The tsunami of populist rage coursing through America is bigger than Daschle’s overdue tax bill, bigger than John Thain’s trash can, bigger than any bailed-out C.E.O.’s bonus. It’s even bigger than the Obama phenomenon itself. It could maim the president’s best-laid plans and what remains of our economy if he doesn’t get in front of the mounting public anger.
Tsunami Of Populist Rage Coursing Through America February 8, 2009Posted by rogerhollander in Economic Crisis.
Tags: AIG, Alston & Bird, bank rescue, bob dole, ceo bonus, citygroup, crony capitalism, deregulation, derivative markets, Economic Crisis, economic meltdown, frank rich, Goldman Sachs, great depression, Hank Paulson, health care reform, income inequality, job loss, Joe the Plumber, Larry Summers, McCain, ordinary americans, Palin, paul volcker, Pepsi and Viagra, Phil Gramm, president obama, public anger, Rahm Emanuel, retirement savings, revolving door, Robert Reich, roger hollander, salary caps, slumdog milionaire, tarp, tax delinquency, tax evasion, timothy geithner, tom daschle, treasury secretary, unemployment
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In New York, editorial pages on both ends of the political spectrum, The Wall Street Journal and The Times, called for Daschle to step down. But not The Washington Post. In a frank expression of the capital’s isolation from the country, it thought Daschle could still soldier on even though “ordinary Americans who pay their taxes may well wonder why Mr. Obama can’t find cabinet secretaries who do the same.”
As Jon Stewart might say, oh those pesky ordinary Americans!
In reality, Daschle’s tax shortfall, an apparently honest mistake, was only a red flag for the larger syndrome that much of Washington still doesn’t get. It was the source, not the amount, of his unreported income that did him in. The car and driver advertised his post-Senate immersion in the greedy bipartisan culture of entitlement and crony capitalism that both helped create our economic meltdown (on Wall Street) and failed to police it (in Washington). Daschle might well have been the best choice to lead health-care reform. But his honorable public record was instantly vaporized by tales of his cozy, lucrative relationships with the very companies he’d have to adjudicate as health czar.
Few articulate this ethical morass better than Obama, who has repeatedly vowed to “close the revolving door” between business and government and end our “two sets of standards, one for powerful people and one for ordinary folks.” But his tough new restrictions on lobbyists (already compromised by inexplicable exceptions) and porous plan for salary caps on bailed-out bankers are only a down payment on this promise, even if they are strictly enforced.
The new president who vowed to change Washington’s culture will have to fight much harder to keep from being co-opted by it instead. There are simply too many major players in the Obama team who are either alumni of the financial bubble’s insiders’ club or of the somnambulant governmental establishment that presided over the catastrophe.
This includes Timothy Geithner, the Treasury secretary. Washington hands repeatedly observe how “lucky” Geithner was to be the first cabinet nominee with an I.R.S. problem, not the second, and therefore get confirmed by Congress while the getting was good. Whether or not this is “lucky” for him, it is hardly lucky for Obama. Geithner should have left ahead of Daschle.
Now more than ever, the president must inspire confidence and stave off panic. As Friday’s new unemployment figures showed, the economy kept plummeting while Congress postured. Though Obama is a genius at building public support, he is not Jesus and he can’t do it all alone. On Monday, it’s Geithner who will unveil the thorniest piece of the economic recovery plan to date — phase two of a bank rescue. The public face of this inevitably controversial package is now best known as the guy who escaped the tax reckoning that brought Daschle down.
Even before the revelation of his tax delinquency, the new Treasury secretary was a dubious choice to make this pitch. Geithner was present at the creation of the first, ineffectual and opaque bank bailout — TARP, today the most radioactive acronym in American politics. Now the double standard that allowed him to wriggle out of his tax mess is a metaphor for the double standard of the policy he must sell: Most “ordinary Americans” still don’t understand why banks got billions while nothing was done (and still isn’t being done) to bail out those who lost their homes, jobs and retirement savings.
As with Daschle, the political problems caused by Geithner’s tax infraction are secondary to the larger questions raised by his past interaction with the corporations now under his purview. To his credit, Geithner, like Obama, has devoted his career to public service, not buckraking. But he still has not satisfactorily explained why, as president of the New York Fed, he failed in his oversight of the teetering Wall Street institutions. Nor has he told us why, in his first major move in his new job, he secured a waiver from Obama to hire a Goldman Sachs lobbyist as his chief of staff. Nor, in his confirmation hearings, did he prove any more credible than the Bush Treasury secretary, the Goldman Sachs alumnus Hank Paulson, in explaining why Lehman Brothers was allowed to fail while A.I.G. and Citigroup were spared.
Citigroup had one highly visible asset that Lehman did not: Robert Rubin, the former Clinton Treasury secretary who sat passively (though lucratively) in its executive suite as Citi gorged on reckless risk. Geithner, as a Rubin protégé from the Clinton years, might have recused himself from rescuing Citi, which so far has devoured $45 billion in bailout money.
Key players in the Obama economic team beyond Geithner are also tied to Rubin or Citigroup or both, from Larry Summers, the administration’s top economic adviser, to Gary Gensler, the newly named nominee to run the Commodity Futures Trading Commission and a Treasury undersecretary in the Clinton administration. Back then, Summers and Gensler joined hands with Phil Gramm to ward off regulation of the derivative markets that have since brought the banking system to ruin. We must take it on faith that they have subsequently had judgment transplants.
Obama’s brilliant appointees, we keep being told, are irreplaceable. But as de Gaulle said, “The cemeteries of the world are full of indispensable men.” You have to wonder if this team is really a meritocracy or merely a stacked deck. Not only did Rubin himself serve on the Obama economic transition team, but two of the transition’s headhunters were Michael Froman, Rubin’s chief of staff at Treasury and later a Citigroup executive, and James S. Rubin, an investor who is Robert Rubin’s son.
A welcome outlier to this club is Paul Volcker, the former Federal Reserve chairman chosen to direct Obama’s Economic Recovery Advisory Board. But Bloomberg reported last week that Summers is already freezing Volcker out of many of his deliberations on economic policy. This sounds like the arrogant Summers who was fired as president of Harvard, not the chastened new Summers advertised at the time of his appointment. A team of rivals is not his thing.
Americans have had enough of such arrogance, whether in the public or private sectors, whether Democrat or Republican. Voters turned on Sarah Palin not just because of her manifest unfitness for office but because her claims of being a regular hockey mom were contradicted by her Evita shopping sprees. John McCain’s sanctification of Joe the Plumber (himself a tax delinquent) never could be squared with his inability to remember how many houses he owned. A graphic act of entitlement also stripped naked that faux populist John Edwards.
The public’s revulsion isn’t mindless class hatred. As Obama said on Wednesday of his fellow citizens: “We don’t disparage wealth. We don’t begrudge anybody for achieving success.” But we do know that the system has been fixed for too long. The gaping income inequality of the past decade — the top 1 percent of America’s earners received more than 20 percent of the total national income — has not been seen since the run-up to the Great Depression.
This is why “Slumdog Millionaire,” which pits a hard-working young man in Mumbai against a corrupt nexus of money and privilege, has become America’s movie of the year. As Robert Reich, the former Clinton labor secretary, wrote after Daschle’s fall, Americans “resent people who appear to be living high off a system dominated by insiders with the right connections.”
The neo-Hoover Republicans in Congress, who think government can put Americans back to work with corporate tax cuts but without any “spending,” are tone deaf to this rage. Obama is not. It’s a good thing he’s getting out of Washington this week to barnstorm the country about the crisis at hand. Once back home, he’s got to make certain that the insiders in his own White House know who’s the boss.
Ethical Malpractice February 3, 2009Posted by rogerhollander in Barack Obama, Health.
Tags: daschle tax avoidance, daschle taxes, dhhs, finance committee, joe biden, marie cocco, Obama cabinet, roger hollander, secretary of health, senate, tim geithner, tom daschle
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No need to fumble for words that sum up the stew of hypocrisy, arrogance and insiderism that is the unfolding saga of Tom Daschle. This is the audacity of audacity.
Daschle, the former Senate Democratic leader turned multimillionaire power broker, is defending his nomination to become secretary of health and human services despite having failed to pay all his taxes, despite having failed to tell President Barack Obama’s transition team about his six-figure nonpayment before his appointment was announced, and despite having raked in about a quarter of a million dollars in fees for giving his insider insight to health insurers and others that the department he wishes to run happens to regulate.
Rush Limbaugh now has the talking points of his most fevered right-wing dreams.
Obama’s problems are bigger than Rush. With the Daschle nomination and the president’s inexplicable support of yet another Cabinet appointee who somehow didn’t notice his tax problems until he was nominated, Obama has undermined what was supposed to be a central tenet of his administration: that he would sweep away the rules under which Washington cossets itself in a surreal bubble where lobbyists, members of Congress, industry heavyweights, fat-cat donors and other insiders do their own bidding first and put the people’s interests last.
Since his re-election defeat in 2004, Daschle has mastered the art of turning humiliating political loss into high-roller riches, much of it coming from his work for a well-connected law firm where he didn’t technically operate as a lobbyist but gave policy advice to companies with business before the government.
But trading on his name, his political connections, his ability to tap into Democratic donors and becoming wealthy by virtue of his past public service isn’t what has Daschle in trouble. Failure to pay taxes is.
The Obama administration now has distinguished itself for lowering the bar so that tax avoidance is no impediment to high public office. Treasury Secretary Tim Geithner’s failure to pay Social Security and other taxes he owed while working for the International Monetary Fund slowed his confirmation, but didn’t derail it. Geithner explained the tax problems as the result of inadvertent oversight, even though Geithner’s employer gave explicit directions on what was owed and how to pay.
Daschle shouldn’t be allowed such excuses. While serving in the Senate he was a member of the Finance Committee, the very panel that writes the tax laws and oversees their administration. The same committee is now deciding whether to clear his nomination for a full Senate vote.
The rationale for confirming Geithner was that he is a financial wizard—one of a handful of people, it was argued, with the experience and intellect necessary to manage the worst banking crisis since the Great Depression. But surely there is more than one Democrat capable of managing the Department of Health and Human Services. And undoubtedly there is more than one—there are perhaps hundreds—as committed to the cause of revamping the health care system.
Daschle isn’t indispensable. But he is indefensible.
Not many Americans manage to underpay their taxes by the whopping sums Daschle overlooked. The $140,000 he paid in January to satisfy the taxes and interest is nearly triple the median household income. That is, the median income of $50,233 reported by the Census Bureau before the layoffs, pay cuts, reduced hours and other hardships of the current economic crisis burdened average families. The free use of a chauffeured limousine provided by a business associate who happens to be a big Democratic donor—the source of the unreported income at the root of Daschle’s tax troubles—is a joy ride to political hell. I hope Daschle enjoyed it.
Some Democratic senators have rallied to defend their former leader. The demonstration merely reinforces the narrative that the rules can be bent by, and for, a member of their club.
This is all uncomfortably reminiscent of the Bush administration’s abhorrent interpretation of what constitutes proper ethics. Perhaps no laws have been broken—but since when is that the standard for holding high public office?
When Vice President Joe Biden said during the presidential campaign that it is a patriotic duty to pay taxes, I agreed. So did most of us who believe in the ability of government to better Americans’ lives. But we also believe this responsibility is to be borne by plumbers and power brokers alike.
If Daschle and the Senate Democrats still believe this, they have their own duty: It is to end this sorry spectacle now.
Marie Cocco’s e-mail address is mariecocco(at)washpost.com.
© 2009, Washington Post Writers Group
Tom Daschle Will Not Reform Healthcare December 6, 2008Posted by rogerhollander in Health, Uncategorized.
Tags: ben cohen, claims, daily banter, health insurance, healthcare, insurance companies, medical costs, medicare, Obama, premiums, regulation, roger hollander, tom daschle
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By Ben Cohen, The Daily Banter, www.thedailybanter.com
December 6, 2008
As Matt Taibbi pointed out in his latest post, Tom Daschle is about the last person on earth capable of making serious reforms to America’s broken health care system. Daschle wrote an article on the Huffington Post outlining his basic philosophy on health care reform, and after reading it, I’m convinced Obama is not at all serious about providing quality health care to every American.
Daschle essentially wants Federal oversight of insurance companies, ensuring profit is privatized, and the basics of the system remain unchanged. He writes:
A Physician left an interesting comment on the post:
Your example of the Federal Reserve is a perfect analogy, and clearly explains why this idea won’t work. For all of its awesome power to manipulate the economy, it couldn’t (or wouldn’t) do a darn thing to stop the stop the subprime mortgage crisis, and is trying to bail out the banks while doing nothing to help individual homeowners.
If there were a federal body like the one you propose, and it acted like the Fed, then we would expect to see it:
1) stand by and do nothing while predatory lenders (oops, I mean insurance companies) peddle no-win insurance coverage to sick people, with every intention of collecting premiums and no intention of paying claims
2) work desperately to save insurance companies (but not patients) when the health care system is in crisis
3) pontificate that individual homeowners (oops, patients) are to blame for picking the wrong insurance plan as they go into bankruptcy from the medical costs that the insurance companies refuse to pay.
I’m inclined to take the doctor’s side on this, as they have to deal with the enormous bureaucracy the insurance companies create, and are in contact with the people they can’t treat because of it. If this is ‘Change You Can Believe in’, then George Bush is a Democrat.