Same Old, Same Old

The President of Honduras has been ousted by the military and exiled to Costa Rica. The United States has expressed "concern," which means that this is likely payback for the OAS vote inviting Cuba to return to the inter-American fold. Send a clear message to the Obama Administration that this is unacceptable. Email him here.

Obama and the Progressives

Various of the punditry are now rising to remind the progressive/left community that we shouldn't be to hard on Obama for his Cabinet choices. After all, he's choosing responsible people. Or he hasn't done anything yet. Well, I disagree. I never thought Obama was going to be all that great in the first place. And I see no reason not to point out that his choices for economic policy include some of the worst offenders in bringing about the present crisis, that his choices for foreign policy are a bunch of hawks (as if we could afford another war), his Chief of Staff is famous not for any progressive legislation, but for his work to bring us NAFTA, and he kept a Republican as Secretary of Defense. And while these choices don't tell us what his policies will be, they give us a pretty good indication. And it's not good.

Such Fun

It's been such fun reading the more right-wing pundits work their way through our economic crisis. I mean, it's so difficult to argue against $60 billion for a national health system when the gummit has just blown $350 billion, and you're not quite sure what they spent it on. And then the gummit decides that the $350 billion didn't do much good and they need to spend another $350 billion and you're not quite sure what they want to spend it on.

But they're doing their best to limit the damage, so to speak. There's been a concerted effort to argue that the New Deal policy to enable unionization was, in fact, bad for workers, as it maintained high levels of unemployment. And now Robert Samuelson has made his contribution, arguing that Obama should devote himself to the immediate crisis and leave issues like health insurance and green industries for some indefinite future. I'm sure that someone probably argued to Roosevelt that he should pay attention to the immediate crisis and leave Social Security to another time. Luckily for us, he didn't listen. And while I expect that Obama would dearly love to offload his more progressive campaign promises, public pressure may force him to come through.

Fall Leaves

Instead of going on our usual brisk walk yesterday, I dragged my friend A to the park, so that I could take pictures of fall leaves. California doesn't have fall like the East, where all of the trees turn at the same time. Our fall dribbles from the end of August through January. Some trees are budding out at the end of January, just as the last trees going dormant lose their leaves. We do, however, have good years and bad ones--well, not so much bad, as mediocre. The best color seems to come with a short, sharp fall, when the nighttime temperatures drop suddenly from 60 to 40 degrees. This year we had erratic temperatures through the fall, so our fall color has ranged mostly from dull yellow to brown.

I've written before that I had little expectation that I would be happy with the Obama Administration. And so far, I've not been disappointed. He headed straight for the miserable centrists in and about the Democratic Leadership Council that brought us the eight-year fiasco that was the Clinton Administration. (The only reason that one no longer seems quite so awful is that the present government is so thoroughly appalling.) The economic advisors are mostly people who helped bring about the mess we're currently in. It will soon become part of the ruling conventional wisdom that the Republicans were responsible for the deregulative frenzy that collapsed so many of our major banking houses. This is not true; the Democrats were as culpable in bringing about the "modernizing" legislation that enabled the development of the alpahbet soup (SIV, CDO, CDS) as the Republicans.

I've been thinking lately about the intersection of Wall Street and Main Street in the present crisis. What made the housing bubble so much more disasterous than the stock bubble? Yes, the collapse of the stock bubble did cause a recession, but it didn't threaten the entire economy. The housing bubble does. Several things are at work here. The first is that the poorest 2/3 of the population has been precarious since the mid-1970s. Wages have been declining since then, and it's only because more family members have gone out to work that household incomes haven't collapsed. (In 1973 a family could make the median income with forty-two work hours a week at the average weekly wage. By the mid 1990s, achieving the median income required eighty-two work hours a week.) When that was no longer sufficient, families turned to the credit card to stretch their incomes. Credit cards were particularly important for single-earner households, as they couldn't work the eighty-two hours a week required to make the median income. Brett Williams called the credit card the virtual domestic partner and that's an apt description. The banking system made huge amounts of money from the expansion of credit card lending--interest, late fees, overlimit fees--but by the beginning of the 21st century, it was pretty obvious that people couldn't borrow much more from Mastercard and Visa. There simply wasn't sufficient income to service all of that debt. I remember Alan Greenspan trying to explain that not all households were in insurmountable debt--only some of them.

So what was left? If I were someone who believed in conspiracy theory, I'd imagine a bunch of bankers looking at the little house on Cul de Sac Lane, light bulbs going off over their heads. What was obvious to them, I'm sure, was that housing was the only resource left to exploit. Most Americans didn't have anything else left. What the mortgage brokers, lenders, hedge fund managers didn't understand was that people were so precarious that they were taking loans they couldn't hope to pay back. I remember reading in the local papers that people would always pay the mortgage, no matter what. But if the mortgage payment is more than the household's monthly income, there's no belt tight enough to save it.

So a good number of our fellows started borrowing against their houses to pay off the aforementioned credit card bills, fix up the house, buy cars and so on. I suppose that some of them bought big-screen TVs with the money or took expensive vacations or whatever, but a lot of people just wanted to send the kid to college. What's worse is that some tenants, who should have been living in subsidized rental housing, were induced to take on mortgages so that they could have a decent place to live. Many tenants are barred from decent rental housing by credit problems, so their best option really was to buy a house they couldn't afford.

That they believed that housing prices would only go up isn't surprising; most of the nation's leading financiers thought the same thing, and produced charts and graphs to show us the truth of their proposition. Unlike our nation's financiers, however, they are suffering the consequences of those beliefs. Whatever credit they had has now been trashed, and they're now doubled up with friends or relatives. Some have rented apartments from unscrupulous landlords, paying exorbitant deposits, only to find that the house they've rented has gone into foreclosure. Particularly sad are the people in their mid-50s who suffered foreclosure, as they will never recover from it. (For a variety of reasons, people born in the mid-1950s are less likely to own houses than those born before or after, so they were specially susceptible to the "now or never" pressure.)

I do wonder what Wall Street will come up with next. They tried commodities, but that seems to have been a bust. Maybe tulips?

Clinton for Secretary of State?

Hillary, that is. It's not that much of a surprise. Were I Barack Obama, I wouldn't want Senator Clinton working her base in the party and her colleagues in the Senate. In a dispute between Congress and the Administration, she might become a countervaling force--with her own interests, constituencies and policy priorities. So giving her a Cabinet position neutralizes her politically and keeps her really busy. If I were Hillary, I'd turn it down--for just those reasons.

Election

And here we all thought we'd be up 'til the wee hours waiting to find out who would be the next President. And it was called the minute the polls closed in California. I'm glad Obama won--I actually voted for him--but I know that I'll spend much of the next four years demonstrating against him.

It also appears that Kevin Johnson has beaten Heather Fargo to become Mayor of Sacramento. Johnson is supported by many of the developer and anti-environmental interests that wanted someone even more willing to do their bidding than Fargo was.

And at this writing Proposition 8 is passing and, while Alameda and Los Angeles returns are (a) always late and (b) some of the most progressive in the state, I'm not sure that will be enough to upset this one. It's passing 53-47.

More tomorrow.

The Debate Tonight

A cure for insomnia. The government could make the money for the bailout by selling tapes.

The Election

I voted for Kucinich. And no, I didn't vote before he withdrew. After all, he was out of contention from the beginning, so that wasn't really an issue. I just decided that in the primary I'd vote for the candidate I'd rather have. I'm going to have to vote for Obama or Clinton in the general election and know that I'm going to regret it. There's no reason to regret my vote twice.

I've listened to Obama's speeches and can't figure out why he's so popular. He doesn't really say anything except that he's in favor of change. There's a scene in Mike Leigh's High Hopes where the main character is standing in front of Karl Marx's grave at Highgate. Reflecting on Marx's admonition to not just understand the world, but change it, the main character says, "Change what?" Well, that's the question I wish someone would ask Obama. And then how he's going to change it.

Clinton--well, DLC. Isn't that enough?

I struggle to find any reason to support one of them over the other, but I can't find enough difference between them to make it worth the energy. Instead I recognize that come November I will vote for one (or both) of them. Not happily, but I've never been happy with my presidential options, so I'm used to it. Although I do admit to being very slightly excited to be voting for the first woman and/or the first African American to run for President and have a chance of winning. I guess it's too much to ask that I actually like the candidate.