This Is Not a Test. This Is Not a Test.
By THOMAS L. FRIEDMAN
It’s always great to see the stock market come back from the dead. But I am deeply worried that our political system doesn’t grasp how much our financial crisis can still undermine everything we want to be as a country. Friends, this is not a test. Economically, this is the big one. This is August 1914. This is the morning after Pearl Harbor. This is 9/12. Yet, in too many ways, we seem to be playing politics as usual.
Our country has congestive heart failure. Our heart, our banking system that pumps blood to our industrial muscles, is clogged and functioning far below capacity. Nothing else remotely compares in importance to the urgent need to heal our banks.
Yet I read that we’re actually holding up dozens of key appointments at the Treasury Department because we are worried whether someone paid Social Security taxes on a nanny hired 20 years ago at $5 an hour. That’s insane. It’s as if our financial house is burning down but we won’t let the Fire Department open the hydrant until it assures us that there isn’t too much chlorine in the water. Hello?
Meanwhile, the Republican Party behaves as if it would rather see the country fail than Barack Obama succeed. Rush Limbaugh, the de facto G.O.P. boss, said so explicitly, prompting John McCain to declare about President Obama to Politico: “I don’t want him to fail in his mission of restoring our economy.” The G.O.P. is actually debating whether it wants our president to fail. Rather than help the president make the hard calls, the G.O.P. has opted for cat calls. It would be as if on the morning after 9/11, Democrats said they wanted no part of any war against Al Qaeda — “George Bush, you’re on your own.”
As for President Obama, I like his coolness under fire, yet sometimes it feels as if he is deliberately keeping his distance from the banking crisis, while pressing ahead on other popular initiatives. I understand that he doesn’t want his presidency to be held hostage to the ups and downs of bank stocks, but a hostage he is. We all are.
Great and difficult crises are what produce great presidents, so one thing we know for sure: Mr. Obama’s going to have his shot at greatness. This crisis is uniquely difficult in four respects.
First, to get out of a crisis like this you need to let markets clear. You need to let failed companies, or homeowners, go bankrupt, unlock their dead capital and reapply it to thriving entities. That is how the dot-com bust ended, and out of that carnage emerged a whole new set of companies. The problem with this crisis is that A.I.G., Citigroup and General Motors — and your neighbor’s subprime mortgage — are not Dogfood.com. You let the market clear them away, and we could all be wiped out with them. Therefore, the president has to find a way to punish bad financial actors without setting off another Lehman Brothers domino effect.
Second, we need to get a market going that would bring fair value and clarity to the “toxic mortgages” crippling the balance sheets of our major banks. This will likely require some degree of government subsidy to private equity groups and hedge funds to get them to make the first bids for these toxic assets by guaranteeing they will not lose. This could make great policy sense, but be a nightmare to sell politically. It will strike many as another unfair giveaway to Wall Street.
Unfortunately, the president may have to look the American people in the eye and explain that “fairness is not on the menu anymore.” All that’s on the menu now is whether or not we avoid a system meltdown — and this will require rewarding some new investors.
Third, the president may have to make some trillion-dollar decisions — like nationalizing major banks or doubling the economic stimulus — with no real precedent and without knowing all the long-term ramifications.
Finally, to do all this, the president has to make us realize how dangerous a moment we’re in, without creating a panic that will prompt Americans to put every dime in their mattresses and undermine the economy even more.
All this will require leadership of the highest order — bold decisions, persistence and persuasion. There is a huge amount of money on the sidelines eager to bet again on America. But right now, there is too much uncertainty; no one knows what will be the new rules governing investments in our biggest financial institutions. If President Obama can produce and sell that plan, private investors, big and small, will give us a stimulus like you’ve never seen.
Which is why I wake up every morning hoping to read this story: “President Obama announced today that he had invited the country’s 20 leading bankers, 20 leading industrialists, 20 top market economists and the Democratic and Republican leaders in the House and Senate to join him and his team at Camp David. ‘We will not come down from the mountain until we have forged a common, transparent strategy for getting us out of this banking crisis,’ the president said, as he boarded his helicopter.”
Wednesday, March 11, 2009
Monday, March 09, 2009
Voting Rights STOPPED by GWB Court!
Court Refuses to Expand Minority Voting Rights
By THE ASSOCIATED PRESS
Filed at 3:47 p.m. ET
WASHINGTON (AP) -- The Supreme Court ruled Monday that a part of the Voting Rights Act aimed at helping minorities elect their preferred candidates only applies in electoral districts where minorities make up more than half the population.
The decision could make it harder for some minority candidates to win election and for southern Democrats, in particular, to draw friendly electoral boundaries after the 2010 Census.
The 5-4 decision, with the court's conservatives in the majority, came in the case of a North Carolina plan that sought to preserve the influence of African-American voters even though they made up just 39 percent of the population in a state legislative district.
While not a majority, the black voters were numerous enough to effectively determine the outcome of elections, the state argued in urging the court to extend the civil rights law's provision to the district. The case dealt with the section of the law that bars states from reducing the chance for minorities to ''elect representatives of their choice.''
But Justice Anthony Kennedy, announcing the court's judgment, said the court would not extend the law to those so-called crossover districts. The 50 percent ''rule draws clear lines for courts and legislatures alike,'' Kennedy said in striking down a North Carolina legislative district.
In 2007, the North Carolina Supreme Court struck down the district, saying the Voting Rights Act applies only to districts with a numerical majority of minority voters. The district also violated a provision of the state constitution keeping district boundaries from crossing county lines, the court said.
Kennedy said that, absent prohibitions like North Carolina's rule against crossing county lines, ''states that wish to draw crossover districts are free to do so.'' But they are not required, he said.
Chief Justice John Roberts and Justice Samuel Alito signed onto Kennedy's opinion. Justices Antonin Scalia and Clarence Thomas agreed with the outcome of the case.
The four liberal justices dissented. A district like the one in North Carolina should be protected by federal law ''so long as a cohesive minority population is large enough to elect its chosen candidate when combined with a reliable number of crossover voters from an otherwise polarized majority,'' Justice David Souter wrote for himself and Justices Stephen Breyer, Ruth Bader Ginsburg and John Paul Stevens.
Ginsburg also suggested that Congress could amend the law to cover districts like the one in North Carolina.
Civil rights groups that urged the court to uphold the North Carolina plan said such districts help to diminish racially polarized voting over time because the candidate who is the choice of black or Hispanic voters must draw some white support to win election.
In April, the court will hear a more significant challenge to another provision of the Voting Rights Act, requiring all or parts of 16 states with a history of racial discrimination to get approval before implementing any changes in how elections are held.
The court's familiar ideological split in this case strongly suggests that Kennedy could hold the key to the outcome in the April case as well, said Nathaniel Persily, an election law expert at Columbia University.
In another election-related case, the court let stand an appeals court decision that invalidated state laws regulating the ways independent presidential candidates can get on state ballots.
Arizona, joined by 13 other states, asked the court to hear its challenge to a ruling throwing out its residency requirement for petition circulators and a June deadline for submitting signatures for independent candidates in the November presidential elections.
Independent presidential candidate Ralph Nader sued and won a favorable ruling from the 9th U.S. Circuit Court of Appeals in San Francisco.
By THE ASSOCIATED PRESS
Filed at 3:47 p.m. ET
WASHINGTON (AP) -- The Supreme Court ruled Monday that a part of the Voting Rights Act aimed at helping minorities elect their preferred candidates only applies in electoral districts where minorities make up more than half the population.
The decision could make it harder for some minority candidates to win election and for southern Democrats, in particular, to draw friendly electoral boundaries after the 2010 Census.
The 5-4 decision, with the court's conservatives in the majority, came in the case of a North Carolina plan that sought to preserve the influence of African-American voters even though they made up just 39 percent of the population in a state legislative district.
While not a majority, the black voters were numerous enough to effectively determine the outcome of elections, the state argued in urging the court to extend the civil rights law's provision to the district. The case dealt with the section of the law that bars states from reducing the chance for minorities to ''elect representatives of their choice.''
But Justice Anthony Kennedy, announcing the court's judgment, said the court would not extend the law to those so-called crossover districts. The 50 percent ''rule draws clear lines for courts and legislatures alike,'' Kennedy said in striking down a North Carolina legislative district.
In 2007, the North Carolina Supreme Court struck down the district, saying the Voting Rights Act applies only to districts with a numerical majority of minority voters. The district also violated a provision of the state constitution keeping district boundaries from crossing county lines, the court said.
Kennedy said that, absent prohibitions like North Carolina's rule against crossing county lines, ''states that wish to draw crossover districts are free to do so.'' But they are not required, he said.
Chief Justice John Roberts and Justice Samuel Alito signed onto Kennedy's opinion. Justices Antonin Scalia and Clarence Thomas agreed with the outcome of the case.
The four liberal justices dissented. A district like the one in North Carolina should be protected by federal law ''so long as a cohesive minority population is large enough to elect its chosen candidate when combined with a reliable number of crossover voters from an otherwise polarized majority,'' Justice David Souter wrote for himself and Justices Stephen Breyer, Ruth Bader Ginsburg and John Paul Stevens.
Ginsburg also suggested that Congress could amend the law to cover districts like the one in North Carolina.
Civil rights groups that urged the court to uphold the North Carolina plan said such districts help to diminish racially polarized voting over time because the candidate who is the choice of black or Hispanic voters must draw some white support to win election.
In April, the court will hear a more significant challenge to another provision of the Voting Rights Act, requiring all or parts of 16 states with a history of racial discrimination to get approval before implementing any changes in how elections are held.
The court's familiar ideological split in this case strongly suggests that Kennedy could hold the key to the outcome in the April case as well, said Nathaniel Persily, an election law expert at Columbia University.
In another election-related case, the court let stand an appeals court decision that invalidated state laws regulating the ways independent presidential candidates can get on state ballots.
Arizona, joined by 13 other states, asked the court to hear its challenge to a ruling throwing out its residency requirement for petition circulators and a June deadline for submitting signatures for independent candidates in the November presidential elections.
Independent presidential candidate Ralph Nader sued and won a favorable ruling from the 9th U.S. Circuit Court of Appeals in San Francisco.
People Kill People?
Court Turns Down NYC Case Against Gun Industry
By THE ASSOCIATED PRESS
Filed at 2:09 p.m. ET
WASHINGTON (AP) -- The Supreme Court has turned away pleas by New York City and gun violence victims to hold the firearms industry responsible for selling guns that could end up in illegal markets.
The justices' decision Monday ends lawsuits first filed in 2000. Federal appeals courts in New York and Washington threw out the complaints after Congress passed a law in 2005 giving the gun industry broad immunity against such lawsuits.
Mayor Michael Bloomberg said the city was examining whether it had other legal options. ''It was one tool. It was one part of our strategy to fight against illegal guns,'' he said.
The city's lawsuit asked for no monetary damages. It had sought a court order for gun makers to more closely monitor those dealers who frequently sell guns later used to commit crimes.
But the 2nd U.S. Circuit Court of Appeals ruled that federal law provides the gun industry with broad immunity from lawsuits brought by crime victims and violence-plagued cities. The Supreme Court refused to reconsider that decision.
The lawsuit was first brought in June 2000 while Rudy Giuliani was New York mayor. It was delayed due to the Sept. 11, 2001 terrorist attacks on the World Trade Center and because of similar litigation in the state courts.
The city refiled the lawsuit in January 2004, saying manufacturers let handguns reach illegal markets at gun shows in which non-licensed people can sell to other private citizens; through private sales in which background checks are not required; by oversupplying markets where gun regulations are lax, and by having poor overall security.
The city said a state nuisance law makes it a crime to knowingly or recklessly create a condition endangering the safety or health of a considerable number of people. But the appeals court said New York's law does not qualify as an exception to federal law. It agreed with U.S. District Judge Jack B. Weinstein that the Protection of Lawful Commerce in Arms Act, signed by President George W. Bush in 2005, is constitutional.
By THE ASSOCIATED PRESS
Filed at 2:09 p.m. ET
WASHINGTON (AP) -- The Supreme Court has turned away pleas by New York City and gun violence victims to hold the firearms industry responsible for selling guns that could end up in illegal markets.
The justices' decision Monday ends lawsuits first filed in 2000. Federal appeals courts in New York and Washington threw out the complaints after Congress passed a law in 2005 giving the gun industry broad immunity against such lawsuits.
Mayor Michael Bloomberg said the city was examining whether it had other legal options. ''It was one tool. It was one part of our strategy to fight against illegal guns,'' he said.
The city's lawsuit asked for no monetary damages. It had sought a court order for gun makers to more closely monitor those dealers who frequently sell guns later used to commit crimes.
But the 2nd U.S. Circuit Court of Appeals ruled that federal law provides the gun industry with broad immunity from lawsuits brought by crime victims and violence-plagued cities. The Supreme Court refused to reconsider that decision.
The lawsuit was first brought in June 2000 while Rudy Giuliani was New York mayor. It was delayed due to the Sept. 11, 2001 terrorist attacks on the World Trade Center and because of similar litigation in the state courts.
The city refiled the lawsuit in January 2004, saying manufacturers let handguns reach illegal markets at gun shows in which non-licensed people can sell to other private citizens; through private sales in which background checks are not required; by oversupplying markets where gun regulations are lax, and by having poor overall security.
The city said a state nuisance law makes it a crime to knowingly or recklessly create a condition endangering the safety or health of a considerable number of people. But the appeals court said New York's law does not qualify as an exception to federal law. It agreed with U.S. District Judge Jack B. Weinstein that the Protection of Lawful Commerce in Arms Act, signed by President George W. Bush in 2005, is constitutional.
Sunday, March 08, 2009
Health Care NYT editorial
A Start on Health Care Reform
President Obama has shown both courage and sound judgment pressing for quick action on comprehensive health care reform, even in the midst of the country’s deep economic crisis. He has rightly stressed the urgency of reining in skyrocketing health care costs that are straining the budgets of families, businesses, and federal and state governments.
But his proposals, for all of their ambition, do not fully answer two central questions: how to cover tens of millions of uninsured Americans, and how to reform the health care system to reduce costs and improve the quality of care.
Mr. Obama has decided to let Congress thrash out the details of those issues, with the White House providing guidance along the way. Democratic leaders in Congress, many of whom are far more versed in the issues than the president is, will have to step up and fashion an effective bill. If they falter, Mr. Obama will need to step in with a clear vision and vigorous leadership.
To his credit, the president has tackled the first tough issue of how to pay for expanded coverage and systemic reforms. His budget has proposed huge expenditures — $634 billion over 10 years — as a down payment, and it clearly specifies where to find the money.
Half would come from raising taxes on the rich, another quarter from eliminating unjustified subsidies for private plans that participate in Medicare, and other big chunks from reducing payments to drug companies, hospitals and the home health care industry.
Yet even the administration admits that $634 billion will not be enough to reach universal coverage: some experts think it will take at least twice that amount.
The administration has also given no clue as to how it will significantly reduce the number of uninsured Americans — now 46 million and growing. The expanded children’s health insurance program, which Mr. Obama signed into law early last month, will cover more than four million uninsured children, and his stimulus bill will help millions more Americans retain or gain coverage. But this, too, is only a down payment on the problem.
The president’s main focus is on starting to reduce the soaring cost of health care. That, he argues, is a prerequisite to making universal coverage affordable and politically palatable. But in the meantime, many millions of uninsured Americans continue to go without adequate care. Congress will need to look hard at whether bigger strides can be made toward universal coverage at the same time that costs are addressed.
The president’s plans make a start toward reforming the health care delivery system, but it is only a start. His stimulus program is pouring money into electronic medical records, preventive care and comparative effectiveness studies of medical treatments — all of which should help improve care and possibly lower costs in the long run. His budget plan calls for Medicare to change its reimbursement rates for hospitals to promote higher quality, greater efficiency and substantial savings.
All told, the changes are projected to cut the growth rate in Medicare spending — from 7.3 percent a year to 6.1 percent in the fifth year. That looks like a modest reduction for now, but when compounded over many decades, it could greatly reduce projected Medicare expenditures by midcentury. Since Medicare policies often ripple through the entire health care system, overall health expenditures should slow.
Meanwhile, the administration has deliberately ducked some of the most contentious issues. There is no mention of requiring individuals to carry health insurance on themselves or their children. No mention of requiring employers to pay for coverage. No mention of having a public plan compete with private plans in a national insurance exchange. No discussion of whether employee health benefits should be taxed. No talk of requiring insurers to cover all applicants. No mention of government negotiating Medicare drug prices.
The White House has obviously decided that it is best to let Congress work out the compromises and decide how to allocate the pain. That is the opposite of the Clinton administration’s approach. It hatched a highly detailed plan in secret that never won Congressional support and crashed under a barrage of opposition from affected industries.
We do not challenge Mr. Obama’s political instincts. We simply note that someone will need to make the hard choices if health care reform and universal coverage are to succeed.
President Obama has shown both courage and sound judgment pressing for quick action on comprehensive health care reform, even in the midst of the country’s deep economic crisis. He has rightly stressed the urgency of reining in skyrocketing health care costs that are straining the budgets of families, businesses, and federal and state governments.
But his proposals, for all of their ambition, do not fully answer two central questions: how to cover tens of millions of uninsured Americans, and how to reform the health care system to reduce costs and improve the quality of care.
Mr. Obama has decided to let Congress thrash out the details of those issues, with the White House providing guidance along the way. Democratic leaders in Congress, many of whom are far more versed in the issues than the president is, will have to step up and fashion an effective bill. If they falter, Mr. Obama will need to step in with a clear vision and vigorous leadership.
To his credit, the president has tackled the first tough issue of how to pay for expanded coverage and systemic reforms. His budget has proposed huge expenditures — $634 billion over 10 years — as a down payment, and it clearly specifies where to find the money.
Half would come from raising taxes on the rich, another quarter from eliminating unjustified subsidies for private plans that participate in Medicare, and other big chunks from reducing payments to drug companies, hospitals and the home health care industry.
Yet even the administration admits that $634 billion will not be enough to reach universal coverage: some experts think it will take at least twice that amount.
The administration has also given no clue as to how it will significantly reduce the number of uninsured Americans — now 46 million and growing. The expanded children’s health insurance program, which Mr. Obama signed into law early last month, will cover more than four million uninsured children, and his stimulus bill will help millions more Americans retain or gain coverage. But this, too, is only a down payment on the problem.
The president’s main focus is on starting to reduce the soaring cost of health care. That, he argues, is a prerequisite to making universal coverage affordable and politically palatable. But in the meantime, many millions of uninsured Americans continue to go without adequate care. Congress will need to look hard at whether bigger strides can be made toward universal coverage at the same time that costs are addressed.
The president’s plans make a start toward reforming the health care delivery system, but it is only a start. His stimulus program is pouring money into electronic medical records, preventive care and comparative effectiveness studies of medical treatments — all of which should help improve care and possibly lower costs in the long run. His budget plan calls for Medicare to change its reimbursement rates for hospitals to promote higher quality, greater efficiency and substantial savings.
All told, the changes are projected to cut the growth rate in Medicare spending — from 7.3 percent a year to 6.1 percent in the fifth year. That looks like a modest reduction for now, but when compounded over many decades, it could greatly reduce projected Medicare expenditures by midcentury. Since Medicare policies often ripple through the entire health care system, overall health expenditures should slow.
Meanwhile, the administration has deliberately ducked some of the most contentious issues. There is no mention of requiring individuals to carry health insurance on themselves or their children. No mention of requiring employers to pay for coverage. No mention of having a public plan compete with private plans in a national insurance exchange. No discussion of whether employee health benefits should be taxed. No talk of requiring insurers to cover all applicants. No mention of government negotiating Medicare drug prices.
The White House has obviously decided that it is best to let Congress work out the compromises and decide how to allocate the pain. That is the opposite of the Clinton administration’s approach. It hatched a highly detailed plan in secret that never won Congressional support and crashed under a barrage of opposition from affected industries.
We do not challenge Mr. Obama’s political instincts. We simply note that someone will need to make the hard choices if health care reform and universal coverage are to succeed.
Tuesday, August 14, 2007
Monday, August 13, 2007
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