Congress

All Wall Street Regulators Should be Self-Funded

Systemic RIsk Council.org
When a crew that calls themselves the "Systemic Risk Council" speaks, it's a good idea to pay attention. After all, the last time people pooh-poohed deep-seated problems within the financial system, trillions of dollars vanished into thin air and millions of people were thrown out of work. Since its creation last year by the Pew Charitable Trusts and CFA Institute, the Systemic Risk Council —which is chaired by former FDIC head Sheila Bair and advised by Paul Volcker—has sought to keep up the pressure for financial reform. That's important because a) many of the rules mandated by Dodd-Frank haven't actually been written yet; b) Wall Street is working every day to weaken that law; and c) additional reforms, beyond Dodd-Frank, are still needed. Yet unfortunately, as Thomas Hedges wrote recently here in Policyshop, sequestration cuts are going to set back the entire process of financial regulation. The SEC and CFTC were already struggling to find the staff capacity to write mandated...

The Fundamentals of Immigration Reform

T he United States, with more than 40 million foreign-born, a number that includes the estimated 11 million illegal residents, is not just the largest immigration player in the world; it’s larger than the next four largest players combined. Because immigration amounts to social engineering, how well we do it has profound consequences for huge swaths of our society, from education to health care to economic growth to foreign relations. Most important, how a country treats its immigrants is a powerful statement to the world about its values and the principles by which it stands. Related Content Spotlight: The Fundamentals of Immigration Reform Demetrios Papademetriou talks about what's next for reforming our broken immigration system. On all these counts, recent U.S. immigration policy has been more notable for its failures than its successes. Almost half a century ago, in 1965, we reversed the discriminatory policies that over the course of the previous 80 years had either barred or...

Tyranny of the Minority

Jamelle Bouie
Jamelle Bouie Adam Liptak, writing for The New York Times , has a long feature on Senate malapportionment , political science shorthand for the fact of unequal representation in the upper chamber of Congress. Our system has always had a small state bias, hence the Senate—a powerful body where each state gets equal representation—and the Electoral College, a variation on the same. But as large states grow larger—and small states stay small—that bias has become a decisive advantage that benefits Republicans—who tend to represent smaller states—over their Democratic counterparts. The Times has more: Beyond the filibuster, senators from Wyoming and other small states regularly oppose and often thwart programs popular in states with vastly bigger populations. The 38 million people who live in the nation’s 22 smallest states, including Wyoming, are represented by 44 senators. The 38 million residents of California are represented by two senators. In one of every 10 especially consequential...

Gone In 22 Seconds: How Frequent is High Frequency Trading?

Flickr/Ars Electronica
This is a story of journalists and economists, and the confusion that can ensue when they communicate. For me, the story starts with a book, Dark Pools , written by Wall Street Journal Reporter Scott Patterson. The book, published in the summer of 2012, is an account of the rise of high-frequency trading or “HFT.” That is automated trading of securities and derivatives using powerful computers driven by complex algorithms. It is widely accepted that trading activity in most markets is dominated by HFT. Firms that specialize in this practice trade in enormous volumes but start and end the day with few if any holdings. Their purpose is to profit from intra-day market moves, not from fundamental investment. They buy and sell in the blink of an eye, churning the markets constantly. Mr. Patterson’s book contains the following passage: At the end of World War II, the average holding period for a stock was four years. By 2000, it was eight months. By 2008, it was two months. And by 2011, it...

The Paul Ryan Medicare Shuffle

Jamelle Bouie
Jamelle Bouie / The American Prospect He still doesn't care about poor people. When Wisconsin Representative Paul Ryan ran for vice president last year, he campaigned against the $716 billion Medicare cut in the Affordable Care Act, calling it a "raid" on the program. "Medicare should not be used as a piggy bank for 'Obamacare,'" said Ryan last August , after joining the Romney campaign, "Medicare should be used to be the promise that it made to our current seniors. Period. End of Story." This was the whole of Ryan's message on Medicare, which included an ad that combined scaremongering with a fair amount of racial resentment: But Ryan's message has always had two problems. First, President Obama's cuts to Medicare are on the provider side; he's reducing payments to hospitals and doctors in order to fund better benefits for seniors and cover low-income people under the Affordable Care Act. And second, by shrinking the pool of Medicare recipients to the oldest and the sickest, Ryan's...

Next Up: Another Budget Fight

Flickr/Ryan McFarland
Senate Democrats are set to release a budget this week, the first time they've done so since 2009. As always, it will be a collection of the party's goals and priorities—more a political statement than a plan for governing. Democrats, according to National Journal , will propose new revenue beyond the fiscal-cliff deal as well as new spending on education, infrastructure, and job training. They will look for ways to undo sequestration, and offer instructions for tax reform. And while they'll look for entitlement savings, they won't go as far as the White House in adjusting Social Security or Medicare, for reasons political—they don't want to give ammunition to Republicans—and substantive—Democrats, including Senate Budget Committee chair Patty Murray, don't want to see large cuts to entitlement programs. Republicans are already gearing up to oppose the plan. "I fear the Democrat proposal will fail this defining test and will never achieve balance. I fear it will crush American workers...

Politicians Awkwardly Dropping Pop Culture References

Wiz Khalifa, who recorded a song that Marco Rubio knows the title of. (Flickr/Sebastien Barre)
Can a United States senator be cool? As it happens, the current Senate has a number of members in their early 40s, and for at least some of them, that youth is a big part of what defines them. There was a time when as a 40-year-old in the Senate you'd worry about establishing your gravitas, but this group seems to be just as interested, if not more, in playing up their youth. That may be particularly true for the Republicans, since their party not only worries about its appeal to young people but wants to make sure it stays relevant in the future. But this can be tricky, especially since, with a few exceptions, the kind of person who becomes a professional politician probably wasn't the coolest person to begin with. After all, part of being cool is not looking like you're trying to be cool, and politicians usually look like they're trying too hard (because they usually are). You may be asking, "Are you talking about Marco Rubio?" The answer is yes, but before we get to him, Rebecca...

The Filibuster that Matters

AP Photo/Jim McKnight
The Prospect 's Jamelle Bouie makes an important point about Rand Paul's rare Mr. Smith Goes to Washington -style filibuster on Wednesday. Before Paul started speaking to hold up the nomination of John Brennan to head the CIA, the Senate silently continued to filibuster Caitlin Halligan's nomination to the D.C. Circuit Court of Appeals. Paul's filibuster will get more attention, but the filibuster of Halligan is more telling. The most important difference? The Halligan filibuster will have practical consequences. Brennan was confirmed by a 63-43 vote the day after Paul started his filibuster. The filibuster of Halligan, conversely, continues with no end in sight. Preventing Obama from getting any nominees confirmed to nation's second most important appellate court is a very important win for the Republican Party as well as a defeat for the country. Apparently, the dysfunction of the Senate has to continue so that the Republican-dominated D.C. Circuit can continue to make the...

Rand Paul's Lonely Stand

AP Photo/Charles Dharapak
AP Photo/Charles Dharapak Senator Rand Paul walks to a waiting vehicle as he leaves the Capitol after his filibuster of the nomination of John Brennan to be CIA director. L ike the roomful of monkeys who eventually write Hamlet if given long enough, or the broken clock that’s on time twice a day, sooner or later an otherwise dubious political figure will find his moral compass pointing true north if he keeps spinning in place. Or maybe it’s Senator Rand Paul of Kentucky who stays in one place as the world spins, with north finally swinging into his sights. Whatever the motive, whatever paranoia fuels the worldview that drives him, whatever withering scorn he invited yesterday from fellow Republicans who found themselves in the strange position of defending a Democratic president, Paul’s filibuster of the last 48 hours was an act of patriotism more authentic than we usually see from a right that so ostentatiously professes to love a country it refuses to understand. If nothing else,...

What We Have Here Is a Failure to Communicate. Sort Of.

Congressional Republicans, apparently. (Flickr/jumbledpile)
Like any number of liberals, I have from time to time complained about the difficulty of having substantive arguments about politics when your opponents refuse to acknowledge plain facts about the world. It's hard to have a discussion about what to do about climate change, for instance, if the other person refuses to believe that climate change is occurring. It's hard to discuss how to handle market failures in health insurance when the other person holds that markets are always perfect and government health insurance is always more expensive. As frustrating as those kinds of impasses are, at least you're talking about complex systems that require at least some investment of time to understand. But there's a rather incredible dance going on right now in the dispute over the budget that takes every stereotype liberals have about know-nothing Republicans and turns it up to 11. To sum it up, Democrats are being forced to negotiate with a group of people who are either so dumb they can't...

The Rand Paul Filibuster: Raw & Uncut

Gage Skidmore / Flickr
Gage Skidmore / Flickr What was noteworthy about Rand Paul's filibuster yesterday wasn't that he held up the confirmation of John Brennan to the CIA, but that he spoke . As a procedural move, the filibuster is extremely common, but rarely does anyone take to the floor and prevent the flow of Senate business. Paul's "talking filibuster" was the first in over two years, and at nearly 13 hours, the longest since South Carolina Senator Strom Thurmond's filibuster of the 1957 Civil Rights Rights Act. Unlike Thurmond's filibuster, or the vast majority of filibusters through history, Paul's was for a good cause—to press the Obama administration for more information on drone strikes, to object to the use of drones in the United States, and to spark a conversation about the administration's overall drone policy and use of targeted killings, which has gone unexamined in official Washington. For actual information on the subject, I recommend reading posts from Mother Jones ' Adam Serwer , The...

Obama Didn't Cry Wolf on the Sequester

Official White House Photo by Pete Souza
Official White House Photo by Pete Souza President Barack Obama talks with Chief of Staff Jack Lew, center, and Treasury Secretary Timothy Geithner as they walk on the Colonnade of the White House, Jan. 10, 2013. Over at the Washington Post , Chris Cillizza chides President Obama for "crying wolf" on sequestration: In the days leading up to the March 1 sequester deadline, dire warnings about its impact were being issued daily from President Obama. Lines at airports would be interminable. First responders would be compromised. Things would be, in a word, bad. Then the sequester hit — and (almost) no one noticed. (Sidebar: It’s kind of like the “snow” storm currently “hitting” D.C.; lots of advance warning, very little immediate impact.) The sky is falling language seemed overblown, and the devastating consequences amounted to the suspension of public tours at the White House. Obama hasn’t helped himself post-sequester — landing in a bit of political hot water with a mistaken claim...

There is No "Fever" to Break

Google Images
Google Images The New York Times 's reports today that President Obama has invited a dozen GOP senators out to dinner, in an effort to get around Republican leadership and build support for a new agreement on long-term deficit reduction. As Greg Sargent writes for The Washington Post , "It’s not hard to figure out what Obama is telling these Senators: He’s telling them what his actual deficit reduction plan contains — a mix of real entitlement cuts and new revenues." This sounds like something Republicans should already know, but they don't. In an interview with Ezra Klein last week, one unnamed Republican lawmaker was surprised to learn that Obama had floated Social Security adjustments (chained CPI, in particular) as part of a deal for new revenue. Likewise, on Twitter, Republican strategist Mike Murphy had no idea that Obama had offered chained CPI and Medicare cuts in exchange for new revenue. But here's the important thing: When this was pointed out to him, he dismissed the...

A Blank Check for Israel? Bad Idea.

On the tenth anniversary of the Iraq War, some in Congress are itching for another ill-advised conflict.

AP Photo/Susan Walsh
AP Photo/ISNA, Amin Khosroshahi Late last week in Almaty, Kazakhstan, the latest round of nuclear talks between the Islamic Republic of Iran and the P5+1 (the permanent five UN Security Council members plus Germany) ended with an agreement for more meetings —a technical experts meeting in Istanbul, Turkey, on March 18, followed by a political directors meeting back in Almaty on April 5-6. As for the tenor of the talks, most observers agree that it was more upbeat that in the past, with Iranian chief negotiator Saeed Jalili at one point referring to the P5+1’s offer of greater sanctions relief as a “ turning point .” While recognizing that challenges still remain, supporters of the talks were encouraged. “What Almaty showed us is that American and international proposals can elicit the kinds of responses from Iran that are necessary to move the process forward,” said Joel Rubin, director of policy and government affairs for the Ploughshares Fund. “There’s a clear consensus among the P5...

The Sequester: Now What?

flickr/Penn State news
flickr/Penn State news President Obama gambled that the threat of the automatic sequester of $85 billion in domestic and defense cuts would force the Republicans to accept major tax increases, and so far he is losing the wager. The Republican leadership, which was badly divided over the New Year’s deal that delayed the fiscal cliff, is now re-united around the proposition that Republicans will accept no further tax increases. So the president is left to court individual Republican House members to support loophole closures in exchange for the restoration of some popular domestic and military spending. But for the moment, Republicans got what they wanted—big spending cuts, party unity around no tax increases, and a weakening of a newly re-elected president. For Obama and the Democrats, there are three big risks going forward. First, the sequester slows down economic growth—cutting it in half this year from about 3 percent to 1.5 percent according to the Congressional Budget Office...

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