Cross posted from The Stars Hollow Gazette

The progressive Democrats of the Senate got Larry Summers to withdraw from consideration for chair of the Federal Reserve over the weekend. So now they’re yellin’ for Yellen. Well, folks Janet Yellen the current vice chair of the Federal Reserve is just the distaff version of Larry minus he misogyny.

Huffington Post‘s senior political economy reporter Zach Carter gives a rundown of Ms. Yellen’s policy history before and during her tenure as chair of Council of Economic Advisers in the Clinton administration. During that time she backed the repeal of the landmark Glass-Steagall bank reform, supported the 1993 North American Free Trade Agreement and pressured the government to develop a new statistical metric intended to lower payments to senior citizens on Social Security. Yes, dears, that last one would be an earlier version of the Chained CPI.

But in the 1990s, Yellen and Summers both served in the Clinton administration, and pursued many of the same policies. Yellen began serving as Chair of President Bill Clinton’s Council of Economic Advisers in 1997, and publicly endorsed repealing Glass-Steagall’s separation between traditional bank lending and riskier securities trading during her Senate confirmation hearing. Yellen referred to deregulating banking as a way to “modernize” the financial system, and indicated that breaking down Glass-Steagall could be the beginning of a process allowing banks to merge with other commercial and industrial firms. [..]

At the same event, Yellen endorsed establishing a new statistical metric that would allow the federal government to reduce Social Security payments over time, by revising the consumer price index, or CPI, the government’s standard measurement for inflation. [..]

Before Yellen joined the Clinton administration, she was a respected economist at the University of California at Berkeley. In 1993, she joined dozens of other academics in signing a letter to Clinton advocating for the North American Free Trade Agreement. The letter was signed by prominent conservative economists including Milton Friedman, but also by many economists who are now considered progressive, including Paul Krugman and former Obama adviser Christina Romer. Krugman has since expressed disappointment with some of the trade pact’s effects.

(all emphasis mine)

The full transcript of Ms. Yellen’s Feb. 5, 1997 conformation hearing can be read here (pdf).

To be fair on the Glass-Steagall repeal, Ezra Klein weighed in at his Washington Post Wonkblog:

Another point here is that Glass-Steagall really wasn’t behind the crisis. Wonkblog’s Glass-Steagall explainer has much more detail on this, but perhaps the simplest way to make the point is to quote Sen. Elizabeth Warren, the lead sponsor behind the bill to restore Glass-Steagall. When Andrew Ross Sorkin asked her whether the law would’ve prevented the financial crisis or JP Morgan’s subsequent losses, she said, “the answer is probably ‘No’ to both.” There are good reasons to bring back Glass-Steagall, but they’re separate from the events of 2007 and 2008.

Which is only to say that supporting the repeal of Glass-Steagall in 1997 doesn’t say that much about somebody’s opinions on regulating Wall Street today. And, in general, we don’t know very much about Janet Yellen’s views on the subject. As I’ve argued before, the support for her on this dimension (as opposed to on the monetary policy dimension) really comes from an anybody-but-Summers impulse.

Carter also noted in his article that Ms. Yellen is more consumer friendly. During her tenure as president of the San Francisco Federal Reserve from June 14, 2004 until 2010, she identified the housing bubble and urged stronger regulation to limit its damage.

This still leaves a lot of questions about whether she would support the chained CPI, that is very unpopular among seniors and the public in general, or support regulation to rein in the TBTF banks. As lambert at Corrente puts it:

“Be careful what you wish for; you might get it” was made for situations like this.

So let’s not confuse a solid base hit with a game-winning grand slam, OK?

Cross posted from The Stars Hollow Gazette

In the aftermath of another mass shooting that took the lives of 12 people and the gunman in the heart of the nation’s capital at the Washington Naval Yard, Washington Hospital Center Chief Medical Officer Janis Orlowsi, a trauma surgeon spoke to the press. After reporting on the status of the victims who were being treated at her hospital, Dr. Orlowsi made a powerful plea for gun control.

You know what, we see a lot of trauma. And you know, sometimes it’s just, you know – accidents that occur that we get to help people with, because they’re accidents. And then you see what I call senseless trauma. And there is – there’s something evil in our society that we as Americans have to work to try and eradicate.

   I – I have to say, I may see this everyday, I may, you know, be the Chief Medical Officer of a very large trauma center. But there’s something wrong here when we have these multiple shootings, these multiple injuries. There is something wrong. and the only thing that I can say is we have to work together to get rid of it.

   I would like you to put my trauma center out of business. I really would. I would like to not be an expert on gunshots and not to be an expert on this. We are – we do it well. Very experienced surgeons. But, quite frankly, I would rather they were doing their surgery on other things. And you know, it’s a great city. It’s a great country. And we have to work together to get rid of this. Because we just cannot have, you know, one more shooting with, you know, so many people killed.

   We’ve got to figure this out. We’ve got to be able to help each other. We’re dealing right now with three innocent people. But my prayers and my thoughts go out to those people who have died as a result of today. And, you know, their families and what they’re going to have to go through. So I have to say, you know, it’s a challenge to all of us. Let’s get rid of this. This is not America. This is not Washington D.C. This is not good. So we have got to work to get rid of this.

Cross posted from The Stars Hollow Gazette

This is your morning Open Thread. Pour your favorite beverage and review the past and comment on the future.

Find the past “On This Day in History” here.

September 19 is the 262nd day of the year (263rd in leap years) in the Gregorian calendar. There are 103 days remaining until the end of the year.

On this day in 1796, President George Washington’s Farewell Address to the Nation is published.

George Washington’s Farewell Address was written to “The People of the United States” near the end of his second term as President of the United States and before his retirement to Mount Vernon.

Originally published in David Claypoole’s American Daily Advertiser on September 19, 1796 under the title “The Address of General Washington To The People of The United States on his declining of the Presidency of the

United States,” the letter was almost immediately reprinted in newspapers across the country and later in a pamphlet form. The work was later named a “Farewell Address,” as it was Washington’s valedictory after 45 years of service to the new republic, first during the Revolution of the Continental Army and later as the nation’s first president.

The letter was originally prepared in 1792 with the help of James Madison, as Washington prepared to retire following a single term in office. However, he set aside the letter and ran for a second term after his Secretary of the Treasury, Alexander Hamilton, and his Secretary of State, Thomas Jefferson, convinced him that the growing divisions between the newly formed Federalist and Democratic-Republican parties, along with the current state of foreign affairs, would tear the country apart in the absence of his leadership.

Four years later, as his second term came to a close, Washington revisited the letter and with the help of Alexander Hamilton prepared a revision of the original draft to announce his intention to decline a third term in office; to reflect the emerging issues of the American political landscape in 1796; and to parting advice to his fellow Americans, express his support for the government eight years following the adoption of the Constitution; and to defend his administration’s record.

The letter was written by Washington after years of exhaustion due to his advanced age, years of service to his country, the duties of the presidency, and increased attacks by his political opponents. It was published almost two months before the Electoral College cast their votes in the 1796 presidential election.

Cross posted from The Stars Hollow Gazette

President Barack Obama briefly addressed the country on the fifth anniversary of the collapse of Lehman Brothers and the start of the financial crisis that would see the middle class loose most of its wealth. The president rightfully chastised the obstruction on congress, blasting the Republican threats to shut down the government unless the he agrees to de-fund the Affordable Care Act and he patted himself on the back for how far the economy has come in the last five years.

In his speech the president paints a glowing picture of the economy and his accomplishments:

And so those are the stories that guided everything we’ve done. It’s what those earliest days of the crisis caused us to act so quickly through the Recovery Act to arrest the downward spiral and put a floor under the fall. We put people to work, repairing roads and bridges, to keep teachers in our classrooms, our first responders on the streets. We helped responsible homeowners modify their mortgages so that more of them could keep their homes. We helped jump-start the flow of credit to help more small businesses keep their doors open. We saved the American auto industry.

And as we worked to stabilize the economy and get it growing and creating jobs again, we also started pushing back against the trends that have been battering the middle class for decades, so we took on a broken health care system, we invested in new American technologies to end our addiction to foreign oil, we put in place tough new rules on big banks, rules that we need to finalize before the end of the year, by the way, to make sure that the job is done, and we put in new protections that crack down on the worst practices of mortgage lenders and credit card companies.

We also changed a tax code that was too skewed in favor of the wealthiest Americans. We locked in tax cuts for 98 percent of Americans. We asked those at the top to pay a little bit more.

So if you add it all up, over the last three-and-a-half years, our businesses have added 7.5 million new jobs. The unemployment rate has come down. Our housing market is healing. Our financial system is safer. We sell more goods made in America to the rest of the world than ever before.

However, his rosy view of the current state of the economy isn’t shared by the 99% who are still struggling with low wage jobs, unemployment, and a housing crisis that is still looming.

The president’s speech makes one wonder who is advising this man and what economy was Obama talking about? Then one remembers that it was his best buddy Larry Summers and the Chicago School of Rubinite cohorts, as The Guardian‘s economics editor Heidi Moore notes in her column. Ms. Moore writes that is time to “end the delusion that this White House has done even a fraction of what it should to help the economy” and concludes that the president has had some poor economic advice:

The president’s economic initiatives – food stamps, manufacturing, infrastructure, raising the debt ceiling, appointing a new chairman of the Federal Reserve – have mostly ended in either neglect or shambles. After five years, the Obama Administration’s stated intentions to improve the fortunes of the middle class, boost manufacturing, reduce income inequality, and promote the recovery of the economy have come up severely short. [..]

Here’s the litany of failure: the president has not pushed through any major stimulus bill since 2009, and most of that was pork-barrel junk. Manufacturing is weak and weakening; the employment gap between the rich and the poor is the widest on record; the economic recovery is actually more like an extended stagnation with 12 million people unemployed; the housing “recovery” will be stalled as long as incomes are low and house prices are high; and quantitative easing as a stimulus, while a heroic independent effort by the Federal Reserve, is past its due date and is no longer improving the country’s fortunes beyond the stock market.

Shall we continue? We don’t have a food stamp bill even though 49 million Americans lack regular access to food. Goldman Sachs analysts have said the sequester is taking a toll on stubbornly growing unemployment: “since sequestration took effect in March, federal job losses have been somewhat more pronounced,” they wrote last week; and another debt ceiling controversy – the third of Obama’s presidency – looms in only a few weeks with the potential to hurt what meager economic growth we can still cling to.

The economy for the vast majority of people and small businesses is not going well and won’t improve in the neat future. One of the people that Pres, Obama has ignored is Pres. Bill Clinton’s former Labor Secretary and economics professor that the University of California, Robert Reich. Prof. Reich sat down with Democracy Now!‘s Amy Goodman to discuss the current state of the economy since the fall of Lehman Brothers.

Meanwhile, the president is living in a bubble. Let’s hope his bubble bursts before ours does and he starts to really do something about it.  

Cross posted from The Stars Hollow Gazette

A long time ago, after an incident that had left me particularly furious with a disagreeable colleague, a friend told me to be patient eventually this person would fall on his own petard. After all, it wasn’t the short term paybacks that one needs to worry about, its the long term paybacks that get them in the end. And so it was, some years later, my nemesis got too arrogant, made some foolhardy decisions and was forced to retire in disgrace. I had long since moved on another path that was ultimately more satisfying but when I heard the story of his fall I had to wryly smile.

Over the weekend, after some weeks of speculation about who would succeed Ben Bernanke as chair of the Federal Reserve, President Barack Obama’s rumored favorite, his former chief economics adviser, Larry Summers, withdrew his name from consideration. Mr. Summers had come under fire from the progressive left for his Chicago School economic policies and his past history as President Bill Clinton’s Treasury Secretary. It was during Summer tenure as Treasury head that Glass-Steagal was repealed leading to the current economic mess. Add to that his misogynistic attitude and the rise of one of the women to whom he was so dismissive and you have the recipe for the down fall of one of the most “dickish” (Charlie Pierce’s term) personalities in government.

Washington bureau chief for The Huffington Post Ryan Grim summarized Larry’s fall from grace:

A progressive-populist coalition fueled by women’s groups and high-end donors was responsible for undoing President Barack Obama’s bid to install Larry Summers as the next chairman of the Federal Reserve. [..]

The five opposing senators were a combination of traditional progressives — Merkley, Elizabeth Warren (Mass.) and Sherrod Brown (Ohio) — and prairie populists — Jon Tester (Mont.) and, according to three Senate Democratic sources, Heidi Heitkamp (N.D.). Tester’s opposition was reported Friday by Reuters; Heitkamp’s intention was not previously public. [..]

Meanwhile, a coalition of progressive groups — which included UltraViolet and the National Organization for Women, two powerful women’s groups — teamed with the big donors and grassroots advocacy groups to pressure Banking Committee members and other Senate Democrats. ..]  The donors, who were mostly women, had [concerns that ranged from populist to feminist. [..]

Merkley, according to another aide, spoke to Democratic senators on the committee during caucus meetings on Tuesday and Thursday, and made Summers’ closeness to Wall Street and prior support for deregulation the key element of his pitch. He homed in on Summers’ backing for the Glass-Steagall repeal, which allowed banks to grow much larger and take on more risk. He also highlighted Summers’ opposition to regulating derivatives in a battle with then-Commodity Futures Trading Commission head Brooksley Born. Summers took both positions as treasury secretary during the Clinton administration. To make the point that Summers had not revised his approach, Merkley noted his intense behind-the-scenes opposition to the Volcker Rule, an attempt to reinstate some of Glass-Steagall’s restrictions that was added to the Dodd-Frank Wall Street reform law by Merkley and Brown. [..]

Summers had also opposed naming Warren to permanently head the Consumer Financial Protection Bureau, a decision that came back to haunt him, as Warren instead ran for the Senate and won a spot on the Banking Committee, where she has now helped tank Summers’ shot at the Fed chairmanship.

Essentially, Larry Summers was the author of his own demise. As Charlie Pierce observes:

The fact is that Senator Professor Warren was one of the driving forces behind a genuine populist uprising of liberal Democratic senators — and Jon Tester, too — and that uprising has kicked Larry Summers to the curb. She has quietly carved out a leadership role in the one area in which she is an acknowledged expert. (What she will do if it ever comes to a vote on making war in Syria is anybody’s guess.) Quite simply, she is doing what she said she would do when she was running for the Senate. She has enough allies to get done a lot of what she wants to get done. Anything this president — or his successor — wants to do as far as national economic policy now has to go through her, and through the coalition to which she belongs. I still don’t think the president will nominate Janet Yellin — He’s got his back up about it now — but whoever he does nominate is going to have to have a chat with the nice professor in the glasses who’s got just a few questions she’d like to ask.

I’m sure there are a lot of women, from Brooksley Born to Christina Romer, wryly smiling. Long term paybacks can be very satisfying.

Cross posted from The Stars Hollow Gazette

This is your morning Open Thread. Pour your favorite beverage and review the past and comment on the future.

Find the past “On This Day in History” here.

September 18 is the 261st day of the year (262nd in leap years) in the Gregorian calendar. There are 104 days remaining until the end of the year.

On this day in 1793, George Washington lays the cornerstone to the United States Capitol building, the home of the legislative branch of American government. The building would take nearly a century to complete, as architects came and went, the British set fire to it and it was called into use during the Civil War. Today, the Capitol building, with its famous cast-iron dome and important collection of American art, is part of the Capitol Complex, which includes six Congressional office buildings and three Library of Congress buildings, all developed in the 19th and 20th centuries.

As a young nation, the United States had no permanent capital, and Congress met in eight different cities, including Baltimore, New York and Philadelphia, before 1791. In 1790, Congress passed the Residence Act, which gave President Washington the power to select a permanent home for the federal government. The following year, he chose what would become the District of Columbia from land provided by Maryland. Washington picked three commissioners to oversee the capital city’s development and they in turn chose French engineer Pierre Charles L’Enfant to come up with the design. However, L’Enfant clashed with the commissioners and was fired in 1792. A design competition was then held, with a Scotsman named William Thornton submitting the winning entry for the Capitol building. In September 1793, Washington laid the Capitol’s cornerstone and the lengthy construction process, which would involve a line of project managers and architects, got under way.

On September 17, 2011, a leaderless resistance group took over a small public park in the heart of the financial district of New York City. Fed up with the dominance of the financial industry in politics and the direction of the economy, the groups message took hold spreading from city to city and around the world. The message was heard, “We are the 99%”

We are the 99 percent. We are getting kicked out of our homes. We are forced to choose between groceries and rent. We are denied quality medical care. We are suffering from environmental pollution. We are working long hours for little pay and no rights, if we’re working at all. We are getting nothing while the other 1 percent is getting everything. We are the 99 percent.

That message change the conversation in the media and in the caverns of government. It brought together people of many colors, genders and political persuasions. Yes, Tea Party Republicans and left wing disenfranchised Democrats stood together on economic and social issues, disgusted with undue influence of corporations on government, particularly from the financial services sector and the unequal wealth distribution in the US. Thus began the Occupy Wall Street movement, 732 days ago.  

For two months, the group camped in Zuccotti Park, renaming it Liberty Park, meeting publicly using a unique human microphone when they were denied a permit for the use of “amplified sound,” including electric bullhorns, providing information, building the People’s Library, providing medical care, as well as, feeding the protestors, visitors and the homeless who flocked to the park. The spontaneous marches and demonstrations brought support and opposition. Much of the opposition from the corporate industry whose crimes and undue influence in government were coming under the public microscope

On November 15, 2011, shortly after midnight and a one hour notice to leave, the New York City Police Department raided the Zuccotti Park encampment, destroying private property and arresting over 200 occupiers, including journalists.

Occupy may not be as noticeable as it was back then but the movement is still a force with Occupy the SEC, focused on advancing lawsuits to push federal agencies to engage in more regulation of Wall Street and Occupy Our Homes which is engaged in direct action to protect homes from being improperly foreclosed by banks and have pressed the Justice Department to prosecute Wall Street executives.

In the aftermath of Hurricane Sandy, Occupy Sandy sprang from the rubble and misery to aid the stranded poor and working in NYC’s housing projects and neighborhoods that were forgotten by Mayor Bloomberg and his band of bureaucrats who were focused on getting their Wall St. cronies back in business. They were vital in saving lives of the sick and elderly stranding in high rises providing note books of information of those in need to Doctors Without Borders in their first mission in the United States. Occupy Sandy operated in all five boroughs and New Jersey with over 70,000 volunteers with just a Tweet and they are still there assisting with rebuilding and helping those still in need.

Occupy is here to stay. We are the voices of the 99% and we will be heard. The revolution continues worldwide.

Cross posted from The Stars Hollow Gazette

This is your morning Open Thread. Pour your favorite beverage and review the past and comment on the future.

Find the past “On This Day in History” here.

September is the 260th day of the year (261st in leap years) in the Gregorian calendar. There are 105 days remaining until the end of the year.

On September 17, 1787, the Constitution was signed. As dictated by Article VII, the document would not become binding until it was ratified by nine of the 13 states. Beginning on December 7, five states–Delaware, Pennsylvania, New Jersey, Georgia, and Connecticut–ratified it in quick succession. However, other states, especially Massachusetts, opposed the document, as it failed to reserve undelegated powers to the states and lacked constitutional protection of basic political rights, such as freedom of speech, religion, and the press. In February 1788, a compromise was reached under which Massachusetts and other states would agree to ratify the document with the assurance that amendments would be immediately proposed. The Constitution was thus narrowly ratified in Massachusetts, followed by Maryland and South Carolina. On June 21, 1788, New Hampshire became the ninth state to ratify the document, and it was subsequently agreed that government under the U.S. Constitution would begin on March 4, 1789. In June, Virginia ratified the Constitution, followed by New York in July.

On September 25, 1789, the first Congress of the United States adopted 12 amendments to the U.S. Constitution–the Bill of Rights–and sent them to the states for ratification. Ten of these amendments were ratified in 1791. In November 1789, North Carolina became the 12th state to ratify the U.S. Constitution. Rhode Island, which opposed federal control of currency and was critical of compromise on the issue of slavery, resisted ratifying the Constitution until the U.S. government threatened to sever commercial relations with the state. On May 29, 1790, Rhode Island voted by two votes to ratify the document, and the last of the original 13 colonies joined the United States. Today, the U.S. Constitution is the oldest written constitution in operation in the world.