Huffpolitics on The Huffington Post

Sarah Palin "Going Rogue": Takes Aim At McCain Campaign, Steve Schmidt

2009-11-13T18:17:54Z

Last month at a conference in Washington D.C., former McCain campaign manager Steve Schmidt was asked how he expected to be portrayed in Sarah Palin's upcoming book.

Not well, he replied. He wasn't wrong.

In an advance copy of her new book, which was obtained by the Huffington Post on Friday, the vice presidential candidate who took the political world by storm only to abruptly resign as governor of Alaska, airs plenty of dirty laundry. Clocking in at over 400 pages, "Going Rogue" is, at its heart, one giant complaint about the conduct of John McCain's 2008 presidential campaign. At the nexus of Palin's grievances lies Schmidt, a character cast as out of touch, overly cautious, and vindictive.

The relationship between vice presidential candidate and the campaign manager doesn't start off on the rocks -- but it ends there. And though she claims they were "very comfortable with each other right off the bat," she also describes Schmidt as "business to the bone." During her vetting Schmidt plays it cool. When Palin admits "the one skeleton [she'd] kept hidden in [her] closet for the past twenty-two years," Schmidt "didn't bat an eye" -- though he does "wince" when she mentions God. That oh-so-dark secret, incidentally, is a D-grade Palin received in a college course.

Palin complains of being "told to sit down and shut up" when she "spoke on the trail about Obama's associations with questionable characters." She bemoans the campaign's unwillingness to tackle "Obama's pastor of twenty years, Jeremiah 'God Damn America' Wright."

"I will forever question the campaign for prohibiting discussion of such association," she writes. "All the more since these telltale signs of Obama's views, carefully concealed with centrist campaign-speak have now been brought into the light by his appointments and actions in office."

She even remarks about how Schmidt's penchant for vulgarity offended her. Writing about the preparation the campaign was conducting for the vice-presidential debates, she recounts the campaign manager declaring that moderator Gwen Ifill is "going to f*** with you?"

"I'm thinking," writes Palin, "Why are you telling me this? Last minute... what's the point? And no more f-bombs around Piper, please?"

Peppered throughout are a stream of insulting descriptions of Schmidt and others of the "professional political caste." Schmidt is "grim-faced" and "cool." The campaign handlers had a "jaded aura" about them. Palin writes: "But I did notice... funny things [about the handlers] that even Piper commented on -- such as tumbling out of the bus in a pack, lighting cigarettes as they went so it looked like a walking smoke cloud with legs."

Eventually the animosity grew quite personal. At one point during the campaign, Schmidt discusses his hopes of getting a nutritionist on the bus. Palin, first assuming that it's for the entire staff, compliments the idea. Only then, does Schmidt tell her, "No, it's for you... You gotta get off that Atkins Diet." Palin, writing up the incident months later, couldn't help but comment on Schmidt's "rotund physique."

I had to do a mental double take.

The Atkins bars -- that must be it. They were everywhere, in every hotel room and on every snack table along the trail. They were great, when I didn't have time to slow down and eat, but I didn't know why they were all over the place.

"I'm not on the Atkins Diet, Steve."

"Don't you know what a high-protein diet does?" he asked, ignoring what I had just said.

He then launched into a discussion of nutrition physiology, holding forth on the importance of carbohydrates to cognitive connections and blah-blah-blah. As he lectured, I took in his rotund physique and noted that he used nicotine to keep his own cognitive connections humming along.

I interrupted his lecture. "Steve, you know what I really need? Half an hour to go for a run in these beautiful cities we're visiting. Also, seeing my kids does wonders for my soul."

He barreled on as if I hadn't spoken. "Headquarters is flying in a nutritionist, and for three days you're going to be on a diet balanced in carbohydrates and nitrates and --"

I'm a forty-four year old, healthy, athletic woman raising five kids and governing a large state, I thought as his words faded into a background buzz. Sir, I really don't know you yet. But you've told me how to dress, what to say, who to talk to, a lot of people not to talk to, who my heroes are supposed to be and we're still losing. Now you're going to tell me what to eat?

Regrets, indeed, are everywhere in "Going Rogue". And blame always seems to fall on someone else. Palin laments the indecisiveness about how to deal with Saturday Night Live's parodies of her, writing that the campaign simply should have taken her advice and gone on the show earlier.

Her soured relationship with the local press -- originally "fine" and even helpful -- was also the campaign's fault. The McCain campaign, complained Palin, wouldn't allow her to "speak her heart and mind."

"Just stick with the script," Schmidt would say. "Ultimately," she writes, "this hurt the campaign to a degree the 'experts' could never grasp." She gives anecdotes detailing incidents where the McCain campaign directly -- sometimes physically -- stopped her from reaching out to reporters.

I moved to go speak with him [a reporter from Anchorage], but a campaign handler grabbed my elbow and said, "No, no, no ... this way." A few minutes later on my way out of the building I saw the same reporter and photographer back behind a rope line.

He yelled out "Alaska!" But as I tried to holler back, different pairs of hands hustled me into the campaign's Suburban. It was not a respectful thing to do. I had turned my back on our own local press. Right then and there, I knew it wasn't going to be good.

It wasn't. In a televised report about the campaign, that reporter wrapped it up this way: "And the Sarah Palin we once knew, is gone."

I wasn't. But I couldn't blame him for thinking so.

Palin makes clear it was the "packaging" the campaign managers wrapped her in -- never the package inside -- that led to her failed candidacy.

Now I was in the hands of "campaign professionals", and it was my first encounter with the unique way of thinking that characterizes this elite and highly specialized guild. In Alaska, we don't really have these kinds of people -- they are a feature of national politics. Naturally enough, as the experts, they are used to being in charge. But no matter how "expert" any of them was, nothing had apparently prepared them for the unprecedented onslaught of rumors, lies, and innuendo that "packaging" would have on my candidacy.

The decision to purchase designer clothes for the trail -- a major embarrassment for the campaign -- is, likewise, ascribed to aide Nicolle Wallace.

"I had a humbling experience while we were back in Wasilla for the Charlie Gibson interview in September," she writes. "While the crews turned my kitchen into a television studio, I took Nicolle into my bedroom and showed her what I thought I should pack for the trail. She flipped through my wardrobe with a raised eyebrow."

"No... no... no...," she said as she slid each garment aside on its hanger," Palin recalls.

She gasps over the expensive price of the nylons they provide for her. When describing her speech at the RNC, she snidely adds, "The kids looked great -- even in a bunch of borrowed clothes."

And the equally humiliating prank phone call Palin took from someone pretending to be French president Nicolas Sarkozy also ends with anger towards Schmidt.

By that time I'd received calls from presidents of other countries and our own, and had met elder statesmen and other dignitaries, so it didn't surprise us too much that we'd be speaking with the French leader.

He's got to be drunk, I thought.

I didn't want to offend the president of France, but this was getting stupid. I kept thinking, surely, someone will pop up and say something like, "Okay, the five minutes are up," but the call just went on and on and on. By now, I was thinking exit strategy. And I kept trying to laugh, even though it was increasingly unfunny.

Right away, the phones started ringing. One of the first calls was Schmidt, and the force of his screaming blew my hair back. "How can anyone be so stupid?! Why would the president of France call a vice presidential candidate a few days out?!"

Good question, I thought. Weren't you the ones who set this up?"

The anger between Palin and Schmidt eventually crests right as the prospects for the campaign begin their precipitous decline. In an incident that has been reported previously, Randy Scheuenemann -- a McCain foreign policy adviser and Palin loyalist -- charges into Schmidt's office after a series of articles surfaced with anonymous campaign aides whacking the vice presidential candidate

To this day, Randy - ever the gentleman - won't tell me everything that was said about the B Team. But a couple of examples tell the story. "They're screwing up,' Schmidt told Randy one day in Schmidt's office. "And the governor's not doing serious homework." Schmidt told Randy he thought I might be suffering from postpartum depression...

Randy laid out a very simply case: "Picking a running mate was John's most important decision, and being loyal to John means being loyal to his pick. That makes what's going on absolutely atrocious!"

Schmidt started in again, telling Randy what an awful pick I was -- the "postpartum" problems, the wardrobe "scandal," "legal exposure" for Todd on Troopergate, whatever he meant by that.

Somehow, Palin ends the story, "the Palins were responsible for all of the campaign's problems."

Why Did Sen. Landrieu's Campaign Donate $25,300 To The Government?

2009-11-13T18:15:20Z

When a political campaign returns dirty donations, it usually releases a statement of some kind praising the integrity of the candidate. So why didn't the campaign of Sen. Mary Landrieu (D-La.) say anything when it donated $25,300 in campaign funds to the U.S. Treasury Department in August 2008?

Progressive watchdog group Citizens for Responsibility and Ethics in Washington noticed the donation and wondered if it had something to do with an investigation by the Senate Ethics Committee. In January 2008, CREW had asked the committee whether Landrieu violated Senate rules in 2001 by requesting a $2 million earmark for the Voyager Expanded Learning literacy program for D.C. public schools -- "a mere four days after receiving $30,000 in campaign contributions from company executives and their relatives."

The committee announced it had cleared Landrieu of wrongdoing on Thursday, two years after the complaint. To CREW, it seemed odd that $25,300 had been returned during the investigation.

Landrieu's campaign said CREW is barking up the wrong tree.

"It has absolutely nothing at all, whatsoever, in any way shape or form to do with the CREW ethics complaint, or Voyager, or anything like that," said Marc Elias, a lawyer for the campaign, in an interview with the Huffington Post.

So why did the campaign return that money? Elias wouldn't say.

CREW executive director Melanie Sloan said she believed Elias' statement that it had nothing to do with Voyager. But she has become even more curious about the donation.

"Now there's something else out there and we don't know what it is!" she told HuffPost. "It may not be Voyager, but I believe something bad happened, and I'd sure like to know what it is... Somehow the money is tainted in some way, and when a senator has a contribution that's tainted in some way the public has a right to know what happened."

Elias said the campaign was protecting the identities of its donors.

"The concern is that these are private citizens who in most instances may not have done anything wrong," he said. "So to throw them in an article that scratches an itch that CREW has isn't fair."

Sloan's response: "Too bad. Life isn't fair."

Incidentally, D.C. public school officials did not even want the literacy program. It didn't even rank among the top three when they searched for a new system-wide program in 2005, according to the December 2007 story by the Washington Post's James Grimaldi that prompted CREW's complaint.

Grimaldi described how Congress' predilection for meddling with D.C. public schools has hurt the system:

"The Voyager story...highlights the haphazard way that curricula end up in the District's classrooms," he wrote. "For many years, educators have said that the patchwork of instructional material is one reason the city's students hover near the bottom of rankings in national test scores."

'Spokesjerk' Revolution Fails To Materialize: FreeCreditReport.com Front Man Sticks To His Guns

2009-11-13T16:18:45Z

Andy Cobb starred in TV commercials pitching health insurance for Blue Cross and Blue Shield of Florida -- until he had a crisis of conscience.

"In some gigs, in rare cases, you're forced to come to terms with the moral content of your commercial," he told the Huffington Post. To disassociate himself from what he now calls "the worst product in American history," Cobb wrote and starred in a short video renouncing his former employer (see below).

He also asked other pitchmen to do the same.

"It's time for change," says Cobb in the video. "That's why I'm calling on leaders of the spokesjerk industry: the FreeCreditReport.com guy, the ShamWow dude, and Senator [Ben] Nelson, recipient of big money from insurance companies, to lead us, to walk away from their cash cows and tell the American people the truth."

The Huffington Post reached out to credit-report peddler Eric Violette, star of the famous commercials airing non-stop on cable television. Violette refused to comment on Cobb's call for a spokesjerk revolution. But in an email, he had this to say:

"Does this guy really equate health insurance with cleaning cloths and credit ratings? When making the decision about health care in the US, I hope the public will see that having access to health care is much more important than cloths and credit scores."

Yes, but what about the epic dishonesty of Violette's vids, whose makers have been repeatedly sanctioned by the government for false advertising? The free credit report offered simply isn't free -- you get the report after signing up for a $14.95 monthly service. Experian, the credit bureau that owns freecreditreport.com, profits in hard times from people worried about identity theft and their credit score.

The New York Times reported last week that 9 million people are spending a total of $650 million to $700 million a year for credit reporting services, with Experian making more than twice its three biggest competitors combined.

The Federal Trade Commission, whose more than $1 million in sanctions have utterly failed to stop the ads, has been so exasperated that it even made its own parody video.

The credit card reform bill signed into law by the president will curb the ads by requiring them to include the following statement: "This is not the free credit report provided for by Federal law."

The truly free credit report is available at www.annualcreditreport.com.

ShamWow huckster Vince Shlomi could not be reached. Didn't seem to be much point in calling Sen. Ben Nelson's office. The Nebraska Democrat made the list because Cobb sees him obstructing health reform.

Cobb said he had his change of heart this year after participating in fundraisers for friends who went bankrupt and broke because they got sick -- even though they had insurance from Blue Cross.

Violette, for his part, is from Canada, where health insurance and credit reports are less of a problem.

Check out Cobb's video, which was produced by Robert Greenwald's BraveNewFilms as part of its Sick for Profit series:

Here are some of those catchy credit spots -- you've got to give Violette credit for being an appealing pitchman:

Here's the FTC's parody:

Anita Dunn Takes Parting Shot At Fox, Hannity And Beck

2009-11-13T14:42:45Z

In a parting shot at Fox News, White House Communications Director Anita Dunn mocked the conservative-leaning network on Friday and laughed off its controversial host Glenn Beck for calling her a Mao enthusiast.

The outgoing administration spokeswoman took a clear and enjoyable dig, first at Sean Hannity for recently airing spliced footage designed to make a crowd of anti-health care protesters seem bigger than reality.

"A fun fact from this week is that an opinion show on a certain news network was using edited footage to make it appear that a rally last week, and political opposition to the president, was much larger than it appeared," said Dunn, during her appearance at the Bloomberg News Washington Summit. "Some of you may have heard about it. The people who went in and did fact checking on that, and actually exposed the spliced edited was... Jon Stewart of the 'Daily Show' on Comedy Central. Well that is where you are getting fact-checking and investigative journalism these days folks. It is a different media environment."

Showing an even greater appreciation for the "Daily Show"'s Fox News fact-checking abilities, Dunn referenced another Stewart triumph later in her question-and-answer session.

"Jon Stewart actually did one of the most amazing pieces of journalism last week or a couple of weeks ago," she said, "in which he looked at the way Fox, on their opinion shows, raises some issue that then gets reported on by their news division as 'a controversy.' ... Now, that's a point of view. That's fine. That's entertainment. It helps their ratings. But I think if you go downstairs and walk through the Newseum that's not traditionally what you think of as traditional news -- to some extent inventing the story."

Approached in the halls outside the forum, the Huffington Post asked Dunn to put Glenn Beck's recent theatrics into the context of her critiques of Fox News's coverage. She chuckled. For the past few weeks, Beck has insisted that the outgoing communications director considers Mao Zedong a political hero and has put a red telephone on his set begging for her to call and explain her political dispositions.

"I think it was news to everybody who knows me," she replied. "You know, most media consultants usually are accused of other things, but that's not one of them."

Last month, Dunn got caught up in a war of words between the White House and Fox News when she made the rather bland observation that the network carries a Republican agenda. On Friday, she was asked whether she considered MSNBC to have a counter-balancing bias -- a common retort offered by Fox's defenders. Dunn replied by noting that for three hours every morning that network handed over its programming to "a former Republican congressman who was a member of Newt Gingrich's revolution": Joe Scarborough.

Elsewhere in her remarks, Dunn acknowledged that her decision to go after Fox News was not an example of her "going rogue." White House chief of staff Rahm Emanuel, Press Secretary Robert Gibbs and perhaps even the president himself gave her the green light. She also mocked Fox for proclaiming that it had secured an exclusive sit-down interview with President Obama during his trip to Asia when, in actuality, it was simply part of a rotating pool of reporters.

"We have on past foreign trips done what are called round-robins where there are short interviews with all of the networks that travel with us," she said. "We have not made a decision network on whether or not we are going to do those. There are no confirmed television interviews in china. And if, oh, some network sent out a press release announcing that was going to happen you'd have to ask about that network and whether or not they really had their facts confirmed before they leaked that."

Spencer Ackerman's Self-Correction: This Is How Stories Should Be Retracted

2009-11-13T14:21:35Z

Spencer Ackerman is a friend of mine and a reporter whose expertise and ecumenical fairness are resources I've come to trust. He's also demonstrated a hardcore willingness to get his body to where the news is happening -- whether its simply trooping out to an obscure but important Congressional hearing, or strapping on the body armor to head to FOB Salerno in Afghanistan.

Yesterday, Ackerman reported out a story about a teleconference between U.S. Ambassador to Afghanistan Karl Eikenberry and the National Security Council, an account predicated on the word of a single source, which subsequently came undone as new facts came to the fore.

The reason Ackerman will continue to be a trusted reporter, in my view, is because when you have to retract a story, you should do it like this:

My original source for the post stands by the account provided. The individual, a National Security Council staffer who spoke on condition of anonymity, has provided truthful and verified information on past stories, and so I trusted the source for this one. Elements of the account have been subsequently borne out: yesterday afternoon, White House Press Secretary Robert Gibbs said that President Obama will ask his Afghanistan-Pakistan advisers to provide him with an exit strategy for the eight-year war, which is congruent with but not identical to my source's information that Obama has asked the team to derive timetables for troop withdrawal.

But there are greater problems with the post. For one, the source was not actually present for the video teleconference that is the post's central scene, and passed information to me second-hand. Furthermore, not only has the White House's Tommy Vietor denied, on the record, that Ambassador Karl Eikenberry participated in a video teleconference yesterday morning, but the other two individuals I named as being present for the meeting -- the inspector generals for Iraq and Afghanistan -- have, through representatives, denied being present. I cannot subsequently stand by this account.

From the start, the post should have a) more clearly indicated that my source wasn't present at the meeting; b) more clearly indicated that the account provided was single-sourced; and c) verified the information provided before publication. My enthusiasm for a hot story outpaced my professional judgment. For that I take full responsibility, retract the story and issue a full apology for its publication.

It's a pretty rare thing for a reporter to offer a thorough itemization of all the errors of a story and how they came about, let alone an admission that "enthusiasm for a hot story outpaced my professional judgment." Yet, this should be the standard.

Additionally, as far as I can tell, Ackerman returned to all of the venues where he distributed his original, and distributed the retraction, ensuring that it would have equal dissemination.

I'd also note that over at the Washington Independent, the original story remains, reformatted to appear with the original text struck through. This is a unique feature of online journalism. Rather than allowing a factual mistake to drop into the memory hole, it remains available for readers. More importantly, it remains a part of the writer's body of work. I've always admired this tradition. It breeds a certain amount of humility, and it reminds us that the richness of our experience is often most strongly derived from our mistakes.

RELATED:
A Retraction of My Eikenberry Post [The Washington Independent]

[Would you like to follow me on Twitter? Because why not? Also, please send tips to tv@huffingtonpost.com -- learn more about our media monitoring project here.]

Holder: Unfair To Blame Greg Craig For Gitmo Failures

2009-11-13T13:12:51Z

Attorney General Eric Holder said Friday that he was surprised by the resignation of White House Counsel Greg Craig and believes Craig has been unfairly blamed for the administration's difficulties in closing the prison base at Guantanamo Bay.

Briefing reporters at the Department of Justice, Holder called Craig a "great lawyer" who had "contributed in a significant way to the success of this administration." On the issue of shutting down Gitmo -- a project that Craig spearheaded within the administration, but which has stalled in Congress -- the AG insisted that it was wrong to scapegoat one person.

"Greg is a friend of mine," he said, "and those who have tried to place on him, I think, an unfair proportion of the blame as to why things have not proceeded, perhaps as we've wanted, with respect to Guantanamo, that is simply unfair."

Craig's departure from the White House on Friday was long anticipated. Inside the administration, there was a growing frustration over what aides considered a botched political process, which was Craig's responsibility. Those who know Craig personally, meanwhile, say he felt increasingly frustrated with his role within the administration. He had, initially, wanted to be part of the White House's foreign policy apparatus.

The push to close Guantanamo has met various pitfalls since it became a stated administrative objective, with Congress balking at the prospect of bringing detainees to domestic prison facilities. And now, it is widely assumed that the one-year deadline for shutting the detention center will be missed.

"I think it is going to be difficult to close that facility by January the 22nd," Holder told reporters on Friday. "There are a number of things that I think are most problematic."

Get HuffPost Politics On Facebook and Twitter!

Jon Stewart Discusses Lou Dobbs's Decision To 'Go Palin'

2009-11-13T12:43:07Z

At some point in the future, Jon Stewart may again have to endure the hour-long waterboarding of the soul that is the Sean Hannity show. But he'll never have to watch Lou Dobbs on CNN again, so upside! Thursday night, the Daily Show host brought his audience up to speed on Dobbs's decision to depart, saying, "Nothing says honest and straightforward better than a surprise announcement that you're quitting for reasons you can't explain to do something you can't discuss."

So true! The only thing that differentiates Dobbs's "I quit" announcement from Sarah Palin's was that there were no woodland creatures squawking in the background. At least none that you could hear. Stewart would go on to make this obvious link.

Dobbs, of course, has some vague plans to wander the earth, kickin' mad science and "contributing positively to a better understanding of the great issues of our day."

Stewart responded: "So, in order to contribute positively to a better understanding of the issues of our day, you must leave your nightly television show, devoted to understanding the issues of our day. I actually agree with you on that one."

[WATCH]

The Daily Show With Jon Stewart

Mon - Thurs 11p / 10c

Lou Dobbs Goes Rogue

www.thedailyshow.com

Daily Show
Full Episodes

Political Humor

Health Care Crisis

[Would you like to follow me on Twitter? Because why not? Also, please send tips to tv@huffingtonpost.com -- learn more about our media monitoring project here.]

Va. Rep. Tom Perriello, On Health Care Vote: 'He Didn't Come To Congress To Get Re-Elected' [UPDATE]

2009-11-13T11:39:24Z

OH NOES! What is Representative Tom Perriello (D-Va.) doing, allowing his spokesperson to say stuff like this, in the wake of his vote for the House health care reform bill:

Perriello spokeswoman Jessica Barba said Perriello met with and respected those who oppose the health care bill but ultimately made the decision he deemed best for his district. Perriello's 5th District stretches from Charlottesville to Danville.

"A lot of the political pundits and all the conventional wisdom is saying that this is going to cost him the election next year," she said. "He didn't come to Congress to get re-elected."

Perriello won his seat in the House after defeating the incumbent Republican Virgil Goode by a razor-thin, 727-vote margin. He's generally seen as one of the most -- if not the most -- vulnerable Democratic incumbents. Sam Stein reported on Monday that the National Republican Congressional Committee immediately went to work on Perriello, sending out 16 separate emails about his vote for the health care bill, the first of which came with the subject heading, "BREAKING: The end of Tom Perriello's political career." And his spokesperson's comment came amid an AstroTurf outpouring of protest from Americans for Prosperity.

It's almost as if Perriello has "convictions" that are more important to him than doing whatever he can to preserve his Congressional career. Inside the Beltway, this behavior is generally regarded as insane. If Perriello was a fighter pilot, he'd be grounded, according to Catch-22.

UPDATE: Apparently believing that it is a sufficient substitute for cogent political thought or maturity, the Danville TEA Party will "will close their "Fired Up for Freedom" rally by burning Rep. Tom Perriello and House Speaker Nancy Pelosi in effigy in response to the passage of landmark healthcare legislation in the U.S. House of Representatives.

That's all going down this Saturday at 5:30pm in Blairs, VA, and will obviously solve our health care problems forever.

RELATED:
Principle over politics [Politico]

PREVIOUSLY, on the HUFFINGTON POST:
Dems Challenge Theme That Health Care Vote Makes Members Vulnerable

[Would you like to follow me on Twitter? Because why not? Also, please send tips to tv@huffingtonpost.com -- learn more about our media monitoring project here.]

White House Official Feels 'Nervousness' About Dodd's Regulatory Plan

2009-11-13T11:37:04Z

(Updated with response from Dodd's office; see below.)

One of the president's top economic advisers expressed concerns Friday that financial regulatory reforms proposed by Sen. Chris Dodd (D-Conn.) would take too long to become operational and would in some respects be ineffective.

Austan Goolsbee, who sits on the White House's Council of Economic Advisers, said he felt some "nervousness" about Dodd's proposal to create a committee independent of the Federal Reserve to oversee risks in the financial system and police potential threats to the economy.

"The administration's view is that systemic institutions ought to be governed by the Fed," Goolsbee said. A different group could be charged with looking at problems on the horizon, "The Dodd version is 'let's combine both of those and create some new agency,'" he said. "I am a little worried that to create that new agency would take a long time and by the time you got to that we are back into this world."

Speaking at Bloomberg News's Washington Summit, Goolsbee compared Dodd's blueprint for financial regulation to the type of system seen in England, then noted that "they have a lot of problems in the U.K. as well." The chief concern, Goolsbee stressed, was to have strong coordination within a regulatory body. Splitting up functions -- as the Dodd bill proposes -- could, he predicted, lead to missed warning signs or bureaucratic mishaps.

"There has always been an issue that in a moment of crisis, where the Fed is out there trying to figure out what to do, if they are not integrally involved with the actual regulation and oversight of the institutions, you can, if you do it wrong, get into a left hand doesn't know what the right hand is doing crisis," Goolsbee said.

Dodd, who chairs the Senate Banking Committee, has put forward what is regarded as the most aggressive of the three official proposals for re-regulating the markets. The senator has called for overhauling the existing regulatory establishment -- in part by removing powers from the Fed and the Federal Deposit Insurance Corp. and creating three new agencies to oversee the financial system, protect consumers, and anticipate future crises. Dodd's proposals have, however, come under attack from industry groups, and House leaders have, as The Washington Post put it, found parts of the proposal "untenable." One of the concerns from the administration is that the Dodd plan is simply too sweeping and ambitious to make it through Congress.

UPDATE:

Kirstin Brost, a spokesman for Dodd on the Senate Banking Committee, emailed the Huffington Post taking umbrage with various of Goolsbee's assertions.

Where Goolsbee suggested that regulatory functions would best be housed under one roof -- the Federal Reserve's -- Brost notes that, "giving the Federal Reserve too many responsibilities led to missed warning signs" in the first place.

In regards to his comparison of the regulatory framework under Dodd's plan to that in the U.K., Brost writes: "The last thing we would want would be to set up a UK style regulator. The FSA in the UK merges regulations for banks, securities, insurance, and consumer protections into one agency. Dodd's proposal does the opposite. The crisis taught us that when an agency has too many responsibilities it won't do any of them well. Dodd's bill creates a single bank regulator, a consumer financial protection agency, and a systemic risk regulator and also preserves the SEC, FDIC, CFTC, NCUA, 50 state bank regulators, and 50 state insurance commissioners."

Finally, Brost pushes back on Goolsbee's suggestion that if you remove responsibilities from the Fed, you could create a system where information is not shared between agencies and crises are missed.

"We keep the Federal Reserve integrally involved with a seat on the boards of the FDIC, the single prudential bank regulator, and the systemic risk regulator," she writes. "Dodd's proposal will ensure that the Fed has the ability to get whatever information they need from banks and other regulators in order to do their job on monetary policy and as lender of last resort.

"Dodd wants to focus and strengthen the Federal Reserve's ability to do their core functions - monetary policy, lender of last resort, and payment systems supervision."

Washington Times Turmoil Continues Amid Resignations, Uncertainty, And Panic

2009-11-13T10:53:39Z

So, here's what's going on at your Washington Times. Confusion! Panic! Resignations! Clampdowns! This week, The Politico is not the most terrifying and sad place to work in Washington, DC. That's actually impressive!

-- Executive editor John Solomon is definitely gone! I guess it was a pretty clear sign when the Times took his parking space away, right? Well, yesterday, the paper, communicating through Don Meyer at Rubin Meyer Communications, said that Solomon's resignation was effective, uhm... six days ago. Naturally, this touched off newsroom panic.

Via Fishbowl DC:

One senior member of the newsroom suggested that it was time to look for a new job while a younger reporter told us, "we're in trouble without John. Solomon had the vision, heart and had begun to make the Times a real force in Washington news media."

-- Employees have been told to stop talking to the press. Which is too bad, because the drama is exquisite. Managing editor David Jones has been weeping over the loss of Solomon. Employees at the paper's field offices are "feeling isolated." White House bureau chief Matt Mosk is currently following the president on his trip to Asia. Are his colleagues lending comfort, during this time? Will there be a paper to return to, when the trip concludes? Will Matt Mosk, inspired by the majesty and the people of Asia, venture off on a voyage of personal discovery, seeking romance and adventure?

-- Where is the paper going from here? Days ago, published Jonathan Slevin told TPM, "We expect The Washington Times to continue to serve its readers and viewers for years to come." But, in the same report, anonymous sources gave TPM's Ben Frumin some worrisome news:

A former Times staffer also tells TPM that the newspaper may have lost immediate access to the stream of money that helps fund the Times. According to the source, the newspaper used a stream of additional investments from the parent company that owns the Times to keep its operation going. But one of the three executives fired on Sunday -- chairman Dong Moon Joo -- was apparently the one responsible for securing those additonal investments. It was his main function, our source says. Without additional cash infusions from the parent company run by Preston Moon, it's possible that the Times will have serious short-term cash problems, we're told.

So, maybe the Times staff spent the day yesterday playing murder mystery games, who knows?

-- Is Friend to Eat The Press and Washington Times society reporter Liz Glover going to just walk up into the office and seize control of the operations using only her boundless personal charisma? Let's hope so! In the meantime, however, Glover is hard at work, getting stood up by Carrie Prejean.

-- Another casualty: perennial anger-management candidate Lanny Davis has told the paper that he will no longer contribute his "Purple Nation" column.

In Davis' e-mail to Times editors, he thanked the staff of the paper, but said "In light of the announcement of John Solomon's resignation, I am no longer comfortable writing a column for the Washington Times. I began writing because John asked me to. And now with him gone, I cannot continue."

And that's the state of your Moonie newspaper! More news as circumstances develop.

[Would you like to follow me on Twitter? Because why not? Also, please send tips to tv@huffingtonpost.com -- learn more about our media monitoring project here.]

Pharma CEO: We Will Fight House Health Care Bill

2009-11-13T10:05:53Z

The CEO of one of the biggest pharmaceutical companies in the country said on Friday that he and others in the industry would switch their support for health care reform to opposition if Congress settles on legislation passed by the House of Representatives.

David Brennan, head of pharma giant AstraZeneca, told the Huffington Post that he was pleased with the White House and the Senate Finance Committee for standing by "the principles which we said are really important." The three parties entered into an agreement, before the health care debate heated up, that saw the pharmaceutical industry committing $80 billion to reform in exchange for various assurances -- the primary one being that the government would not use its purchasing power to negotiate cheaper prescription drug prices.

The House, however, hasn't played by those rules. And in an appearance at Bloomberg News's Washington Summitt, Brennan warned that the industry's ample resources could be turned against the broader reform effort if Speaker Nancy Pelosi's legislation were to emerge from the Congress.

"Right now the answer to that is yes," Brennan said, when asked if the support would change to opposition. "We said there were principles we didn't want to see violated. And if those principles -- price controls, Medicare rebates, moving dual eligibles back from Medicare and back into the Medicaid discount program -- if those things happen, I can't see how we could be supportive of the program."

Asked after the conference by the Huffington Post what kind of opposition he was discussing, Brennan refused to reveal his cards.

"We said we are not in favor of the House bill but we haven't seen what they are going to try to reconcile," he said. "We are going to do what we are going to do. Right now we are in support [of the process] because there are certain things we are trying to get into the system which we think make it a better outcome."

Part of that "better outcome" entails the potential for major profits for the pharmaceutical industry. According to an analysis put together by the pharmaceutical research firm, IMS, the industry stands to gain an estimated $137 billion from an improved economy, new market innovations, as well as the deal struck by with the White House and Senate Finance Committee.

And yet, when Brennan was asked whether Big Pharma stood to make profits going forward, he said no.

"Until we really see the elements of a health care bill come through... it is difficult to project," he said. "But right now it is not obvious to me that there is an upside to this."

Asked to reconcile his dour outlook with the IMS data, Brennan replied: "I talk to the IMS. They, I think, have gone from projecting the market would be flat to roughly two or three percent. I think you have to go back and look at their record of prospectively being able to project that out. And right now the market is softer than we probably expected it to be a few years ago."

Get HuffPost Politics On Facebook and Twitter!

Castellanos Whacks Crist, Questions Palin's Appeal

2009-11-13T08:59:55Z

One of the Republican Party's most respected and relied-upon consultants has serious reservations about two the party's biggest names.

Alex Castellanos, a conservative media strategist and regular presence on CNN, raised questions of Sarah Palin's viability for office and took major swipes at Florida Senate candidate Charlie Crist during an appearance at Bloomberg News' Washington Summit Thursday.

The harshest lines were saved for Crist, who Castellanos said was not really a Republican.

"Nobody is running out the Charlie Crists of the world," Castellanos said, when asked about the shrinking GOP tent. "Look, if Barack Obama stood up tomorrow in the Democratic Party and said: 'I got a great idea. George Bush's tax cuts. They are terrific. They are the best thing ever. I'm for that.' What do you think would happen to him in the Democratic Party? He would have stepped out of the mainstream of the Democratic Party at that point. Charlie Crist happens to be the guy who stepped out of the mainstream of the Republican Party."

"The Republicans are actually very unified at this point," Castellanos added. "You see it, recently, in Florida, where the fella who is out of the mainstream is one guy. It happens to be the governor, unfortunately for him. But Marco Rubio [Crist's challenger for the Senate seat] and every Republican in the state doesn't quite understand why... the governor there voted to support this huge stimulus."

Crist, of course, never voted for the stimulus bill. He merely expressed appreciation for the help the president was providing his state. For that acknowledgment, he has been branded a heretic within the GOP. As for the Bush tax cuts, despite Castellanos' assertion, a dozen Senate Democrats did support the measure and none were seriously punished for it.

But Castellanos wasn't done throwing haymakers at fellow Republicans. Asked if former Gov. Sarah Palin, about to embark on a book tour, was she the future of the GOP, Castellanos was skeptical.

"[She's a] fascinating character and that is what the news loves to play," Castellanos observed. "I think [Obama] is stopping by Alaska as he begins this week-long trip to Asia. I don't think he is going to announce that he is resigning from politics," he said, in reference to Palin's abrupt resignation from office.

"I think it is going to be very tough for Sarah Palin, who has stepped back from the governorship under the explanation that her state would be better off without her, to now explain why the other 49 states would somehow be better off with her," he concluded.

Get HuffPost Politics On Facebook and Twitter!

Goldman To Private Insurers: No Health Care Reform At All Is Best

2009-11-12T17:12:56Z

A Goldman Sachs analysis of health care legislation has concluded that, as far as the bottom line for insurance companies is concerned, the best thing to do is nothing. A close second would be passing a watered-down version of the Senate Finance Committee's bill.

A study put together by Goldman in mid-October looks at the estimated stock performance of the private insurance industry under four variations of reform legislation. The study focused on the five biggest insurers whose shares are traded on Wall Street: Aetna, UnitedHealth, WellPoint, CIGNA and Humana.

The Senate Finance Committee bill, which Goldman's analysts conclude is the version most likely to survive the legislative process, is described as the "base" scenario. Under that legislation (which did not include a public plan) the earnings per share for the top five insurers would grow an estimated five percent from 2010 through 2019. And yet, the "variance with current valuation" -- essentially, what the value of the stock is on the market -- is projected to drop four percent.

Things are much worse, Goldman estimates, for legislation that resembles what was considered and (to a certain extent) passed by the House of Representatives. This is, the firm deems, the "bear case" scenario -- in which earnings per share for the top five insurers would decline an estimated one percent from 2010 through 2019 and the variance with current valuation is projected to be negative 36 percent.

What the firm sees as the best path forward for the private insurance industry's bottom line is, to be blunt, inaction.

The study's authors advise that if no reform is passed, earnings per share would grow an estimated ten percent from 2010 through 2019, and the value of the stock would rise an estimated 59 percent during that time period.

The next best thing for the insurance industry would be if the legislation passed by the Senate Finance Committee is watered down significantly. Described as a "bull case" scenario -- in which there is "moderation of provisions in the current SFC plan" or "changes prior to the major implementation in 2013" -- earnings per share for the five biggest insurers would grow an estimated ten percent and the variance with current valuation would rise an estimated 47 percent.

The report, a Goldman official stressed, was analytic not advocacy-based. Their job was to provide a sober assessment of the market realities facing private insurers under various versions of health care reform.

"If no reform at all happens you would see the largest rise in EPS," a Goldman official acknowledged. "But what we are doing is just analyzing what the stocks would do under different scenarios."

The study does note on the front page that the firm "does and seeks to do business with companies covered in its research reports." Those companies include Aetna, Wells Point and United Health.

goldman -

In the context of the current health care debate, the findings provide a small window into the concerns that have driven the private insurance industry's opposition to reform legislation. Simply put: health care reform is going to hurt their bottom line. No less a prestigious voice than Goldman Sachs is telling them so.

Some insurers, in the end, will be hit harder than others. CIGNA is the lowest of the big five, for instance, because it does little business providing insurance plans to Medicare patients, individuals and families buying health plans directly, or small employers that offer health plans to their workers.

In addition, some reforms are going to hurt the industry more than others. Regulatory changes -- such as prohibiting the prejudice against consumers with pre-existing conditions -- will have an impact across the board, as will the funding cuts to Medicare Advantage.

Overall, Goldman calculates the probability of reform passing Congress at 75 percent. Though the limitations of Goldman's political prognostications were on full display earlier in the document:

By mid-late October, we expect a cloture vote (60 votes) to bypass a potential filibuster followed by several weeks of debate over proposed amendments on the Senate floor (with a similar process under way in the House). If both the Senate and House are able to pass legislation (perhaps before the Thanksgiving recess), a House-Senate conference negotiation should produce combined legislation for final approval (perhaps by mid-December).

Insane Deficit Commission Idea Gathers Momentum

2009-11-12T15:51:32Z

The deficits! Your Beltway media is sore afraid of them! But like a family who goes to live in a haunted house only to refuse to move out once the ancient demons that reside in the tool shed reveal themselves and announce their intention to eat their children in allegiance to Satan, they don't do much to account for the grandiose failures in judgment they have made that have sped the way to wrack and ruin.

You don't hear anyone ever talking about "bending the cost curve" of the Afghanistan War. And the idea that the taxpayers, having invested billions propping up a coven of incompetent banks, should receive the same sort of return on investment as a Warren Buffet is treated as if it sprang from the skull of an alien being. In this way, they enable members of Congress, who never take responsibility for the decisions they make that pave the way to potential deficit crises, to go right on making the same sorts of decisions.

And now, via The Hill, comes this:

Senators from both parties on Tuesday put new pressure on Speaker Nancy Pelosi to turn the power to trim entitlement benefits over to an independent commission.

Seven members of the Senate Budget Committee threatened during a Tuesday hearing to withhold their support for critical legislation to raise the debt ceiling if the bill calling for the creation of a bipartisan fiscal reform commission were not attached. Six others had previously made such threats, bringing the total to 13 senators drawing a hard line on the committee legislation.

And here's what the commission would do:

Among its chief responsibilities would be closing the gap between tax revenue coming in and the larger cost of paying for Social Security, Medicare and Medicaid benefits. The Government Accountability Office recently reported the gap is on pace to reach an "unsustainable" $63 trillion in 2083.

The panel would also have the power to craft legislation that would change the tax code and set limits on government spending.

The legislation would then be subject to an up-or-down vote; it could not be amended.

In other words, a group of senators have ginned up an idea to outsource their responsibility to some wondrous and new deficit-hawk commission in order to steal entitlement money to pay for their own foolish and profligate spending.

By doing so, they limit their exposure to bad or unpopular legislative decisions, preserving their career longevity while vesting enormous power in a body over whom the American people have no oversight. And to get their way, they'll threaten to basically blow up the government.

Oh, and why are "Social Security, Medicare and Medicaid benefits" in this commission's crosshairs? Well, why try to get our money back from Citigroup when the elderly and the poor have so much more they can give?

The supporters of this crapulence are, not surprisingly, serial crapulence supporters: Senators Kent Conrad (D-N.D.), Judd Gregg (R-N.H.), Evan Bayh (D-Ind.), Dianne Feinstein (D-Calif.), Mark Warner (D-Va.), Joe Lieberman (I-Conn.), George Voinovich (R-Ohio) and Jeff Sessions (R-Ala.). They've gotten their talking points together, and are happy to repeat them robotically, for reporters:

You rarely do have the leverage to make a fundamental change," said Senate Budget Committee Chairman Kent Conrad (D-N.D.).

[...]

"There are rare moments in this institution when you can implement fundamental change," Bayh said during Tuesday's hearing. "This is one of them."

So does this make Nancy Pelosi, who has "scoffed" at the idea, some sort of debt-hugging monster who wants to destroy the future, for the children? No. She just understands that there's this thing called the legislative process that shouldn't be thrown in the dustbin for the sake of allowing a group of unelected idiots with blue ribbons pinned to their chests to decide funding priorities without any means of holding them accountable for their decisions.

Back in February, The Nation's William Greider warned about the Coming Of The Deficit Commission:

Governing elites in Washington and Wall Street have devised a fiendishly clever "grand bargain" they want President Obama to embrace in the name of "fiscal responsibility." The government, they argue, having spent billions on bailing out the banks, can recover its costs by looting the Social Security system. They are also targeting Medicare and Medicaid. The pitch sounds preposterous to millions of ordinary working people anxious about their economic security and worried about their retirement years. But an impressive armada is lined up to push the idea--Washington's leading think tanks, the prestige media, tax-exempt foundations, skillful propagandists posing as economic experts and a self-righteous billionaire spending his fortune to save the nation from the elderly.

These players are promoting a tricky way to whack Social Security benefits, but to do it behind closed doors so the public cannot see what's happening or figure out which politicians to blame. The essential transaction would amount to misappropriating the trillions in Social Security taxes that workers have paid to finance their retirement benefits. This swindle is portrayed as "fiscal reform." In fact, it's the political equivalent of bait-and-switch fraud.

It's easy to see why lawmakers would cotton to this idea. They made a bunch of stupid decisions, which ran up the deficit. At some point, they're going to have to do something that's potentially difficult or unpopular to fix their mistakes. This puts their precious seats and the flow of sweet, sweet special interest money at risk. So if someone could provide them with a behind-closed-doors cabal that would solve their problems at the expense of the poor and the old, these senators could simply shrug and say, "Sorry, y'all! This is all beyond my control!" And they'll get what they want by throwing a tantrum, and threatening to do something stupid: forcing the Federal government to default on its debt.

Matt Yglesias rightly calls out these lawmakers for their "egomania, self-righteousness, irresponsibility, and cowardice":

Why not throw it back at this crew? Tell the Irresponsible Threat Caucus that instead of asking for a commission, they should just start calling themselves a "budget commission" and then they can specify their own proposed set of tax hikes and Medicare cuts.

Note that Senators Gregg, Bayh, Voinovich, and Sessions didn't have these concerns about the budget when voting to give hundreds of billions of dollars in tax cuts to the children of multi-millionaires. And I continue to await congressional support for making the war in Afghanistan deficit neutral.

And by the way, this craven crew isn't above putting the health and welfare of the American people at risk, to get their way:

Conrad signaled that he may likewise have run out of patience with the status quo, suggesting that if Democratic leaders refuse to couple a vote on a bipartisan fiscal task force of some kind with the debt limit increase, he would seek to attach a commission proposal to other crucial legislation.

"There are other vehicles," Conrad said Tuesday, "including healthcare."

It gets harder, with each passing day, to continue to pretend that adults are running this country. But you'd never know this from reading about them in the traditional media!

[Would you like to follow me on Twitter? Because why not? Also, please send tips to tv@huffingtonpost.com -- learn more about our media monitoring project here.]

Rep. Blackburn Won't Pledge To Stop Calling Obama A Socialist

2009-11-12T15:32:37Z

Rep. Marsha Blackburn, one of the most prominent flamethrowers in the House of Representatives, simply could not commit herself on Thursday to no longer call President Obama a socialist or a tyrant.

Appearing at the Bloomberg Washington Summit, the Tennessee Republican was asked whether she disapproved of some of the more vitriolic rhetoric heard at conservative town-hall or tea-party protests.

"I think many of us would appreciate having a more civil tone here in Washington," Blackburn responded. "And what we would love to see is less partisanship; and individuals coming to the table and sitting down and working in a bipartisan manner. That is one of the items that has been so frustrating in dealing with the health care bill."

Nice dodge. Gary Flake, an employee of Microsoft and the person who posed the question, kept at it. Will you, he asked, "no longer endorse the words and language of socialism and evil and tyranny and things like that."

"What I will tell you --" Blackburn replied, carefully choosing her words.

"-- Is a crisp answer?" chimed in Flake.

"What I will be happy to tell you is that the American people are very frustrated," replied Blackburn, getting a big flummoxed. "And what I can speak to is for me. And what I think to do is to represent my constituents in ways that are going to honor the fact that they have elected me and that they have sent me here. They want to see action... They are frustrated with Washington D.C. as a whole. And what we need to do is make certain that we as representatives coming here are able to sit down and work on these issues and work these problems out."

With that, the interview ended. Unbeknown to both parties at the time was that a local official from Blackburn's home state had just thrown another rhetorical haymaker at the White House. Rep. Richard Floyd, a Republican member of the Tennessee House of Representatives, blasted out an email on Thursday afternoon warning about "what socialist leader Obama and his gang of thugs are trying to do to this country." Floyd was worried, for some odd reason, that Obama was trying to take away people's firearms.

Few Earmarks For Bridge Repairs After Minnesota Collapse

2009-11-12T14:45:42Z

Amid the national hand-wringing after the Minnesota bridge collapse of 2007, members of Congress earmarked 10 times more money for new transportation projects than for bridge repair, according to a new report by the U.S. Public Interest Research Group.

In the transportation appropriations bill for fiscal 2008, approved just months after the I-35 bridge collapse killed 13 people, members of Congress included more than 700 earmarks worth $574 million in Federal Highway Administration spending. Seventy-four of those earmarks sent just under $60 million to bridge repair -- even though one out of every four bridges in the United States needs work, according to a 2009 report by the American Society of Civil Engineers.

The total amount earmarked for the federal highway program "could have been used to bring approximately 20 structurally deficient bridges per state or two bridges per Congressional district into a state of good repair," says PIRG's report. The good-government group attributes the lack of earmark funds for deficient bridges entirely to elected representatives' insatiable hunger for campaign cash.

"In a political system in which elected officials must raise huge sums of campaign contributions from major donors to win reelection, spending may be skewed toward road widening and new highway projects favored by developers, road builders and other interests," says the report, co-authored by PIRG's Lisa Gilbert and John Krieger.

"Deferring maintenance to build new capacity may seem senseless -- much like a family with a leaky roof who instead builds a new addition -- but it makes sense in Congress if money and politics favor those choices."

Using data from the Center for Responsive Politics, PIRG reports that "highway interests from the construction and transportation industry" contributed $80 million to federal campaigns during the 2008 election cycle.

Sen. Charles Schumer (D-N.Y.) is one senator who doesn't seem to have put his money where his mouth was after the I-35 collapse, at least according to a review of earmarks in the transportation bill by the Huffington Post.

''For too long, the federal government has focused on building new bridges at the expense of fixing old ones, and now we are living with the consequences,'' Schumer said in August 2007, according to the New York Times. ''Robbing Peter to pay Paul is no way to keep America's drivers safe.''

Schumer's name appears on a dozen earmarks worth $10 million for various transportation projects in New York, only one of which involved fixing up an old bridge. His office did not immediately respond to a request for comment from the Huffington Post.

State legislators in Albany joined a rally on Tuesday to draw attention to the state's aging bridges after the Crown Point Bridge was deemed unsafe and shut down. The New York Department of Transportation has estimated that 1,526 bridges will be deficient within the next five years.

Schumer's remark about the federal government's spending priorities did not refer to earmarks, but U.S. PIRG's report calls them a "clear demonstration of the influence and prioritization of members of Congress, because their project requests circumvent agency review."

"Earmarking is kind of the one place where members of Congress actually choose" where money goes, said transportation policy expert Mark Stout in an interview with HuffPost. Stout, who lent his expertise to the report, spent 25 years working for the New Jersey Department of Transportation. "I've spent a lot of time in the weeds and in the mechanics of the funding of the industry."

In their report, U.S. PIRG did not call out any specific members of Congress but they did have some sharp words for the entire Mississippi delegation, one of several to designate zero earmarks to old bridges:

"The delegation from Mississippi," the report says, "secured funding for 19 earmarked projects at a cost of $29,414,000, and despite having a backlog of over 3,000 structurally-deficient bridges in the state, none of their earmarks went to bridge repair."

U.S. PIRG's report, titled "Greasing the Wheels," is available here.

Byron Dorgan's Financial Plan: Common Sense From The Senator Who Saw This Coming

2009-11-12T14:02:09Z

He got it right last time.

Senator Byron Dorgan, Democrat of North Dakota, was one of eight senators who stood up to oppose the repeal of the Glass-Steagall act in 1999. That repeal, which was signed into law by President Clinton exactly 10 years ago today, broke down the barriers between commercial banking and investment banking, and led to the growth of behemoth financial firms that were able to take enormous risks with impunity, because they were "too big to fail."

"I think we will in 10 years' time look back and say we should not have done this," Dorgan said back then. The video of his speech has become something of a cult favorite for wonks -- ten years, a $700 billion bailout and a major financial crisis later.

Washington has an odd habit of listening to the people who consistently get such things wrong, and ignoring the ones who get them right.

So today, on this solemn anniversary, how about listening to this guy? What does he think we should do now?

"Three things," the senator told me in an interview. "One is to separate investment banks and FDIC-insured banks. Second, prohibit FDIC-insured banks from dealing in risky financial instruments on their own proprietary accounts... And third, abolish 'too big to fail.' If you're too big to fail, you're too big. Too big to fail is what I call no-fault capitalism."

All in all, it's a much more forceful agenda than his party leaders -- including his president -- are advocating.

Why isn't the administration at his side? "You'd have to address that question to the administration," Dorgan said. He did, however, express disappointment. "I would like to see them more aggressive on this issue."

But he's still hopeful. "We don't have any bill on the floor of the House or the Senate to evaluate," said Dorgan, who is not on the Senate's Finance Committee. "My hope is that we'll get a piece of legislation that will restore that separation."

Dorgan said he hasn't yet taken a position on the administration's proposed Consumer Finance Protection Agency, but "clearly there needs to be consumer protection. The question is how."

Also, he said, "I think you have to regulate hedge funds... You have to have transparency on these financial instruments."

And then there's the whole issue of accountability. "It's one of the most frustrating things," Dorgan said. "We essentially have had modern-day bank robbers -- except that they wore gray suits and not masks -- and there's been no accountability for it."

Dorgan has repeatedly called -- fruitlessly -- for a federal task force to investigate and establish accountability for the crisis. What's needed, he said, is an agreed-upon "master narrative" for the story -- and then prosecution of any criminal activity.

Dorgan, who is finishing up his third term in the Senate, is also an author. His latest book, published in May, is titled: "Reckless! How Debt, Deregulation and Dark Money Nearly Bankrupted America and How We Can Fix It".

In it, he writes about the government's obligation to right the tilted playing field of modern free-market capitalism, which currently favors the major players over regular folk. He writes:

Every day we see energy speculators, war profiteers, managed health-care providers, media propagandists, and/or financiers given some unfair advantage over the average consumers and taxpayers, and the cumulative effect of the American people watching selfishness prevail over the public interest has been an undermining of the public's trust in government.

This "anything goes" approach to capitalism has injured the very economy we have aspired to create. It is a philosophy that corporations and markets can be counted on to police themselves....

I'm a big fan of the free-market system. I don't know of any better method of allocating the goods and services. But in a free- market economy it is not unusual to see the big interests pitted against the little guy. When they are allowed to run unchecked or to rig the system, the big interests have the potential to drag down the very economy they need to remain stable and healthy. That is why it is so important we fight for a new era of reform and change to put our country back on track -- giving working people and small businesses the voice and the power to make the changes necessary.

This is not about a liberal or conservative philosophy. It is about making sure our economy and the free-market system work for everybody.

"There's no question the system is rigged against the little guy," Dorgan told me. "The bigger interests have a lot more information. They jerry-rig the system so that they always win."

"I think that has to be one of the lessons that comes out of this experience," he said, noting that it's been "one of the most expensive lessons in the history of our country."

As for what motivated him back in 1999, Dorgan said: "I just felt that merging the risks of investment banks with FDIC-insured banks was going to cause very expensive problems for the taxpayers of the country. And it turns out that's exactly what happened."

WATCH:

Here's Dylan Ratigan "celebrating" the 10th birthday of the Glass-Steagall repeal.

Visit msnbc.com for Breaking News, World News, and News about the Economy

* * * * * * * * * * * *
A message from Dan about how to find me: You can find my latest posts on this page, or you can subscribe to this RSS feed. You can also get an e-mail alert as soon as I post by creating a HuffPost Account (or logging in, if you have one already) and becoming one of my "fans". Make sure you also click on "Get Email Alerts from this Reporter" -- so that on this page, the little box next to "Notify me when a blogger I'm a fan of writes a new post" is checked. You can also follow me on Twitter, or Facebook. And I always welcome your emails at froomkin@huffingtonpost.com.

Rick Morrissey, Chicago Sportswriter, Literally Eats His Own Words (VIDEO)

2009-11-12T12:42:35Z

Thanks to the Columbia Journalism Review, Eat The Press is proud to finally bring you an example of actual press being actually eaten. Oh, frabjous day!

I rather like the example set here in this video, where Chicago Tribune columnist Rick Morrissey, having been the author of an "unflattering assessment of Chicago Bulls center Joakim Noah" -- an assessment that ultimately proved to be incorrect -- sits down with the vindicated Noah and proceeds to eat his own words. By which I mean, he takes his story and literally gets his mastication on, while a joyful Noah looks on. Maybe sportswriter Rick Reilly should consider what wine will best wash down his many hysterically wrong predictions about the Denver Broncos!

WATCH:

Naturally, this is all sort of a good-spirited goof, but I rather like Noah's statement, "Finally, a reporter is taking some accountability for what he's doing." Imagine if this was the standard means by which journalistic accountability was enforced. Why, so many so-called Iraq War experts would be presently choking down the reams of paper upon which they got the war wrong, that there wouldn't be anyone available to get the War in Afghanistan wrong! And, naturally, the high fiber intake would make the alimentary canals of many columnists practically frictionless for life.

[Would you like to follow me on Twitter? Because why not? Also, please send tips to tv@huffingtonpost.com -- learn more about our media monitoring project here.]

Petraeus Not Asked About, Won't Address, Afghan Strategy At News Summit

2009-11-12T12:18:39Z

Bloomberg News scored a major opportunity when news broke Wednesday evening that (1) President Obama had scrapped four proposals for operations in Afghanistan; and (2) the U.S. ambassador to that country had expressed deep reservations about a troop build-up.

The news outlet was, on Thursday, hosting a Washington summit. And its featured guest was General David Petraeus, head of the United States Central Command and, perhaps, the most highly-respected voice in the armed forces.

So which topic was the center of discussion? It was, in the end, topic (3): None of the above.

For 30 minutes, Petraeus was asked about a host of policy issues not by a reporter, but by Michael O'Hanlon, a prominent war cheerleader and fellow at the Brookings Institution. The issues covered were surely substantive -- ranging from U.S. commitments to Pakistan, the ability to sustain security achievements in Iraq and the difficulties posed by Iran. But never once was the issue of the day broached.

The closest O'Hanlon came was when, at the very beginning of the session, he asked Petraeus whether he thought the template for counterinsurgency in Iraq was transferable to Afghanistan. It was the same question Petraeus fielded the last time he appeared at a forum at the Newseum in Washington D.C.: The Atlantic's First Draft of History Conference on the first of October.

For the next half hour, the task of quizzing Petraeus was turned over to the crowd, and the questions offered ventured even further into the obscure. At one point, the general discussed the military's policy toward Somali pirate ships for roughly ten minutes. Halfway in, it seemed like a breakthrough could happen. A reporter from U.S. News and World Report was able to get her hand on a microphone. But before she could get through her own introduction she was asked to pass the mic along after it was explained that the inquiries were to be saved primarily for the audience and a trade publication reporter had asked the previous question.

Finally, the spotlight came back to O'Hanlon, who on various occasions during the forum had expressed the appreciation and friendship he felt for Petraeus. His last query, however, returned to the issue of Pakistan -- certainly a worthwhile topic but not, necessarily, THE topic. The hour ended without one question on the White House strategy sessions taking place on Afghanistan or the concerns raised by Amb. Karl Eikenberry, who in classified cables revealed the night before, had expressed misgivings about sending additional forces into war.

Leaving the stage, the Huffington Post was able to track Petraeus down. But by then he was in the clear and making a quick dash for the exit.

"Are you comfortable with the president's decision to continue deliberations on Afghanistan?" I asked.

"I'm sorry I'm not taking any questions about that," he replied.

Indeed, he wasn't.

Get HuffPost Politics On Facebook and Twitter!

FLASHBACK -- Lou Dobbs's Past Bluster: "It's Killing The Left... That They Can't Force CNN To Fire Me"

2009-11-12T11:46:51Z

Here's a reminder of how now-resigned-from-CNN Lou Dobbs used to bellow on and on about his various persecution complexes, and as recently as August 14, blustered to his radio audience that "It's just killing the left... that they can't force CNN to fire me."

DOBBS: You know, it's just killing the left wing in this country that they can't force CNN to fire me. They're coming after me with everything they've got. I'm used to it. They've been doing it since...what would it be? I'm going to say 2000, 2001, 2002, when I started criticizing, in earnest, the Bush administration, and ultimately was blackballed by the Bush administration. The left wing, this time, is just as committed as the right wing used to be, coming after me for talking about free trade policies and they wanted to absolutely destroy me, and the National Association of Manufacturers dedicating entire websites to me because I was criticizing manufacturing policies -- or the lack of a manufacturing policy. This is just crazy stuff.

LISTEN:

Well, it was "just crazy stuff." But ultimately, the lion's share of "crazy stuff" -- the weird leprosy claims, the legitimizing of the "birther" movement, the weird "North American Union" conspiracy mongerings, the overheated anti-immigrant rhetoric -- was authored by Dobbs himself. And that's what brings pressure from quarters where rational thought is held in esteem.

So, while Lou Dobbs had a healthy coterie of detractors, as well as a vivid imagination that permitted him to think that enemies lurked in every shadow, it's important to remember that Dobbs himself is ultimately responsible for his own misfortunes. And CNN? Well, they aren't going to miss Lou Dobbs one little teensy bit.

[Would you like to follow me on Twitter? Because why not? Also, please send tips to tv@huffingtonpost.com -- learn more about our media monitoring project here.]

Read more: Lou Dobbs, Video, Cnn, Media Criticism, Media News

Trumka: Deeds Lost And Dems Will Lose Without Populist Focus

2009-11-12T11:28:42Z

One of the most powerful labor leaders in the country said on Thursday that Democrats were unable to hold the governor's chair in Virginia and may lose seats nationally because of a lack of truly populist principles.

Richard Trumka, president of the AFL-CIO, told a summit in Washington D.C. that without improvements in the job market, elected officials -- including the Democratic majority in Congress -- would likely flounder in 2010.

"I don't think we should feel comfortable with what's going on for several reasons," Trumka said, when asked about the current status of economic growth. "One: even though you may see some green sprouts right now as far as the economy, until jobs are starting to be created it means nothing..."

The union leader saved his toughest political analysis, however, for a candidate that his institution endorsed. Former gubernatorial aspirant Creigh Deeds lost the race for Virginia governor because he declined to promote progressive policy points, said Trumka.

"Creigh Deeds said he would opt-out of the public option, which certainly depressed his base," said Trumka. "He was against giving workers greater collective bargaining rights."

"He really didn't define himself in a way that people wanted to hear. People want to hear about jobs. They want to hear about how you will create jobs."

Pressed if a winning electoral message was a populist one, Trumka replied: "If you look at the last election that's exactly what's happened. The populist message is everything."

Obama Appointments: This Day In Pointless Obstruction

2009-11-12T11:17:06Z

If you thought that the filibuster was the only means by which senators could engage themselves in self-indulgent and pointless political warfare, think again! There's also the hold procedure, by which individual senators can obstruct an executive branch appointment just because they feel like it.

The most recent example is the case of Tom Shannon, a former Bush State Department appointee who has been appointed to serve as the Ambassador to Brazil by President Obama. For reasons that defy understanding, Senator George LeMieux (R-Fla.) has decided to place a hold on Shannon, because, as Dave Weigel reports, he needs to "discuss [his] concerns" and "fully vet him." This follows a long hold placed on Shannon by Jom DeMint (R-S.C.), who did so in order to show his displeasure with the administration's approach to Venezuela and Honduras.

Matt Yglesias weighs in:

Neither DeMint nor LeMieux invented the abuse of the hold procedure, but the Republican Party of the 111th congress has taken this to such new heights that it's about time the Senate take some responsibility and start organizing itself like a legislative body of an important country and not like a country club. The ability for one senator to delay confirmation of key executive branch personnel indefinitely for no real reason has never been a good idea. At times, this power has been abused to advance policy goals I believe in. Oftentimes it's used to advance bad policy goals. More recently, it just seems to be being used as a matter of principle--maximum feasible obstruction. It needs to be changed.

There's a certain amount of irony involved in LeMieux placing a hold on Shannon, since LeMieux is only in the Senate because Florida Governor Charlie Crist wanted to "place a hold" on that Senate seat.

[Would you like to follow me on Twitter? Because why not? Also, please send tips to tv@huffingtonpost.com -- learn more about our media monitoring project here.]

John Galligan, Hasan Defense Attorney, Target Of Wolf Blitzer's Shame Campaign

2009-11-12T10:28:47Z

It goes without saying that when the available facts accrue and weigh so heavily against a defendant, like the alleged Fort Hood killer Nidal Hasan, one can begin to think of the upcoming trial as something of an afterthought.

Yet, there's this thing called the Sixth Amendment to the United States Constitution that provides defendants -- even the unlikeable and the ultimately guilty -- with all sorts of inviolable rights, one of which is the right to legal representation. And so, the duty of defending Hasan in open court would have become someone's responsibility. That's just a fact.

And yet, it seems like we're obliged to endure the odd and illogical spectacle of people like CNN's Wolf Blitzer, mounting something of a shame campaign against Colonel John Galligan, who is presently engaged as Hasan's defense attorney.

BLITZER: They asked me, how could a retired U.S. military officer, a full colonel, go ahead and represent someone accused of mass murder? And I want you to explain to our viewers why you're doing this.

GALLIGAN: Wolf, I will tell you what I have told, consistently, anyone who's asked that same question, and that is, as a former military JAG officer, former military judge, former prosecutor, former defense counsel, and now currently actively involved in the civilian practice of criminal defense work, I fully appreciate the importance of ensuring that everybody has a fair trial. I think that's particularly important when it applies to anyone in uniform, officer or enlisted. Their profession is to defend us, we owe it to them as either fellow servicemembers or as U.S. citizens to ensure that they properly defend them. The rights that I'm asking be accorded to Major Hasan are the rights that service members live and die for.

Galligan went on to attest to his experience in the military justice system, and express confidence in the fact that at the end of the trial, observers would have no doubt that a "fair and impartial hearing" would be rendered. All of which should have been sufficient! But then Blitzer felt the need to beat his chest a little bit:

BLITZER: I'm sure he will get a much fairer hearing than those 13 Americans who were brutally gunned down the other day. I'm sure he will get all of the rights that are applied by the military code of justice.

Galligan retorted, "The difficulty that I have, of course, is when people end discussions with me with references like the one that you just made," adding, "We wanna make sure that everybody watching the process unfold feels comfortable and confident that it's going to be fair and just. The minute we try to isolate certain cases in the process and say, well we can make a judgment before the trial, or assumptions before the trial, I think it leads to the wrong result."

What I don't understand is this: Why is Wolf Blitzer trying to steal Nancy Grace's thunder? I thought howling about what monsters defense attorneys are was her schtick.

WATCH, via TPM

Anyway, if you don't like our criminal justice system, maybe move to Iran? KTHXBAI.

RELATED:
Wolf Blitzer Questions How Hasan's Lawyer Can Represent 'Someone Accused Of Mass Murder' [Talking Points Memo]
A Bad Moment Today at CNN [Josh Marshall]

[Would you like to follow me on Twitter? Because why not? Also, please send tips to tv@huffingtonpost.com -- learn more about our media monitoring project here.]

Pay 'Czar' Feinberg: I'm Not Eager To Use Imperial Edicts

2009-11-12T10:10:00Z

The man known as President Obama's "czar" of CEO pay, Kenneth Feinberg, said on Thursday that he finds the title "unfortunate" and believes that the criticism he is getting from both sides of the compensation debate means he must be doing his job right.

Speaking at the Bloomberg Washington Summit, Feinberg beat back questions about the power he wields and role he's played in limiting CEO pay at seven institutions dependent on government bailout funds.

"I must say, this czar characterization is very unfortunate," he said at one point, when asked what he could do about corporate governance -- something not under his domain. "I really am not eager to use imperial edicts. I would rather cooperate with these companies. And they've been very cooperative."

His goal is to implement a policy authorized by Congress, based on respecting the need to keep these institutions "thriving" while simultaneously getting the taxpayers money back, he said. The fact that some people feel he's gone too far and others are hungry for more, he said, indicates that "maybe I've struck the right balance."

In late October, Feinberg ordered a 90 percent cut in average salaries for the top 25 executives at Bank of America Corp., American International Group Inc., Citigroup Inc., General Motors, GMAC, Chrysler and Chrysler Financial.

"There was no vindictiveness in my decision," Feinberg explained. "There was no revenge. It was strictly: Here is the statue, here are the accompanying regulations, here is the Congress watching... and here is what I think, in my assessment, will keep these companies thriving."

Asked whether he thought his purview -- which consists only of those institutions still dependent on taxpayer funds -- is too limited, Feinberg replied:

"I have no jurisdiction over nor should I have over these other Wall Street firms. I hope that the recommendations that are made on compensation -- particularly the structure -- will be voluntarily adopted by Wall Street firms and other companies... But that's up to them."

The position of pay czar -- if you will -- was established earlier this year when Congress amended the language of the TARP legislation to ensure that a situation similar to AIG's issuance of exorbitant bonuses did not happen again. Feinberg, a protege of former U.S. Senator Ted Kennedy, took over the post as part of pro-bono work.

It is, in many ways, a no-win situation, with those angry at Wall Street's excesses demanding stiff punishments and devotees of the capitalist system decrying the heavy government hand.

"I must say," Feinberg acknowledged, "you cannot help but be sensitive to the political realities. What good is it to render decisions if they will be so vilified and criticized by Congress that the very companies that you want to thrive are placed in jeopardy?"

The Economist The Obama Administration Should Have Listened To

2009-11-12T09:53:23Z

Eight months ago, the Obama administration launched a plan to help troubled homeowners avoid foreclosure by providing $75 billion in taxpayer funds to banks and mortgage servicers. The money was intended to help three to four million homeowners by lowering their monthly payments, largely by cutting their interest rates.

The next day, a Yale economist and a colleague penned a New York Times op-ed arguing for a different approach.

Rather than cut interest rates, John D. Geanakoplos and Susan P. Koniak wrote, the government should reduce the overall amount owed on the mortgage -- the principal.

"The plan announced by the White House will not stop foreclosures because it concentrates on reducing interest payments, not reducing principal for those who owe more than their homes are worth. The plan wastes taxpayer money and won't fix the problem," they wrote.

The facts seem to be bearing this theory out. As many as 3.4 million homes are expected to enter foreclosure by year's end, with some experts estimating that next year will be even worse. As of Sept. 1, less than two percent of homeowners who received a temporary modification under Obama's plan ended up with a permanent fix. And so far, the plan has already cost taxpayers about $27 billion.

Only five of the 1,711 permanent modifications as of Sept. 1 involved a principal reduction -- in fact, most homeowners with a permanent fix ended up owing even more on their mortgage than they did before the modification.

For those who were already "underwater" on their mortgages, meaning they owed more on their mortgage than the house is worth, the move pushed them even further below the surface.

A recent Fed study confirmed that the Obama administration's plan could actually make matters worse for taxpayers when it comes to helping those homeowners underwater.

And a New York Times editorial Thursday morning concludes: "What is evident, now, is that at the current pace of modifications, and with the housing market coming under renewed pressure, the plan has little chance of making a meaningful dent in the crisis."

What to do? The Times says: "To help people with negative equity, the subsidies in the Obama plan should be redeployed so that they are used to modify loans by reducing the principal balance."

Geanakoplos, interviewed on Wednesday by the Huffington Post, says nearly a year has been wasted.

"I think the Obama administration has made a big mistake. The administration's plan went about as badly as I foresaw, possibly even worse," he says. "Things have been awful. They've barely modified any loans, and those they have haven't done any good."

"I don't fathom the logic of their plan," Geanakoplos says, looking back. "I can't figure out who it's going to help."

In that March op-ed, Geanakoplos and Koniak (a law professor at Boston University) proposed the following: a government-formed, taxpayer-funded plan that would focus on reducing principal for credit-impaired homeowners who were underwater in their mortgages. Total cost to the taxpayer: About 3 to 5 billion dollars over three years.

Here's how it would work:

The program would be limited at first to subprime and other nonprime borrowers who were current on their mortgages because a) you don't want to reward homeowners who have fallen behind on their payments, thus risking a situation where homeowners are incented to fall behind and b) homeowners with good credit typically value their high credit scores, thus are more likely to make regular payments and not become delinquent.

The plan would be administered by a staff of community bankers, who would be hired from the private sector. That's where the cost comes into play. These folks, who would be experienced in dealing with home mortgages and loan modifications, would be the ones looking at individual mortgages and trying to determine the best course of action. Under the administration's plan, mortgage servicers do the modifications. The results haven't been stellar.

A key to the plan was that the reduced principal would be less than the value of the house - so the homeowners would have equity again - but still greater than the note-holder could get simply by foreclosing. For example, suppose a couple took out a $280,000 mortgage when they bought their home, but the home's value dropped to $200,000. "Bondholders today anticipate making as little as $70,000 on a foreclosed home like that in our example," Geanakoplos and Koniak wrote, because foreclosed homes typically sell for a steep discount relative to other for-sale homes. So the principal would be reduced to somewhere between $200,000 and $70,000.

The net result would be that the homeowners, with newfound equity, would have increased motivation to stay in their homes, and the bondholders would be satisfied because they would maintain their income stream and wouldn't lose as much money as they would through foreclosure. Communities also would benefit, because there would be fewer foreclosures in the area, which means less blight, less houses for sale on the market, and less downward pressure on housing prices.

In referencing the provision in Obama's plan that pays mortgage servicers and bondholders for each successfully modified loan, Geanakoplos and Koniak wrote: "The taxpayers need not and should not be responsible for making up the difference between the payments due bondholders before a loan is modified, and those due after modification. Why? Because the bondholders and the banks, the ultimate beneficiaries of homeowner payments, will be better off if mortgages are modified correctly and foreclosures stopped. The government 'owes' them nothing more than that."

And Geanakoplos says the bondholders have already largely discounted the value of their subprime mortgage holdings. He should know; in addition to being an economist, he's a partner in a hedge fund that trades in mortgage-backed securities.

"Bondholders who actually have to mark their positions properly have them marked way down, anticipating that these borrowers will eventually default," he told the Huffington Post in an interview Wednesday. "So you wouldn't be costing the bondholders any money by lowering the principle -- they've already taken the losses....

"That's the whole point. That's the beauty of the plan," Geanakoplos says. "You'd be making the people absorb the loss who have already taken the loss."