This is the first of three installments.

---

Whether or not you consider yourself a Democrat, whether or not you are or were a supporter of Barack Obama, there seems to be wide agreement at this point that things have not gone well for the Obama administration and Democratic governance over the last year.  The Obama administration started out with a very high measure of public support and the largest congressional majorities in decades.  One year later, the Obama's approval numbers are middling and the numerical congressional majorities seem not to mean much at all.  Already into the 2010 election cycle, the Democratic party seems incredibly vulnerable.  What happened?

In my opinion, the first major mistake was the stimulus package.  Economic analysis called for a stimulus of approximately $1.2 trillion to compensate for lack of aggregate demand.  The stimulus package that was passed was $500 billion short of that.  The typical explanation for this is that the package that was passed is the one that was "politically possible."

I find this notion to be specious in general, especially as it has been issued over the last year.  The limits of possibilities are revealed.  The way that this phrase gets used has been to provide cover for beginning negotiations from a decidedly weak position.  It goes something like this:

Well, the other side will not give us what we want, so we shouldn't even bother to ask for it.

This is the first reason that the Democratic approach to the stimulus was a mistake: It signaled to the GOP that Democrats were all too willing to negotiate from a position of weakness. The GOP learned early on that this Democratic party was not going to negotiate from a position of strength and that they could very easily be made to capitulate.

Furthermore, it raises the question of whether the Democratic leadership even believes in the economic theory that recommends such a stimulus.  One is inclined to think that they must believe in it in some measure since they championed and passed some form of it, but I'll employ an analogy here to illustrate why I question whether they really understand and/or believe the theory.

Imagine that you wish to build a bridge across a river.  Your engineers assess what will be required to build this bridge.  You decide to proceed by allotting the construction crew about two-thirds of what the engineers say will be required.  The result is two-thirds of a bridge.

Perhaps this gets you across the deepest part of the river, but you're still going to get wet.

This places the Dems in a sort of political double-jeopardy.  There are two reasons for this.

The first: It leaves the Dems facing elections in the face of high unemployment. Everyone knows the conventional wisdom here.  The incumbent party always suffers when there is high unemployment.  This is my main reason for questioning whether they believe the economic theory behind fiscal stimulus.  It's all about a lack of aggregate demand.  If you don't make up for the lack of demand, you'll still have unemployment.  If you accept the conventional wisdom about how this becomes detrimental to the incumbent party, then they should have avoided this outcome at all poltical costs.  Even if all you care about is winning, this was a sink or swim initiative if you believe the conventional wisdom.

Ah, but the stimulus prevented things from being much worse than they otherwise would have been, right?  This is true, but it's hardly relevant in political terms.  Most people don't understand economic theory (again, I'm not even convinced the Democratic leadership does).  What people understand is this: The government spent $750 billion dollars and there's still double-digit unemployment.  Put otherwise, we have the second reason why this has resulted in political double-jeopardy: The Dems must now argue the counter-factual.

The GOP is now free to argue exactly what I've stated above.  It doesn't matter whether or not it's true.  It sounds like it could be true and the only rebuttal is something that can't be proved.  Indeed, the GOP has now moved to hammering on the deficit, which is a direct attack on the ability of the Obama administration to have any fiscal latitude in addressing the issue of unemployment.  Again, it's not at all relevant that these attacks are contradictory within the framework of economic theory.  What's relevant is high unemployment for the short-run and widespread fear of deficits for the long-run.

Finally, and perhaps most regrettably, Obama passed up what I believe will prove to have been his best (and perhaps only) opportunity to use his oratory and charisma in order to persuade a nation at a crossroads of a bold, new vision for the future.  That $1.2 trillion could have been invested in a vast new array of infrastructure and R&D projects to create the energy and transportation technologies of the future.  Platitudes about "going green" and becoming less dependent on foreign oil are just that.  Without investment, it's just talk.  And without investment in these areas, America is destined to slip economically.  In the long-run, it's all about being on the cutting edge of technology.

There are so many reasons to have done this, but really only one not to: Being afraid to put your political career on the line for something truly audacious and visionary.

In the parlance of Rahm, the crisis has been wasted.  Fear has returned to eclipse hope.  Even Obama's biggest detractors are willing to acknowledge his exceptional skill in working a crowd.  The moment to parlay both that skill and the political moment of early 2009 into a political agenda that would have been truly historic, not just in terms of price tag, but in terms of scope and vision, is gone.

---

This has been the first installment of three.  The next installment: Be Aggressive

***

Cross-posted @ dagblog.com

At first sight the business resembles a thriving pottery. In a dusty courtyard women mould clay and water into hundreds of little platters and lay them out to harden under the Caribbean sun.

The craftsmanship is rough and the finished products are uneven. But customers do not object. This is Cité Soleil, Haiti's most notorious slum, and these platters are not to hold food. They are food.

Brittle and gritty - and as revolting as they sound - these are "mud cakes". For years they have been consumed by impoverished pregnant women seeking calcium, a risky and medically unproven supplement, but now the cakes have become a staple for entire families.

It is not for the taste and nutrition - smidgins of salt and margarine do not disguise what is essentially dirt, and the Guardian can testify that the aftertaste lingers - but because they are the cheapest and increasingly only way to fill bellies.

I'm not sure that I really have anything to add here (except perhaps to consider this in light of the likewise dire sanitation situation).  Mostly, I'm still trying to come to terms with the fact that people in the Western hemisphere during the 21st century are literally eating dirt.

---

Cross-posted @ dagblog.com

If I give you five dollars in exchange for consideration in your decision-making process in the voting booth, that's illegal.  If I give a member of Congress five-thousand dollars for the same purpose, that's politics.

But Glenn Beck, who criminally lifted the name of Thomas Paine's revolutionary pamphlet for his book, won't tell you that Tom Paine was one of the first Americans to advocate progressive taxation, even going so far as to draw up his own tax schedules.  How's that for American socialism?  Lou Dobbs will seethe over reforming our immigration policies, but have you ever heard him suggest that we erect an economic wall by criminally prosecuting those who employ illegal aliens?  Nope, of course you haven't.  That's because that would harm Dobbs' friends in the business community.

With so many transparent pretenders to the cause of "independence" it behooves us to ask what they're really trying to sell us.  Superficially, it's easy to observe that partisanship is seen as the greatest of all political evils at present.  Even our Democratic President eschews the trappings of partisanship, openly pining for a post-partisan politics.

But why is this the case?  Why is partisanship so evil and independence the sought after position?  If I'm to believe the polling data, Americans are in fact sharply divided on a number of issues.  Especially when it comes to social issues, "independence" doesn't seem like something people desire at all.

Yet on other issues, like healthcare reform, it seems clear that the American people do want to change the system.  Even beyond the polling data, Americans made their choice known in the polling place when they elected Barack Obama, who campaigned at least partially on what, at least last year, was being discussed as "universal healthcare."

What's amazing though is that this reform seems so difficult.  You would think that if the majority of Americans want it, then politicians would get it done for them.  Right?

It's okay.  I'm laughing, too.

Nevertheless, here we are in a place where Congress can't pass legislation that the majority of people want.  Why is that?  Furthermore, what have the great "independent" voices to say on this issue?

Oh, that's right.  It's a socialist endeavor that's rapidly bringing on the downfall of Western Civilization.

But I still don't understand what this "independence" is.  The one thing that I do observe in claims of independence is that it's always preface to a political position, as if to create an air of credulity.  "Hey, I'm an independent, so you can trust that I'm not being partisan at all when I tell you that Barack Obama is the spawn of Satan."  Something like that.

What exactly are people distancing themselves from when they claim independence from partisan affiliation?  Perhaps for the more right-wing examples, the answer is "George W. Bush."  But then there's the President himself, unquestionably the top Democrat in the nation, denouncing partisanship.

I have a suggestion as to what is generally driving this phenomenon: When people are making claims of independence from partisan affiliation, they are trying to distance themselves from the obvious corruption in the American political system without addressing it.  You see, this way you don't offend your keepers, whether they be lobbyists or advertisers, and you can keep espousing your view in order to forward your agenda, which is, after all, the reason for politicians and pundits to exist.

And this is perhaps no more clear than when we examine the world of finance.  Last year, I blogged in favor of the nomination of Barack Obama.  One of the things that I was most excited about was his apparent penchant for transparency and his shunning of so-called "soft money."  I have to say at this point that those views were at least somewhat naive.  It's not that I was wrong about soft money, but the nearly $1B election of Barack Obama tells me that the soft money ain't running the system.

No, despite Obama's dismissal of soft money, he collected and spent a fortune.  And like pretty much every other politician that's successful at the national level, plenty of that money came from the financial sector.  In fact, the only sector that sent more money his way (by one popular breakdown) was lawyers and lobbyists.  However, it's very important to point out that he's not unique in this respect.  The same can be said of Hillary Clinton, John McCain, George W. Bush, etc.

It's been about a year since Hank Paulson's magnum opus, his criminally broad bailout proposal, was drafted.  How has team Obama done when it comes to dealing with the banks?  Apparently, not much better.

I'll summarize the findings of the federal government's negotiation with AIG counter-parties for you:

1. Geithner proposed that counter-parties take a haircut.
2. Counter-parties said, "Umm, no."
3. Geithner said, "Okay!"

That's all folks!  I bet those dumb auto-manufacturer bond-holders are really kicking themselves right about now.  All they had to do was refuse to take less than they wanted!  Okay, in fairness they were actually faced with the offer the government gave them or the almost certainly worse scenario they'd get from a judge, but this only serves to underline the stark difference in the way these business entities were treated.  Why?  Because there was never even the slightest hint at the pretense of a suggestion that the i-banks were going to end up in bankruptcy court.  Receivership, like impeachment, was off the table.

This underscores what I would argue is the single biggest problem in American politics.  It's not crazy Republicans.  It's not one party or the other.  That much is true.  The ersatz independents might even glean that much.  However, it's obviously not that there's no difference between the two parties.  All you have to do is look at their issue platforms to understand that.  No, the problem is that the two parties are little different when it comes to one issue, but that's because it's a systemic issue and they function within that system.  The issue is that the system is hopelessly corrupt.  The issue is, as I summarized above, that what we would call bribery on an individual level is simply how we do business at the national level.

I like the idea of no PAC money.  What I didn't bargain for is that this new era of hard money politics was going to double-down on the flows of capital into the political system.  That's not the right direction to head in.  Americans from every part of the political spectrum ought to be mad as hell about this.  Partisan demagogues in the robes of the Independent aren't going to get the job done.  In fact, people don't even need to give up their political views to rally around the cause of getting the money the hell out of our political system.  If we don't do that, then I think you can take all of the hope and change, flush it right down the toilet and let it float down the Potomac and out to sea.

People need to wrap their heads around this: If the currency of politics is the dollar and not the vote, then those with the most dollars have the most political power, votes be damned.

---

Cross-posted @ dagblog.com where we get our money for nothin' and our clicks for free

However, cable news content is not entirely available on the Internet at this point in the game.  I'm really okay with that.  When I've had cable in recent years, for example last year when I was living at a residence where cable was included, I end up watching cable news.  This is regrettable because I really dislike cable news.

So, I'm happy that my exposure to cable news is limited to what I encounter on the Internet.  That's usually more than enough to remind me about how awful it is.

While it's easy to hate on Fox, the other networks are in many ways different only in degree and not in kind.  Case in point is CNN's Wolf Blitzer who recently engaged in this astounding display: