Kentucky Blue

Here in the Bluegrass State, turns out only just over half of us believe the President was born in the U.S. while 20 percent are firmly in the birther category, 29 percent are unsure.

“While 94 percent of black respondents said they think Obama was born in the United States, only 45 percent of white respondents were certain that he was born here.” The Lexington Herald-Reader reports, “Investigations by numerous media outlets, including the Pulitzer Prize-winning PolitiFact service of the St. Petersburg Times, have determined that Obama was born in Hawaii.”

Among Democrats, 72 percent said Obama was born in America. Nine percent answered no and 19 percent weren't sure.

Among Republicans, 30 percent said they think the president was born in the United States, 36 percent said they think he was born elsewhere and 34 percent were not sure.

Yep, that means we've actually got worse overall birther numbers than North Carolina, but the state's Republicans are slightly better informed, there's just a lot fewer Democrats to raise the average. There's a cheery thought.

StupidiNews!

• President Obama addresses the nation's schoolchildren today with a stay in school message.
• Afghanistan's president accuses the U.S. of undermining his authority in the war-torn country.
• Federal judges continue to side with Gitmo detanees, declaring their permanent detentions illegal.
• The World Economic Forum says that Switzerland has replaced the U.S. as the world's most competitive economy.
• A new government study says geoengineering can help with climate change, but not at the expense of other technologies.

Last Call

In a statement that's sure to drive the Wingers insane, the UN is again calling for the greenback to be replaced as the de facto world currency for the second time in six months.

The United Nations Conference on Trade and Development said in a report published Monday that the U.S. dollar should be replaced as the world’s standard reserve currency, giving rise to a new global currency managed by an as-yet undetermined financial regulatory organization.

Heiner Flassbeck, director of the conference, told Bloomberg News that changes needed in the world’s financial systems rival the scope of the Bretton Woods or European Monetary System agreements.

The Bretton Woods agreement established in 1944 the International Monetary Fund and World Bank, following allied victory in World War II.

“[The] dominance of the dollar as the main means of international payments [has] played an important role in the build-up of the global imbalances in the run-up to the financial crisis,” the report says. “Another disadvantage of the current international reserve system is that it imposes a greater adjustment burden on deficit countries (except if it is a country issuing a reserve currency) than on surplus countries.”

The UN adds: “Such a multilateral system would tackle the problem of destabilizing capital flows at its source. It would remove a major incentive for speculation and ensure that monetary factors do not stand in the way of achieving a level playing field for international trade. It would also get rid of debt traps and counterproductive conditionality. The last point is perhaps the most important one: countries facing strong depreciation pressure would automatically receive the required assistance once a sustainable level of the exchange rate had been reached in the form of swap agreements or direct intervention by the counterparty.”

The move should not be surprising to observers of global economics, as a U.N. panel of currency experts came to the same conclusion in March, according to Reuters.

Frankly, the UN is simply being honest: having the dollar as the world reserve currency is one major reason why our financial crisis became a global systemic one. The rest of the world is tired of footing the bill for us, especially the Chinese. If everybody else decides to go with another world currency, then America is done for, we become a third world country overnight.

That date is coming closer, frankly. I think it's a question of when, not if. Between this and the Chinese complaining earlier today, gold has shot up above $1,000 an ounce and may hit much, much higher.

What recovery?

The Roberts Court's Biggest Ruling

Ironically, E.J. Dionne is correct when he says that the biggest event Wednesday is not Obama's health care speech, but the special Supreme Court hearing on campaign finance laws.

Judged by the standard of an event's potential long-term impact on our public life, the most important will be the argument before the Supreme Court (on the same day, as it happens) about a case that, if decided wrongly, could surrender control of our democracy to corporate interests.

This sounds melodramatic. It's not. The court is considering eviscerating laws that have been on the books since, in one case, 1907 and in the other, 1947 banning direct contributions and spending by corporations in federal election campaigns. Doing so would obliterate precedents that go back two and three decades.

The full impact of what the court could do in Citizens United v. Federal Election Commission has only begun to receive the attention it deserves. Even the word "radical" does not capture the extent to which the justices could turn our political system upside down. Will it use a case originally brought on a narrow issue to bring our politics back to the corruption of the Gilded Age?

Citizens United, a conservative group, brought suit arguing that it should be exempt from the restrictions of the 2002 McCain-Feingold campaign finance law for a movie it made that was sharply critical of Hillary Clinton. The organization said it should not have to disclose who financed the film.

Instead of deciding the case before it, the court engaged in a remarkable act of overreach. On June 29, it postponed a decision and called for new briefs and a highly unusual new hearing, which is Wednesday's big event. The court chose to consider an issue only tangentially raised by the case. It threatens to overrule a 1990 decision that upheld the long-standing ban on corporate money in campaigns.

The one swing vote on this is going to be the Chief Justice himself, John Roberts. If he chooses to side with the conservatives of the court and strike down the laws preventing direct corporate contributions and limiting indirect ones, the spigots will be opened. Races will literally be bought and sold in 2010 by big corporate interests.

In other words, it would actually be worse than it is now. We'll see where it ends up, but keep an eye out on Wednesday for news of this.

Labor Daze

The President spoke today here in Cincy, and his speech was fairly good, but more interesting was what Blue Dog Steve Dreihaus had to say.

President Barack Obama told a union audience in Cincinnati on Labor Day that the nation has "never been this close" before to health care reform. But he cautioned that special interests are trying to scare Americans to protect the status quo.

"We've never had such broad agreement on what needs to be done,'' Obama said in his appearance at the 23rd annual Cincinnati AFL-CIO Labor Day picnic. "And because we're so close to real reform, the special interests are doing what they always do - trying to scare the American people and preserve the status quo.''

Obama, in his first visit to Cincinnati as president, spoke for 36 minutes to nearly 5,000 people at the PNC Pavilion at Riverbend Music Center in Anderson Township.

Obama's speech came two days before he is scheduled to address a joint session of Congress on the progress of health care reform. Obama said he didn't want to give away many details of his speech -- "I want you all to tune in.''

But Obama reiterated some core principles of reform in which people wouldn't lose health insurance if they lost their jobs, where there is a cap on out-of-pocket expenses and where people would not be denied coverage because of a pre-existing medical condition.

He also backed the creation of a marketplace where individuals and small businesses could purchase insurance at a reasonable cost.

"And I continue to believe that a public option within the basket of insurance choices would help improve quality and bring down costs,'' he said, addressing one of the most contentious parts of health care reform.

One of the congressmen unsure about the extent of reform is US Rep. Steve Driehaus, D-West Price Hill, who said at the picnic that he will be returning to Washington with Obama. Driehaus said he expects to have “some time to talk to the president and get down to brass tacks on health care and other issues.”

Driehaus has been on the fence when it comes to health-care reform proposals by the Obama administration and Democratic leaders in Congress.

Driehaus said, “I think we have spent the last month here in the district listening to all points of view and I think I’m better for it. What I want to do now is get the president’s perspective on this.”

In other words, this Steve Dreihaus.

"Yes, I think money is access." And people wonder why health care is in trouble. Who has access to Congressmen and women like Steve Dreihaus?

Here's a hint: it's not the people of West Price Hill here in Cincy. Something to think about this Labor Day.

Not Trading On The Name

Former Congressman Joe Kennedy Jr. has decided not to run for his late uncle's Senate seat.

"Given all that my uncle accomplished, it was only natural to consider getting back involved in public office," said Kennedy on the website of the non-profit organization he founded, Citizens Energy.

"After much consideration, I have decided that the best way for me to contribute to those causes is by continuing my work at Citizens Energy Corporation."

Edward Kennedy held the Senate seat for almost five decades, giving the Boston-based family a major presence in Washington long after the assassinations of both president John F. Kennedy in 1963 and Robert F. Kennedy in 1968 as he campaigned for the White House.

That leaves the door open for other Bay State Dems, most notably Massachusetts AG Martha Coakley. We'll see if anyone else throws in.

In Which Zandar Answers Your Burning Questions

Josh Marshall asks:

Am I the only one who thinks that if the Dems pass a bill with mandates and subsidies for poor and moderate income people to purchase it but no public option or competition with the insurers, that it will be pretty much a catastrophe for the Democrats in political terms?

The answer of course is no. Once again, a national law that mandates health insurance but has no affordable public option is doomed to failure, it is nothing more than 50 million new customers and a trillion dollar gift to the insurance companies.

Yes, the Democrats will take massive political damage from it, it won't drive down costs at all, and the Republicans can rightfully say that they warned America and can run in 2012 on overturning it. Yes, there's a real danger here that a bad bill like a 100% mandate, no public option plan would actually be worse than no bill at all, because millions of Americans will get booted from their company plan and will have to go it alone, driving costs up even more.

Without cost controls, companies will simply not be able to afford health insurance coverage for employees, period. It'll be a train wreck.

Obama has to know this. Congress sure as hell is aware of it.

What will Obama's plan on Wednesday include?

[UPDATE 1:38 PM] Surprise! Max Baucus's plan drops the public option for "health insurance co-ops". No public option plus mandates equals disaster.

A Dollar And Change In Beijing

The Telegraph's Ambrose Evans-Pritchard is once again reporting that China is warning America about Helicopter Ben's little printing press problem.

"We hope there will be a change in monetary policy as soon as they have positive growth again," he said at the Ambrosetti Workshop, a policy gathering on Lake Como.

"If they keep printing money to buy bonds it will lead to inflation, and after a year or two the dollar will fall hard. Most of our foreign reserves are in US bonds and this is very difficult to change, so we will diversify incremental reserves into euros, yen, and other currencies," he said.

China's reserves are more than – $2 trillion, the world's largest.

Such a public warning out of the otherwise inscrutable Chinese is tantamount to having China's ambassador to the US standing outside the White House and chucking eggs at the front door. Treasury is going to try to hem and haw this off as just talk, but this is a real problem. On one hand, when the stimulus wears off, 2010 and 2011 are going to be economically miserable. One the other hand, inflation is going to catch up with us at some point, resulting in the same thing, just further down the road. If Helicopter Ben raises rates too quickly, growth will get strangled, if he does it too slowly inflation will smash the country. It's an ugly position and Ben Bernanke role in getting us into this mess must be noted.

But hey, four more years!

[UPDATE 8:20 AM] The Telegraph also has an interesting article where two economists say America is headed down the Peronista collapse road that destroyed Argentina's economy and will put us in another depression.

Although the authors support the Federal Reserve's moves to slash interest rates to just above zero and embark on quantitative easing, pumping cash directly into the system, they warn that greater intervention could set the US back further. Rowley says: "It is also not impossible that the US will experience the kind of economic collapse from first to Third World status experienced by Argentina under the national-socialist governance of Juan Peron."

Which is funny, because the mistakes of the Depression were that not enough government intervention and oversight caused a major collapse. Since when do conservatives think deficit spending is bad? They've been doing it for 30 years.

Obama Comes To Cincy

President Obama will be here in Cincy today at the AFL-CIO's annual Labor Day Picnic this afternoon, where he will announce his new "manufacturing czar" Ron Bloom.

When President Barack Obama speaks at Coney Island Monday, he is expected to announce that Ron Bloom will be his senior counselor for manufacturing policy.

Bloom, who heads the Treasury Department's auto task force, is traveling with the president to Monday afternoon's annual AFL-CIO Labor Day picnic at Coney. The labor union has distributed 10,000 tickets for the president's afternoon address.

Obama is expected to speak around 1:15 p.m.; gates open at 9:30 a.m.

Bloom will remain head of the auto task force as he takes on the expanded task of working across federal agencies to integrate existing programs and develop new initiatives affecting the manufacturing sector.

According to prepared remarks released by the White House Sunday night, Obama is expected to tell the picnic attendees that he tapped Bloom to coordinate the administration's manufacturing policy because of his extraordinary service on the auto task force and his extensive experience with both business and labor.

"Ron has the knowledge and experience necessary to lead the way in creating the good-paying manufacturing jobs of the future," according to the White House statement. "We must do more to harness the power of American ingenuity and productivity so that we can put people back to work and unleash our full economic potential."

Ohio is still very much union country, folks. Maybe not as much as Michigan or Pennsylvania, but a lot of manufacturing jobs have been lost here lately and Ohio is most certainly a vital state to the Dems. This time last year the national unemployment rate was 3.5% lower. The state badly wants more green manufacturing jobs, and will need them.

I'll have more on the President's speech here later this afternoon.

StupidiNews, Labor Day Edition

Happy Labor Day, folks. Of course, an increasing number of us would of had the day off anyway...no job.

• Sen. Ben Nelson (D-NE) sees a health care bill compromise possible on a "trigger" mechanism for the public option.
• Scientists say they have discovered the genes that cause Alzheimer's, which may lead to genetic treatments.
• The loss of arctic ice is leaving summer shipping lanes more clear than ever before, saving some ships days worth of sailing.
• Taiwan's PM and cabinet will resign Thursday over the government's botched response to Typhoon Morakot last month.
• Google celebrates the 20th anniversary of the video game that brought us "All your base are belong to us!"

Last Call

Olbermann's deciding to take on Glenn Beck. Somebody has to, of course. But after Van Jones, all this is doing is making things worse.

On the other hand, we've pretty clearly established that not going after Glenn Beck makes things worse, too. Good luck Keith...you're gonna need it.

Hungry For Answers

More and more working Americans are turning to food stamps to help them through tough times, and again, these are Americans with jobs who are resorting to food stamps, according to the Financial Times.

While the increase in take-up is often attributed to the sharp rise in unemployment – which on Friday hit 9.7 per cent – the Financial Times has learnt that some 40 per cent of the families now on food stamps have “earned income”, up from 25 per cent two years ago.

The agriculture department, which runs the programme, attributes this rise to workers having their hours cut back.

“I’m sort of stunned, it seems like a dire warning . . . that even the jobs people are retaining in this recession aren’t at the wage level and hours level that they need to provide for their families,” said Heidi Shierholz, economist at the Economic Policy Institute.

The pace of outright job losses in the US has started to recede, prompting hopes that the labour market could be stabilising. Official figures on Friday showed that non-farm payrolls dropped by a better than expected 216,000 in August, but still marked the 20th consecutive month that the US economy has shed jobs.

Less attention has been paid to those still in the workforce, whose incomes are also being squeezed. The average working week is now about 33 hours, the lowest on record, while the number forced to work part-time because they cannot find full-time work has risen more than 50 per cent in the past year to a record 8.8m. Wages and benefits have decelerated.

The food stamp data suggest that “the labour market problems are more significant than you would expect, given just the unemployment rate”, said John Silvia, chief economist at Wells Fargo. “For me it suggests the consumer is not going to rebound or contribute to economic growth for the next year, as the consumer would in a traditional economic recovery.”

Understand some 80% of America's entire economy is consumer based. If the American consumer is so tapped out that they are having to turn to food stamps because the average American is now working only 33 hours a week, there's something badly wrong with our economy right now. Who will lift us out of this mess? How can hard-working Americans work hard when they are asked increasingly to make do with 40 hours worth of work and getting paid for only 33? American workers continue to be the most productive in the world.

Think of how many things you do for your job off the clock. Millions of us check work email at home or on the road. We're expected to take care of work increasingly on weekends or nights. At the same time, companies are shedding employee benefits left and right in an effort to stay profitable. So again, if companies are now expecting workers that are left to start doing even more work in even less hourly time and do more work off the clock without being paid for it, how does that help our consumer driven economy?

The answer is simple: it doesn't.

What recovery?

[UPDATE 7:12 PM] California's effective unemployment/underemployment rate is 40% at this point.

A report released Sunday says two of five working-age Californians do not have a job, underscoring the challenges in one of the toughest job markets in decades. A new study has found that the last time employment levels among this group were this low was February 1977.

The study was done by the California Budget Project, a Sacramento-based nonprofit research group that advocates for lower- and middle-income families. The report said that California now has about the same number of jobs as it did nine years ago, when the state was home to 3.3 million fewer working-age people.

As bad as things are now, they're actually going to be worse next year. Count on it.

A False Alarm

Felix Salmon posits that this morning's NY Time article about securitizing life insurance the way subprime mortgages were bundled together and traded is actually much ado about nothing.

The NYT has an excellent article on the life settlement industry, explaining its pros and cons in a balanced and clear-eyed manner. If you’re interested in such things, you should read it: it was written by Charles Duhigg, and published in December 2006. He mentioned that Wall Street was getting interested in such things:

Trading in life insurance policies held by wealthy seniors has quietly become a big business. Hedge funds, financial institutions like Credit Suisse and Deutsche Bank, and investors like Warren E. Buffett are spending billions to buy life insurance policies from the elderly…

This nascent market illustrates one way that investors are hoping to make money from a large and wealthy generation of Americans as they reach retirement age.

Today, Jenny Anderson covers most of the same ground but adds little in the way of actual news. What she does add is a much more ominous tone:

Wall Street is racing ahead for a simple reason: With $26 trillion of life insurance policies in force in the United States, the market could be huge…

If a small fraction of policy holders do sell them, some in the industry predict the market could reach $500 billion…

Some financial firms are moving to outpace their rivals. Credit Suisse, for example, is in effect building a financial assembly line to buy large numbers of life insurance policies, package and resell them — just as Wall Street firms did with subprime securities.

If Wall Street is really “racing ahead”, it’s been doing so for well over a decade now, and doesn’t seem to have got very far. There have been people on Wall Street trying to securitize and trade life settlements for as long as I can remember, and nothing much ever seems to happen. Is anything different now? Not really: Anderson has managed to find exactly one securitization of life settlements, and even that one she only mentions in passing:

Standard & Poor’s, which rated a similar deal called Dignity Partners in the 1990s, declined to comment on its plans.

In fact, Dignity Partners launched in March 1995, and was the grand total of $35 million in size. “Could” the market “reach $500 billion”, as “some in the industry predict”? Well, anything’s possible. But so far it’s managed to go from $35 million to zero over the course of the past 14 years. Wake me up when something happens: for the time being there’s nothing at all.

None of the big three ratings agencies is involved right now: the closest thing to a news hook in Anderson’s story is that DBRS, which she describes as “a little known rating agency in lower Manhattan”, is thinking about applying ratings to these things. Is there any evidence that investors are going to trust DBRS on this one, in the event that anything gets off the ground? No.

The real problem is still regulating the existing derivatives market, still orbiting in the hundreds of trillions of dollars category, far outpacing anything here. Salmon is right: for once, the financial sector's seemingly evil ways mean squat, there's no way for the financials to make money off of trading insurance when the actuarial nerds over at the actual insurance companies are already squeezing out a much profit as possible for the numbers. Insurance is supposed to be low risk and stable for a reason, there's just not any way to leverage something like this into a highly speculative market when the entire industry is built on predictability. The banks aren't going to outsmart the insurance companies here, if there was billions of dollars to be made off a market like this, the insurance companies would already be doing it. The banks have been trying to do so for decades now, and with no luck.

Like A Troubled Bridge Over Water

Turns out the San Francisco-Oakland Bay Bridge may be closed for a lot longer than just this weekend.

During inspection of the east span of the bridge, workers found a crack in one of the eyebars on the side of the structure, said Bart Ney, spokesman for the California Department of Transportation.

"It's a significant crack -- significant enough to have closed the bridge on its own," he said in a news conference aired on the agency's Web site Saturday night.

Ney said the crack has to be repaired immediately and acknowledged that the work may stretch past Tuesday when the bridge was scheduled to reopen.

"I want to assure everyone that this repair will be made and we will return the Bay Bridge safer than when we took it out," he said.

Nice. Wonder how much that'll cost the state...or how much the cuts caused the crack to be missed until now.

Or how many other bridges have cracks. Remember Minneapolis 2 years ago?

Mr. Jones And Me

Chalk one up for the Wingers, Obama's "Green Jobs Czar" Van Jones has resigned his post after it was discovered Jones signed a 9/11 truther web petition in 2004.

Jones, who denied agreeing with the petition and issued an apology last week, said he was a victim of health-care reform opponents.

"On the eve of historic fights for health care and clean energy, opponents of reform have mounted a vicious smear campaign against me," Jones said in the statement. "They are using lies and distortions to distract and divide."

"But I came here to fight for others, not for myself. I cannot in good conscience ask my colleagues to expend precious time and energy defending or explaining my past. We need all hands on deck, fighting for the future," Jones said.

The Jones controversy centers on a 2004 petition he signed on a Web site that said: "A call for immediate inquiry into evidence that suggests high-level government officials may have deliberately allowed the September 11 attacks to occur."

An administration source told CNN that Jones did not carefully review the language on the petition.

The truth is Van Jones didn't go down because of health care reform, but because the activist group he founded, Color of Change, went after Glenn Beck's advertisers on FOX News. It didn't matter that Jones left the group two years ago. The Wingers set out to destroy him, found their avenue of attack, and got their pound of flesh.

The bad guys won here, certainly. You go after the hate merchants like Glenn Beck or El Rushbo, you'd better bring an ironclad defense and your top game, otherwise you end up like Van Jones. That's how the game is played. They're not above destroying a man's career or life over something like an advertising boycott, especially if the person is related to the Obama administration.

As you can imagine, the usual suspects are crowing over their victory. With Jones folding within a couple of weeks, Dave Weigel goes over the next group of heads that the Wingers are looking to collect:

As he makes a real impact in pushing conservative fringe attacks on Obama administration officials into the mainstream, Glenn Beck’s Twitter feed has become a must-read. In a message from last night, Beck told his followers to “FIND EVERYTHING YOU CAN ON CASS SUNSTEIN, MARK LLOYD AND CAROL BROWNER.” They are, respectively, the nominee to head the Office of Information and Regulatory Affairs, the Associate General Counsel and Chief Diversity Officer of the FCC, and the Assistant to the President for Energy and Climate Change. Browner was also administrator of the EPA for all eight years of Bill Clinton’s presidency.

Beck’s ostensible purpose here is to expose the “czars” who’ve been appointed by the president. Sunstein stands out like a sore thumb, as he’s been tied up by holds and filibusters for months, and Sen. Harry Reid (D-Nev.) only filed for cloture on his nomination at the start of August.

While Sunstein definitely will be attacked, my money's on the next target being Mark Lloyd, as he's the guy that represents the most paranoid threat that the Wingers have: that Obama is going to shut down right wing talk radio.

You smell that? It's 1994 and the chum's in the water. The sharks are circling. The Obama Derangement level just kicked up a notch.

[UPDATE 11:25 AM] As Digby sums up:

Wow. "Extremist views and coarse rhetoric" have no place in the public debate? Some people don't seem to have gotten the memo.

I certainly hope this makes it quite clear that consistency is not something Obama should count upon from his enemies. Indeed, I fully expect that the next time the Republicans take office they will launch several investigations of the previous Democratic administration (assuming they haven't already taken over congress, in which case they will begin while he's still in office.) They do not observe the self-imposed rules the Democrats put upon themselves. That should be obvious by now.

As for Jones, he says he signed that Truther petition without really reading it and thought he was signing something that merely requested further investigation. Who cares? We have people in the congress right now who assert that the president is an illegal alien and that the Democrats are going to euthanize old people. it's hard for me to give a damn about some stupid petition from a few years ago.

Doesn't matter. Attack Democrats for doing what you have done yourselves. The Republican attack plan hasn't changed since Newt Gingrich.