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W. Post Hammered For Partnership With Austerity Ideologue Pete Peterson
OurFuture.org's Roger Hickey sounds alarm at Fiscal Times-W. Post arrangement to advance austerity agenda: "...The Washington Post published an article, presented as a news story, which could be a signal of the death of the Post as an independent and objective news source. The piece, entitled 'Support grows for tackling nation's debt,' appeared to be one of those background news pieces common in newspapers like the Post. But article was written not by the newspaper’s reporters – and not by an objective wire service, like the Associated Press – but by a new organization called The Fiscal Times, whose founder and major backer [is] Peter G. Peterson ... Nowhere in the 'story' would the reader find reference to the fact that it is now official government policy to increase the federal deficit in order to stimulate growth and economic recovery from the worst recession since the great depression. The whole piece seems designed to give prominence to the legislation, advanced by Sens. Kent Conrad, D-N.D., and Judd Gregg, R-N.H., that would create a commission to come up with a plan for slashing deficits which would be voted on – without amendments and with limited debate – by both houses of Congress. No mention is made of the fact that Pete Peterson recently testified in favor of such a commission before Conrad’s Senate Budget Committee."
Politico flags the controversy: "Critics are calling on The Washington Post to stop printing news articles from The Fiscal Times ... In a letter to The Post’s ombudsman, 14 academic and public-policy experts on Social Security said the newspaper should 'rescind the partnership, reserve opinion pieces for the op-ed page, and not allow itself to be a propaganda arm for ideologues who use fiscal distress as a stalking horse to destroy social insurance.'"
Huffington Post's Susie Madrak shreds the Post: "... if the healthcare battle hasn't opened your eyes to the fact that immensely wealthy and powerful corporate interests are perverting our democracy, you're not paying attention. Why else do you suppose the Washington Post turned over a chunk of their news section the other day to a Peterson propaganda supplement - as news content?"
FireDogLake's David Dayen notes the larger battle against the Peterson agenda: "The letter is part of a larger effort to rebut the Peterson Foundation’s money and influence with pushback from multiple angles. As the letter notes, over 40 organizations, including the AFL-CIO, AFSCME, Common Cause, NAACP, National Organization for Women and SEIU, have objected to the deficit commission which the Fiscal Times article and Peterson’s organizations in general have promoted."
Media Matters offers a backgrounder on Peterson
Bernanke's Call For More Regulation Attracts Criticism
Bloomberg reports on Bernanke speech to American Economic Association on Fed's role in the mortgage meltdown: "Federal Reserve Chairman Ben S. Bernanke said low central bank interest rates didn’t cause the housing bubble of the past decade and that better regulation would have been more effective in curbing the boom. 'The best response to the housing bubble would have been regulatory, rather than monetary,' Bernanke said yesterday ... The Fed’s efforts to constrain the bubble were 'too late or were insufficient,' which means that regulatory actions 'must be better and smarter,' he said ... Bernanke said increased use of variable-rate and interest-only mortgages, and the 'associated decline of underwriting standards,' were more responsible for the bubble than low rates."
Bernanke reiterated call for stronger Fed reg powers. NYT: "Mr. Bernanke, in his talk, echoed his previous calls for Congress to grant the Fed greater oversight powers over the financial system, like the ability to help monitor and regulate against 'systemic risk.' The implication is that the Fed believes that regulation and supervision, rather than tighter monetary policies, should be used to address asset bubbles in the future."
Angry Bear's Ken Houghton rejects call to expand Fed reg power: "Bernanke: We Didn't Do a Good job Regulating, so Let Us Regulate More."
Baseline Scenario's James Kwak says speech moves him to oppose Bernanke re-appointment: "Bernanke claims that he is getting serious about consumer protection, yet he has lobbied against the Consumer Financial Protection Agency, which everyone who is serious about consumer protection wants ... The other thing is a lot of talk about systemic risk. ... Yes, it’s true that the thing that hit us in 2008 was systemic risk. But it’s also true that regulators already had the power to supervise Citigroup, Bank of America, Wachovia, Washington Mutual, Lehman Brothers, Bear Stearns, and Countrywide and force them to pare back their risky activities–and didn’t. Talking about systemic risk is a way of passing the buck–of excusing regulatory failure by saying that regulators didn’t have the authority to look at systemic risk."
Calculated Risk criticizes Bernanke for not explaining how he thought better regs would have helped: "Bernanke didn't discuss how the current regulatory structure missed this 'protracted deterioration in mortgage underwriting standards' (even though many people were pointing it out in real time). And Bernanke didn't discuss specifically how the new regulatory structure would catch this deterioration in standards. How about some specific example of how the previous regulatory structure missed underwriting problems, and how the new structure would have caught the problem?"
Economist's View's Mark Thoma has positive takeaway: "This is a big step forward relative to the Greenspan years. Greenspan argued that the Fed could not identify bubbles as they are inflating with sufficient clarity to allow policy to do much about them ... [Bernanke's speech] is an evolution in the Fed's view of its role in preventing asset price bubbles from threatening the stability of the broader economy."
Krugman, Stiglitz, Feldstein Worry Of Weak Stimulus in 2010
Krugman column warns positive economic data should not be overhyped: "...the odds are that any good economic news you hear in the near future will be a blip, not an indication that we’re on our way to sustained recovery. But will policy makers misinterpret the news and repeat the mistakes of 1937? Actually, they already are. The Obama fiscal stimulus plan is expected to have its peak effect on G.D.P. and jobs around the middle of this year, then start fading out. That’s far too early: why withdraw support in the face of continuing mass unemployment? Congress should have enacted a second round of stimulus months ago, when it became clear that the slump was going to be deeper and longer than originally expected. But nothing was done — and the illusory good numbers we’re about to see will probably head off any further possibility of action."
Economists Stiglitz and Feldstein also warn against letting up on stimulus. Bloomberg: "Harvard University economics professor Martin Feldstein said U.S. economic growth may falter this year because of a waning stimulus from federal spending and tax incentives for purchases of homes and autos. 'These forms of stimulus will be missing in 2010, creating a serious cloud over the near-term economic outlook,' Feldstein said yesterday during a panel discussion in Atlanta sponsored by the Allied Social Science Associations. His comments were echoed by Joseph Stiglitz, the Nobel Prize-winning economist, who said on the same panel that 'robust' growth is unlikely soon."
House, Senate Leaders Gear Up To Finish Health Care
The Treatment's Jonathan Cohn reports House and Senate Dems will negotiate health care informally to prevent conservative obstructionists from slowing down final bill.
Bloomberg analyzes that Senate provisions likely to win out: "Senate Democrats will have the upper hand as U.S. lawmakers return to Washington this month to confront the last major hurdle in the effort to overhaul the nation’s health-care system. With Democrats in both chambers under pressure to craft compromise legislation, the biggest areas of contention are the different taxes the House and Senate chose to fund their bills, how strictly to bar federal money for abortion and whether to create a government-run program to compete with private insurers. Senate Democrats have more clout because they have no room for defections, analysts and lawmakers said. Even so, House members will push for their provisions, including the public insurance program, likely making the negotiations among the most complex in congressional history."
USA Today edit board criticizes Senate's "state-by-state" approach to health care exchanges, praises House for establishing a "single national health care exchange".
NYT examines provision ensuring most construction companies will need to provide health insurance, unlike other small businesses which get an exemption: "Labor unions that have negotiated health benefits for construction workers lobbied for the provision. Without it, they said, small nonunion employers would have an unfair competitive advantage over companies that they say do 'the right thing'..."
Copenhagen Fallout
NYT reviews the widely varying reactions to the Copenhagen Accord: "For the past two weeks, those involved in the conference and onlookers alike have traded a variety of 'I told you so' denunciations of the meeting; celebrations of its perceived collapse; and mild praise for the ability of nearly 200 nations to come together and, at the very least, agree to keep talking — essentially what the Copenhagen Accord accomplished."
Treehugger's Jesse Fox argues despite failure, Copenhagen was a "game-changer:" "Just before the summit, a group of lawmakers proposed a package of four green bills. Two are moving forward. In Copenhagen, Israel's President announced the country's commitment to reduce its carbon emissions by 20% by 2020. The Ministry of the Environment is already working on practical ways to make this happen. And COP15 may have tipped the scales against a new coal-fired power plant, a battle that environmentalists have been stubbornly waging for years. Failure or not, Copenhagen has already changed the rules of the game in Israel, and I'm convinced similar things are happening in other places as well. For example in Brazil, where a new post-Copenhagen law calls for a 39% reduction in carbon emissions by 2020. We can expect to hear about a lot more of these commitments in the wake of the summit. The reason is that the world's governments now realize that they will be required to cut their countries' emissions in the future."
The Vine's Brad Plumer explores the special interest minefield that the Senate carbon cap bill faces: "Last summer, remember, when Henry Waxman and Ed Markey were cobbling together a climate bill in the House, they struck an intricate balance on how to divvy up the pollution permits under the cap. Some were given away gratis to big polluters or industries at risk of fleeing to China (steel, cement, aluminum, etc.); others were doled out to local electric utilities with the provision that the money would be used to cushion the blow for ratepayers; still other permits were set aside to reduce deforestation or fund new energy sources. You can read Robert Stavins's detailed breakdown of where all the permits went—he argues that about 20 percent of the permits were pure corporate giveaways, while the rest went to ostensibly public purposes. But the point is that this was all a delicate compromise, and still the bill only barely passed through the House. Now that the bill's wending its way through the Senate, a bunch of new companies have decided to get into the lobbying game and try to force a revision to that formula. Natural-gas producers, for example, feel they got short-shifted by the House. And they have a point. But any new revision also risks alienating the industries that backed the original House bill."
