Vilsack caught up in beltway scandal du jour (updated)

Rarely are secretaries of agriculture near the center of attention in Washington, but Tom Vilsack is in the hot seat after abetting the right-wing noise machine’s latest attempt to undermine the Obama administration. On Monday an African-American US Department of Agriculture official, Shirley Sherrod, was sacked because a right-wing website made her appear to have discriminated against a white farmer.

Sherrod, USDA’s rural development director for Georgia, said she was ordered to resign on Monday after a video, posted on one of Andrew Breitbart’s conservative sites, showed her saying she had not given a white farmer her “full force.”

The NAACP later posted the full, unedited video of Sherrod speaking at an NAACP Freedom Fund Dinner, and it showed the remarks had been taken out of context in the version posted by Breitbart. Breitbart had said that he had posted the full version he was given. The farmer, Roger Spooner, now 87, appeared on CNN from his Georgia home and said Sherrod had been “helpful in every way – she saved our farm.”

Vilsack should know better than to validate a phony right-wing narrative, but he’s never been a happy partisan warrior. I’m not surprised he kicked a USDA official to the curb instead of waiting to hear all the facts. He probably hoped to kill this “news” story before it gained momentum. The problem is, he has created more incentive for Obama’s opponents to gin up fake scandals. Vilsack also damaged his own reputation. Lots of people will want answers to the questions Greg Sargent asks today:

Now that the full Shirley Sherrod video has been released, vindicating her completely, Agriculture Secretary Tom Vilsack is  promising to undertake a review of her firing. So maybe he will re-instate her after all.

But it isn’t enough for Vilsack to reinstate her. People should demand that his review include an explanation for his own decision to fire her. We need to hear his justification for the decision to ax this woman before all the facts were in, on the strength of nothing more than an Andrew Breitbart smear.

Did Vilsack make any effort to learn more about her speech before giving her the push? If not, why not? Sherrod says she told top USDA officials that the full speech would vindicate her. Did anyone at USDA give her protestations even a passing listen? Did anyone try to obtain video of the full speech? If not, why not? Why was Breitbart’s word alone allowed to drive such a high-profile decision?

People should also demand that the White House weigh in publicly on what happened here. The White House has only discussed this via anonymous leaks, and this morning, officials are conveniently leaking word that the White House prodded Vilsack to reconsider Sherrod’s firing. That’s nice, but was the White House told in advance that the firing was about to happen, and if so, why did it allow the firing to proceed?

The White House looks bad for supporting Vilsack’s rush to judgment, then backing off when the full video of Sherrod’s remarks appeared. But ultimately, this was Vilsack’s mistake. Let’s hope he learned the right lessons from it.

UPDATE: Charles Lemos posted the full video of Sherrod’s speech and his reaction to it. It’s worth a read.

SECOND UPDATE: Vilsack has apologized and offered Sherrod another USDA position. I’ve posted the video after the jump. Good for him; it’s not always easy for politicians to admit a mistake. TPMDC reported today,

In response to a question from TPMDC, Vilsack called the debacle “a teachable moment for me.” He admitted that Sherrod had received advance notice of Breitbart’s intention to (mis)use the clip and had attempted to inform her superiors, including Vilsack, by email — but the email did not get through, and thus her superiors’ first contact with her regarding the incident was after Breitbart’s release of the clip.

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Has bogus "austerity movement" won over Obama?

President Barack Obama has nominated Jacob “Jack” Lew as his new director for the Office of Management and Budget. Peter Orszag recently announced plans to step down from that position. Lew served as OMB director during Bill Clinton’s administration. Announcing his choice at a July 13 press conference, Obama said,

“Jack’s challenge over the next few years is to use his extraordinary skill and experience to cut down that deficit and put our nation back on a fiscally responsible path. And I have the utmost faith in his ability to achieve this goal as a central member of our economic team,” Obama said.

The president pulled this line straight from Republican talking points:

“At a time when so many families are tightening their belts, he’s going to make sure the government continues to tighten its own,” Obama said in announcing Lew’s selection at the White House.

“He’s going to do this while making government more efficient, more responsive to the people it serves,” Obama continued.

How will the government become “more efficient”? We know the Pentagon won’t be asked to make any sacrifices, since Obama can’t bring himself to request even a slight reduction in our defense budget. On the contrary, he keeps going back to Congress for more supplemental war spending.

I hope Obama doesn’t believe what he’s saying, because aggressive policies to reduce unemployment are much more urgently needed than “belt-tightening” by the government. The Clinton economic boom turned deficits into surpluses not only (or mainly) because of spending cuts, but because unemployment dropped to historically low levels across the country.

If the president was speaking sincerely yesterday, then Lew’s appointment likely means less spending on infrastructure, social benefits and other domestic programs. The trouble is, we’re not going to significantly reduce the federal deficit if unemployment remains high. More federal spending may be needed to stave off a double-dip recession and ease the strain on state budgets. Bonddad decimated the argument for “austerity” here. Click over to view the numbers he posted, which show that the U.S. has had a structural deficit for the last decade.

Notice this started a long time ago. Yet suddenly everyone is up in arms about the deficit. Please.

Secondly, the complete denial about the important beneficial effects of government spending (especially infrastructure spending and unemployment benefits) is maddening. Regrettably, everyone now talks in sound bites instead of facts. So here’s a few inconvenient facts.

1.) The US economy grew at a solid rate in the 1960s. Why? A big reason was the US government building the highway system. Now goods and services could move between cities in a far easier manner. If you think that wasn’t a big deal then you obviously don’t get out much.

2.) Since 1970, government spending has accounted for about 20% of all US GDP growth.

Bonddad further explained here why austerity hasn’t created economic expansion in European countries that have gone down that road.

Instead of echoing Republican messaging, which suggests the deficit should be the government’s top concern, Obama should be out there making the case for more spending on job creation and economic relief (such as unemployment benefits, which yield more stimulus “bang for the buck” than most forms of government spending). He should also demand more federal fiscal aid to the states, particularly through the Medicaid program. If Congress cuts off further support now, state budget cuts could cost this country nearly a million jobs, according to Nicholas Johnson of the Center on Budget and Policy Priorities:

The [National Governors Association (NGA) and the National Association of State Budget Officers (NASBO)] report shows that federal Recovery Act [2009 stimulus bill] assistance has greatly helped states deal with their shortfalls in a responsible, balanced way. But that assistance will largely run out by the end of December, halfway through states’ fiscal year and long before state budgets are expected to recover.

In the year ahead, state budget-closing actions could cost the economy up to 900,000 public- and private-sector jobs without more federal help. When states cut spending, they lay off teachers and police officers and cancel contracts with vendors. The impact then ripples through the wider economy as laid-off workers spend less at local stores, putting more jobs at risk.

If Obama stakes his presidency on bringing down the budget deficit in the short term, he may be looking for a new job in 2013.

LATE UPDATE: Chris Hayes wrote a good piece for The Nation called “Deficits of Mass Destruction”:

Nearly the entire deficit for this year and those projected into the near and medium terms are the result of three things: the ongoing wars in Afghanistan and Iraq, the Bush tax cuts and the recession. The solution to our fiscal situation is: end the wars, allow the tax cuts to expire and restore robust growth. Our long-term structural deficits will require us to control healthcare inflation the way countries with single-payer systems do.

But right now we face a joblessness crisis that threatens to pitch us into a long, ugly period of low growth, the kind of lost decade that will cause tremendous misery, degrade the nation’s human capital, undermine an entire cohort of young workers for years and blow a hole in the government’s bank sheet. The best chance we have to stave off this scenario is more government spending to nurse the economy back to health. The economy may be alive, but that doesn’t mean it’s healthy. There’s a reason you keep taking antibiotics even after you start to feel better.

And yet: the drumbeat of deficit hysterics thumping in self-righteous panic grows louder by the day.

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Is Larry Summers on the way out?

The Atlantic’s Joshua Green thinks so:

I think Summers is going to leave sooner rather than later, possibly before the mid-term elections, and if not then, soon afterward.

Why? Because Summers is frustrated by his role, and his colleagues are clearly frustrated with him. Alexis Simendinger had a devastating item in last week’s National Journal suggesting that Summers’s “legendary self-regard” and “ego the size of the national debt” had gotten out of control. Some of Summers’s frustration no doubt stems from his wanting to be Treasury secretary. When that plum went to Geithner, Summers cast his eye on the Fed chairmanship and agreed to bide his time until Ben Bernanke’s term ended at the NEC–a staff position well below his old job as Clinton’s Treasury secretary. Most administration officials tactfully avoid pointing this out, because Summers has a fragile ego. But that’s why Joe Biden is so great. “How many former Secretaries of the Treasury would come in not as Secretary of the Treasury?” Biden blurted out to the New Yorker’s Ryan Lizza last fall.

But Summers didn’t get the Fed job either. Apparently that didn’t sit well. Administration insiders told Simendinger that Summers demanded a series of perks as compensation, including cabinet status, golf dates with the president, and a personal car and driver. In the “No Drama” Obama administration, such behavior stands out.  […]

Summers always seemed a bad fit for NEC director because the job entails dispassionately presenting the president with the counsel of his competing economic advisers. Summers doesn’t do “dispassionate” and he didn’t want to limit himself to fielding others’ advice–he had plenty of his own to offer. In other words, he was supposed to be the referee, but he also wanted to play power forward.

Summers was one of President Obama’s worst appointments, in my opinion, but I wouldn’t expect the president to reshuffle his economic team unless a mostly-jobless recovery continues, or the worst-case scenario of a douple-dip recession develops. Anyway, Summers’ departure wouldn’t herald a real change in economic policy if Green is right about Timothy Geithner being “ever more secure at Treasury.”

What do you think, Bleeding Heartland readers?

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Past time for Geithner to go

UPDATE: Cenk Uygur asks and answers a very good question: Why is Fox News leaving Geithner alone?

Let’s hope the latest scandalous revelation about Timothy Geithner will bring a rapid end to his service as Treasury secretary:

Jan. 7 (Bloomberg) — The Federal Reserve Bank of New York, then led by Timothy Geithner, told American International Group Inc. to withhold details from the public about the bailed-out insurer’s payments to banks during the depths of the financial crisis, e-mails between the company and its regulator show.

AIG said in a draft of a regulatory filing that the insurer paid banks, which included Goldman Sachs Group Inc. and Societe Generale SA, 100 cents on the dollar for credit-default swaps they bought from the firm. The New York Fed crossed out the reference, according to the e-mails, and AIG excluded the language when the filing was made public on Dec. 24, 2008. The e-mails were obtained by Representative Darrell Issa, ranking member of the House Oversight and Government Reform Committee.

The New York Fed took over negotiations between AIG and the banks in November 2008 as losses on the swaps, which were contracts tied to subprime home loans, threatened to swamp the insurer weeks after its taxpayer-funded rescue. The regulator decided that Goldman Sachs and more than a dozen banks would be fully repaid for $62.1 billion of the swaps, prompting lawmakers to call the AIG rescue a “backdoor bailout” of financial firms.

“It appears that the New York Fed deliberately pressured AIG to restrict and delay the disclosure of important information,” said Issa, a California Republican. Taxpayers “deserve full and complete disclosure under our nation’s securities laws, not the withholding of politically inconvenient information.” […]

Barney Frank, a Massachusetts Democrat and chairman of the House Financial Services Committee, said the e-mail exchanges were “troubling” and that he supports holding congressional hearings to review them.

I’ve been hoping for the last year that President Obama would ditch Geithner sooner rather than later. President Obama didn’t react publicly to the November report from the Office of the Special Inspector General for the Troubled Asset Relief Program, which slammed Geithner’s conduct during the AIG bailout. But it’s clear that Geithner wasn’t looking out for the public interest in his last job and never should have been promoted to his current position.  

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Year in review: national politics in 2009 (part 1)

It took me a week longer than I anticipated, but I finally finished compiling links to Bleeding Heartland’s coverage from last year. This post and part 2, coming later today, include stories on national politics, mostly relating to Congress and Barack Obama’s administration. Diaries reviewing Iowa politics in 2009 will come soon.

One thing struck me while compiling this post: on all of the House bills I covered here during 2009, Democrats Leonard Boswell, Bruce Braley and Dave Loebsack voted the same way. That was a big change from 2007 and 2008, when Blue Dog Boswell voted with Republicans and against the majority of the Democratic caucus on many key bills.

No federal policy issue inspired more posts last year than health care reform. Rereading my earlier, guardedly hopeful pieces was depressing in light of the mess the health care reform bill has become. I was never optimistic about getting a strong public health insurance option through Congress, but I thought we had a chance to pass a very good bill. If I had anticipated the magnitude of the Democratic sellout on so many aspects of reform in addition to the public option, I wouldn’t have spent so many hours writing about this issue. I can’t say I wasn’t warned (and warned), though.

Links to stories from January through June 2009 are after the jump. Any thoughts about last year’s political events are welcome in this thread.

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