Any address to the Muslim world by an American president is a significant event. But Obama's Cairo speech was unlike anything Muslims around the world — and Americans, for that matter — have heard from a U.S. president before. What he said, what he meant, and what moment itself means are fueling debate and will continue to do so for some time.
Congressional Republicans responded as usual, chastising the President on the Israel-Palestine issue, and falsely accusing of failing to mention terrorism in his speech. Huffington Post:
Reactions to President Obama's speech today at Cairo University have been overwhelmingly positive, but some conservative voices are griping that Obama's speech left out any mention of terror.
In fact, Obama talked about the September 11th attacks in his third paragraph. Later in the historic speech, the president described the presence of American troops in Afghanistan as a "necessity" born out of the fact that extremists are "determined to kill as many Americans as they possibly can." The president also said that America's commitment to destroying terror networks "will not waver," and that extremists cannot be "tolerate(d)."
But despite these clear comments on terrorism, some pundits are playing word games in an attempt to put a negative spin on the speech.
The New York Times must have heard a different speech than conservative pundits, as it lauded the president for speech strong on the need to defend the United States and reinforcing its relationship with Israel.
Mr. Obama spoke, unwaveringly, of the need to defend the country’s security and values. He left no doubt that he would do what must be done to defeat Al Qaeda and the Taliban, while making it clear that Americans have no desire to permanently occupy Afghanistan or Iraq.
He spoke, unequivocally, of the United States’ “unbreakable” commitment to Israel and of why Iran must not have a nuclear weapon. He was also clear that all of those listening — in the Muslim world and in Israel — must do more to defeat extremism and to respect the rights of their neighbors and their people.
Words are important. Mr. Obama was right when he urged leaders who privately speak of moderation and compromise to dare to say those words in public. But words are not enough. Mr. Obama, who, after all, has been in office for less than six months, has a lot to do to fulfill this vision. So do others.
The LA Times Peter Wallsten took on the question of whether the Presidents words "reveal his Middle East sympathies," and turned it into an examination not only of how well prepared the President is to meet the challenges the U.S. faces in Mid-East policy, but comes close to suggesting that fear about "sympathies" is really anxiety about balance:
The country has come to know Obama as someone willing to face a skeptical audience -- a Muslim world wary of U.S. power, abortion rights opponents at the University of Notre Dame and, during the presidential campaign, voters questioning his ties to the Rev. Jeremiah A. Wright Jr. -- and to ask that audiences move beyond old divisions.
Obama's style has been to cast himself as ready to lead the nation past the entrenched battles of the Clinton and Bush years and to ask Americans to look beyond old fault lines and accept a new politics of pragmatism and compromise.
Now, a key test of Obama's presidency is whether he can actually find new paths across old ideological battlefields.
...Others said they were troubled by Obama's apparent desire to be evenhanded in his descriptions of the region's history. They objected to how the president, after invoking the bloody legacy of the Holocaust and criticizing Holocaust deniers, added: "On the other hand, it is also undeniable that the Palestinian people -- Muslims and Christians -- have suffered in pursuit of a homeland."
Said David Harris, executive director of the American Jewish Committee: "It's the search for the perfect balance that sometimes concerns me."
Political Animal's Hilzoy extracts the essential nuggets of the speech for closer examination, and suggested the real reason for discomfort is that the president dared to break with the accepted script:
"I am convinced that in order to move forward, we must say openly the things we hold in our hearts, and that too often are said only behind closed doors. There must be a sustained effort to listen to each other; to learn from each other; to respect one another; and to seek common ground. As the Holy Koran tells us, "Be conscious of God and speak always the truth." That is what I will try to do -- to speak the truth as best I can, humbled by the task before us, and firm in my belief that the interests we share as human beings are far more powerful than the forces that drive us apart."
...That's what made Obama's speech so powerful. He broke out of the script. He didn't say what he might have been expected to say...
Noam Chomsky on what Obama didn't say: "...Obama called on Arabs and Israelis not to 'point fingers' at each other or to 'see this conflict only from one side or the other.' There is, however, a third side, that of the United States, which has played a decisive role in sustaining the current conflict. Obama gave no indication that its role should change or even be considered."
The Nation's Robert Scheer on what Obama has to do after the Cairo speech:
But Obama will have to do a lot more than be not-Bush.
The tricky part of Obama's speech is navigate the intricate relationship between (1) the need for the United States to establish strong, state-to-state relationships with autocratic and less-than-democratic leaders in the region, from pro-Western military strongmen like Egypt's Mubarak to the conservative and kleptocratic Arab royal families of the Persian Gulf to Syria's secular regime and Iran's clerical one; (2) the challenge posed by the rise of political Islam, from the Muslim Brotherhood in Egypt, Jordan, and Kuwait to the power of Hezbollah in Lebanon and Hamas in Palestine to Iraq's Shiite fundamentalist government and on to Iran, Afghanistan, and Pakistan; and (3) the question of democracy, elections, and representative government.
Meanwhile, Mother Jones' Nick Bauman distilled nine "hard truths" from Obama's Cairo speech, challengin all parties involved in the clash between the West and the Muslim world.
The official job numbers from the Labor Dept. are expected to be bad, but also to show improvement, leading some to believe the worst may be behind us. Forbes:
Analysts estimate that the Labor Department will report that the U.S. economy lost 520,000 non-farm jobs in May after a drop of 539,000 in April. While a smaller amount, that would still be large by historical standards, and the consensus expectation is that the percentage of jobless Americans will rise to 9.2%, up from 8.9% in April. Many believe that the jobless rate will peak at 10% next year, though the economy is expected to begin to grow in the second half of this year.
The jobs numbers from ADP for May were encouraging — we still lost about half a million jobs, but not quite as many people lost their jobs as ever other month this year. But the GM and Chrysler bankruptcies may do a hit-and-run on improving job numbers: CNN Money.
Among the jobless are 170,000 veterans, many of whom are finding employers reluctant to hire veterans.
On the Hook
To catch a fish, one must put a line in the water. To catch a big fish, it's best to fish in a big pond. Having awakened from a long nap, the SEC finally took advantage of its spot in the middle of the big pond. It took long enough, but the SEC may finally have a big fish on its hook. In this case, it's former Countrywide boss Angelo Mozillo. BBC:
Angelo Mozilo, former boss of Countrywide Financial, has been charged with civil fraud and insider trading by the Securities and Exchange Commission.
He is the highest profile executive to face charges relating to the US sub-prime mortgage crisis in 2007.
Bank of America eventually rescued the biggest US mortgage lender, buying it for $2.5 billion in July 2008.
Mr Mozilo has denied doing anything wrong. Two other former executives have also been charged with civil fraud.
Mozillo isn't alone. Aside from two of his "top lieutenants," nine others have been indicted in a $92 million New York mortgage fraud. USAToday:
Federal prosecutors and the FBI say the scheme centered on property that Kontogiannis bought and subdivided from 2001 to 2003 in the New York City boroughs of Brooklyn and Queens.
To finance the projects, the defendants are accused of staging sales of the properties financed by mortgage loans. Bogus appraisals supported the price of the properties, even where buildings had not yet been built or had fictional addresses, according to the U.S. Attorney's Office in Brooklyn, which is prosecuting the case.
The loans were financed by lenders controlled by Kontogiannis and were later sold to Washington Mutual and DLJ Mortgage Capital, prosecutors say.
Entities controlled by Kontogiannis made monthly payments on the mortgages, ensuring that none became delinquent, until payments ceased in 2007 with about $92 million in principal outstanding on the fraudulent loans, prosecutors say.
Mozillo's indictment, however, raises more questions than it answers. Time's Bill Saporito asks, "When is keeping up with the competition illegal?" and goes on to raise another significant question:
The SEC says that Countrywide, desperate to protect its market share, gradually loosened its mortgage guidelines to match anything marketed by any competitors, a so-called supermarket approach.
...That may well be true. But where were the regulators while Countrywide and others were churning out loans that many observers had already flagged as trouble? Certainly, the federal agency had no jurisdiction over state mortgage regulators in states like California, where Option ARM and other such loans were popular. That's not the case in securitization. As the underwriting of CDOs mushroomed — securities that held AAA-rated tranches of what were essentially junk mortgages — the Bush administration's SEC was in no mood to throw a spanner in the works. The market would determine the appropriate risks and rewards. So Countrywide played the game. And lost. Or rather, we did.
The Return of the Regulator
Even as indictments are handed down, The Obama administration is intensifying its efforts to toughen bank and financial firm rules, meeting with lobbyists and sending Commodity Futures Trading Commission Chairman Gary Gensler to a Senate Agriculture Committee hearing. But it's not yet clear what shape that reform will take. Reuters:
The administration's latest push comes ahead of the expected release in two weeks of proposals targeting not only banks, but hedge funds, executive pay, the securitization industry, and the over-the-counter derivatives markets.
The mid-June package is likely to come in the form of a concept paper, rather than formal legislative language, said Floyd Stoner, executive director of congressional relations and public policy at the American Bankers Association.
It was unclear whether insurance reform would be included. The administration was said to be examining approaches to establishing a U.S. insurance regulator. The nation's 6,000 insurers are regulated by state and territorial governments.
The insurance industry is still deeply divided on the idea of federal regulation. It is favored by large life insurers and some large property-casualty insurers because they could save money by answering to one regulator instead of more than 50.
Gensler told the Senate Agriculture Committee that he needs broad authority to bring all derivatives under regulation. McClatchy Newspapers :
Firing the opening shot in a likely battle with Wall Street, the federal regulator who's overseeing the trading of oil contracts asked Congress on Thursday for broad powers to regulate the exotic private contracts that are thought to contribute to rising oil prices and the global financial crisis.
Testifying before the Senate Agriculture Committee, Commodity Futures Trading Commission Chairman Gary Gensler told lawmakers that he needs broad authority to bring all derivatives contracts under regulatory supervision. Derivatives involve bets that derive their value based on future prices of some underlying asset, such as oil contracts, interest rates, currency or even bonds and other forms of credit.
The new commission chief also called for an additional set of rules for swaps dealers, big global financial institutions that dominate activity in these markets. These rules would force players on both sides of a transaction in these markets to set aside cash to cover potential losses.
Stronger regulations aren't the only thing Wall Street has coming. The Obama administration is sending a "Pay Czar" to Wall Street, too. WSJ:
The Obama administration plans to appoint a "Special Master for Compensation" to ensure that companies receiving federal bailout funds are abiding by executive-pay guidelines, according to people familiar with the matter.
The administration is expected to name Kenneth Feinberg, who oversaw the federal government's compensation fund for victims of the Sept. 11, 2001, terrorist attacks, to act as a pay czar for the Treasury Department, these people said.
Mr. Feinberg's appointment could be announced as early as next week, when the administration is expected to release executive-compensation guidelines for firms receiving aid from the $700 billion Troubled Asset Relief Program. Those companies, which include banks, insurers and auto makers, are subject to a host of compensation restrictions imposed by the Bush and Obama administrations and by Congress.
Holding Forth On Health Care Reform
Reactions Obama's Cairo speech have not entire wiped other issues from headlines or pundits' minds.
Paul Krugman holds forth on health care and the importance of a public plan option in any reform package:
What’s still not settled, however, is whether regulation will be supplemented by competition, in the form of a public plan that Americans can buy into as an alternative to private insurance.
Now nobody is proposing that Americans be forced to get their insurance from the government. The “public option,” if it materializes, will be just that — an option Americans can choose. And the reason for providing this option was clearly laid out in Mr. Obama’s letter: It will give Americans “a better range of choices, make the health care market more competitive, and keep the insurance companies honest.”
Those last five words are crucial because history shows that the insurance companies will do nothing to reform themselves unless forced to do so.
And Ezra Klein tackles Sen. Bob Bennett's fear of British Health care, and explains why conservatives should be able to embrace a public plan:
In general, there are two ways for firms to adopt an idea. The government solution -- the socialist solution -- is to impose it on them by legislative fiat. An example would be Congress passing a law that makes selling New Coke illegal. The other path is through market competition. Plummeting revenue and rising market share for Pepsi convince the Coca Cola company that selling New Coke is a bad plan and they should cut it out.
It is perhaps evidence of the triumph of market-based ideas that the public plan falls pretty decisively on the right edge of that spectrum. The idea here is that the public plan will adopt effective reforms that will then lower its costs and improve its quality. In response, the private market will follow suit.
Bill Scher is away
