The GOP Women’s Auxiliary

Oh wowza’ the Republicans in Congress have created a Women’s Policy thingie.  [CBS]  Oh, oh. Look. See.  If the GOP has established a very special committee panel caucus whatever for its females, then however could anyone imagine they’ve been waging a lovely war on Women? Surely if the Democrats can “manufacture” a War on Women, then the GOP can manufacture a committee parodying the finer qualities of the venerable Women’s Institute, albeit without  “Jam and Jerusalem?”    One of the members assigns lofty goals for this august body:

“As mothers, grandmothers, daughters, wives and sisters, women often see things in a different context,” Rep. Bono Mack explained. “Today, our nation is confronting historic challenges – from a $15 trillion national debt to a sluggish economy that has suffered through 39 straight months of unemployment above 8 percent.  As Republican women, we have some really unique ideas for moving our nation forward, and we’re excited about working together to find solutions.”

Oh good, “unique ideas” — what might those be? We might have expected the roll out to include a tidy web page highlighting those “unique ideas,” but no — the  Click Here bit simply sends a person back to Tennessee Congresswoman Marsha Blackburn’s press release.  So, why all the window dressing if the ladies are simply going to recite the Republican Anthem, singing the praises of small government and lower taxes for the wealthy, with less ideological independence than the average Sophoclean Chorus?

The “war on women” didn’t catch on as a national phenomenon because GOP officials are invariably men; it caught on after Republicans in Virginia decided to mandate medically-unnecessary, trans-vaginal ultrasounds for women who want to undergo a legal medical procedure.

In recent months, Republicans at the state and federal level and have been fighting to restrict contraception; cut off Planned Parenthood; approving sweeping new restrictions on abortion; playing games with the Violence Against Women Act; denying the existence of gender-based pay discrimination and rolling back pay-equity laws. [Maddow]

How did the ladies of the Republican Chorus Caucus vote on these matters?  They might as well have been their ancient counterparts in Athenian theater — men costumed as women offering their collective voice in the dramatic action.

Chart of the Day: What Spending?

The latest Rovian/Romney  insertion into the political discussion is an ad which charges the Obama Administration with spending our way into oblivion.  Not. So. Fast.   There’s more from the Wall Street Journal’s Marketwatch.

Quick Picks: Bishops To Square One on Contraception

Bishops to Square One:  The US Conference of Catholic Bishops is pleased to announce their “Fortnight to Freedom,” June 21 to July 4, described by the Catholic News Agency, as follows:

“The initiative was created in response to several moves by the Obama administration that are threatening the Church’s religious freedom. The most well-known action is the Health and Human Services mandate that requires employers to cover birth control and other services that Catholics and other believers find morally objectionable.”

Now, what was that old line the Bishops used to find so objectionable, could it have been “They want to hang their religions around other people’s necks?”

Tax dollars are going out the back door to private schools.  This may not be what the Alliance for School Choice had in mind:

“While the scholarship programs have helped many children whose parents would have to scrimp or work several jobs to send them to private schools, the money has also been used to attract star football players, expand the payrolls of the nonprofit scholarship groups and spread the theology of creationism, interviews and documents show. Even some private school parents and administrators have questioned whether the programs are a charade.”  [NYT]

How many didn’t believe the programs were a charade in the first place?

Solyndra and Lobbyists in Romney’s Bundle?  If an article included  “Solyndra, lobbyists, fundraising, and Romney” would you click over and read it? Would it surprise anyone that Romney has not released the names of any of his bundlers?  We could guess we’d find the list in the stack with his tax returns?

The Not Debt Crisis?  Next time some one tells you that the national debt is Crushing the Nation!!!  Ask why then have Treasuries remained low after a $35 Billion 2 yr. sale. “The securities drew a yield of 0.300 percent…”  [Bloomberg]

Meanwhile back with the “Job Craters” — JPMorganChase is being sued by employees whose retirement funds were hit by the bank’s Big At Least $3B Blunder. “The defendants were accused of violating their duties to 401(k) and other retirement plan participants by including company stock as an investment option, hiding the stock’s risk, and failing to move participants to safer choices.” [Reuters]   And about their former risk manager… there were red flags. [Reuters]

Infrastructure Anyone: The Chinese say yes.  Reuters reports:

The pace of investment in the likes of roads, bridges and real estate is running at its weakest in nearly a decade, April data showed, suggesting the world’s second-biggest economy is heading for a sixth straight quarter of slowing growth.

To provide some support the government had asked for project proposals by the end of June, even for those initially earmarked for the end of the year, said the China Securities Journal, one of the country’s top financial papers.

Citing government sources, the article said Beijing did not rule out bringing forward next year’s projects, if it thought more investments would be needed to stimulate the economy.

Meanwhile, the American Energy and Infrastructure Act  stalled in the U.S. House of Representatives. [ASCE] There is a House-Senate Committee moving on the topic in fits and starts. [VTD]

Flowing Foreclosure money?  Want to see what your state has done with settlement funds from the Big Five Banks?  Pro Publica has the information in a convenient chart.

Yucca Mountain is Still Dead.  [Las Vegas Sun]

Nevada unemployment rate drops below 12% for the first time in 3 years.  [NNBureau]

Who’s The Job Creator? The Answer Is No Surprise

“President Romney introduces tax cuts and reforms that reward job creators, not punish them,” the voice-over says as video of Romney’s speaking at various campaign events across the country plays.”  [ABC]

The Republican presidential candidate has a message, Day One, “introduce tax cuts and reforms that reward job creators…”  Really?  Who are those job creators?  Hint: They aren’t the Financialists of the private equity management firms.   If you happen to have stumbled on the DB post for December 2, 2011, then you’ve already guessed the answer. If you’ve been a reader since wayback times, like February 3, 2009, then you’re ahead of the game:

“For all intents and purposes, it seems as though the House Republicans have completely forgotten that there are two sides to the fundamental economic equation for an equilibrium price: Supply and Demand. For that matter, they don’t even appear to be taking the interests of the suppliers into consideration either. Evidently, they don’t understand that when you “spend, spend, spend” you are buying “things, things, things” manufactured by companies that make their livings from “orders, orders, orders.”

That’s right, in an economy predicated on consumer spending the real job creators are Consumers.  However, no one really needs a liberal blogger to tell them that, why not listen to someone in the financial sector who demonstrates comprehension of the whole Supply and Demand thing, fund manager Nick Hanauer:

“That’s why I can say with confidence that rich people don’t create jobs, nor do businesses, large or small. What does lead to more employment is the feedback loop between customers and businesses. And only consumers can set in motion a virtuous cycle that allows companies to survive and thrive and business owners to hire. An ordinary middle-class consumer is far more of a job creator than I ever have been or ever will be.”

But what of David Brooks’ rejoinder that without financiers there would be no manufacturing? [PBS]   There are a couple of holes in the fabric of this clichéd argument.   First, as Hanauer explains:

“It is unquestionably true that without entrepreneurs and investors, you can’t have a dynamic and growing capitalist economy. But it’s equally true that without consumers, you can’t have entrepreneurs and investors. And the more we have happy customers with lots of disposable income, the better our businesses will do.”

There’s a second problem as well.  Brooks’ assertion that it’s the financial sector that floats all the manufacturing boats is true, but when he called out those who feel more regulation is necessary as “financial illiterates,” he’s gone a step too far.  The muck into which he’s stepped is that the Econ 101 textbook theory of financial operations upon which he’s basing his objection is outdated by at least 30 years.  Yes, once upon a time the financial sector did old fashioned “boring banking” in which the emphasis in the investment houses was geared toward underwriting capital accumulation plans for clients.   Not any more.

Brooks’ may have missed or forgotten the memo from May 1, 1975 when the old system of fixed commissions for trading securities were abolished, setting off a squeeze on brokering revenues.  Ye olde Broker-Dealer was going the way of the DoDo.  Then Salomon Brothers pioneered the Proprietary Trading Desk.  Salomon began betting on the market with its own money while buying and selling securities for its clients.  Remember Salomon Brothers?  It was the subject of Michael Lewis’s popular book, “Liar’s Poker.”   We also remember that Salomon Brothers became Salomon Smith Barney, and became extinct in 2003.

September 11, 2001- the day the towers went down and the Fed dropped a money bomb. The Fed decided to institute a sharp drop in interest rates and the housing boom was on.  Enter securitization, as a means by which the investment bankers could recoup profits lost or  squeezed by the decline in revenues from the old core securities sales businesses because their commissions had shrunk to fractions of a percentage point per trade.  So, how would more money roll in?

Investment banks also expanded into the underwriting and selling of complex financial securities, such as collateralised debt obligations. They were aided by the Federal Reserve’s decision to cut US interest rates sharply after September 11 2001. That set off a boom in housing and in mortgage-related securities.

The catch was that investment banks were taking what turned out to be life-threatening gambles. They did not have sufficient capital to cope with a severe setback in the housing market or markets generally. When it occurred, three (so far) of the five biggest banks ended up short of capital and confidence. [FTGapper]

By the end of the debacle there wasn’t a single old fashioned investment bank left on Wall Street.

In short, it doesn’t matter how much money Wall Street could infuse into a hypothetical Ultimate Frying Pan, Inc. if there is no demand for the product there will be no industrial expansion required.  Secondly, if underwriting Ultimate Frying Pan, Inc. is performed by Dewey, Grasp, & Grabbe we can be fairly certain that collateralized debt obligations and credit default swaps will not be far behind.

The “reward the job creators” argument falls apart in two directions so far: (1) the real job creators are middle class Americans who create demand for goods and services; and (2) the notion that financiers are the primary job creators requires that we ignore the last 37 years of Wall Street investment house history.   But, wait, there’s more.

The function of companies like Bain Capital and other alleged job-creators is NOT job creation.  The purpose of the $60 billion under management Bain operation is to maximize shareholder value.  Give Mr. Romney his due, he was a pioneer in revamping private equity management to the purposes of (1) growing earnings, (2) increasing dividends, and (3) increasing share prices.  [DB Romney & Shareholder Value]  If jobs are created in the process, fine, but if jobs are sent off shore or eliminated entirely that is of no particular concern to the Financialists.  Their bottom line is the shareholder value NOT the value of a trained workforce, an economically healthy community, or even an economically vibrant nation.

For the Wall Street investors who are supporting the Romney campaign, if the shareholders are happy, their proprietary trading desks are profitable, and the fees and commissions are rolling in All Is Well.  What happens on the factory floor, in the local restaurants, at the local car dealership, or in the local barber shop is of no particular concern.

As the arguments are refined we may see that in some cases Bain Capital was a venture proposition, in others a vulture, and in still others a combination of both.  The epithets will fly because this is a campaign season, but the political spiels should not gloss over the fact that the 2012 elections will highlight the very different economic perspectives of the GOP and its Wall Street financiers, and the Democrats who place more emphasis on the capacity of consumers to keep the demand side of the classic economic equation operational.

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References and Recommended Reading:  Benjamin Wallace-Wells, “The Romney Economy,” New York Magazine, Oct. 23, 2011.   “Romney The Revolutionary,” The Economist, Jan. 14, 2012. DB “Romney and Shareholder Value, May 15, 2012.   Pete Kotz, “Romney American Parasite,” Village Voice, April 18, 2012. Nick Hanauer, “Reward True Job Creators,”  Bloomberg, Nov. 30, 2011.   Ezra Klein, “Hanauer’s Talk On Taxes,” Washington Post, May 17, 2012.   CAP, “Middle Class, Inequality, and Economic Growth,” on-going issues, links.  Economic Policy Institute, “Romney Budget vs. the Budget For All,” May 17, 2012.

Filibusters and Busting Fillies

Politics being cyclical, J. Patrick Coolican makes some interesting observations about Senator Harry Reid’s (D-NV) opinions on filibuster reform in the Las Vegas Sun.  Raw data on the use of the filibuster in the Senate since God Was In Short Pants can be found here in the Senate Virtual Reference section.    As Ezra Klein points out, strict constructionists may want to temper their current approval of Senatorial Filibustering — the framers weren’t all that pleased with the idea when it was first considered:

“In Federalist 22, Alexander Hamilton savaged the idea of a supermajority Congress, writing that “its real operation is to embarrass the administration, to destroy the energy of government and to substitute the pleasure, caprice or artifices of an insignificant, turbulent or corrupt junta, to the regular deliberations and decisions of a respectable majority.”

In Federal 58, James Madison wasn’t much kinder to the concept. “In all cases where justice or the general good might require new laws to be passed, or active measures to be pursued, the fundamental principle of free government would be reversed. It would be no longer the majority that would rule; the power would be transferred to the minority.” [WaPo]

Klein has a much fancier chart accompanying his remarks, a chart illustrating the use of the filibuster since it became the cudgel of choice beginning around 1990 looks like this:

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Congressman Joe Heck (R-NV3) is pleased all over himself for voting in favor of the Violence Against Women Act — except the following comments don’t exactly fit the bill for which he voted.

“This bill provides increased resources for criminal investigations, strengthens penalties against abusers to better protect victims, regardless of their gender or sexual orientation, and funds programs that protect victims from the physical and mental scars of domestic abuse, sexual assault, and rape.” [Heck]

Heck voted in favor of H.R. 4970 — the House version of the bill — which doesn’t protect women in LGBT relationships.  Law enforcement officers called out on domestic assaults don’t ask who’s in the house, they perform their duties, and then may steer the victims to services available to assist them.  Services are not always available to victims in alternative relationships.  Secondly, the House version DOES NOT PROTECT NATIVE AMERICAN WOMEN from non-tribal abusers who can take advantage of jurisdictional issues in order to avoid prosecution in state courts, and/or advantage of the lack of resources in federal courts for prosecuting the miscreants.

“Native women aren’t safer as a result of the passage of  H.R. 4970. In fact, the tribal provisions included in this bill create additional hurdles for Indian women seeking protection from violence on tribal lands, and that is unacceptable” – Juana Majel-Dixon, 1st Vice President of the National Congress of American Indians (NCAI) and co-chair of the NCAI Task Force on Violence Against Women.”  [4VAWA] (emphasis added)

Finally, Heck has actually reduced law enforcement resources required to fight sex trafficking crimes against women.  Women lured to this country by “marriage” offers and then battered by abusive husbands are trapped in a bind — seek prosecution of their abusers and lose permission for residency (meaning they can be deported before they have a chance to testify) or endure the abuse to maintain legal residency.  Law enforcement officials want to offer women in these relationships special immigration status so that they can remain here to help substantiate charges of abuse.  Therefore, it should come as no surprise that one of the vocal lobbyists against the Senate version of the bill is associated with SAVE and Encounters International. The bottom line:

“It’s shocking to me that the people who are advocating for these anti-immigrant provisions are the people who have a monetary interest in not holding batterers accountable and not holding marriage broker agencies accountable,” she told HuffPost. “These are the ones reaching out to House Republicans, and Republicans are supporting the policies they’re pushing.” [RWW]*

So, Representative Heck can assert that he “supports” the Violence Against Women Act, BUT without protecting members of the LGBT community, Native American women, and battered mail-order brides.

Nevada Representative Mark Amodei (R-NV2) is also pleased with himself:

“As the father of two daughters, this legislation is very important to me,” said Amodei. “It increases resources for investigations, prosecutions, and victim services, while strengthening penalties and promoting educational awareness to prevent violence from occurring in the first place. And because good intentions aren’t good enough, this version of the bill would help ensure taxpayer resources go to help victims rather than Washington bureaucrats.”  [Amodei]

However, “this legislation” he is speaking of is also H.R. 4970. Well now, NO, H.R. 4970 doesn’t actually “increase resources” at least not for the victims mentioned above.  Nor does his last comment about “good intentions” make any sense other than as a toss-in line bashing federal efforts to administer VAWA efforts.  In fact, Amodei’s “good intentions” obviously don’t apply to the three categories of victims (LGBT, Native American, and Battered Mail Order Brides).

Congresswoman Shelley Berkley (D-NV1) hasn’t yet offered an explanation for her vote in favor of H.R. 4970 in roll call 258, unless it is that she is hoping conference committee actions will retain the crucial elements of S. 1925 assisting members of the LGBT community, Native American women, and battered mail order brides.

* This entire post is highly recommended reading.  For additional information about S. 1925 and H.R. 4970  go to the 4VAWA website for fact sheets and analytical information.

Chart of the Day: Spending, Taxes, Deficit All Decreased

For more information see the post at Think Progress.   There’s more information and analysis of the national debt available from Adelphia University’s Stephen Bloch here, including this nugget:

“Obama took office in the middle of, by far, the biggest-deficit year in history, dealing with two wars and the most severe recession since the 1930′s; it would have been remarkable if the deficit hadn’t decreased during his term. What is surprising in Obama’s case is that the decrease in deficits has continued, and even accelerated, rather than being a one-year “blip” due to repayment of bailout loans and the like.”

The Congressional Joint Economic Committee also has some graphs illustrating indebted by Administration.  (PDF warning)

For good old fashioned raw data look to the Treasury Department’s Treasury Direct.

The Unflyable,The Unfloatable, and the Unnecessary

Before we get too involved in the latest bubbling brouhaha from House Speaker John Boehner (R-OH) about yet another deficit standoff, there are still some elements of the GOP scuttling of last summer’s debt deal which deserve more attention.  On May 10, 2012 Representative Mark Amodei (R-NV2) and Representative Joe Heck (R-NV3) voted “aye” on H.R. 5652, [roll call 247] which in the simplest possible terms protected Defense Department spending from any cuts while doing violence to Department of Agriculture, Health Care, Medicaid, Financial Regulation implementation, and Social Services Block Grants including Meals on Wheels and other programs for the elderly and disabled.

This opens the opportunity to discuss what cuts to Pentagon spending might have been rationally considered?

The Unflyable F-22:  Last Tuesday, Secretary of Defense Leon Panetta stepped in to announce new flight restrictions on this troubled aircraft, “…Panetta endorsed Air Force efforts to figure out why some F-22 pilots have experienced dizziness and other symptoms of an oxygen shortage while flying…” And, there’s more: “Panetta was briefed on the problem Friday, just days after a CBS “60 Minutes” report featured Capt. Josh Wilson and Maj. Jeremy Gordon, two F-22 pilots from Joint Base Langley-Eustis in Hampton. Each said that during some flights, they and other pilots have experienced oxygen deprivation, disorientation and other problems. They cited safety concerns and the potential for long-term personal health problems.” [VAPlt]

“The stealth F-22 Raptor, at an estimated $420 million each, is America’s most expensive fighter jet. Despite going combat ready in late 2005, the plane has yet to take off for a single combat mission. The whole fleet, estimated to cost U.S. taxpayers up to $79 billion, was grounded for nearly five months last year as the Air Force investigated the mystery problem, but a solution was never found and the Air Force has cautiously allowed the planes to fly since.” [ABC]

The cost of the entire Social Services Block Grant Program is $1.7 billion annually.  [CBPP pdf] It would take 47 1/2 years for the Social Services Block Grant program to run up $79 billion in expenses.   But, apparently Representatives Amodei and Heck believe it’s a “better investment” to continue spending taxpayer dollars on an unflyable aircraft than Meals on Wheels?

An Unfloatable Boat:   What on earth could make us leery of the Littoral Combat Ship (LCS) program?

“From the time the Navy accepted LCS-1 from Lockheed Martin on September 18, 2008, until the ship went into dry dock in the summer of 2011—not even 1,000 days later—there were 640 chargeable equipment failures on the ship.  On average then, something on the ship failed on two out of every three days. From the time the Navy accepted LCS-1 from Lockheed Martin on September 18, 2008, until the ship went into dry dock in the summer of 2011—not even 1,000 days later—there were 640 chargeable equipment failures on the ship. On average then, something on the ship failed on two out of every three days.”  [POGO]

But wait, it gets worse:

“These failures during deployment were not the last time LCS-1 would face significant operational challenges. Before and during the ship’s second set of rough water trials in February 2011, 17 cracks were found on the ship, according to the Navy’s Crack Monitoring Survey During Rough Water Trials Period #2 (enclosed).[13] For example, a crack over 18 inches long was found at the corner of the deckhouse near a bi-metallic strip that binds the ships aluminum deckhouse and steel hull together.”  [POGO]

What every ship needs — an 18 inch crack in the part that binds the deck and the hull together….  Think things couldn’t get worse?

“The Littoral Combat Ship (LCS-1) USS Freedom is plagued by extensive corrosion and manufacturing issues more recent and serious than anything the Pentagon or prime contractor Lockheed Martin has publicly acknowledged thus far.

This is based on a guided tour of the ship in dry dock, as well as sources intimately familiar with Freedom’s design, repairs and operations, U.S. Navy documents and defense analysts.

The vessel is rusting and blistered by corrosion in many areas, marred by crack repairs throughout the deckhouse and hampered by what appear to be flaws in vital piping systems.

Corrosion is particularly evident throughout the ship’s waterborne mission area, located at the Freedom’s stern, because of a large gap between the stern doors and the vessel’s deck floor, which allows water to pour in when the doors are closed. They are supposed to form a watertight seal (see photo.)” [Aviation Week]

Yes, the magazine has a picture.  And, how much as this LCS mess already cost U.S. taxpayers?  Answer:  $7.6 Billion. [Speier] How much did the Department of Agriculture spend on the SNAP (food stamp program) in 2011?  Answer: $75,669,320.  [SNAP annual report]  Now, divide $7.6 billion by $75.7 million — How long could we run the SNAP program?

The Dubious Double Engine:  The Bush Administration tried to kill it, the Pentagon doesn’t want it, the Senate voted it down, the House voted it down — but It’s Baacckkk!  That would be the duplicate engine for the F-35.

If we apply just a bit of imagination we can almost see this mechanical Banquo’s Ghost appear before Defense Secretary Leon Panetta who cries out: “What man dare, I dare: Approach thou like the rugged Russian bear, The arm’d rhinoceros, or the Hyrcan tiger; Take any shape but that, and my firm nerves Shall never tremble: or be alive again, And dare me to the desert with thy sword; If trembling I inhabit then, protest me The baby of a girl. Hence, horrible shadow! Unreal mockery, hence!” (MacBeth3:2)

However, no matter how many times the Pentagon, the Administration, or the Congress may shout out “Unreal mockery, hence!” members of the GOP in the House will resurrect it.

“Condemned as a $450 million-a-year boondoggle earmark from House leaders who represent General Electric jet engine workers, supporters on the GOP-controlled House Armed Services Committee yesterday included a provision in the fiscal 2012 Pentagon spending bill that would force the department to continue the dueling engine programs for the Joint Strike Fighter.

Section 215 of the markup from the tactical air and land forces committee, however, does not include any funding. Instead, it limits spending for improvements to the F-35 Lightning II propulsion system, now focused only on Pratt & Whitney engines, unless the secretary of defense continues with the General Electric engine project.”  [USNews May 4, 2012]

Yes, that is $450 million per year, for duplicate engines NO ONE wants.

It is all too easy to find waste and dubious transactions in the Pentagon Budget, but for all the $3,000 toilet seats and $500 hammers, there are some portions of the budget which might use more attention.

If the Pentagon could free itself from the expensive and evidently troubled programs such as those described above, could some funds be restored for military construction and family housing?  “The $4.9 billion sought for military construction and family housing is down from the $5.8 billion requested in fiscal 2011. Military construction carries that cut, as housing would see a $100 million increase over last year’s request.” [AT]

If the Defense Department didn’t have to fund duplicate engines at $450 million annually, then could we raise the pay for a new enlistee above $1,491 per month.  How many of us would put ourselves in harm’s way for $17,892 per year?  God Bless those kids, and most of them are our youngest and best, they’re barely starting out above the minimum wage, while willing to give us their maximum effort.

There are about 1,468,364 reasons to support Defense Department funding, those would be the young men and women serving this country, and they do need the best equipment we can provide. They need housing, medical services, and educational opportunities. They need better pay — what they don’t need are aircraft that can’t fly, boats that crack, and duplicate engines.   However, the Republican controlled  House of Representatives seems determined to sustain funding for DoD programs of highly dubious benefit at the expense of both our vulnerable military and civilian families.