinton? At least she’s making interest on that loan.

Over at TNR, Christopher Orr emphasizes this finding from the piece: “More than $2 million of the red ink is owed to chief consultant and adviser, Mark Penn.” So that goes a long way toward explaining why he’s still employed over there these days, despite his obvious incompetence.

And a commenter in the same TNR thread teases out another key line buried in the article: “[T]he lengthy laundry list of IOUs also includes unpaid bills ranging from insurance coverage, phone banking, printing and catering at events in Iowa, New Hampshire and California.” Wait a tic: Sen. Clinton, she of the much-touted mandate, is now ducking the insurance bills? Hmm…maybe affordability is the real problem after all.

Update: Politico‘s Kenneth Vogel has more on where the money went, including $10 million to Mark Penn and $1300 to Dunkin Donuts.

Update 2: The NYT piles on the terrible financing issue: “Senator Hillary Rodham Clinton’s latest campaign finance report, published Wednesday night, appeared even to her most stalwart supporters and donors to be a road map of her political and management failings…’We didn’t raise all of this money to keep paying consultants who have pursued basically the wrong strategy for a year now,’ said a prominent New York donor. ‘So much about her campaign needs to change — but it may be too late.‘”