Not that I’m particularly upset that he’s managed to re-sour (is that even a word?) relations with Venezuela before he even got to meet with Hugo. But you do remember the promise:
Venezuela’s President Hugo Chavez said on Sunday his U.S. counterpart Barack Obama was at best an “ignoramus” for saying the socialist leader exported terrorism and obstructed progress in Latin America.
“He goes and accuses me of exporting terrorism: the least I can say is that he’s a poor ignoramus; he should read and study a little to understand reality,” said Chavez, who heads a group of left-wing Latin American leaders opposed to the U.S. influence in the region.
Chavez said Obama’s comments had made him change his mind about sending a new ambassador to Washington, after he withdrew the previous envoy in a dispute last year with the Bush administration in which he also expelled the U.S. ambassador to Venezuela.
“When I saw Obama saying what he said, I put the decision back in the drawer; let’s wait and see,” Chavez said on his weekly television show, adding he had wanted to send a new ambassador to improve relations with the United States after the departure of George W. Bush as president.
Apparently during the January interview with Spanish language Univision, Obama said Chavez hindered progress in Latin America and accused him of exporting terrorist activities and supporting Colombian guerrillas. As you might imagine this was not something El Supremo found to be helpful:
“My, what ignorance; the real obstacle to development in Latin America has been the empire that you today preside over,” said Chavez, who is a fierce critic of U.S. foreign policy.
Mark up another victory in that promised attempt to have the world “like us better”. The upcoming Summit of the Americas scheduled for next month ought to be a real circus – both Chavez and Obama will be attending.
Man, am I glad that doofus Bush is out of office.
Hope and change.
The Supreme Court will take up a case dealing with free speech:
Months after its debut, “Hillary: The Movie” faces nine of the nation’s toughest critics: the Supreme Court.
The justices’ review of the slashing documentary financed by longtime critics of Secretary of State Hillary Clinton could bring more than just a thumbs up or thumbs down. It may settle the question of whether the government can regulate a politically charged film as a campaign ad.
At issue in the case being argued before justices Tuesday is the 90-minute anti-Clinton movie and television ads [David] Bossie wanted to air during the 2008 primaries advertising the film.
Bossie’s group, the conservative Citizens United, released the movie as Clinton, then a New York senator, was competing with Obama for the Democratic presidential nomination.
The movie is unquestionably anti-Clinton, featuring commentary from conservative pundits, some of whom specifically say Clinton was not fit to be commander in chief.
The movie was shown in eight theaters. Bossie’s group wanted run ads on television in key election states during peak primary season and show the movie on cable television’s video-on-demand.
Federal courts said the ads would violate the McCain-Feingold law, the popular name for 2002 revisions to the nation’s campaign finance laws. Judges called “Hillary: The Movie” a 90-minute attack ad, rulings that would require Citizens United to identify the financial backers for the ads if they were to appear on television.
The court also said that if Bossie’s group showed the movie on cable television, financial backers would have to be named and the group would have to pay the cost of airing the movie.
Whether you agree with the message of the documentary, but voters will be able to discern for themselves if something is true or not. The government doesn’t need to stifle speech, let alone political speech.
The case is Citizens United v. Federal Election Commission. Oral arguments begin on Tuesday, March 24th.
In this podcast, Bruce, Michael and Dale talk about the AIG bonus Fiasco, limiting executive pay, and the public’s tolerance for President Obama.
The direct link to the podcast can be found here.
The intro and outro music is Vena Cava by 50 Foot Wave, and is available for free download here.
As a reminder, if you are an iTunes user, don’t forget to subscribe to the QandO podcast, Observations, through iTunes. For those of you who don’t have iTunes, you can subscribe at Podcast Alley. And, of course, for you newsreader subscriber types, our podcast RSS Feed is here. For podcasts from 2005 to 2007, they can be accessed through the RSS Archive Feed.
Call in number: (718) 664-9614
Yes, friends, it is a call-in show, so do call in.
Subject(s): The AIG bruhaha and how it has been handled by both Congress and the administration. The banking plan. The recent unpleasantness in the NYT editorial pages with various and sundry pundits taking well-deserved shots at Obama.
And a fairly surprising one. Regardless of your opinion of Barack Obama, most people consider him to be a great orator and communicator. Or at least they have until recently:
Of all the pitfalls Barack Obama might face in the presidency, here is one not many people predicted: He is struggling as a public communicator.
Indeed he is – read the whole piece by Jim VandeHei and Mike Allen of Politico.
Yesterday I mentioned Paul Krugman’s trashing of the Geithner plan, now the NYT op-ed page triumvirate of MoDo, Thomas Friedman and Frank Rich take a few shots as well.
Friedman tried mightily to temper his criticism by claiming the that GOP was using this horrible crisis as an opportunity for partisan bashing.
We’re in a once-a-century financial crisis, and yet we’ve actually descended into politics worse than usual. There don’t seem to be any adults at the top — nobody acting larger than the moment, nobody being impelled by anything deeper than the last news cycle. Instead, Congress is slapping together punitive tax laws overnight like some Banana Republic, our president is getting in trouble cracking jokes on Jay Leno comparing his bowling skills to a Special Olympian, and the opposition party is behaving as if its only priority is to deflate President Obama’s popularity.
Interesting. Friedman was no where in sight, of course, when Democrats were engaged in precisely what he accuses the Republicans of doing during the war in Iraq. As with many on the left, apparently history started on January 20th of this year.
OTOH, deflating Obama’s popularity is politically important to the GOP, because anyone who watches politics knows full well that Obama plans to trade on his popularity to pass the economy killing legislation he want to see passed. This ain’t bean bag, Mr. Friedman.
Frank Rich likens this crisis to “Bush’s Katrina moment”:
A charming visit with Jay Leno won’t fix it. A 90 percent tax on bankers’ bonuses won’t fix it. Firing Timothy Geithner won’t fix it. Unless and until Barack Obama addresses the full depth of Americans’ anger with his full arsenal of policy smarts and political gifts, his presidency and, worse, our economy will be paralyzed. It would be foolish to dismiss as hyperbole the stark warning delivered by Paulette Altmaier of Cupertino, Calif., in a letter to the editor published by The Times last week: “President Obama may not realize it yet, but his Katrina moment has arrived.”
Rich implies that Obama doesn’t recognize the depth of political risk this crisis carries for him. And I agree. Obama, it appears, thinks he can lay this all off on “inherited” problems. But he can’t. It’s his now. While it may have been right to say New Orleans Mayor Ray Nagin and Louisiana Governor Kathleen Blanco were the real reason Katrina was a fiasco, that’s not who much of the public ended up blaming. Bush too seemed not to understand the depth and breadth of the anger (whether right or not) that Katrina spawned. Obama seems even less aware of the risk, jetting around the country having moved on to defending his budget and appearing on comedy shows while the financial crisis lingers and deepens. As I’ve said a number of times on this blog, it is all about leadership, or the lack thereof. In reality, it is the “lack thereof” on which both Rich and Friedman are actually commenting.
Maureen Dowd wonders if, after watching Michelle Obama talk about the White House garden, perhaps the wrong Obama is in the Oval Office. She then let’s the male Obama have it with both barrels:
It’s a time in America’s history where we need less smooth jazz and more martial brass.
Barack Obama prides himself on consensus, soothing warring sides into agreement. But the fury directed at the robber barons by the robbed blind in America has been getting hotter, not cooler. And that’s because the president and his Treasury secretary have been coddling the Wall Street elite, fretting that if they curtail executives’ pay and perks too much, if they make the negotiations with those who siphoned our 401(k)’s too tough, the spoiled Sherman McCoys will run away, the rescue plan will fail and the markets will wither. (Now that Mr. Obama has made $8,605,429 on his books — including $500,000 for letting his memoir be condensed into a kids’ book — maybe he’s lost touch with his hole-in-the-shoe, hole-in-the-Datsun, have-not roots.)
Despite all the appeals to class warfare, what is at the base of her criticism?
Lack. Of. Leadership.
The nation elected someone who has never once been in a position in which he had to lead. Mr. Obama is a charmer and someone who knows what to say to please his audiences. But he’s never had to translate what he says into action. He’s never had to really take full ownership of his agenda, at whatever level, and implement it. He has never had to ‘make it happen’.
Where does one learn to do those sorts of things? From experience. Take a new lieutenant and make him a battalion commander and I can promise one poorly led battalion which will fail at its first leadership test. That’s because the LT isn’t a leader yet. He first had to serve as a platoon leader and learn leadership skills. Then if he does well there and is advanced in rank, he’ll eventually get a chance to become a company commander and fine tune those skills with a larger organization. Again, if he shines and is further advanced in rank and responsibility, he may get a shot at a battalion command. But he will first prove himself to everyone’s satisfaction at the lower level leadership positions before he is even considered for that job.
Anyone – what lower level position held by Barack Obama did he demonstrate the leadership necessary to do the job he now holds? Why is charm more important politically than experience and leadership abilities?
Apparently Krugman, Dowd, Rich and Friedman are suddenly discovering what many of us have understood from the beginning – Obama is completely unqualified for the job he holds.
Unfortunately for all of us, if ever there was a worst time for such a man to be President of the United States, this is probably it.
At least when it comes to spending money. Business takes a hard look at the potential and when there doesn’t seem to be any, it pulls back. Government, on the other hand, decides it believes something has a future and spends money to try to make their belief a reality.
Oil Major Royal Dutch Shell Plc doesn’t plan to make any more large investments in wind and solar energy in the future and does not expect hydrogen to play an important role in energy supply for some time.
“We do not expect material amounts of investment in those areas going forward,” Linda Cook, head of Shell’s gas and power unit told reporters at a press conference on Tuesday.
“They continue to struggle to compete with the other investment opportunities we have in our portfolio,” Cook said of solar and wind.
Shell’s future involvement in renewables will be principally limited to biofuels, which the world’s second-largest non- government-controlled oil company by market value believes is a better fit with its core oil and gas operations.
Now let’s be clear. “Oil companies” such as Royal Dutch Shell understand that in reality they’re “energy companies”. They realize that somewhere in the far distant future, we’ll wean ourselves from fossil fuels and they need to be in a position to supply what we decide is the viable alternative fuel(s) for that time. And my guess is, they’ll do so.
However, on a purely business assessment of “potential” (that would be potential profit) for some of the favorite alternatives of this era, Shell just doesn’t see a real future, at this time, in solar, wind or hydrogen.
With one exception:
In the past year, the company said it was refocusing its wind business on the U.S. as it pulled out of European projects.
Can anyone guess why that may be? Well, whether or not wind works or has a real application anytime soon, there’s money being promised for R&D. Why not get a little of it even while pulling back in Europe where it sees no real future for wind at this time? They’d like to keep researching it, but why spend their own money when it would appear they can use yours?
Meanwhile, I’m sure we’ll hear all about the government no longer subsidizing Big Oil with tax breaks (while you pay the difference at the pump).
I’m no arguing for tax subsidies or anything else. I’m just pointing out a few things. Shell obviously believes there’s no real business potential in the alternatives it’s backing out on right now. But it will certainly accept subsidy money for wind research if our government is handing it out, all the while our government is telling us it is no longer subsidizing Big Oil. It’s an irony thing.
In the meantime, given Shell’s decision, I don’t expect much from the billions of your money the government plans on throwing at alternatives any times soon. But I could be wrong. After all, isn’t there a new emerging “conventional wisdom” about markets among the anti-capitalists among us?
Markets – they’re always wrong, aren’t they?
The CEO’s of banks and financial firms that received bailout money may not be the only executives to see their pay regulated:
The Obama administration will call for increased oversight of executive pay at all banks, Wall Street firms and possibly other companies as part of a sweeping plan to overhaul financial regulation, government officials said.
The outlines of the plan are expected to be unveiled this week in preparation for President Obama’s first foreign summit meeting in early April.
The administration has been considering increased oversight of executive pay for some time, but the issue was heightened in recent days as public fury over bonuses spilled into the regulatory effort.
The officials said that the administration was still debating the details of its plan, including how broadly it should be applied and how far it could go beyond simple reporting requirements. Depending on the outcome of the discussions, the administration could seek to put the changes into effect through regulations rather than through legislation.
One proposal could impose greater requirements on company boards to tie executive compensation more closely to corporate performance and to take other steps to ensure that compensation was aligned with the financial interest of the company.
The new rules will cover all financial institutions, including those not now covered by any pay rules because they are not receiving federal bailout money. Officials say the rules could also be applied more broadly to publicly traded companies, which already report about some executive pay practices to the Securities and Exchange Commission.
You are not free to make as much money as you want. You are not free to succeed because government will tax you at the point of a gun to make sure you aren’t making more money than they approve of.
Welcome to Obama’s America.
Thanks to last night’s White House info dump, we now have gotten the outlines of the White House’s banking recovery plan. As I mentioned earlier this week, the banking problem is the fundamental issue in the current financial crisis. We’ve been waiting for the White House to give it to us. Now that we’ve got it, I don’t like it much.
The details, as reported, are as follows:
The plan to be announced next week involves three separate approaches. In one, the Federal Deposit Insurance Corporation will set up special-purpose investment partnerships and lend about 85 percent of the money that those partnerships will need to buy up troubled assets that banks want to sell.
In the second, the Treasury will hire four or five investment management firms, matching the private money that each of the firms puts up on a dollar-for-dollar basis with government money.
In the third piece, the Treasury plans to expand lending through the Term Asset-Backed Securities Loan Facility, a joint venture with the Federal Reserve.
The goal of the plan is to leverage the dwindling resources of the Treasury Department’s bailout program with money from private investors to buy up as many of those toxic assets as possible and free the banks to resume more normal lending…
Although the details of the F.D.I.C. part were still being completed on Friday, it is expected that the government will provide the overwhelming bulk of the money — possibly more than 95 percent — through loans or direct investments of taxpayer money.
The hope is that such a generous taxpayer subsidy will attract private investors into the market and accelerate the recovery of the country’s banks.
The key protection for taxpayers, according to people briefed on the plan, is that the private investors will bid in auctions against each other for the assets. As a result, administration officials contend, the government will be buying the troubled loans of the banks at a deep discount to their original face value.
That last paragraphs is a howler, since it’s so self-evidently untrue. As Ezra Klein at The American Prospect–hardly an enemy of the Obama Administration–notes:
You almost wonder if that’s a typo. It seems to imply that the protection comes because private investors will accurately price the assets. After all, they don’t want to lose money.
But it’s not their money. It’s our money. The plan uses public funds to protect and subsidize private investors. As such, a private auction will not price the assets. It will price the potential upside of the assets given that taxpayers will assume the brunt of the losses. [Emphasis mine–EDF]
As illustration, imagine an art auction. Now imagine an art auction where Sotheby’s loans money to the participants and promises to pay the losses if the paintings fall in value. Think the pricing will be the same? And who would you say is being protected: Sotheby’s or the private investors? As Calculated Risk says, “With almost no skin in the game, these investors can pay a higher than market price for the toxic assets (since there is little downside risk). This amounts to a direct subsidy from the taxpayers to the banks.”
As for the contention that “the government will be buying the troubled loans of the banks at a deep discount to their original face value,” I’m not even sure what to say about that. Their original face value was a lie. If I pretend this beautiful bic pen is worth $60 million and then sell it to you for $1.00, you’re not getting a $59,999,999 discount because I’ve come down from the imaginary price where I started. The question is what these assets are actually worth, and whether taxpayers are paying more or less than that. We’re in this mess because the original face value is wrong.
I don’t know how to explain it any better than that. Moreover, Ezra links to Yves Smith, who further comments:
First, the banks, as in normal auctions, will presumably set a reserve price equal to the value of the assets on their books. If the price does not meet the reserve (and the level of the reserve is not disclosed to the bidders), there is no sale; in this case, the bank would keep the toxic instruments.
Having the banks realize a price at least equal to the value they hold it at on their books is a boundary condition. If the banks sell the assets as a lower level, it will result in a loss, which is a direct hit to equity. The whole point of this exercise is to get rid of the bad paper without further impairing the banks.
So presumably, the point of a competitive process (assuming enough parties show up to produce that result at any particular auction) is to elicit a high enough price that it might reach the bank’s reserve, which would be the value on the bank’s books now.
And notice the utter dishonesty: a competitive bidding process will protect taxpayers. Huh? A competitive bidding process will elicit a higher price which is BAD for taxpayers!
Dear God, the Administration really thinks the public is full of idiots. But there are so many components to the program, and a lot of moving parts in each, they no doubt expect everyone’s eyes to glaze over.
The last point is another big problem. There are a number of other ways to accomplish recapitalization, from just purchasing the assets from the banks for cash to outright nationalization of the banks. Whether we would actually like those options is another story, but at least they have the virtue of simplicity. Even laymen would be able to grasp their essentials. That certainly isn’t true is the case of what the Obama Administration has released. It is complicated. It’s made of three different parts, all of which are complicated in their own special ways. Ezra Klein again:
If it goes bad — and it really might go bad, and the details might prove galling in much the way that AIG’s bonuses did — the byzantine approach could well leave voters feeling tricked. That risk might make sense if this were the only viable path forward. But it’s actually hard to imagine the set of questions you ask that ends in this particular answer.
And it’s difficult to see how this actually becomes an answer in the real world. The trouble with these kinds of complicated plans is that they so often crash against the rocks of reality. When one part of the plan goes awry, the whole plan breaks up. With the triple complications of the plan leaked by the administration, there is a not insignificant chance that the plan will fail due to it’s unnecessary complexity.
I don’t think that will be helpful.