The Obama Administration

The Commodities Market: A Big Bank Love Story

The Fed loosened rules to allow banks to buy commodities, driving up everyday prices for consumers. Who the next chair is matters if these kinds of practices are ever to be stopped. 

AP Images/Carolyn Kaster
AP Images/Charles Dharapak W ho becomes the next Federal Reserve chair matters, not only because of the implications for economic and monetary policy, but because the Fed remains one of the nation’s chief financial regulators. There are dozens of policies, some we don’t even know about, over which the Fed wields critical influence. While the past year has seen a small but important shift toward tighter controls, particularly on the largest Wall Street institutions, all of that could change if President Barack Obama selects another deregulator in the Greenspan tradition. A perfect example of the Fed’s centrality to the financial regulatory space came last week, when a Senate hearing focused on an unseemly practice that the Fed perpetuated and has the power to stop. As reported in The New York Times and elsewhere, large investment banks like Goldman Sachs have purchased warehousing facilities for aluminum and shuffled the product from one facility to another. When a purchaser buys the...

Kerry's Heavy Lifting Begins on Israel-Palestine

Preliminary peace talks begin in Washington next week amid hopes that the U.S.'s efforts will engender much-needed change in the region. 

 

AP Images/ Fadi Arouri
Defying the skeptics, Secretary of State John Kerry announced last Friday that Israelis and Palestinians had “established a basis” to return to peace talks, which have stalled since 2010. Kerry is wisely keeping a close hold on details so as not to create opportunities for spoilers in advance of negotiations actually taking place, but the latest is that preliminary talks, in which the Palestinians will be represented by longtime negotiator Saeb Erekat and the Israelis by Justice Minister Tzipi Livni and Netanyahu’s “personal envoy” Yitzhak Molcho , will begin in Washington next Tuesday . Now that new talks are imminent, critics are hard at work detailing the challenges ahead. As Daniel Levy noted in a recent piece, “Predicting the difficulties for Israeli-Palestinian peace negotiations is about as challenging as predicting the media interest in a British royal birth.” The more important question now is whether, having successfully brought the parties back to the table, Kerry will be...

Is Obamacare a Republican Job Creator?

flickr/divaknevil
AP Photo A lmost 50 years ago, Congress passed and Lyndon B. Johnson signed the law establishing Medicare. It was, soon, wildly popular—so much so that to this day Republican opposition to the program can only be expressed in terms of “saving” Medicare from supposed instability. In the next congressional elections, liberals took a beating—and the Democrats lost the White House in 1968. Scratch that—Democrats lost five of the next six presidential elections. That’s not the only story I could tell like that. Social Security? It passed in 1935, during what turned out to be a very good election cycle for the Democrats. Implementation began after the 1936 election, and the 1938 election began a string of conservative coalition control in Congress that lasted 20 years. Want another one? Let’s try foreign policy. The Cold War was over time a bipartisan policy, but it was the Republicans who were in office when the Cold War ended and the Soviet Union dissolved … a policy outcome universally...

The Privilege of Whiteness

flickr/shaire productions
A s a biracial child who spent part of his youth abroad, Barack Obama learned the feeling of otherness and became attuned to how he was perceived by those around him. As a politician, he knew well that many white people saw him as a vehicle for their hopes of a post-racial society. Even if those hopes were somewhat naïve, they came from a sincere and admirable desire, and he was happy to let those sentiments carry him along. Part of the bargain, though, was that he had to be extremely careful about how he talked about race, and then only on the rarest of occasions. His race had to be a source of hope and pride—for everybody—but not of displeasure, discontent, or worst of all, a grievance that would demand redress. No one knew better than him that everything was fine only as long as we all could feel good about Barack Obama being black. So when he made his unexpected remarks about Trayvon Martin on Friday, Obama was stepping into some dangerous territory. By talking about his own...

The Next Phase of the Obamacare Battle Begins

President Obama speaking yesterday on health care. (White House photo by Chuck Kennedy)
We're beginning a new phase of the battle over Obamacare—and the fact that we can continue to refer to it as a "battle" tells you something—one that in some ways takes on the appearance of an electoral campaign, with television ads, media events, PR stunts, and a universal assumption that the whole thing is zero-sum. If anything related to Obamacare goes well—like, say, people getting health insurance at affordable prices—then that's bad for Republicans and something they'll do what they can to stop. What we have here is something truly unprecedented: an opposition party not just insisting that a significant government program was a bad idea, not even just hoping that in its implementation it doesn't work, but committing itself to actively working to make sure the program fails and that as much human misery as possible can be created along the way, so that eventual repeal of the program will become possible. The Obama administration is facing a huge administrative task, laid on top of...

Transatlantic Trouble

How much has America's spying on European allies damaged the transatlantic trade deal once thought to be one of Obama's best opportunities for shaping his foreign policy legacy?

AP Images/Charles Dharapak
Recent revelations that the U.S. government had been spying on European allies continue to rile public sentiment on the continent, just as officials from both sides of the Atlantic sit down for talks in Washington on the Transatlantic Trade and Investment Partnership (TTIP), a wide-ranging deal that the Obama administration has been pushing as a key foreign policy initiative. If successful, TTIP would deepen the economic ties between North America and the European Union and represent the biggest trade deal in over two decades. But with public trust in the United States ebbing throughout the core countries of the European Union, President Obama will probably have to do more than simply downplay the scandal as a hyped-up, misunderstood policy detail. Old school Atlanticists have long touted the wisdom of deeper economic integration between the United States and the European Union, which is already vast and significant. U.S.-EU trade in goods and services totals about one trillion...

Three Things You’ve Got Wrong about the Filibuster

AP Photo/Columbia, File
AP Photo/Henry Griffin W ith the Senate showdown on executive branch appointments—and eventually filibuster rules—moving towards the moment of truth, it’s a good time to revisit some of the myths surrounding one of the hallowed chamber’s most perplexing procedures. Here are three: 1. Filibusters ≠ Cloture Votes Really: Filibusters are not the same as cloture votes. All those charts and fact sheets you’ve seen showing the explosion of filibusters in 2009? Well, it happened, but the explosion was due to an increase in cloture votes, which are—get it now?—not the same as filibusters. Cloture—or cutting off debate on a bill, nomination, or motion, which by rule in the Senate requires three-fifths of all Senators—is one way the majority can end a filibuster. But it’s not the only way. Filibusters can end through attrition (that is, the minority tires of doing it); through cutting a deal on some minority demand, such as allowing one nomination to go through while another is withdrawn; or...

How the Conservative Media Are Eating Up the Zimmerman Trial

George Zimmerman during his interview with no-nonsense journalist Sean Hannity.
George Zimmerman's trial in the shooting of Trayvon Martin is coming to a close. For what it's worth, I think he'll probably get acquitted, since 1) the lack of any eyewitnesses leaves room for doubt, and 2) my impression is that in Florida it's perfectly legal to pursue somebody, confront them, and then when the confrontation turns physical and you begin to lose the fight, shoot them in the chest. You know—self defense. In any case, conservative media are feasting on the Zimmerman trial (as are some other media). Their basic storyline goes like this: Trayvon Martin was a thug. George Zimmerman's gated community was beset by roving gangs of vicious black teen criminals. Zimmerman was in the right. And most critically, this whole thing is being drummed up by racial provocateurs, most especially Barack Obama and Eric Holder, to continue their ongoing war on white people, who are the real victims of racism in America today. Let's take, for instance, this little story. After Martin's...

Going Abroad With Dodd-Frank

Come Friday, the hope reformers once had that risky trades made overseas by American banks might be regulated is likely to be crushed. Democrats cozy with Wall Street are just fine with that. 

AP Images/Harry Hamburg
AP Images/Harry Hamburg One of the biggest catastrophes of the 2008 financial crisis came out of the AIG Financial Products division, whose disastrous trades eventually led to a $182 billion bailout of the insurance company. One of the largest financial market blowups since the crisis came from the Chief Investment Office of JPMorgan Chase , where similar trades backfired and cost the company at least $6.2 billion. The common thread? Both of these offices, despite being subsidiaries of American corporations, were based in London, and they enjoyed a degree of autonomy, both from their management teams and from federal regulators, who were unable to recognize the outsized risk until it was too late. The Dodd-Frank financial reform law intended to end the practice of financial industry behemoths shifting away their riskiest practices from U.S. regulators’ prying eyes. But a rule that would subject the $630 trillion global derivatives market to the same regulations, no matter the location...

Under Obamacare, Millions Will Die

Barack Obama may be trying to kill this woman's son.
I have questions. For instance, are Charles and David Koch aliens from the planet Fnerzblax 6, come here to feast on the entrails of Earth humans to give them strength for their coming war with the barbarians of Fnerzblax 4? We don't know, and that's what has me so concerned. I ask because Americans for Prosperity, the group through which the Kochs channel much of their political activism, is initiating a new television campaign to get people afraid of and angry about Obamacare, and this seems to be the method of the campaign. The first ad, called "Questions," asks whether Obamacare is going to take money from a worried-looking young mother and deprive her sick child of the care he needs to survive. Not that it would truly do these things, but hey, she's just asking: Beyond the just-asking format, there's a preview here of something else we'll be seeing as Obamacare gets implemented over the next couple of years. Every problem that anyone has with anything related to health care will...

Guns and Gut Feelings

Obama's good intentions post-Newtown haven't been enough to fix our gun problem. So what's next for gun-control legislation?

AP Images/Jacquelyn Martin
AP Images/Jacquelyn Martin “It has been two months since Newtown. I know this is not the first time this country has debated how to reduce gun violence. But this time is different.” —Barack Obama, February 12, 2013, State of the Union Address “We need everyone to remember how we felt 100 days ago and make sure that what we said at that time wasn’t just a bunch of platitudes–that we meant it.” —Barack Obama, March 28, 2013 Sometimes in politics, good intentions are not enough. Even though the president often radiates all the passion of some-assembly-required instructions from Ikea, the dead children at Sandy Hook Elementary School obviously scarred Obama’s soul. But nearly seven months after Newtown, perhaps we should sadly conclude that this time is not different and that the president accomplished little that is lasting with his intense advocacy of gun control. Yes, I know this pessimism runs against the liberal wish to believe that a few more months, a few more petitions and...

What Happened to the Obama Scandals?

flickr/United States Government Work
flickr/United States Government Work A few months ago, political scientist Brendan Nyhan started warning that Barack Obama was due for a major scandal. Nyhan had analyzed previous two-term presidents and determined that by this stage of his second term, particularly with low approval ratings among the opposition party and a lack of major stories dominating the news for long periods, a president stands a strong chance of being engulfed in the kind of controversy that can hobble or even undo a presidency. Nothing was certain, of course—Ronald Reagan and Bill Clinton didn't see their all-consuming scandals until the sixth year of their presidencies, which would give Obama a few months—but conditions were ripe. And for a few weeks there, it seemed like the prediction would come true. The news media became simultaneously fascinated with three separate issues—the attack in Benghazi, I.R.S. scrutiny of conservative groups, and Justice Department surveillance of reporters—and it seemed like...

The Part-Timer Problem

The Obama Administration’s decision to delay for a year the penalty that employers (in firms of 50 or more employees) must pay if they don’t provide health insurance to their workers shines a light on a problem that may be even more profound than getting health coverage for every American: that is, the decline of the American job. The employer mandate was designed for an economy in which American workers were employed in what had been normal jobs. In firms of 50 or more, all workers who put in at least 30 hours a week were either to receive coverage from the firm or else the firm would have to pay the government a $2,000 yearly penalty. Problem is, fewer and fewer workers are putting in 30 hours a week. To begin with, labor-force participation is at its lowest level since women increased their work-force participation in the 1970s. It has declined even during the past four years of so-called recovery. The past four years have also seen a rise in the percentage of workers who are part-...

The Magic of Leaked Memos

Flickr/World Economic Forum
Supposedly, people in the White House are told when they start working there that you shouldn't put anything down on paper or email that you wouldn't like to see on the front page of The Washington Post . Not only are lots of documents subject to open records laws, they can be subpoenaed by Congress or a court, or much more likely, just get leaked by one of your co-workers. So you'd think White House staff would exercise some care when it comes to memo writing. Alas, they apparently do not. The time is ripe for some juicy behind-the-scenes tales from the Obama administration, which we'll apparently be getting from This Town , an upcoming book from New York Times Magazine reporter Mark Leibovich. In an excerpt released (leaked?) today, we learn that some staffers circulated a memo with talking points for people to repeat about senior adviser Valerie Jarrett, a longtime confidant of the President's who hasn't exactly been the most popular person on Pennsylvania Avenue. There's nothing...

Should the Employer Mandate Be Eliminated Altogether?

President Obama signing the Affordable Care Act.
This week the Obama administration announced that it was delaying implementation of the "employer mandate" part of Obamacare, so companies won't be required to cover their workers until the beginning of 2015 instead of the beginning of 2014. Their stated reason is that they need more time to work with employers to implement the somewhat complex reporting requirements, and they're trying to be flexible and respond to employers' concerns. Which is probably true, but it's also true that the issue has become something of a political headache, with lots of news stories profiling employers saying the mandate is going to destroy their businesses or lead them to lay off workers and cut back their hours so they don't have to comply. We'll get to what's true and false about those news stories in a moment, but it's important to understand that the "mandate" isn't really a mandate at all. First, it only applies to businesses with 50 employees or more. And second, if employers still don't want to...

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