As Sen. Sam Ervin completed his 20-year Senate career in 1974 and issued his final report as chairman of the Senate Watergate committee, he posed the question: "What was Watergate?"Countless answers have been offered in the 40 years since June 17, 1972, when a team of burglars wearing business suits and rubber gloves was arrested at 2:30 a.m. at the headquarters of the Democratic Party in the Watergate office building in Washington. Four days afterward, the Nixon White House offered its answer: "Certain elements may try to stretch this beyond what it...
'We need to legislate and we need to do things quickly,' Dianne Feinstein said.
ABOARD AIR FORCE ONE -- The White House is denying claims from Republican Sen. John McCain that it orchestrated leaks of classified information to news organizations to boost President Barack Obama's national security reputation and re-election chances.
White House press secretary Jay Carney says any claim of leaks for political gain is "grossly irresponsible."
Referring to McCain by name, Carney says the Obama administration always takes proper precautions to prevent leaks of information that could harm ongoing counterterrorism or intelligence operations. He spoke to reports traveling with Obama to the West Coast on Wednesday.
A day earlier, McCain had accused the Obama administration of selectively leaking classified data on a computer virus attack on Iran and CIA drone strikes.
Obama defeated McCain to win the presidency in 2008.
ON Friday night, the nation's capital was under a tornado watch. And that was the best thing that happened to the White House all week.As the president was being slapped by Mitt Romney for being too weak on national security, he was being rapped by a Times editorial for being too aggressive on national security.A Times article by Jo Becker and Scott Shane revealed that the liberal law professor who campaigned against torture and the Iraq war now personally makes the final decisions on the "kill list," targets for drone strikes. "A unilateral campaign of death...
Re-printed from Predator Nation: Corporate Criminals, Political Corruption, and the Hijacking of America; Copyright © 2012 by Charles Ferguson. Published by Crown Business, a division of Random House, Inc.
Many people who saw my documentary film about the 2008 economic crisis, Inside Job, found that the most surprising, and disturbing, portion of the film was its revelation of widespread conflicts of interest in universities, think tanks, and among prominent academic experts on finance, economics, business, and government regulation. Viewers who watched my interviews with eminent professors were stunned at what came out of their mouths.
Over the last thirty years, in parallel with deregulation and the rising power of money in American politics, significant portions of American academia have deteriorated into "pay to play" activities. These days, if you see a famous economics professor testify in Congress, appear on television news, testify in a legal case or regulatory proceeding, give a speech, or write an opinion article in the New York Times (or the Financial Times, the Wall Street Journal, or anywhere else), there is a high probability that he or she is being paid by someone with a big stake in what's being debated. Most of the time, these professors do not disclose these conflicts of interest, and most of the time their universities look the other way. Increasingly, professors are also paid to testify for defendants in fraud trials, both civil and criminal. The pay is high -- sometimes a quarter of a million dollars for an hour of congressional testimony. But for banks and other highly regulated industries, it's a trivial expense, a billion or two a year that they barely notice; and just as with politicians, it's a very good investment, with very high benefits.
Academics on industry payrolls are now so numerous and powerful that they can often prevent universities, professional associations, and academic journals from adopting or enforcing strong conflict-of-interest policies. They also have a chilling, even dominant, effect on several areas of academic research and policy analysis.
The sale of academic "expertise" for the purpose of influencing government policy, the courts, and public opinion is now a multibillion-dollar business. Academic, legal, regulatory, and policy consulting in economics, finance, and regulation is dominated by a half dozen consulting firms, several speakers' bureaus, and various industry lobbying groups that maintain large networks of academics for hire specifically for the purpose of advocating industry interests in policy and regulatory debates.
These consulting firms are not like McKinsey or the Boston Consulting Group. They do not exist to help companies make better products or operate efficiently. Their principal focus is on helping companies avoid or influence legislation, public debate, regulation, prosecution, class-action lawsuits, antitrust judgments, and taxes. The largest academic regulatory consulting firms are the Berkeley Research Group, the Analysis Group, the Brattle Group, Criterion, Compass Lexecon, and Charles River Associates. All have relationships with many prominent academics. Their combined academic roster is around one thousand, and their combined revenues are certainly well over $1 billion per year. (Most are private and don't release revenue information.) In some cases, they include a majority of the prominent academics in important policy-related fields, such as antitrust policy and the economics of regulation.
But how important and influential are these people and their relationships? Let's take two examples, one Republican and one Democratic: Glenn Hubbard and Larry Summers.
R. Glenn Hubbard became dean of Columbia Business School in 2004, shortly after leaving the George W. Bush administration, where he was chairman of the White House Council of Economic Advisers from 2001 through 2003. Hubbard has a PhD from Harvard and has taught at Columbia since 1988. Hubbard is co-chairman of the Committee on Capital Markets Regulation, a nonprofit organization that serves as a de facto public policy lobbying organization for Wall Street.
Much of Hubbard's academic work has been focused on tax policy. A fair summary is that he has never seen a tax he would like, particularly one on corporations or the wealthy. He was deeply involved in designing the Bush administration's tax cuts in 2003, which heavily favored the wealthy; half of their benefits went to the wealthiest 1 percent of the population.
Hubbard also coauthored an astonishing article with William C. Dudley in November 2004. The article, entitled "How Capital Markets Enhance Economic Performance and Facilitate Job Creation," was published by the Goldman Sachs Global Markets Institute. Dudley, his coauthor, was the chief economist at Goldman Sachs at the time. In 2009, when Tim Geithner became Obama's treasury secretary, Dudley succeeded Geithner as president of the Federal Reserve Bank of New York; he's still there. This should not reassure you. But neither should the fact that Glenn Hubbard remains dean of Columbia Business School.
Their article would be kind of funny, if it weren't deadly serious. Remember, this is November 2004, with the bubble well under way.
- "The ascendancy of the US capital markets . . . has improved the allocation of capital and risk throughout the US economy. . . . [The benefits include] enhanced stability of the US banking system . . .more jobs and higher wages . . . less frequent and milder [recessions] . . . a revolution in housing finance."
- "The capital markets have helped make the housing market less volatile. . . . 'Credit crunches' of the sort that periodically shut off the supply of funds to home buyers, and crushed the homebuilding industry . . . are a thing of the past."
- "The revolution in housing finance has also led to another radical transformation that has been important in making the economy less cyclical."
- "We believe that the economic performance of the United States over the past decade provides strong evidence of the benefits of well-developed capital markets."
Hubbard refused to say whether he was paid to write the article. He also refused to provide me with his 2001 federal financial disclosure form (from when he entered the George W. Bush administration), which we could not obtain otherwise, because the White House had already destroyed it. Hubbard also refused to identify most of his private consulting clients. He is currently on the boards of MetLife, ADP, Inc., KKR Financial Corporation, and BlackRock Closed End Funds. In 2010, the first three paid him $707,000 in cash and stock. Consulting/advisory relationships listed on Hubbard's CV include Nomura Holdings, Bank of America, Capital Research, Citigroup, Fidelity,
Franklin Resources, JPMorgan Chase, Visa, Laurus Funds, Chart Venture Partners, and Ripplewood Holdings. Until January 2009, he was also on the board of Capmark, a major player in commercial real estate during the bubble that went bankrupt after the crisis.
Hubbard was paid $100,000 to testify for the criminal defense of two Bear Stearns hedge fund managers prosecuted in connection with the bubble, who were acquitted. That assignment came through the Analysis Group, one of the large economic consulting firms mentioned earlier. Hubbard's Columbia web page lists the Analysis Group as a consulting client but does not list the ultimate, real clients for whom he worked via this relationship. Nor does his Columbia web page list his paid speaking engagements. However, satisfied clients giving public testimonials to Hubbard's speaking abilities include the Alternative Investment Group, BNP Paribas, the Massachusetts Bankers' Association, and Barclays Bank.
In 2011, Hubbard became a senior economic advisor to Mitt Romney's presidential campaign.
Larry Summers, who is undeniably brilliant, became a full professor at Harvard at a very young age and by now has held almost every important government position in economics. After being chief economist of the World Bank, he became, successively, undersecretary of the treasury for international affairs, deputy treasury secretary, and finally treasury secretary in the Clinton administration. He then became president of Harvard, his candidacy championed by Robert Rubin, until Summers was forced out in 2006. In 2009 he became director of the National Economic Council in the Obama administration; he returned to Harvard in 2011 as a professor at the John F. Kennedy School of Government.
At the World Bank, Summers authorized a memo suggesting that wealthy nations should export pollution to the poor; when president of Harvard, he suggested that women might be innately inferior to men in scientific reasoning. Then there were his policy choices: remaining entirely silent about the abuses within investment banking that furthered the Internet bubble; working with Robert Rubin and Alan Greenspan to repeal the Glass-Steagall Act and then to ban regulation of all privately traded derivatives.
When Summers became president of Harvard, he also started consulting to, and making speeches for, financial services firms. Because Harvard, along with most other major universities, does not require its faculty (or its presidents) to disclose outside income, we do not know how much Summers made. Even now, his Harvard Web page lists none of his consulting clients or speaking engagements.
Most of our information about his outside activities at Harvard comes from his mandatory federal disclosure form. (Like Summers himself, Harvard's president and provost declined to be interviewed for my film and also declined to respond to written questions.) Shortly after he was forced to resign as president and returned to being a professor, Summers agreed to work one day a week at D. E. Shaw, a large hedge fund, which paid him over $5 million in the year before Summers entered the Obama administration in 2009.
Summers's 2009 federal disclosure form stated his net worth to be $17 million to $39 million. His total earnings in the year prior to joining the administration were $7,813,000. He made $1,729,000 from thirty-one speaking engagements, nearly all for financial services companies; Goldman Sachs paid him $135,000 for one speech. He was also paid $45,000 by Merrill Lynch for a speech on November 12, 2008 -- after Merrill had completely collapsed financially, and one week after Obama's election. After questions were raised, Summers donated the Merrill Lynch fee to charity.
In the Obama administration, Summers opposed strong measures to sanction bankers or curtail their income. He has never apologized for any of the decisions or statements he made between 1995 and 2006.
And as of early 2012, the web page on his speaking agent's website included testimonials about Summers from seven clients. All but one (Regent University) were financial; they included the Texas Pacific Group, the Chinese Finance Association, Charles River Ventures, and Institutional Investor magazine.
Before 9 a.m., a group of lobbyists began showing up at the White House security gates with the chief executives of their companies, all of whom serve on President Obama’s jobs council, to be checked in for a roundtable with the president.
The 162-year-old border war between Missouri and Kansas heated up again this week as Show Me State lawmakers voted three times to ban a Kansas logo from their Missouri license plates.
A bipartisan team of Missouri lawmakers proposed amendments to three separate bills to prohibit the University of Kansas' Jayhawk logo from being displayed on Missouri plates, a request made by KU's alumni association. The effort is the latest in a war between the two states which began over slavery issues in 1850 and continues today over college athletics, jobs and almost anything else.
"Like generations of Missourians before us, we face an incursion from the west," Missouri Rep. Stephen Webber (D-Columbia) said on the House floor Tuesday. "It will be repulsed. This is the effort to affix the dreaded, disgusting Jayhawks symbol to our Missouri license plates."
Webber has joined Missouri Rep. Caleb Jones (R-California) to push the legislation. Webber told HuffPost that the actual amendment does not single out KU or Kansans, but rather mandates legislative approval before issuing any university-related license plates. Currently, specialty plates can either be approved by the Legislature or by petition to the state revenue department. KU alums filed a petition on the subject prompting the move by Jones and Webber, whose district encompasses the University of Missouri campus.
In order to make the measure a state law, Webber said he and Jones have affixed the measure to various bills on the House floor to ensure it passes the House and Senate, and gets to Gov. Jay Nixon's desk. Three of those have passed through the House.
"We are getting it on everything," Webber told HuffPost, noting the amendments passed each time.
Webber said that he and Jones are trying to joke about the subject, but the Missouri-Kansas rivalry is serious business between the two states. It has turned primarily into a sports rivalry between KU and University of Missouri in both football and basketball. Mizzou's football team has historically ranked higher than KU's, while KU's men's basketball team has been superior to Mizzou's, but the sports war is likely coming to an end as KU has changed conferences and will not play Mizzou.
"It is exceptionally insulting this year," Webber said Tuesday. "This year is the year that those folks to the west after 120 years of competition have decided not to meet our teams on the field of competition. I don't like KU on any circumstances. This year that they can't find the heart and courage to play us, is the year they want to add something to our license plates. Not if this Legislature has anything to do about it."
Webber did say that if KU is willing to play Mizzou again, he would sponsor legislation to allow the plates.
The Missouri measure has managed to unite Democratic and Republican lawmakers in the Republican-dominated Kansas Legislature. Kansas Rep. Brett Hildabrand (R-Merriam) said that as a Kansas State University alum he can understand rivalry with KU, but he is standing behind his home state. He said he is prepared to file similar legislation if Mizzou alums attempt to place their logo on Kansas plates.
Kansas Rep. Mike Slattery (D-Mission) joined his GOP colleague in attacking their neighbors to the east. "That is the most ridiculous display and a waste of time," Slattery said with a laugh. "If that is the most important thing they can do in Missouri, then go for it. We have been taking Missouri jobs for years. If they want to stop the license plates as a form of payback, then so be it."
During last week's debate over allowing local school districts to hold referendums on student activity fees, Kansas lawmakers took several swipes at Missouri, including comments that Missourians are fleeing to the Sunflower State for better schools and jobs.
Webber told HuffPost that he believes the feuding will continue, even if the sports rivalry ends. "We've been fighting since 1850, we just need something to fight about," he said.
DENVER -- Supporters of traditional marriage rallied at the Colorado Capitol as tensions remained high one day after state Republicans rejected civil unions legislation.
Dozens of people on Tuesday cheered Republican lawmakers and thanked state House Speaker Frank McNulty, who assigned the civil unions bill Monday to a Republican-led House committee sure to defeat the legislation.
A man with a horn heckled McNulty as he urged the crowd to carry the "message throughout the state of Colorado that we will protect families."
At the same time, Democrats blasted McNulty for the demise of the bill and another proposal that would ask voters to repeal three laws that have been ruled unconstitutional. They related to campaign finance and to a 1992 voter-approved ban on cities passing anti-discrimination laws to protect gays.
Today the House is planning to take up H.Res.568 -- a resolution that shifts the U.S. redline for war with Iran -- on a suspension vote. There has not been a single hearing on this measure and no debate about its very serious implications.
If passed, the House will be voting to contradict the unequivocal redline established by the President just one week before the U.S. enters crucial negotiations with Iran. The President reiterated his redline most recently at this year's AIPAC conference in Washington, where he stated:
"Iran's leaders should understand that I do not have a policy of containment; I have a policy to prevent Iran from obtaining a nuclear weapon."
Some cosponsors of this resolution have been mistakenly convinced that it merely restates the President's position ruling out containment of a nuclear-armed Iran. This is completely false. In reality, this resolution endorses a lower threshold for military action by stating that the United States cannot contain a nuclear weapons capable Iran.
The President and the Administration have deliberately never used the "capable" phrasing when articulating its redlines because, as it stands, this term has no definition. In theory, it would apply to any country with a civilian nuclear program, including Japan, Brazil, and the Netherlands. It is dangerous and irresponsible to stake the question of war on such uncertain footing.
Had there been a hearing on this resolution, the House could have established what is the definition of "nuclear weapons capability." But instead of committing due diligence to ensure the U.S. is speaking in unified voice and conveying clear redlines to Tehran, the House is moving to play spoiler.
This measure comes at an incredibly inopportune and sensitive time considering U.S. diplomatic efforts. The U.S. and Iran are scheduled to hold negotiations on May 23, along with the rest of the P5+1 (Permanent 5 Security Council members plus Germany). These talks hold the potential to achieve real progress in achieving near-term curbs on Iran's nuclear program--with Iran's Supreme Leader for the first time publicly endorsing negotiations and signaling that Iran is prepared to make key concessions to cap its enrichment in accordance with U.S. national security interests.
This resolution could poison those talks by signaling to Iran that the President is weak, domestically isolated, and unable to deliver at the negotiating table because a hawkish Congress will overrule him. Perhaps this is good politics for some, but it is disastrous policy for U.S. national security interests. It gives Iran little incentive to finally make hard fought concessions. It also fuels Tehran's paranoia that the U.S. is committed to war and regime change regardless of whether Iran's nuclear program is for military or civilian purposes.
Finally, there are legitimate concerns that this resolution could be construed as an authorization for the use of force. Given H.Res.568's unambiguous statement ruling out containing a nuclear weapons-capable Iran, the measure should, at the absolute minimum, clarify that it is not an authorization for force. This was the subject of intense debate before the companion resolution was first introduced in the Senate, and ultimately the measure's supporters refused to include clarifying language that it is not an authorization for war. Step by step, Congress appears to be backing the U.S. into a war of choice.
Last year, as the federal government approached a limit on how much it could legally borrow, the Obama administration asked Congress to rubber-stamp an increase in the government's borrowing authority without any spending cuts to match.When House Republicans made clear that any increase in the debt limit must be accompanied by an even greater amount of spending reduction, the President insisted that he would not accept a debt-limit deal that did not include large tax increases on American families and businesses.All of this work was made more difficult by the Senate's failure to...
National Right to Life Committee: The Obama White House recognizes a "baby that has not been born" for security purposes.
The National Right to Life Committee cried foul on Tuesday after it obtained an email from an Obama administration aide asking future White House visitors to provide information about their unborn babies. In a news release, the anti-abortion group said the policy was hypocritical because of the Obama administration's support for abortion rights. "Obama White House recognizes ‘baby that has not been born’ for White House security purposes, but tolerates legal abortion to moment of birth in District of Columbia," the May 8, 2012, news release said. The release ...>> More
Conservative activist James O'Keefe spoke to a packed house of Seacoast Republicans Sunday not in person, but rather on streaming video because stepping foot in New Hampshire would trigger a criminal grand jury subpoena.
WASHINGTON -- With Socialist leader Francois Hollande likely to become the next president of France, Europe's hot populist anger is about to confront the cold austerity measures required by the eurozone, with a predictable result: a storm that rattles the foundations of the European economic house.Financial traders and treasury ministers this week are debating just how much damage this political-economic collision will bring. Some argue that it could take down the structure entirely. Others insist that Germany, for all its insistence on austerity, will never let the structure collapse --...
WASHINGTON -- In a sign that Democrats may consider getting on board with Sen. Marco Rubio's Dream Act-style legislation, three leading Latino members of Congress plan to meet with Rubio Wednesday afternoon.
Sen. Robert Menendez (D-N.J.) and Reps. Charles Gonzalez (D-Texas) and Luis Gutierrez (D-Ill.) will meet with Rubio (R-Fla.) around 3 p.m. to hear more about his plan, a senior Democratic aide told HuffPost. The aide spoke on condition of anonymity because the members of Congress had agreed not to publicize the meeting.
Under discussion will be Rubio's "Dream Act," a term appropriated from a long-standing bill supported by Democrats. Both bills would be aimed at undocumented immigrants who entered the United States as children, and would allow some to stay if they kept a clean criminal record and joined the military or attended college.
Menendez, Gonzalez and Gutierrez all support the Dream Act that passed the House in 2010 but was defeated in the Senate 55-41, with three Republicans supporting and five Democrats defecting to vote against the measure.
But that bill, which was initially introduced more than a decade ago with bipartisan support, has become politicized as "amnesty" because it would allow some undocumented young people to receive green cards and possibly citizenship if they completed government requirements. Republican presidential candidate Mitt Romney, whom Rubio endorsed, said in December that he would veto that Dream Act. Romney said Monday that Rubio's bill has "many features to commend it," but that he will need to see more details before giving full support.
Rubio's framework -- he has not yet introduced a bill -- would not provide a path to permanent residency or eventual citizenship, which immigrant rights groups said would undercut the purpose of the Democrat-supported Dream Act.
Of course, holding a meeting doesn't necessarily mean the members of Congress would sign on to Rubio's bill.
Grijalva told MSNBC last week that Rubio's plan would create a "second class" because it would allow some undocumented immigrants to stay, but with few options for ever becoming citizens.
Earlier on Wednesday, Gutierrez did not comment on whether there would be a meeting but told HuffPost he had two questions about the Rubio legislation: whether it would stop deportation of those young people and whether it could pass.
"Most importantly, does he have 10 Republican senators?" Gutierrez said. "We know we got 55 the last time, do you have another 10?"
Last night I joined Rachel Maddow to talk about Mitt Romney's evolving views on Afghanistan. At various times, Romney has said we needed to get out of the Afghanistan mess, agreeing for the most part at the time of early GOP debates with House Representative and then presidential candidate Michele Bachmann until shifting to a harder-line posture on staying in Afghanistan.
Romney, who has endorsed the general time frame of closing down most of the US mission in Afghanistan at the end of 2014 has been critical of Obama's decision to drawdown the committed surge forces and bringing levels to 68,000. Obama -- acting like a Commander-in-Chief should listened to the advice of 'the generals' and then made a decision based on larger strategic factors and ordered that the surge troops be drawn out. Romney has implied that Obama should not only 'listen to the generals' but should do what they tell him.
Romney might want to go back and read testimony given by former ISAF Commander General David Petraeus about Afghanistan before Congress in which Petraeus said that the recommendations he was making were based on factors inside and related to Afghanistan alone -- but were not taking into account the larger "strategic situation." Petraeus shied away from giving a strategic assessment of the value of Afghanistan in relation to other matters like America's posture with Iran, with the broader Middle East, with stability dynamics in South Asia -- particularly with Pakistan and India.
Obama and his national security team lead by Tom Donilon and Denis McDonough have committed to a strategic rebalancing of US forces and long-term commitments. They are working to downsize America's vulnerability to the instability and challenges in the Middle East and South Asia which are sapping American resources and power and deploy to where global economic growth is shifting: Asia.
If Mitt Romney re-reads his Citadel speech and checks out the Asia sections, he agrees that Asia needs more attention.
The clip of my discussion with Rachel Maddow follows below:
Rachel Maddow talks to Atlantic editor-at-large Steve Clemons about whether John McCain is pushing Mitt Romney into more hawkish, never leave Afghanistan position
While I have largely dismissed the foreign policy competence and coherence of Mitt Romney's strategic vision in the past, I'm seeing Romney up his game in a few hires he has made.
First of all, the Romney team has brought on board former Department of State Under Secretary for Global Affairs Paula Dobriansky to play a lead role on shaping his national security and foreign policy agenda and positions. Dobriansky, who until recently was a senior executive with ThomsonReuters and once was Vice President and Director of the Washington operations for the Council on Foreign Relations, is a formidable and creative public intellectual. I'm not sure she wrote the piece, but one could sense a different hand -- probably Paula Dobriansky's by my guess -- behind the interesting Mitt Romney Foreign Policy magazine oped, "Bowing to the Kremlin", in which he challenged Obama's caught-on-mic comments to Russian President Dmitry Medvedev on ballistic missile defense.
The essay was tough-minded, internally consistent and coherent, and a real contrast to other Romney foreign policy commentary.
The next big hire that I mentioned to Rachel Maddow last evening was that Ric Grenell, a long time communications expert who served as spokesman for four US Ambassadors to the United Nations, is now Romney's national security spokesman. Grenell worked for former Senator Jack Danforth at the UN; then John Negroponte; then the affable John Bolton; and finally Zalmay Khalilzad. During the long battle over John Bolton's Senate confirmation vote which he never received, Grenell was a tireless, tenacious, tough advocate for Bolton with the media. I was one of those skeptical of John Bolton's UN confirmation, but I give Grenell credit for being fair-minded and serious with me.
Foreign policy pundits and analysts are now going to have to reconsider Romney on foreign policy and national security and consider his positions more seriously.
Presidents aren't just people -- they are franchises. And with Dobriansky and Grenell, Romney has upped the stock value of his foreign policy operation.
They'll Call It RacistA no-brainer. Who else rushes so eagerly to exploit and worsen every inflammatory racial situation going? Who else"”after the notorious Tawana Brawley hoax (in which he falsely accused six white men of raping a 15-year old black girl); and the racial conflagration in Crown Heights, Brooklyn (where a Jew was stabbed to death after he inflamed local blacks byÂ proclaiming, "If the Jews want to get it on, tell them to pin their yarmulkes back and come over to my house,"); and the Freddy's Fashion Mart tragedy (wherein...
I have explained why I believe there may be a U.S. recession this year, spurred by renewed consumer retrenchment amid further declines in house prices, stagnant incomes and uncertain job prospects. So why are investors continuing to show such an appetite for equities?Stocks have been volatile: Over the past month, the Standard & Poor's 500 (SPX) Index had three trading days when gains exceeded 1 percent and three when losses exceeded 1 percent. And major stock indexes dropped sharply in the early days of April. Â
GREENSBORO, N.C. -- After years of investigation, denials and delays, jury selection was set to begin Thursday for the criminal trial of former presidential candidate John Edwards.
Edwards was expected inside a Greensboro, N.C., courtroom to face six criminal counts related to nearly $1 million in secret payments made by two campaign donors to help hide the married Democrat's pregnant mistress as he sought the White House in 2008.
The money flowed to Andrew Young, a former campaign aide who initially claimed the baby was his. Young is expected to be a key witness for the prosecution. The mistress, Rielle Hunter, may testify as part of Edwards' defense.
Following years of adamant public denials, Edwards acknowledged paternity of Hunter's daughter in 2010.
The trial is expected to last about six weeks.
A key issue will be whether Edwards knew about the payments made on his behalf by his national campaign finance chairman, the late Texas lawyer Fred Baron, and campaign donor Rachel "Bunny" Mellon, an heiress and socialite who is now 101 years old. Both had already given Edwards' campaign the maximum $2,300 individual contribution allowed by federal law.
Edwards denies having known about the money, which paid for private jets, luxury hotels and Hunter's medical care. Prosecutors will seek to prove he sought and directed the payments to cover up his affair, protect his public image as a "family man" and keep his presidential hopes viable.
If convicted, Edwards faces a maximum penalty of 30 years in prison and as much as $1.5 million in fines.
Edward DeMarco is the beleaguered bureaucrat in charge of an agency called the FHFA. And because the FHFA is now managing Fannie Mae and Freddie Mac, DeMarco's charge of most American mortgages. He's been the target of resignation demands for weeks. Everyone from Tim Geithner on down - and therefore presumably the President, too - has fingered DeMarco as the one person standing in the way of relief for millions of American homeowners.
DeMarco's still an unelected ideologue with too much power, and he still needs to go. But today, after remaining silent and refusing to share some of his technical information with members of a Congressional oversight committee, the previously Garbo-esque Ed DeMarco finally spoke up today. His speech at the Brookings Institution was technical in nature, but to anyone with the right political or emotional closed-captioning device the message was loud and clear: Don't rush me, Mr. President - and find yourself another fall guy.
And to anyone who's underwater on a mortgage the message was even clearer: You're not getting much help from me.
Using material from his prepared text, we now present the remarks of Edward DeMarco - with closed captioning provided for the mortgage impaired:
WHAT DEMARCO SAID:
"I will not be announcing any conclusions today - our work is not yet complete - "
WHAT HE MEANT (closed captioning):
What's the hurry? It's only been three years, eleven million underwater mortgages, and lost housing value that exceeds seven trillion dollars. We'll get around to it eventually. I promise.
WHAT DEMARCO SAID:
" ...but in view of the state of the public policy debate on this subject ..."
WHAT HE MEANT:
The public pressure is finally getting to me ... and maybe even to my political patron on Capitol Hill, Sen. Richard Shelby.
(Shelby's the Republican from Alabama who has abused Senatorial privilege for three years by refusing to allow a hearing on Obama's nominee for DeMarco's position as head of the FHFA. That's left DeMarco in place as Acting Director for quite a while now.)
WHAT DEMARCO SAID:
" ... , I am pleased to have this venue to enhance the public understanding of this difficult question and to explain how FHFA has approached the matter."
WHAT HE MEANT:
I'd rather sound like i'm glad for the chance to educate the public than like someone who's been getting heat for weeks now - heat that's finally getting to me.
WHAT DEMARCO SAID:
"I set the context by reviewing FHFA's legal responsibilities as conservator."
WHAT HE MEANT:
I took over Fannie and Freddie after Republicans and so-called "centrist" Democrats privatized them - an act which destroyed them when their greedy executives behaved like sheep and followed the irresponsible example of Wall Street's banks.
And I'm continuing to interpret my role as strictly one of restoring them to fiscal balance, not as that of someone who as a government official must also ensure they succeed in the mission for which they were created - which, as one of their websites tells us, is to "Meet the needs of the mortgage market by making homeownership and rental housing more affordable; Reduce the number of foreclosures; Helping families keep their homes."
That part doesn't interest me.
WHAT DEMARCO SAID:
"Clearly, many households got over-extended financially. Some accumulated debts they couldn't afford when hours or wages were cut or jobs were lost. Others withdrew equity from their homes as house prices soared. Others bought houses at the peak of the market, often with little money down, perhaps in the belief house prices would continue to climb ..."
WHAT HE MEANT:
... and they got what was coming to them. Bailing out these irresponsible so-and-so's would reward the undeserving - although it wasn't unreasonable to bail out the banks that persuaded them to do all the things I described, and which inflated the values of their homes and used deceptive booking to persuade many of them to do it.
WHAT DEMARCO SAID:
"Yet there are other Americans who did not do these things. There are families that did not move up to that larger house because they weren't comfortable taking the risk. Perhaps they had to save for college or retirement, and did not want to invest that much in housing."
WHAT HE MEANT:
So why rescue the gamblers and freeloaders? Of course I don't have any data to prove that struggling homeowners did anything wrong, but I have something better: ideology. With ideology you don't need proof.
WHAT DEMARCO SAID:
"And there are people working multiple jobs, or cutting back on the family budget in many ways, to continue making their mortgage payments through these tough times. Many of these families are themselves underwater on their mortgage, even though they may have made a sizeable down payment."
WHAT HE MEANT:
Your heroes, the very Administration that's demonizing me, only seems to be proposing that we help people who have actually gone delinquent on their mortgages. But that's not fair to all the underwater homeowners who haven't gone delinquent.
(He's got a point: From recent remarks on C-SPAN it's clear that HUD Secretary Shaun Donovan is focused only on reducing principal for delinquent borrowers and not anyone else. That's an approach which helps irresponsible banks but leaves the vast majority of duped homeowners high and dry - even when homeowners were duped into taking out loans that were too big by a bank that used dishonest appraisers. That's not fair - and suggests greater concern for bankers than for homeowners.)
WHAT DEMARCO SAID:
"Indeed, the majority of those most hurt by this housing crisis did nothing wrong - they were playing by the rules but they have been the victims of timing or circumstance or poor judgment."
WHAT HE MEANT:
I'm an ideologue, but I'm not a complete dick.
WHAT DEMARCO SAID:
"The first modification program the Enterprises use to evaluate a borrower is the Administration's Home Affordable Modification Program, or HAMP."
WHAT HE MEANT:
You know HAMP, don't you? That wildly unsuccessful program, the one that's helped banks and shafted a lot of homeowners? The one that's run by Tim Geithner, the guy who says I'm the problem?
If Geithner and the Administration are doing such a great job, then you should be pleased to know we're going right along with them. But if we're eff-ups, then they're eff-ups too.
WHAT DEMARCO SAID:
"While mortgages owned by other financial institutions or held in private label mortgage-backed securities have a much higher delinquency rate than those owned or guaranteed by the Enterprises, the Enterprises have been leading national foreclosure prevention efforts."
WHAT HE MEANT:
We're a government enterprise, and we're running circles around the private sector when it comes to meeting our goals. There are some functions that government performs better. (Wait! That came out the wrong way. I didn't mean to say that!)
WHAT DEMARCO SAID:
"Fannie Mae and Freddie Mac own or guarantee 60 percent of mortgages outstanding but they account for only 29 percent of seriously delinquent loans ... "
WHAT HE MEANT:
And your pals in the White House aren't exactly sweating the banks over this stuff, are they? Just poor old Ed.
WHAT DEMARCO SAID:
"Foreclosure prevention efforts are not the only form of assistance to borrowers. For borrowers who are current on their loan and not in imminent default, FHFA worked with Treasury and the Enterprises to develop the Home Affordable Refinance Program (HARP)."
WHAT HE MEANT:
Like I was saying, Timmy Geithner's not carrying his weight around here. Why don't you liberals go sweat Timmy for a while and give me a break?
WHAT DEMARCO SAID:
"In the original HAMP, principal forgiveness has always been permitted, but was rarely used."
WHAT HE MEANT:
That's Geithner. G-E-I-T-H ...
DeMarco then provides some reports and statistics. He also suggests that their previous attempts to analyze the problem were inadequate and offers a glimpse of their new corrective methodology - methodology which still looks to me like it will understate the problem (e.g. he says they'll lower FICO scores for modeling purposes from what they were at the time the loan was issued - but only by 100 points, which doesn't seem like nearly enough to reflect the reduced circumstances of many underwater and struggling homeowners).
DeMarco continued to insist that his primary, if not only, responsibility is to cut Fannie and Freddie's losses. But that position was undercut by the fact that he acknowledged that relieving principal as the Administration has requested would save his enterprises $1.7 billion. Yet he says he's still studying the issue.
DeMarco's right about one thing: it's wrong to step in only when a loan is delinquent. Personally, I agree with Stephen Lerner: All eleven million underwater homeowners should be helped. That's been my position for a while now.
There may be as strong an economic case for helping them as there was for helping Wall Street - and morally the case is much, much stronger. On a practical note, not helping them creates the threat of increased delinquency that DeMarco says he's worried about - although he would probably not endorse this solution.
Sadly, the Administration doesn't appear to endorse it either. Until they do there will always be a structural flaw with anything they propose - a flaw which DeMarco has found and will probably continue to press them about.
One other point: Fannie and Freddie, and therefore the taxpayer, don't own all of these loans. They own some, and they guarantee others with taxpayer money. And every solution discussed so far uses taxpayer money to rescue banks from the fiscal consequences of their own bad behavior. That's a pattern that needs to change.
DeMarco wound up his remarks with these words (we now resume our closed captioning):
WHAT DEMARCO SAID:
"FHFA remains committed to working with the Administration and Congress on these difficult questions, recognizing our shared objective of preventing avoidable foreclosures, minimizing taxpayer losses, and bringing a greater measure of stability to housing markets across the country."
WHAT HE MEANT:
Asking banks to take responsibility for their actions in the mortgage market? That's not on my to-do list - and it doesn't seem to have much of a place on the Administration's, either.
WHAT DEMARCO SAID:
"Thank you for inviting me here today."
WHAT HE MEANT:
It sure beats talking to that Cummings guy. Now will you people please go bother Geithner for a while?
Richard (RJ) Eskow, a consultant and writer (and former insurance/finance executive), is a Senior Fellow with the Campaign for America's Future and the host of The Breakdown, broadcast Saturdays nights from 7-9 pm on WeAct Radio, AM 1480 in Washington DC.
Despite an idealistic vision of the country's devotion to the Constitution and its Bill of Rights amendments, it may come as a shock to any American who has not been paying attention that the US government has been conducting illegal unconstitutional surveillance on its citizens for much of the last hundred years.
In what may have been the country's earliest coordinated effort at unconstitutional snooping, a government agency ominously named Black Chamber was in cahoots with Western Union after WWI to retrieve copies of telegrams in violation of the Radio Communications Act of 1912 and the Fourth Amendment.
Once publicly revealed, the operation was shut down only to resurface in 1945 when the Army Signals Security Agency, predecessor to the NSA (National Security Agency) began Operation Shamrock with the interception of millions of international communications from a 'watch list' of Americans.
Assured by government promises of legal immunity, RCA, Western Union and ITT Communications had agreed to provide confidential information to the government's Military Intelligence Division despite a violation of the Communication Act of 1934 and the Fourth Amendment.
James Bamford's well-researched The Shadow Factory -- The Ultra-Secret NSA from 9/11 to the Eavesdropping on America describes the details of how Shamrock's existence was revealed in 1975 and that Rep. Bella Abzug (D-NY), known for her colorful chapeaux and equally colorful personality, opened an investigation as Chair of the House Government Information and Individual Rights subcommittee.
With a bee in her bonnet, subcommittee hearings were scheduled. Bamford goes on to chronicle the rest of the story on Shamrock, claiming that with White House Chief of Staff Donald Rumsfeld and Attorney General Edward Levi's encouragement, President Gerald Ford was willing to play hardball to protect the government's role in spying on Americans. After a series of high level bureaucrats including a personal visit by the Attorney General, failed to convince Abzug to cancel the hearings in the name of 'national security,' the three telecom companies, with encouragement from the White House, refused to testify. Upping the stakes, according to Bamford, both Levi and NSA Director Lew Allen also refused to testify.
By the time Abzug's subcommittee issued subpoenas to the absent CEOs, Rumsfeld had become Secretary of Defense and was replaced by Dick Cheney as WH Chief of Staff. Bamford goes on to examine the role of both Rumsfeld and Cheney as believers in vigorous executive privilege as they urged Ford to resist the subcommittee's requests while advising the CEOs to not comply with the subpoenas. In addition, Bamford states that "for the first time in American history, the concept of executive privilege was extended to a private corporation," as if private corporations had the same Constitutional rights as a president.
As the wheels of justice moved in reverse, a little known Assistant Attorney General in the Office of Legal Counsel at the Justice Department came to Rumsfeld and Cheney's attention for his confrontational style as he prepared incisive legal arguments in favor of continued warrantless surveillance and granting unrestricted rights to the Executive Branch. By 1986, Antonin "Nino" Scalia would be appointed to the Supreme Court on a 98-0 vote.
Never a shrinking violet or intimidated by authority, Abzug, a graduate of Columbia University Law School who represented victims of the McCarthy era in the 1950's, was fully aware of the Constitutional precedents at risk. Knowing that Ford Administration appointees would hide behind official 'classified' lingo promising to reveal all in a closed door session, Abzug understood the necessity of pushing back in the interests of public disclosure.
Once the subcommittee voted to issue contempt citations for its recalcitrant witnesses, the three CEOs testified as to their involvement with Shamrock and turned over lists of names, as the Ford Administration capitulated.
That same year, Sen. Frank Church's (D-Id) Senate Committee on Government Operations conducted historic hearings that revealed illegal intelligence gathering on American citizens by the CIA and FBI.
In response to the government's covert role revealed by both investigations. Congress adopted the Foreign Intelligence Surveillance Act (FISA) signed by Ford's successor, Jimmy Carter, in 1978. The Act, which did not apply to US citizens, provided much needed Judicial and Congressional oversight of the government's surveillance activities of foreign agents in the United States and created a Foreign Intelligence Surveillance Court (FISC).
Appointed by the Chief Justice and staffed by eleven judges to serve seven year terms, the Attorney General provides the Court with evidence to approve surveillance and the Court provides compliance reports to Congressional intelligence committees. From 1980 through 2006, the Court approved a total of 22, 985 surveillance warrants out of 22,990 requests. Since 1978, the Act appeared to function as expected until the Bush Administration launched an unprecedented assault on the civil liberties of American citizens with warrantless surveillance.
Bamford and others have described in detail how the Administration's wiretap program caught the attention of Assistant Attorney General Jack Goldsmith in 2004 when the obvious became apparent -- that the Bush warrantless surveillance program was illegal and unconstitutional. Goldsmith prepared a memo outlining his concerns as Deputy AG Jim Comey, the second highest law enforcement officer in the country, agreed that the program could no longer be certified by the Department of Justice. Sharing their conclusion with Attorney General John Ashcroft, it was decided to allow the program to terminate the next day.
What happened next was more dramatic than any West Wing script ever anticipated, when Ashcroft suddenly doubled over in pain. Rushed to George Washington Hospital, Ashcroft had major surgery for gallstone pancreatitis which left the AG in a seriously debilitated condition.
From there the story becomes more bizarre. Bamford describes how Comey, now acting in Ashcroft's absence, informed the White House that the Department would not re-authorize NSA's surveillance program. Faced with the potential of a shutdown at NSA as the deadline approached or the potential of criminal charges and seeing Comey as a 'loose cannon,' White House Chief of Staff Andrew Card and WH Counsel Alberto Gonzales made a frantic bee-line to the hospital.
As Comey headed home that evening, he received an urgent call from Mrs. Ashcroft that two visitors were on their way. Comey immediately called FBI Director Robert Mueller to meet him at the hospital and with red lights flashing and sirens wailing, Comey's FBI driver put the peddle to the metal. Running up the stairs and arriving in Ashcroft's room just ahead of the White House aides, Mueller ordered Comey's FBI security detail to not allow him to be removed from Ashcroft's room.
Upon Gonzales and Card's arrival, Ashcroft, still in a weakened condition, refused to sign the necessary document to continue the program.
According to Bamford, soon after, Comey received an irate call from Card demanding that he come immediately to the White House. Comey replied that he would only meet with Card if a witness was present. Accompanied by Solicitor General Ted Olson, Comey arrived at the White House at almost midnight and reiterated the Department's position that the NSA program was outside the law as he continued to refuse to authorize its existence.
The next day the President of the United States used his executive authority to reauthorize the warrantless surveillance program over his Attorney General's objections. As a result, Attorney General Ashcroft, both Comey and Goldsmith along with a handful of other Department of Justice attorneys and FBI Director Mueller all prepared their letters of resignation. After a one on one meeting with both Comey and Mueller, realizing the potential for an en masse resignation of the country's top law enforcement officials, Bush agreed to scrap the most egregious elements of NSA's illegal 'data mining.'
Beginning with adoption of the Patriot Act in 2001 (98-1) the floodgates opened for covert government surveillance not only for the NSA, FBI, CIA and Homeland Security but for hundreds of municipal and state governments, a green light to infiltrate and spy on millions of American citizens. All it took was a frightened bi-partisan majority to open the legislative doors to allow a steady erosion of Fourth Amendment protections against 'unreasonable search and seizure' and 'probable cause' requirements while fragmenting FISA's original intent of limited surveillance and required judicial and Congressional oversight.
For all of its good intentions in 1978, FISA has since been thrust into dangerous, uncharted territory morphing into a vehicle of unintended consequences, subject to a series of amendments in 2008 that further eviscerated the Fourth Amendment.
As already well-documented by Glenn Greenwald and the ACLU, the Obama administration has accelerated the erosion of due process and Constitutional protections beyond the Bush era even as candidate Obama promised that "with the firm intention -- once I'm in as president -- to have my attorney general conduct a comprehensive review of all our surveillance programs, and to make further recommendations on any steps needed to preserve civil liberties and to prevent executive branch abuse in the future."
Just as the Operation Shamrock experience instilled a lifelong passion in Cheney for omnipotent executive privilege, Jack Goldsmith resigned from the Department of Justice in 2004 with Jim Comey and John Ashcroft resigning soon after George Bush's inauguration in 2005. Robert Mueller remains FBI Director.
As the Act is due for reauthorization by December 31st it can be expected that legislative action will occur in the shadows of a lame duck session after the elections when what remains of the Act's original intent will be at its most vulnerable.
As the actions of fearless Members of Congress like Abzug and Church whose first priority was to truth and public servants like Jim Comey and Robert Mueller who stood, face to face, against a sitting President, is it too much to hope that somewhere there is a government official or two who might dig deep to find the courage and integrity to speak out, loud, clear and insistent, while there is still something of democracy worth saving?
On his congressional website, Rep. Paul Ryan, R-Wis., makes a striking claim that President Obama has doubled the size of goverment. Ryan, the chairman of the House Budget Committee, is perhaps the leading Republican voice for a fiscally conservative approach to taxing, spending and reducing the federal debt. So when a reader recently pointed out the doubling-government claim on a web page devoted to Ryan’s views on tax policy, we thought it was worth a look. Here’s an excerpt from the Web page: "At a time ...>> More
First dog Bo Obama takes his inspiration from the Easter Bunny, according to President Barack Obama's campaign.
Below, a tweet from @barackobama on Sunday and a picture of Bo included in the message.
Below, more details on the event via the White House website:
On Monday April 9, 2012, the First Family will host the 134th annual White House Easter Egg Roll. This year's theme is âLet's Go, Let's Play, Let's Moveâ and more than 35,000 people will be joining us on the South Lawn for games, stories, and, of course, the traditional egg roll on the Lawn.
WASHINGTON — Mitt Romney is starting to hone his appeal to female voters, acutely aware as he turns to the general election that he has little choice but to narrow President Barack Obama's commanding lead among this critical constituency.
None too soon, say many Republican activists. They expect Romney, as well as his popular wife, Ann, to make an explicit pitch to female voters on the economy and jobs, their top issues.
The eventual nominee "needs to start recognizing the power that women voters have," said Rae Lynne Chornenky, president of the National Federation of Republican Women.
Romney, on pace to clinch the nomination in June, if not earlier, acknowledges that the GOP faces a historical challenge in closing the advantage Democrats have with women. Like Obama, he sees pocketbook issues as the key to winning them.
"We have work to do to make sure we take our message to the women of America, so they understand how we're going to get good jobs and we're going to have a bright economic future for them and for their kids," Romney said this past week in Middleton, Wis.
By Friday, Obama was making the same argument at the White House, where he hosted a conference on women and the economy. He presented a full review of the administration's achievements on equal pay and workplace flexibility as new unemployment numbers showed an uptick in job creation.
"When we talk about these issues that primarily impact women, we've got to realize they are not just women's issues. They are family issues, they are economic issues, they are growth issues, they are issues about American competitiveness," said Obama, using his office to cast himself as a defender of women. His Democratic allies are putting it more bluntly, accusing Republicans of waging a "war against women."
Almost daily, the nation's political discourse features some echo of this battle for women's votes, whether from members of the House and Senate, the Democratic and Republican national committees or the presidential candidates.
Earlier this spring, the president called Georgetown University law student Sandra Fluke to reassure her after radio host Rush Limbaugh called her a "slut." She had testified to congressional Democrats in support of their national health care policy that would compel her school to offer health plans that cover her birth control. Republicans widely called Limbaugh's comments inappropriate.
On Thursday, Obama called for women to be accepted as members to the all-male Augusta National, home of the Masters golf tournament. Romney quickly followed his lead.
But the Republican's challenge is stark.
Romney must overcome history, political math and the missteps of a party that picked a fight over one provision of Obama's health care law and ended up on the defensive over access to birth control. Romney also has work to do with female voters after inconsistencies or misstatements on issues such as abortion and the future of Planned Parenthood.
Republicans have faced a "gender gap" since 1980, with women generally favoring Democratic candidates. A recent USA Today/Gallup poll found that gap lifts Obama to a lead across a dozen crucial states. The poll showed women favor Obama by 18 percentage points while men split about evenly between the two candidates. Taken together, that means women boost Obama to a 51-42 lead over Romney in those states.
There's evidence that Romney may have a steeper climb among women than Arizona Sen. John McCain, the GOP president nominee in 2008, faced.
Washington Post/ABC News polls at roughly the same point in the political calendar show McCain was viewed favorably by 47 percent of women at this time in 2008, while Romney currently stands at 30 percent favorable among women.
Romney is convinced that women, like men, will vote chiefly on Obama's stewardship of the nation's finances, so he tried to stay focused on the economy during this year's battle over contraception.
But some of his surrogates led the effort to cast the law's mandate for birth control coverage as a violation of religious freedom, widely considered a lost argument that left questions about the GOP's commitment to preserving women's rights.
Romney may have dealt himself trouble with his inconsistent position over the years on abortion and a comment earlier this year that sounded as if he wanted to "get rid of" Planned Parenthood. His campaign later clarified that he was referring to deleting federal funding for the organization, not eliminating it outright.
Then there's the way Romney handles questions about his message to women; conservative Republican women say he has to work do to on that front.
Virtually every time, Romney answers by invoking his wife of 43 years, and reports what's she's told him about what women want.
"She reports to me regularly that the issue women care about most is the economy, and getting good jobs for their kids and for themselves," Romney told the Newspaper Association of America on Wednesday. "They are concerned about gasoline prices, the cost of getting to and from work, taking their kids to school or to practice and so forth after school. That is what women care about in this country, and my vision is to get America working again."
A few days earlier in Middleton, he was asked how he'd counter the Democrats' narrative on contraception. He prefaced his answer this way: "I wish Ann were here ... to answer that question in particular."
Some Republican activists say they are eager to see Romney show a genuine interest in and understanding of how women have experienced the recession, while also using his wife to rally female voters.
She did just that last month on Super Tuesday, saying: "Do you know what women care about? Women care about jobs. They're angry, and they're furious about the entitlement debt that we're leaving for our children."
The Republican National Committee is providing a model for any direct pitch Romney eventually makes to women.
It has an extensive operation of surrogates and specific talking points that connect the party's commitment to lower taxes and smaller government to the "kitchen table decisions" women make every day: fitting rising gas and college prices into family budgets, for example, or managing health care costs under Obama's new law, or keeping government regulations from whittling the profit margins of the small businesses millions of them own.
Rep. Cathy McMorris Rodgers, chairwoman of Romney's campaign in Washington state and a leader of the RNC's messaging to women, notes that women split between the parties in the 2010 congressional elections and helped drive her party into the House majority.
Democrats can't let that stand, she has argued, so they're waging a "war against reality."
Some Republican women say Romney's got time to figure out how and whether to make an explicit pitch to women voters.
RNC committeewoman Heidi Smith said he's already doing that with his pitch on the economy. And, she suggested, he should stick with what he knows.
Said Smith, who represents Nevada: "I don't care if he never says a thing about, quote, women's issues. If he doesn't get the economy back together it doesn't make a difference."
Associated Press Deputy Director of Polling Jennifer Agiesta contributed to this report.
Luxury retailers are smiling. So are the owners of high-end restaurants, sellers of upscale cars, vacation planners, financial advisors, and personal coaches. For them and their customers and clients the recession is over. The recovery is now full speed.
But the rest of America isn't enjoying an economic recovery. It's still sick. Many Americans remain in critical condition.
The Commerce Department reported Thursday that the economy grew at a 3 percent annual rate last quarter (far better than the measly 1.8 percent third quarter growth). Personal income also jumped. Americans raked in over $13 trillion, $3.3 billion more than previously thought.
Yet it's almost a certainty that all the gains went to the top 10 percent, and the lion's share to the top 1 percent. Over a third of the gains went to 15,600 super-rich households in the top one-tenth of one percent.
We don't know this for sure because all the data aren't in for 2011. But this is what happened in 2010, the most recent year for which we have reliable data, and there's no reason to believe the trajectory changed in 2011 or that it will change this year.
In fact, recoveries are becoming more and more lopsided.
The top 1 percent got 45 percent of Clinton-era economic growth, and 65 percent of the economic growth during the Bush era.
According to an analysis of tax returns by Emmanuel Saez and Thomas Pikkety, the top 1 percent pocketed 93 percent of the gains in 2010. 37 percent of the gains went to the top one-tenth of one percent. No one below the richest 10 percent saw any gain at all.
In fact, most of the bottom 90 percent have lost ground. Their average adjusted gross income was $29,840 in 2010. That's down $127 from 2009, and down $4,843 from 2000 (all adjusted for inflation).
Meanwhile, employer-provided benefits continue to decline among the bottom 90 percent, according to the Commerce Department. The share of people with health insurance from their employers dropped from 59.8 percent in 2007 to 55.3 percent in 2010. And the share of private-sector workers with retirement plans dropped from 42 percent in 2007 to 39.5 percent in 2010.
If you're among the richest 10 percent, a big chunk of your savings are in the stock market where you've had nice gains over the last two years. The value of financial assets held by Americans surged by $1.46 trillion in the fourth quarter of 2011.
But if you're in the bottom 90 percent, you own few if any shares of stock. Your biggest asset is your home. Home prices are down over a third from their 2006 peak, and they're still dropping. The median house price in February was 6.2 percent lower than a year ago.
Official Washington doesn't want to talk about this lopsided recovery. The Obama administration is touting the recovery, period, without mentioning how narrow it is.
Republicans would rather not talk about widening inequality to begin with. The reverse-Robin Hood budget plan just announced by Paul Ryan and House Republicans (and endorsed by Mitt Romney) would make the lopsidedness far worse -- dramatically cutting taxes on the rich and slashing public services everyone else depends on.
Fed Chief Ben Bernanke -- who doesn't have to face voters on Election Day -- says the U.S. economy needs to grow faster if it's to produce enough jobs to bring down unemployment. But he leaves out the critical point.
We can't possibly grow faster if the vast majority of Americans, who are still losing ground, don't have the money to buy more of the things American workers produce. There's no way spending by the richest 10 percent -- the only ones gaining ground -- will be enough to get the economy out of first gear.