The Economic Consequences of Mr. Bush

President Obama has to deal with yet another crippling legacy of George W. Bush: The Economy.

Nobel laureate, Joseph E. Stiglitz, sees a generation-long struggle to recoup. Read his assessment of Bush's economy by Joseph E. Stiglitz from the December 2007 edition of Vanity Fair:

The American economy can take a lot of abuse, but no economy is invincible. When we look back someday at the catastrophe that was the Bush administration, we will think of many things: the tragedy of the Iraq war, the shame of Guantánamo and Abu Ghraib, the erosion of civil liberties. The damage done to the American economy does not make front-page headlines every day, but the repercussions will be felt beyond the lifetime of anyone reading this page.

I can hear an irritated counterthrust already. The president has not driven the United States into a recession during his almost seven years in office. Unemployment stands at a respectable 4.6 percent. Well, fine. But the other side of the ledger groans with distress: a tax code that has become hideously biased in favor of the rich; a national debt that will probably have grown 70 percent by the time this president leaves Washington; a swelling cascade of mortgage defaults; a record near-$850 billion trade deficit; oil prices that are higher than they have ever been; and a dollar so weak that for an American to buy a cup of coffee in London or Paris—or even the Yukon—becomes a venture in high finance.

And it gets worse. After almost seven years of this president, the United States is less prepared than ever to face the future. We have not been educating enough engineers and scientists, people with the skills we will need to compete with China and India. We have not been investing in the kinds of basic research that made us the technological powerhouse of the late 20th century. And although the president now understands—or so he says—that we must begin to wean ourselves from oil and coal, we have on his watch become more deeply dependent on both.

Up to now, the conventional wisdom has been that Herbert Hoover, whose policies aggravated the Great Depression, is the odds-on claimant for the mantle “worst president” when it comes to stewardship of the American economy. Once Franklin Roosevelt assumed office and reversed Hoover’s policies, the country began to recover. The economic effects of Bush’s presidency are more insidious than those of Hoover, harder to reverse, and likely to be longer-lasting. There is no threat of America’s being displaced from its position as the world’s richest economy. But our grandchildren will still be living with, and struggling with, the economic consequences of Mr. Bush.

Remember the Surplus?

The world was a very different place, economically speaking, when George W. Bush took office, in January 2001. During the Roaring 90s, many had believed that the Internet would transform everything. Productivity gains, which had averaged about 1.5 percent a year from the early 1970s through the early 90s, now approached 3 percent. During Bill Clinton’s second term, gains in manufacturing productivity sometimes even surpassed 6 percent. The Federal Reserve chairman, Alan Greenspan, spoke of a New Economy marked by continued productivity gains as the Internet buried the old ways of doing business. Others went so far as to predict an end to the business cycle. Greenspan worried aloud about how he’d ever be able to manage monetary policy once the nation’s debt was fully paid off.

This tremendous confidence took the Dow Jones index higher and higher. The rich did well, but so did the not-so-rich and even the downright poor. The Clinton years were not an economic Nirvana; as chairman of the president’s Council of Economic Advisers during part of this time, I’m all too aware of mistakes and lost opportunities. The global-trade agreements we pushed through were often unfair to developing countries. We should have invested more in infrastructure, tightened regulation of the securities markets, and taken additional steps to promote energy conservation. We fell short because of politics and lack of money—and also, frankly, because special interests sometimes shaped the agenda more than they should have. But these boom years were the first time since Jimmy Carter that the deficit was under control. And they were the first time since the 1970s that incomes at the bottom grew faster than those at the top—a benchmark worth celebrating.

By the time George W. Bush was sworn in, parts of this bright picture had begun to dim. The tech boom was over. The nasdaq fell 15 percent in the single month of April 2000, and no one knew for sure what effect the collapse of the Internet bubble would have on the real economy. It was a moment ripe for Keynesian economics, a time to prime the pump by spending more money on education, technology, and infrastructure—all of which America desperately needed, and still does, but which the Clinton administration had postponed in its relentless drive to eliminate the deficit. Bill Clinton had left President Bush in an ideal position to pursue such policies. Remember the presidential debates in 2000 between Al Gore and George Bush, and how the two men argued over how to spend America’s anticipated $2.2 trillion budget surplus? The country could well have afforded to ramp up domestic investment in key areas. In fact, doing so would have staved off recession in the short run while spurring growth in the long run.

But the Bush administration had its own ideas. The first major economic initiative pursued by the president was a massive tax cut for the rich, enacted in June of 2001. Those with incomes over a million got a tax cut of $18,000—more than 30 times larger than the cut received by the average American. The inequities were compounded by a second tax cut, in 2003, this one skewed even more heavily toward the rich. Together these tax cuts, when fully implemented and if made permanent, mean that in 2012 the average reduction for an American in the bottom 20 percent will be a scant $45, while those with incomes of more than $1 million will see their tax bills reduced by an average of $162,000.

The administration crows that the economy grew—by some 16 percent—during its first six years, but the growth helped mainly people who had no need of any help, and failed to help those who need plenty. A rising tide lifted all yachts. Inequality is now widening in America, and at a rate not seen in three-quarters of a century. A young male in his 30s today has an income, adjusted for inflation, that is 12 percent less than what his father was making 30 years ago. Some 5.3 million more Americans are living in poverty now than were living in poverty when Bush became president. America’s class structure may not have arrived there yet, but it’s heading in the direction of Brazil’s and Mexico’s.

The Bankruptcy Boom

In breathtaking disregard for the most basic rules of fiscal propriety, the administration continued to cut taxes even as it undertook expensive new spending programs and embarked on a financially ruinous “war of choice” in Iraq. A budget surplus of 2.4 percent of gross domestic product (G.D.P.), which greeted Bush as he took office, turned into a deficit of 3.6 percent in the space of four years. The United States had not experienced a turnaround of this magnitude since the global crisis of World War II.

Agricultural subsidies were doubled between 2002 and 2005. Tax expenditures—the vast system of subsidies and preferences hidden in the tax code—increased more than a quarter. Tax breaks for the president’s friends in the oil-and-gas industry increased by billions and billions of dollars. Yes, in the five years after 9/11, defense expenditures did increase (by some 70 percent), though much of the growth wasn’t helping to fight the War on Terror at all, but was being lost or outsourced in failed missions in Iraq. Meanwhile, other funds continued to be spent on the usual high-tech gimcrackery—weapons that don’t work, for enemies we don’t have. In a nutshell, money was being spent everyplace except where it was needed. During these past seven years the percentage of G.D.P. spent on research and development outside defense and health has fallen. Little has been done about our decaying infrastructure—be it levees in New Orleans or bridges in Minneapolis. Coping with most of the damage will fall to the next occupant of the White House.

Although it railed against entitlement programs for the needy, the administration enacted the largest increase in entitlements in four decades—the poorly designed Medicare prescription-drug benefit, intended as both an election-season bribe and a sop to the pharmaceutical industry. As internal documents later revealed, the true cost of the measure was hidden from Congress. Meanwhile, the pharmaceutical companies received special favors. To access the new benefits, elderly patients couldn’t opt to buy cheaper medications from Canada or other countries. The law also prohibited the U.S. government, the largest single buyer of prescription drugs, from negotiating with drug manufacturers to keep costs down. As a result, American consumers pay far more for medications than people elsewhere in the developed world.

You’ll still hear some—and, loudly, the president himself—argue that the administration’s tax cuts were meant to stimulate the economy, but this was never true. The bang for the buck—the amount of stimulus per dollar of deficit—was astonishingly low. Therefore, the job of economic stimulation fell to the Federal Reserve Board, which stepped on the accelerator in a historically unprecedented way, driving interest rates down to 1 percent. In real terms, taking inflation into account, interest rates actually dropped to negative 2 percent. The predictable result was a consumer spending spree. Looked at another way, Bush’s own fiscal irresponsibility fostered irresponsibility in everyone else. Credit was shoveled out the door, and subprime mortgages were made available to anyone this side of life support. Credit-card debt mounted to a whopping $900 billion by the summer of 2007. “Qualified at birth” became the drunken slogan of the Bush era. American households took advantage of the low interest rates, signed up for new mortgages with “teaser” initial rates, and went to town on the proceeds.

All of this spending made the economy look better for a while; the president could (and did) boast about the economic statistics. But the consequences for many families would become apparent within a few years, when interest rates rose and mortgages proved impossible to repay. The president undoubtedly hoped the reckoning would come sometime after 2008. It arrived 18 months early. As many as 1.7 million Americans are expected to lose their homes in the months ahead. For many, this will mean the beginning of a downward spiral into poverty.

Between March 2006 and March 2007 personal-bankruptcy rates soared more than 60 percent. As families went into bankruptcy, more and more of them came to understand who had won and who had lost as a result of the president’s 2005 bankruptcy bill, which made it harder for individuals to discharge their debts in a reasonable way. The lenders that had pressed for “reform” had been the clear winners, gaining added leverage and protections for themselves; people facing financial distress got the shaft.
And Then There’s Iraq

The war in Iraq (along with, to a lesser extent, the war in Afghanistan) has cost the country dearly in blood and treasure. The loss in lives can never be quantified. As for the treasure, it’s worth calling to mind that the administration, in the run-up to the invasion of Iraq, was reluctant to venture an estimate of what the war would cost (and publicly humiliated a White House aide who suggested that it might run as much as $200 billion). When pressed to give a number, the administration suggested $50 billion—what the United States is actually spending every few months. Today, government figures officially acknowledge that more than half a trillion dollars total has been spent by the U.S. “in theater.” But in fact the overall cost of the conflict could be quadruple that amount—as a study I did with Linda Bilmes of Harvard has pointed out—even as the Congressional Budget Office now concedes that total expenditures are likely to be more than double the spending on operations. The official numbers do not include, for instance, other relevant expenditures hidden in the defense budget, such as the soaring costs of recruitment, with re-enlistment bonuses of as much as $100,000. They do not include the lifetime of disability and health-care benefits that will be required by tens of thousands of wounded veterans, as many as 20 percent of whom have suffered devastating brain and spinal injuries. Astonishingly, they do not include much of the cost of the equipment that has been used in the war, and that will have to be replaced. If you also take into account the costs to the economy from higher oil prices and the knock-on effects of the war—for instance, the depressing domino effect that war-fueled uncertainty has on investment, and the difficulties U.S. firms face overseas because America is the most disliked country in the world—the total costs of the Iraq war mount, even by a conservative estimate, to at least $2 trillion. To which one needs to add these words: so far.

It is natural to wonder, What would this money have bought if we had spent it on other things? U.S. aid to all of Africa has been hovering around $5 billion a year, the equivalent of less than two weeks of direct Iraq-war expenditures. The president made a big deal out of the financial problems facing Social Security, but the system could have been repaired for a century with what we have bled into the sands of Iraq. Had even a fraction of that $2 trillion been spent on investments in education and technology, or improving our infrastructure, the country would be in a far better position economically to meet the challenges it faces in the future, including threats from abroad. For a sliver of that $2 trillion we could have provided guaranteed access to higher education for all qualified Americans.

The soaring price of oil is clearly related to the Iraq war. The issue is not whether to blame the war for this but simply how much to blame it. It seems unbelievable now to recall that Bush-administration officials before the invasion suggested not only that Iraq’s oil revenues would pay for the war in its entirety—hadn’t we actually turned a tidy profit from the 1991 Gulf War?—but also that war was the best way to ensure low oil prices. In retrospect, the only big winners from the war have been the oil companies, the defense contractors, and al-Qaeda. Before the war, the oil markets anticipated that the then price range of $20 to $25 a barrel would continue for the next three years or so. Market players expected to see more demand from China and India, sure, but they also anticipated that this greater demand would be met mostly by increased production in the Middle East. The war upset that calculation, not so much by curtailing oil production in Iraq, which it did, but rather by heightening the sense of insecurity everywhere in the region, suppressing future investment.

The continuing reliance on oil, regardless of price, points to one more administration legacy: the failure to diversify America’s energy resources. Leave aside the environmental reasons for weaning the world from hydrocarbons—the president has never convincingly embraced them, anyway. The economic and national-security arguments ought to have been powerful enough. Instead, the administration has pursued a policy of “drain America first”—that is, take as much oil out of America as possible, and as quickly as possible, with as little regard for the environment as one can get away with, leaving the country even more dependent on foreign oil in the future, and hope against hope that nuclear fusion or some other miracle will come to the rescue. So many gifts to the oil industry were included in the president’s 2003 energy bill that John McCain referred to it as the “No Lobbyist Left Behind” bill.

Contempt for the World

America’s budget and trade deficits have grown to record highs under President Bush. To be sure, deficits don’t have to be crippling in and of themselves. If a business borrows to buy a machine, it’s a good thing, not a bad thing. During the past six years, America—its government, its families, the country as a whole—has been borrowing to sustain its consumption. Meanwhile, investment in fixed assets—the plants and equipment that help increase our wealth—has been declining.

What’s the impact of all this down the road? The growth rate in America’s standard of living will almost certainly slow, and there could even be a decline. The American economy can take a lot of abuse, but no economy is invincible, and our vulnerabilities are plain for all to see. As confidence in the American economy has plummeted, so has the value of the dollar—by 40 percent against the euro since 2001.

The disarray in our economic policies at home has parallels in our economic policies abroad. President Bush blamed the Chinese for our huge trade deficit, but an increase in the value of the yuan, which he has pushed, would simply make us buy more textiles and apparel from Bangladesh and Cambodia instead of China; our deficit would remain unchanged. The president claimed to believe in free trade but instituted measures aimed at protecting the American steel industry. The United States pushed hard for a series of bilateral trade agreements and bullied smaller countries into accepting all sorts of bitter conditions, such as extending patent protection on drugs that were desperately needed to fight aids. We pressed for open markets around the world but prevented China from buying Unocal, a small American oil company, most of whose assets lie outside the United States.

Not surprisingly, protests over U.S. trade practices erupted in places such as Thailand and Morocco. But America has refused to compromise—refused, for instance, to take any decisive action to do away with our huge agricultural subsidies, which distort international markets and hurt poor farmers in developing countries. This intransigence led to the collapse of talks designed to open up international markets. As in so many other areas, President Bush worked to undermine multilateralism—the notion that countries around the world need to cooperate—and to replace it with an America-dominated system. In the end, he failed to impose American dominance—but did succeed in weakening cooperation.

The administration’s basic contempt for global institutions was underscored in 2005 when it named Paul Wolfowitz, the former deputy secretary of defense and a chief architect of the Iraq war, as president of the World Bank. Widely distrusted from the outset, and soon caught up in personal controversy, Wolfowitz became an international embarrassment and was forced to resign his position after less than two years on the job.
Globalization means that America’s economy and the rest of the world have become increasingly interwoven. Consider those bad American mortgages. As families default, the owners of the mortgages find themselves holding worthless pieces of paper. The originators of these problem mortgages had already sold them to others, who packaged them, in a non-transparent way, with other assets, and passed them on once again to unidentified others. When the problems became apparent, global financial markets faced real tremors: it was discovered that billions in bad mortgages were hidden in portfolios in Europe, China, and Australia, and even in star American investment banks such as Goldman Sachs and Bear Stearns. Indonesia and other developing countries—innocent bystanders, really—suffered as global risk premiums soared, and investors pulled money out of these emerging markets, looking for safer havens. It will take years to sort out this mess. Meanwhile, we have become dependent on other nations for the financing of our own debt. Today, China alone holds more than $1 trillion in public and private American I.O.U.’s. Cumulative borrowing from abroad during the six years of the Bush administration amounts to some $5 trillion. Most likely these creditors will not call in their loans—if they ever did, there would be a global financial crisis. But there is something bizarre and troubling about the richest country in the world not being able to live even remotely within its means. Just as Guantánamo and Abu Ghraib have eroded America’s moral authority, so the Bush administration’s fiscal housekeeping has eroded our economic authority.The Way Forward
Whoever moves into the White House in January 2009 will face an unenviable set of economic circumstances. Extricating the country from Iraq will be the bloodier task, but putting America’s economic house in order will be wrenching and take years.

The most immediate challenge will be simply to get the economy’s metabolism back into the normal range. That will mean moving from a savings rate of zero (or less) to a more typical savings rate of, say, 4 percent. While such an increase would be good for the long-term health of America’s economy, the short-term consequences would be painful. Money saved is money not spent. If people don’t spend money, the economic engine stalls. If households curtail their spending quickly—as they may be forced to do as a result of the meltdown in the mortgage market—this could mean a recession; if done in a more measured way, it would still mean a protracted slowdown. The problems of foreclosure and bankruptcy posed by excessive household debt are likely to get worse before they get better. And the federal government is in a bind: any quick restoration of fiscal sanity will only aggravate both problems.

And in any case there’s more to be done. What is required is in some ways simple to describe: it amounts to ceasing our current behavior and doing exactly the opposite. It means not spending money that we don’t have, increasing taxes on the rich, reducing corporate welfare, strengthening the safety net for the less well off, and making greater investment in education, technology, and infrastructure.

When it comes to taxes, we should be trying to shift the burden away from things we view as good, such as labor and savings, to things we view as bad, such as pollution. With respect to the safety net, we need to remember that the more the government does to help workers improve their skills and get affordable health care the more we free up American businesses to compete in the global economy. Finally, we’ll be a lot better off if we work with other countries to create fair and efficient global trade and financial systems. We’ll have a better chance of getting others to open up their markets if we ourselves act less hypocritically—that is, if we open our own markets to their goods and stop subsidizing American agriculture.

Some portion of the damage done by the Bush administration could be rectified quickly. A large portion will take decades to fix—and that’s assuming the political will to do so exists both in the White House and in Congress. Think of the interest we are paying, year after year, on the almost $4 trillion of increased debt burden—even at 5 percent, that’s an annual payment of $200 billion, two Iraq wars a year forever. Think of the taxes that future governments will have to levy to repay even a fraction of the debt we have accumulated. And think of the widening divide between rich and poor in America, a phenomenon that goes beyond economics and speaks to the very future of the American Dream.

In short, there’s a momentum here that will require a generation to reverse. Decades hence we should take stock, and revisit the conventional wisdom. Will Herbert Hoover still deserve his dubious mantle? I’m guessing that George W. Bush will have earned one more grim superlative.

Anya Schiffrin and Izzet Yildiz assisted with research for this article.
Joseph Stiglitz, a leading economic educator, is a professor at Columbia.

Wall Street Crash Of 2008

Marine One Security Breach

For those wondering about the state of America's cybersecurity, consider the latest item: Tiversa, a Pennsylvania security company, recently discovered that highly sensitive data had leaked from a defense contractor onto public peer-to-peer networks. Among the files leaked was one containing detailed information about President Obama's helicopter, Marine One.

"We found a file containing entire blueprints and avionics package for Marine One, which is the president's helicopter," Tiversa CEO Bob Boback said in an interview with NBC's local affiliate in Pittsburgh, WPXI. "What appears to be a defense contractor in Bethesda, Md., had a file-sharing program on one of their systems that also contained highly sensitive blueprints for Marine One."

In addition to the technical information, the files from the defense contractor included a variety of financial information with potential intelligence uses, including costs related to transporting the president from the White House to various locations in the D.C. area, including Andrews Air Force Base and Camp David.

P2P Program Defaults

The preliminary results of the investigation into the incident suggests the breach was unintentional. An employee at the defense contractor reportedly installed a peer-to-peer sharing program and forgot to turn off the program's default sharing.

Most P2P clients are set up to automatically share common folders such as "My Music" or "My Documents"; some even go so far as to "share" an entire hard drive. Unfortunately, in this case, the hard drive in question contained a variety of classified files.

Retired Air Force General (and former presidential candidate) Wesley Clark, a consultant with Tiversa, told WPXI that any threat had been contained. "We found where this information came from," he said. "We know exactly what computer it came from. I'm sure that person is embarrassed and may even lose their job, but we know where it came from and we know where it went."
Oh, Really?

Clark's confidence may be misplaced, given the fact that the IP address at which Tiversa first found the Marine One file was located in Tehran, Iran.

Boback noted that a number of countries actively scan peer-to-peer networks for sensitive information, including Pakistan, Yemen, Qatar and China. "They are actively searching for information that is disclosed in this fashion," Boback told the television station, "because it is a great source of intelligence."

The incident has already caught the attention of Congress and may lead to inquiries into computer-security procedures at sensitive installations. Among the questions that need to be answered: How was it possible for P2P software to be installed on a computer with such sensitive information? What training, if any, was conducted to educate employees about potential security breaches using P2P software? And why was P2P traffic allowed at all on the contractor's network? (source: Sci-tech Today)

Enron: The Smartest Guys In The Room

Frontline: Inside the Meltdown

As the housing bubble burst and trillions of dollars' worth of toxic mortgages began to go bad in 2007, fear spread through the massive firms that form the heart of Wall Street. By the spring of 2008, burdened by billions of dollars of bad mortgages, the investment bank Bear Stearns was the subject of rumors that it would soon fail.

"Rumors are such that they can just plain put you out of business," Bear Stearns' former CEO Alan "Ace" Greenberg tells FRONTLINE.

The company's stock had dropped from $171 to $57 a share, and it was hours from declaring bankruptcy. Federal Reserve Chairman Ben Bernanke acted. "It was clear that this had to be contained. There was no doubt in his mind," says Bernanke's colleague, economist Mark Gertler.

Bernanke, a former economics professor from Princeton, specialized in studying the Great Depression. "He more than anybody else appreciated what would happen if it got out of control," Gertler explains.

To stabilize the markets, Bernanke engineered a shotgun marriage between Bear Sterns and the commercial bank JPMorgan, with a promise that the federal government would use $30 billion to cover Bear Stearns' questionable assets tied to toxic mortgages. It was an unprecedented effort to stop the contagion of fear that seemed to be threatening the rest of Wall Street.

The Man Who Figured Out Madoff's Scam

(CBS) It has been two and a half months since Bernard L. Madoff was picked up and charged with what is believed to be the largest financial fraud in history. Yet we still don't know much more about the alleged $50 billion scam than what Madoff initially told the FBI agents who arrested him. There are still no indictments as federal prosecutors continue to unravel the case and try to figure out exactly what happened and who was involved.

But the proof that it happened can be found in the ruined lives of thousands of victims. The one person who knows the most and is willing to talk about it is Harry Markopolos, the man who figured out Madoff's scheme before anyone else.

Gov. Bobby Jindal Responds to President Obama

Mayor to quit over Obama watermelon e-mail

LOS ALAMITOS, Calif. - The mayor of a California city says he will resign after being criticized for sharing an e-mail picture depicting the White House lawn planted with watermelons under the title "No Easter egg hunt this year."

Los Alamitos Mayor Dean Grose issued a statement Thursday saying he is sorry and will step down as mayor at Monday's City Council meeting.

Grose came under fire for sending the picture to what he called "a small group of friends." One of the recipients, a local businesswoman and city volunteer, publicly scolded the mayor for his actions.

Grose says he accepts that the e-mail was in poor taste and has affected his ability to lead the city.

Located in Orange County, Los Alamitos is a 2 1/4-square-mile city of around 12,000 people.

Joe the Author, Plumbing New Lows in Interest

Paul Farhi of the Washington Post writes: Joe the Plumber (no longer a plumber; first name actually Samuel) popped into our town yesterday evening to sell his new book and to remind people that he's still a plain and simple guy. Mission accomplished, on at least one of his missions.

About 11 people wandered into the rows of seats set up hopefully in the basement of a downtown Border's bookstore to hear Joe speak. Joe addressed them from behind a lectern and with a microphone, but that seemed unnecessarily formal.

If you've already forgotten "Joe" Wurzelbacher, 35, of Toledo, Ohio, it just goes to show you how ephemeral the life of a plain-speaking, Republican Everyman is these days. Joe was the square-jawed guy briefly drafted by John McCain's campaign to be its Voice of Regular Folks. Joe got a couple of news cycles' worth of attention starting on Oct. 12 -- he remembers the date clearly -- when he was videotaped confronting Barack Obama about his small-business tax plans. He later called Obama's plans "socialism."
Now, only a few months later, he's kind of like a vestigial tail, a leftover artifact from a forgotten time. He's Clara Peller, Willie Horton or Gennifer Flowers -- names that are the questions in a "Jeopardy!" category called "Presidential Campaign Distractions." To his credit, Wurzelbacher is hip to the audacity of hype: "I get e-mails all the time from people asking me when my 15 minutes is going to expire," he grinned after his talk. "Sometimes they just write, '15 . . . 14:59 . . . 14:58 . . .' "

....Wurzelbacher was scheduled to speak and sign books for three hours, but the Joe Show was over in 55 minutes. Total copies of "Joe the Plumber" sold: five.

Read the entire Washington Post article here.

Bigot of the Week: Michael Steele

Okay, I was wondering what GOP bobble-head would insult Governor Bobby Jindal by comparing him with the characters of the Oscar winning best picture Slumdog Millionaire. Wow, that didn't take long. The Bigot of the Week Award goes to RNC Chairman, Michael Steele.

Michael Steele speaking for the GOP and the Republican Party showed his culturally insensitive behind when he linked Governor Jindal with the Untouchable caste of East India. Damn man, that would be akin to Governor Jindal calling Mr. Steele a "buckdancing coon" or a "watermelon eating Sambo."

Mr. Jindal could say to Mr. Steele: "Remember that little ditty that was so popular during the Tin Pan Alley Era: 'All Coons Look Alike To Me"? Or, what about that great children's novel by an English author during her tenure in India......"Little Black Sambo?" Governor Jindal could just say, "I'm just keeping it real my nigger." After all, isn't that the langage of the hip-hop crowd that you are trying to attract to the Republican Party?

Mr. Steele embarasses the whole black race. India is an old country, with old customs, folkways and morays. If he doesn't understand the difference between a fictional slum dweller and the Governor of the Great State of Lousiana then he should just hang-up his tap shoes.

From Politico: Steele offers Jindal 'slum love'

In an interview with Curtis Sliwa on ABC Radio last night, the host and RNC Chairman Michael Steele jokingly linked Louisiana Gov. Bobby Jindal to the film "Slumdog Millionaire." Steele offered Jindal "slum love.

Here's the transcript:

SLIWA: Now, using a little bit of that street terminology, are you giving him any Slum love, Michael?

STEELE: (laughter)

SLIWA: Because he is — when guys look at him and young women look at him — they say oh, that's the slumdog millionaire, governor. So, give me some slum love.

STEELE: I love it. (inaudible) ... some slum love out to my buddy. Gov. Bobby Jindal is doing a friggin' awesome job in his state. He's really turned around on some core principles — like hey, government ought not be corrupt. The good stuff ... the easy stuff.

Just when you thought the racist GOP couldn't get any worse, the Mayor of Los Alamitos, Dean Grose's e-mail included the above picture with a heading that read, "No Easter Egg hunt this year."

Keyanus Price, an African American, said she was appalled when she received an e-mail from Mayor Dean Grose's personal account that showed a picture of the White House with a watermelon patch imposed as the White House garden. "I think he's saying that since there's a black president, there will be no need to hunt for eggs since they're growing watermelons in the front yard this year," Price wrote.

She responded to the e-mail with: "Hey, that's not nice at all. Not all black people like watermelon… you should know better than that."

Grose replied: "The way things are today, you gotta laugh every now and then. I wanna see the coloring contests."

Price said Grose's response upset her more.

"As soon as I saw his response; that put me over the top because it was no big deal to him," she said.

Price and Grose have worked together in the past – they both sit on the board of the Youth Center, and she often works with city officials in the community representing her employer. The two have exchanged e-mails in the past.

The e-mail was sent to at least one other person, but the mayor said he isn't sure how many people received it. He said there is a "small group" of people he sometimes forward e-mails to.

In his apology to Price via e-mail, Grose wrote that he was not representing himself as a public official.

"It was not sent to a whole bunch of people, and it went through my personal e-mail," he said. "People e-mail things all the time, but that's not an excuse."

Peter Eliasberg of the ACLU said that while the mayor wasn't acting as a city official at the time, it doesn't mean that it was OK to send.

"Even though as much as we may always think they're always public officials, they're not always public officials; it's kind of going out as a private citizen," Eliasberg said. "That doesn't mean that she doesn't have every right to demand a public apology. It seems like it was pretty offensive." (Source: Orange County Register)

Rachel Maddow Reacts to Gov. Jindal

Gov. Bobby Jindal's Response to President Obama

Insane. Childish. Disaster. And those were some of the kinder comments from political pundits about Louisiana Gov. Bobby Jindal and his response to President Barack Obama's speech to Congress on Tuesday night. Jindal, 37, a Rhodes scholar and son of Indian immigrants, is considered a rising star in Republican ranks and a likely 2012 presidential candidate. GOP leaders, looking for a fresh face for the party's image, tapped Jindal earlier this month for the high-profile task of rebutting Obama's first address to a joint session of Congress.

But in both style and substance, Jindal's speech has drawn flak from Republicans and Democrats alike.

His criticism of government spending for emergency economic relief has been widely panned, especially given his state's receipt of billions in federal assistance after Hurricane Katrina in 2005. And Jindal's voice and earnest, awkward delivery have drawn comparisons to Kenneth Parcell, the geeky page on the NBC comedy "30 Rock."

Indeed, a new Facebook group titled "Bobby Jindal is Kenneth the Page" had already attracted more than 1,800 members Wednesday afternoon.

Republicans had high hopes for Jindal after his appearance Sunday on NBC's "Meet the Press," where he delivered a forceful, concise critique of Obama's $787 billion stimulus plan and explained his decision to reject some of the money allotted for his state. He also impressed observers when he spoke to reporters after a meeting with Obama and other governors at the White House Monday.

Jindal spoke from the governor's mansion in Baton Rouge, and critics pounced on his remarks almost immediately, panning everything from his overly folksy demeanor to his complaint that Obama's plan to revive the economy was "irresponsible."

David Brooks, a conservative New York Times columnist who has criticized aspects of the stimulus plan, nonetheless called Jindal's arguments "insane" and tone-deaf given the dire economic challenges the country faces.

"To come up in this moment in history with a stale, 'Government is the problem, you can't trust the federal government' is just a disaster for the Republican Party," Brooks said. "It's not where the country is, it's not where the future of the country is."

Fox News commentator Juan Williams focused on Jindal's delivery.

"It came off as amateurish, and even the tempo in which he spoke was singsongy," Williams said, adding that the content of the speech was "very simplistic and almost childish."

Penni Pier, a political communication specialist at Florida's Nova Southeastern University, said Jindal's presentation was overly colloquial and his message of less government and more tax cuts was substantively thin.

"It sounded like the same old rhetoric — we had tax cuts the last eight years, and look where it got us," Pier said. "Jindal was also trying to be so familiar, he lost credibility. Obama is familiar, but at the same time always a statesman."

To be sure, Jindal had a tough act to follow in Obama, a naturally gifted orator whose argument for vast federal intervention to stem the nation's economic crisis was widely praised. A CNN poll taken after his speech found 92 percent of viewers had a positive reaction to it.

Rush Limbaugh, arguably the nation's most prominent conservative voice, defended Jindal on his radio show Wednesday while acknowledging that "stylistically," Obama had outshined Jindal.

"The people on our side are making a real mistake if they go after Bobby Jindal," Limbaugh said. "We cannot shun politicians who speak for our beliefs just because we don't like the way he says it."

Jindal was headed to Disney World Wednesday with his family for a vacation. But his chief of staff, Timmy Teepell, said his boss had prepared carefully for the speech and that his message was strong.

"It's a challenge for anybody to follow Obama. The guy is one of the most gifted speakers of our generation," Teepell said. "Bobby's his own harshest critic. He's always looking for ways to improve."

Confidence erodes in U.S. food supply

From the Star Tribune in Minnesota: Consumer confidence dipped last year with the outbreak of salmonella first linked to tomatoes but later tied to peppers. Confidence rebounded, the CFST found, only to nosedive to a new low with the peanut butter salmonella outbreak that has sickened at least 500 and killed eight people, three of whom were Minnesotans. The findings should give the industry some food for thought. It's hard evidence that the peanut butter outbreak isn't simply the problem of one Georgia company. It has damaged the reputation of the entire food industry. Action is needed, lest the precipitous drop in peanut butter sales plague other products.

Recent developments in the peanut butter outbreak have pointed to critical areas for industry improvement. A New York Times story published earlier this month suggested major problems with the independent safety audit systems that the industry uses. Basically, companies providing audit services act as private inspectors. The president of the company that inspected the Georgia peanut plant -- AIB International -- told the paper that one of its inspectors gave the plant a "superior" rating. Another inspector said the plant met or exceeded expectations. Investigators since have documented slime, mold and roaches at the plant and ongoing problems with salmonella; the plant may have knowingly shipped product that tested positive for the bacteria. Minnesota Sen. Amy Klobuchar recently called for criminal prosecution of the plant's owners, and she's entirely correct. At the same time, the entire food industry needs to rapidly evaluate what went wrong with the auditing system and make changes so it doesn't happen again. Making audit reports public is one potential solution to improve accountability.

Another area that needs to be addressed is traceability. One reason that the peanut butter recall seems never-ending is that it's difficult to trace where commodity foods -- like large tubs of peanut butter used as ingredients in other foods -- have gone. Ideally, food safety officials would have issued one list of all affected foods and had stores and consumers clear them from shelves and pantries. They couldn't do that under the current system. Instead, officials have issued multiple updates as they've gone through the slow, laborious process of tracking the product's distribution. That's kept peanut butter recalls in the news, reinforcing consumers' negative attitudes about food safety. As the CFST data shows, the industry as a whole has a business interest in being able to quickly announce a complete, comprehensive list of affected foods. More important, there's a critical public health advantage to this. Quickly identifying dangerous products and pulling them from shelves saves lives. The industry has to do better.

Banking Bombs

Scary Food Supply

The New York Times' Editorial "Dangerous Food" posted on February 17, 2009 states:

The more investigators look into the latest food-safety scandal involving the Peanut Corporation of America, the worse it gets. It now appears that as many as nine people have died and 19,000 have been sickened after eating cookies, crackers or institutional peanut butter tainted with salmonella from a plant in Georgia owned by the company.

At a charged Congressional hearing last week, company executives refused to answer questions on the advice of their attorneys, but the questions told much of the story. “The food poisoning of people — is that just a cost of doing business?” one congressman asked. When another angrily asked the company’s president if he would like to try some of the recalled products, he refused.

The company is facing a criminal inquiry and has now filed for bankruptcy court protection. But it would be a mistake to view this as “an unconscionable act by one manufacturer,” as an official from the American Peanut Council, the industry’s trade association, said.

While most successful food producers are far more diligent — big name-brand peanut butter is considered safe, for example — American consumers have faced far too many food-supply emergencies in the last few years. Congress and the Obama administration must finally make food safety a serious priority.

The new agriculture secretary, Tom Vilsack, is talking about creating “a modern, unified food-safety agency capable of reducing the risk of food-borne illness.” Many thoughtful food-safety experts have been calling for such an approach for years. Today’s patchwork system requires frozen pizzas to be inspected by two agencies: one if they’re cheese and another if they’re pepperoni.

A one-stop agency could take time in Washington. Until then, Mr. Vilsack should look at ways to strengthen current federal and state systems for avoiding food hazards. Congress needs to find more money for inspectors, especially at the Food and Drug Administration.

The F.D.A. also should have the authority to recall tainted food quickly, establish strict federal standards on cleanliness and create an advanced system for tracking foods so that any tainted products can be culled from the food supply more quickly. Finally, Congress should require a more efficient way to test food products and give government food inspectors the authority to review those results more easily.

What was particularly galling about the latest recall was how federal inspectors had to threaten to use anti-terrorism laws to finally gain access to the Peanut Corporation of America’s testing reports. Those reports showed how samples were re-tested if they were contaminated and how some products were shipped even before the tests showing salmonella had come in.

President Obama promised during the campaign to create a government that does a better job of protecting the American consumer. The nation’s vulnerable food supply is a healthy place to start.

Phony Baloney GOP

From the Mississippi Clarion Ledger "Federal money? Mississippi's about the easiest girl in town" by Sid Salter:

The jury is still out in the court of public opinion over Gov. Haley Barbour is right or wrong to join with a handful of other Republican governors in saying he will refuse a portion of the $787 billion federal stimulus package that would expand the state's unemployment insurance coverage.

The battle lines, however, are pretty clear at the State Capitol.

"There is some (stimulus money) we will not take in Mississippi," Barbour told CNN's John King on Sunday. "If we were to take the unemployment insurance reform package that they have, it would cause us to raise taxes on employment when the money runs out, and the money will run out in a couple of years."

Barbour joins a handful of Republican governors like Sarah Palin of Alaska and Bobby Jindal of Louisiana in rejecting federal money to expand unemployment insurance coverage.

House Speaker Billy McCoy, D-Rienzi, sharply disagreed with Barbour's take on the stimulus funds on Monday, telling reporters that Barbour's stance "bothers us greatly. Our neighbors, our friends and even family members have lost their jobs in this economic downturn through no fault of their own."

McCoy referenced the possibility of an effort by the Legislature to bypass Barbour should he formally reject stimulus funds.

Is accepting the money Barbour's call? Partly. The stimulus package legislation, on page 491 of Division A, clearly states that state governors must within 45 days of the bill being enacted certify that the state will request and use the funds, and that "the funds will be used to create jobs and promote economic growth."

But if a governor does not accept the money, the bill further empowers state legislatures to bypass a governor and to accept the cash "by means of the adoption of a concurrent resolution."

Clearly, that's what McCoy means to try to do if Barbour formally rejects part of the funds. But Republican Lt. Gov. Phil Bryant rebutted that threat: "I would resist any effort by the Legislature to override the governor's decision regarding accepting or declining the federal funds from President Obama's economic stimulus plan," said Bryant.

Make no mistake - this fight is far more about partisan politics than about policy.

Why? There absolutely no aversion in Mississippi among Republicans or Democrats to accepting federal funds - just as there isn't in Alaska or Louisiana. Mississippi's about the easiest girl in town on that score.

In terms of federal aid to states and localities received per capita, Governing magazine ranks Mississippi 3rd per capita at ($2,545) behind second-ranked Alaska ($3,552) and just ahead of Louisiana ($2,366) in 4th place.

Mississippi is just about the easiest girl on the block in terms of taking federal money. In the last two rounds of elections, Republicans bragged openly about how much federal aid they brought home to the state from Capitol Hill in Hurricane Katrina relief.

The pro-union National Employment Law Project challenged Barbour on his claims that of the $54 million offered to Mississippi under the bill, only $4 million would be available unless the state changed its law to expand eligibility to part-time workers.

NELP's co-policy director Maurice Emsellem told The New York Times Saturday that the stimulus package offered Mississippi $42 million for increased payments to unemployment recipients and $4 million for administrative costs without changing its policies.

In a state that clearly likes taking federal money and has a history of doing so with both hands, Barbour still has some work to do to sell his message to recession-battered Mississippi taxpayers that turning down federal help is smarter than taking it.

Or, the Democratic majority in Congress may well raise the price of political poker for Barbour and try to make stimulus approval an all-or-nothing proposition.

Race Cowards

The visceral response to the newly minted Attorney General Eric Holder's “coward” comments around the blogosphere and among pundits (on both sides of the aisle) proves Mr. Holder's point. The ginned-up outrage sounds phony and shrill. In the words of William Shakespeare “me thinks thou protests too much.”

The New York Times op-ed columnist Maureen Dowd shrieks: “We need leaders to help us through our crises, not provide us with crude evaluations of our character. And we don’t need sermons from liberal virtuecrats, anymore than from conservative virtuecrats.”

“In the middle of all the Heimlich maneuvers required now — for the economy, Iran, Pakistan, Afghanistan, health care, the environment and education — we don’t need a Jackson/Sharpton-style lecture on race. Barack Obama’s election was supposed to get us past that.”

The talking head shows from the Sunday morning line-up on NBC, ABC, and CBS all addressed Mr. Holder's “coward” comment, as well as PBS's McLaughlin Group and the assorted 24-hour cable shows all broached the “coward” comment.

Chris Matthews threw a pint of gasoline on the fire with Pat Buchanan, who is never the voice of reason when it comes to racial matters and the extremely loquacious Dr. Michael Eric Dyson. At least David Gregory, who isn't the sharpest tool in the drawer, asked NPR's Michelle Norris during the roundtable discussion about Mr. Holder's comment. Of course, Michelle's answer was thoughtful and measured, so her segment is not available online to watch at MSNBC.com. If she would have said something stupid then that segment would have become viral, instead of deleted.

Mr. Holder's comments negate the media myth-making narrative of a post-racial society. America collectively as nation has a great deal to be proud of with respect to race, class, gender and religious tolerance. President Obama's victory last November is a testament to that fact. But, to completely deny the Republican radical, populist racial response to President Obama's candidacy is ludicrous and disingenuous.

The fever pitchforked crowds that swarmed at Governor Palin's rallies, the constant drumbeat of the conservatives charging President Obama with being un-American, not a natural born citizen, a communist, a socialist. The media lynching of Reverend Wright, with a continuous loop of “g—damn America” over and over again. Along with Michelle Obama's “terrorist fist jab,” and her “proud of America” comment.

How do the media overlook the racially charged assaults?

After Prop 8 in California, with its 7% black population, passed the gay pundits railed against the African American community, African American voters, and African American churches. The gay community waved their rainbow flags in the same manner of the Confederate flag at a Ku Klux Klan rally. Where was the post-racial media narrative when the gays bashed black voters? Where was the outrage?

Attorney General Holder's complete speech, not the “coward” soundbite, was good. Mr. Holder spoke calmly and rationally. Like an adult speaking with adults. Unfortunately, the childish shrills from the media pundits absolutely illuminates Mr. Holder's point.

We are cowards. It is positively amazing that the whole racially charged experience of the presidential election over the past two years was just a sidebar. Yes, President Obama won an historical election. We've come a long way, baby. But, the post-racial American utopia is still a mirage just over the horizon.