Tuesday, September 22, 2009

Bank Of Hardball

Bank of America wants to play hardball with the Feds?

Okay, you go ahead and do that (Via John Cole.)
The Securities and Exchange Commission said Monday that it will broaden its investigation into alleged wrongdoing at Bank of America and may seek additional charges as it prepares for a trial against the bank.

The move was the latest effort by the agency to combat the impression that it took a soft approach in a high-profile investigation stemming from Bank of America’s acquisition last year of Merrill Lynch. The SEC suffered a serious setback last week when a federal judge ordered a trial after rejecting a $33 million settlement in the case.

“[W]e will vigorously pursue our charges against Bank of America and take steps to prove our case in court,” the SEC said in a statement. “We will use the additional discovery available in the litigation to further pursue the facts and determine whether to seek the court’s permission to bring additional charges in this case.”

Making an example of the biggest bank in the country would be a good thing.

The Afghan Argument

Spencer Ackerman wonders what the end game of the McChrystal leak is.

The sun rose today and its gravitational force kept the planet twisting around it through the void, so naturally Fred and Kim Kagan, the neoconservative wing of counterinsurgency, have put out a call for between 40,000 and 45,000 additional troops to be sent to Afghanistan in the next year. Both Kagans advised the McChrystal strategy review that leaked yesterday to box President Obama into escalation. But they say — really, really prominently — that they’re not speaking for Gen. Stanley McChrystal or anyone else. Maybe so, but now we have a good idea of who on the review advocated for 40,000 troops, something that fellow adviser Anthony Cordesman recently reported.

It’s difficult to understand how the Kagans think there are 40,000 – 45,000 U.S. troops available for deployment — the Pentagon doesn’t think the Army can deploy a single additional combat brigade to Afghanistan in the next six months — and the report is silent on whether to increase the pace of withdrawal from Iraq (formerly a Kagan no-no); whether to decrease the time in between deployments, which the Army and the Secretary of Defense will resist after having to do it to sustain the 2007 Iraq troop surge; or whether to … I don’t know. They just want the politically treacherous 40,000-45,000 troop increase, and now the GOP will have a troop figure to say Afghanistan requires if Obama doesn’t provide such a ginormous increase. (They also back the consensus call for speeding up the development and deployment of Afghan security forces.)

The Obama administration is not reacting kindly to the leak’s attempted trap. “The impact may be the opposite of the leakers’ intent,” said an official in the Office of the Secretary of Defense. “This will increase the determination of the civilian leadership not to be rushed or pressured.”

The hawks have been trying to drive for the SURGE!!! Part Deux since Obama took over in January. Now they feel they have him painted into a corner. But it's clear that the White House sees this and may be resisting, which is far more than I gave them credit for this morning.

But in the end I still believe that Obama will fold. McChrystal will get his 40K troops.

Elections Have Consequences

This, evidenced by President Obama's speech at the UN this morning on climate change.
Speaking to UN Secretary Ban Ki-Moon's climate change summit this morning, President Obama spoke of the progress the U.S. has made on sustainable energy, but warned, "We did not come here to celebrate progress. We came because there's so much more progress to be made, so much more work to be done."

Speaking of the world as a whole, he said, "The hardest part of our journey is still ahead of us."

He pointed out American efforts to reign in greenhouse gases, including initiatives to capture carbon, build off-shore wind farms, phase out subsidies for fossil fuel and tracking, for the first time, how much greenhouse gas pollution the country is creating. He also urged fellow leaders of industrialized nations to help poorer countries fight climate change and create low-impact development.

"We understand the gravity of the climate threat," he said.

Obama looked forward to December's international climate change summit in Copenhagen. "We must seize the opportunity to make Copenhagen a significant step forward in the fight against climate change."

America is well behind the curve after eight years of Republicans pretending climate change doesn't exist. It's time for us to catch up and actually lead on this issue, and Obama seems dedicated to this cause, as he should be.

It's also time for the Senate to move on legislation, pass it like the House did, and get it on Obama's desk.

Zandar's Thought Of The Day

If Republicans agree with Democrats on 80% of health care reform as GOP Rep. Eric Cantor of Virginia says, then as Steve Benen points out, why do Democrats have to completely scrap Obamacare, especially when the Republicans don't have a bill at all?
Richmond resident Ben Ragsdale demanded to know how Republicans were going to expand access to healthcare if they have only a four-page list of bullet-points as their plan.

"What is your substantive proposal to meet these real everyday problems that people have? Where's the beef?" Ragsdale asked, triggering applause from the crowd.

The telegenic GOP lawmaker said Republicans and Democrats agree on 80 percent of fixing the nation's healthcare system, but could not show the crowd a detailed plan that has been endorsed by House Republicans.

Cantor earlier this year said House Republican leaders would release an alternative healthcare plan, but have not done so yet.

Nor will they ever release a plan, because that would totally defeat their purpose of seeing no plan is passed. Besides, releasing that plan would show that Republicans and Democrats are 80% in agreement on health care reform, and that the GOP would actually then be under tremendous pressure to you know, compromise in good faith for once.

Not going to happen.

Killing The Patient To Save It

CNBC goofball Dennis Kneale gives the old "Kill Obamacare to save health care reform" argument only he has the worst logic I've ever seen for it.
Do you really want the feds forcing you to buy insurance and taxing your family almost $4,000 a year if you refuse or decide you can't afford it?

That's what happens when health coverage--a personal responsibility of each of us--is transformed into an obligation of government, which now supposedly must provide it for all of us.

We simply can't afford it. Rather than aim at all 300 million of us, an ObamaLite overhaul should narrow the target to two groups:

First: The 15 million or so Americans who are the Truly Uninsured: they want coverage, can't afford it and don't qualify for government help. So let's give them some help.

Second: the 12 million who buy individual freelance policies rather than get coverage on the job. They need easy online access to a newly formed marketplace with interstate competition among the nation's 1,300 private insurers.

Wait a minute--we have 46 million uninsured, based on the latest U.S. Census data. Why help only that first one-third? Because, among all the uninsured, one-third are people who could afford insurance but elect to take the risk of going bare.

Which is their right--until Bam & Co. take it away as the Baucus bill would do.

Now Kneale does have a point here: the Baucus bill sucks. What we need is an affordable public option which the Baucus bill does not have. But then he goes into spiriling lunatic land.
After narrowing Obamacare at the start to just the Truly Uninsured--the 15 million lower-income folks who want coverage but don't qualify for government help—we also should make them pay some portion from their own wallets.

For them, Obamacare could cover, free of charge, catastrophic care and chronic care (for five often preventable diseases that pose over half of all costs: cancer, diabetes, heart disease, stroke and pulmonary disease).

That "doughnut" would leave recipients to cover the hole in the middle: regular doctor visits for routine ailments and maintenance.

One big cost problem we already have is a function of too much insurance.

Some 50% of all healthcare costs already are paid by government. Employer health plans cover the other biggest chunk. And only a sliver of the total cost is paid directly out of our own pockets.

If that personal portion went up, only then would we behave as tougher, smarter shoppers and worry more about keeping our own expenses down.

Got that? He doesn't want people who can afford health insurance but choose not to have it to be forced to pay for it, because that's unfair and something these folks can't afford, but on the other hand he wants people who can't afford health care now to pay more for it in order to discourage them from using health care.

In other words, rich people who don't want health insurance shouldn't be forced to buy it, but people who do want it should be forced to pay a lot for it...more than they can afford. This will drive costs down somehow.

And people wonder why I think this guy's a knucklehead.

General McChrystal Plays His Hand

Afghan theater commander Gen. Stanley McChrystal has painted Obama into a corner masterfully, with McClatchy reporting that aides to the General say he will resign if not given the proper resources to win the war in Afghanistan.
In the last two weeks, top administration leaders have suggested that more American troops will be sent to Afghanistan, and then called that suggestion "premature." Earlier this month, Adm. Michael Mullen, the chairman of the Joint Chiefs of Staff, said that "time is not on our side"; on Thursday, Secretary of Defense Robert Gates urged the public "to take a deep breath."

The White House didn't respond to requests for comment. Officials willing to speak did so only on the condition of anonymity because they weren't authorized to speak publicly.

In Kabul, some members of McChrystal's staff said they don't understand why Obama called Afghanistan a "war of necessity" but still hasn't given them the resources they need to turn things around quickly.

Three officers at the Pentagon and in Kabul told McClatchy that the McChrystal they know would resign before he'd stand behind a faltering policy that he thought would endanger his forces or the strategy.

"Yes, he'll be a good soldier, but he will only go so far," a senior official in Kabul said. "He'll hold his ground. He's not going to bend to political pressure."

For an avowed non-political commander, McChrystal has given a virtuoso performance here. McChrystal is doing exactly what I thought our commanders in Iraq should have done years ago: ask for enough resources to finish the job, and then say that if those resources aren't given, to resign. It's that second part that Gen Petraeus refused to do, but in the end he got his surge.

McChrystal is playing hardball. His resignation would effectively end our war in Afghanistan and all sides know it. Here's the question: does Obama have the guts to do what the American people want him to do and say "Okay, then it's time to wrap up our mission there and leave"? Will he call McChrystal's hand?

Somehow I doubt it. Expect tens of thousands of more troops in Afghanistan before the end of the year.

Picking Up The Tab

The FDIC is preparing to have big banks contribute to the busted bank fund to cover the failing smaller banks that seem to pop up each Friday, as the government agency is running out of cash to do so.
Senior regulators say they are seriously considering a plan to have the nation’s healthy banks lend billions of dollars to rescue the insurance fund that protects bank depositors. That would enable the fund, which is rapidly running out of money because of a wave of bank failures, to continue to rescue the sickest banks.

The plan, strongly supported by bankers and their lobbyists, would be a major reversal of fortune.

A hallmark of the financial crisis has been the decision by successive administrations over the last year to lend hundreds of billions of taxpayer dollars to large and small banks.

“It’s a nice irony,” said Karen Shaw Petrou, managing partner of Federal Financial Analytics, a consulting company. “Like so much of this crisis, this is an issue that involves the least worst options.”

Bankers and their lobbyists like the idea because it is more attractive than the alternatives: yet another across-the-board emergency assessment on them, or tapping an existing $100 billion credit line to the Treasury.
So what's the catch, as evidenced by that second sentence up there showing the banks and bank lobbyists love this plan?

The catch is through these bank failures, the big banks can get bigger without regulatory oversight by purchasing the assets of failed banks for pennies on the dollar, and splitting the costs of the toxic waste with all competitors. It's certainly a huge win for the big banks across the board, from a financial standpoint as well as a rehabilitative public relations issue. Even better, the big banks are in perfect position to make these long term loans with interest to the FDIC and will earn interest in the long run, meaning that not only will the FDIC pay them back at some point with government money, they'll actually make a profit off of it.

In other words, it's another gift of cash to the big banks on top of the government gift of consolidation for the industry, removing competition and expanding the biggest banks.

Who's picking up the tab? As usual, we are.


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