Sunday, March 22, 2009

Who's So Afraid of An Angry Public?


The wealthy, that's who. And they should worried. It is not easy being a thief in this country while everyone else is being pauperized.

Frankly, I think the anger is a good thing, as a form of venting, and as a means of holding people accountable. So, Wall Street is upset that the AIG executives might lose the bonuses they stole from us? All that tells us is just how utterly removed Wall Street is from the problems of this country.

And it is not just Wall Street. It is also the Obama Administration. His neo-liberal free trade DLC picks for economic advisers and Secretary of Treasury are coming back to haunt him in the worst way. To hear Lawrence Summers tell us, we just cannot stop anyone from stealing, if it was contractually allowed, but I Mr. Summers sure did not mind running out leftist professors from Harvard, in violation of their contract, or preaching the virtues of union-busting as a free market economist. You see, when a high school-educated industrial worker from the Midwest makes $60,000 in a union job, that is a threat and his or her contract must be renegotiated. Such are the values of the Blue Dog/DLC clique that has run the party into the ground (and are only riding the halls of power now because of the ineptitude of George Bush).

Just how far removed are they? Here is Vice President Biden's economic adviser Jared Bernstein on AIG.

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VP adviser: AIG bonus tax may go too far

WASHINGTON – Vice President Joe Biden's economic adviser warned Sunday that a congressional plan to tax American International Group Inc. executives' bonuses may go too far in using the tax code as a tool for retribution.

President Barack Obama has not said whether he would veto some version of a House-backed plan to heavily tax the $165 million in bonuses. Biden economist Jared Bernstein said it's important to look at what version of the proposal comes out of the Senate.

"I think the president would be concerned that this bill may have some problems in going too far — the House bill may go too far in terms of some — some legal issues, constitutional validity, using the tax code to surgically punish a small group," Bernstein said in a television interview. "That may be a dangerous way to go."

Democratic and Republican leaders in the Senate also have expressed concern about the plan's approach to dealing with the AIG bonuses.

American International Group received billions in taxpayer dollars to keep its doors open but still paid employees the bonuses their contracts required. Populist anger led the House to impose a 90 percent tax on bonuses paid this year to companies that needed government bailout money.

Obama and his top advisers called the bonuses outrageous and condemned them. Bernstein said the administration must be focused on the big picture, not just one company.

"What happened at AIG, vis-a-vis these bonuses, is a symptom of a much larger problem," he said. "And we cannot lose sight of the larger problem, which is stabilizing financial markets,"

Bernstein appeared on ABC's "This Week."

http://news.yahoo.com/s/ap/20090322/ap_on_go_pr_wh/biden_economist_aig
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The saddest part is that Bernstein is supposed to be the most progressive, "pro-labor" of the advisers. If ever you wondered why the Democratic Party is not a real progressive party, it is attitudes like Mr. Bernstein's. Good luck to those wishing or hoping that Congress or the White House will want to bring back the Glass-Steagall Act, the repeal of which was precipitated by those same economic advisers back in the late '90s.

5 comments:

Michael said...

I must have missed something. Which "leftist professors" did Summers "run out of Harvard," and what action(s) did he take that violated their employment contracts? Also, in what publication did Summers "preach the virtues of union-busting"? It certainly wasn't here:

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=227274

TA said...

Specifically, back when Summers was president of Harvard he ran Cornell West out, as well as a few other professors from the humanities. These were people who were extremely critical of Summers during his tenure at the World Bank back in the '90s, including his memo supporting the dumping of toxic trash on developing countries. Not surprisingly, those like West who were most critical of Summers' past became the focus and target of his administration, leading West to leave for Princeton.

People tend to pay attention to the sexism scandal during Summers' tenure at Harvard, but there was another scandal that was much bigger, one that is almost completely ignored in the media, almost as much as his role in lobbying for the repeal of Glass-Steagall, which made possible the permissive deregulated environment that facilitated the collapse of our banking and lending institutions--and that was the case of Andrei Shleifer, a fellow economist at Harvard and close friend of Summers, who was a part of a privatization scheme in Russia during his employment at Harvard under Summers. The federal government went after him and ruled that Harvard had violated its contract with them (since Shleifer was violating federal guidelines by being both a stockholder and adviser). In all, Shleifer was responsible for the illegal accumulation of about $33 million (US gov't treble damages was over $100 million), which Harvard was partly on the hook for (since Shleifer was under contract with the US government and Harvard at the time he was advising the Russians on their privatization program). In the end, Harvard (under Summers) paid over $25 million dollars for the money Shleifer ripped off and its violation of its contract (as well as Shleifer's breach with both his employer and the feds).

As for Summers' hatred of unions, this should not be a revelation. I have had the misfortune of reading him, and he is about as much of a progressive as Ron Paul's left lung. Here is but one example, an article Summers wrote blaming welfare and labor unions for unemployment. In fact, he considers unions to be an interference with employment altogether. Great Democrat there.
http://www.econlib.org/library/Enc/Unemployment.html

Another little tidbit you might like to consider about our most esteemed economic adviser. While telling the rest of us to suck it up and pull ourselves up by the bootstraps, Mr. Summers took corporate perks, including private jet flights and dinners, from Citigroup, as recently as last year (the same Citigroup living off our dollar since it has forgotten how to make its own). In fact, Summers lobbied Banking Committee Chairman Sen. Dodd to oppose caps on executive pay at firms which have received stimulus money, including Citigroup. Out of all the people Obama should have avoided as an economic adviser, Lawrence Summers is the worst.

Lastly, I leave Larry in his own words, from the memo in 1991 on using developing countries as dumping grounds for our waste.
"I think the economic logic behind dumping a load of toxic waste in the lowest wage country is impeccable and we should face up to that. ... I’ve always thought that underpopulated countries in Africa are vastly under polluted; their air quality is vastly inefficiently low [sic] compared to Los Angeles or Mexico City."

Michael said...

Misleading. Summers violated no employment contract beyond simply having the temerity to tell Cornel West to do his job. You seem not to recall that at the time West had slighted his scholarship in favor of recording one of the worst rap albums in history. (If you ever listen to it, I'm sure you'll agree that keeping West out of the studio would be an important public service.) West left of his own volition, out of a bruised ego, not a bruising anti-union campaign. (American unions should have it so good.) In a more general sense, much of Summers's unpopularity among Harvard faculty stemmed from a similar stand--he told them that they should teach more, stop inflating grades, etc.

In similar fashion, you distort the article. It argues that unions increase unemployment based upon the fairly uncontroversial premise that when something costs more, people buy less of it. While a shallow and narrow way of viewing the subject, that statement falls well short of "hatred."

Despite the above statements, I am no fan of Summers either, both for his shady ties and his almost willful blindness to the hazards of free markets. I would much prefer that Obama instead pay attention to Paul Volcker, whom I consider a much more honorable man with a much more sensible take on the economy.

The point I'm making is that I don't see why you must make distorted claims, especially with such bile and bombast, when there is a good case to make against Summers on the facts. It just makes you look bad.

TA said...

The truth is never a distortion, but misappropriating my point by falsely associating it with something else most certainly is. First, I was not referring to his employment contract with West. The contracts he violated were with his protege, Mr. Shleifer, as well as to the US government, which cost Harvard over $25 million. As for West, his scholarship was no more lacking in publication and output than Summers, and neither were his student reviews any better or worse. If you paid attention to his tenure at Harvard, you would know that there was a contingency of faculty and even a few board members opposed to Summers' hire as president because of his past, particularly his helm at the World Bank. West was one of those critics, as well as other faculty and staff. When Summers became president, low and behold he began to pretend to care about the scholarship production of all those aforementioned critics. That is what ran West out of Harvard (even though West had more publications and better scholarship than the man Summers forced Harvard to pay out $25 million in defense of). The others who left bided their time for Larry to complete his act of hari kari by publicly observing those "normative" members of the opposite sex of being incapable of understanding math and science.

Secondly, with regards to labor unions, when you accuse an entire industry (designed to represent the interests of people who work) of causing unemployment, no one is going to consider that anything but an attack on the very purpose of such groups to exist. In fact, that was but one article. I recall one he wrote about Latin America back in the '90s, asserting that the crushing of unions by military regimes paved the way for democratization. If that's your idea of non-hatred, you can have it.

Of course, you cannot comment on his lobbying on behalf of Citigroup to Sen. Dodd (against executive pay caps), while accepting dinners and corporate jet rides from the company (now a subsidiary of the American taxpayer). Or that he helped facilitate the repeal of the Glass-Steagall Act, along with the current Secretary of Treasury, which created the deregulated environment for the subprime mortgage crises. Those are actions you cannot address because it means conceding facts you do not want to accept, your claims of loyalty to the quantitative method notwithstanding.

And those are the facts, regardless of how much you want to pretend otherwise while in the act of defending someone you claim to oppose. But since you are a claimed opponent of Mr. Summers, I will leave you with this one-time advocate of monetarism, Paul Volcker, who is not only critical of Summers and Geithner, but supportive of the return of the very regulations that would help protect us in the future from what is occurring now.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aSHGfg2EIp8c&refer=home

Michael said...

Your intellectual dishonesty is staggering.

Let's look at the record. My original question was, "Which professors did he run out of Harvard, and what actions did he take to violate their employment contracts?" You responded, "Specifically, back when Summers was president of Harvard he ran Cornell West out," thus establishing a direct connection between the issue of employment contracts and Cornel West. Conversely, the only contract you mentioned in relation to Shleifer was between Harvard and the federal government. To accuse me of "misappropriation" in this instance takes a lot of gall, considering that the evidence is there for everybody to see.

As to scholarly output, you know better. The standard in academia is peer-reviewed publications. Summers had very few because he was employed in an administrative position. Shleifer has pages and pages--you may not think they are very good, but that is not the opinion of his peers. West, on the other hand, was taking a paycheck for work as a professor as he was recording rap albums. (And student evaluations as evidence of instructional quality? Honestly?)

Furthermore, there was no need for me to discuss Citibank or Glass-Steagall because I was not supporting Summers--in fact, I said he had "shady ties" and an "almost willful blindness to the hazards of free markets."

Evidently you are too dogmatic to understand that people can hold positive and negative opinions about different aspects of the same subject. One can indeed consider a connection between unemployment and unions as something other than an "attack" on their "purpose to exist" (for example, they have other virtues that are more important) and one can oppose Summers while resisting distortions of his record (that intellectual honesty thing again).