AI
Tuesday, February 09, 2016 2:57:24 AM
What Sanders Means When He Says That the System is Rigged
January 28, 2016 7:38 AM
"Bernie Sanders’s single-payer plan isn’t a plan at all"
By Nancy LeTourneau
Phil Roeder/flickr
The more I listen to and read about Bernie Sanders, the clearer it becomes that there is one central theme we need to understand about him on which almost everything else rests. It is what he clarified in the last Democratic debate .. http://www.washingtonmonthly.com/political-animal-a/2016_01/democratic_debate_visions_clar059317.php .
---
In all due respect, you’re missing the main point. And the main point in the Congress, it’s not the Republicans and Democrats hate each other.
That’s a mythology from the media. The real issue is that Congress is owned by big money and refuses to do what the American people want them to do.
---
Notice that he didn’t say that “Republicans are owned by big money.” Sanders believes that ALL of Congress is owned by big money. That’s what he means when he says that the system is rigged. His view is that the gridlock we are witnessing right now is not a result of ideological differences. It is because big money is in charge and that makes Congress oblivious to the needs of the American people.
This explains why Sanders has never formally joined the Democratic Party. And why he hasn’t stumped for many Congressional Democrats - much less help them raise money for their campaigns. It’s why he thinks the only way to change things is via a revolution of the people.
When it comes to this central belief of Sanders, it is not something new for him. Thirty years ago when he was Mayor of Burlington, VT, here’s what he told the LA Times .. http://articles.latimes.com/1985-04-28/news/vw-21595_1_vermonters/2 :
---
I think from one end of this country to the other people are ripe for political revolution. Fifty percent of the people do not bother voting in the presidential and statewide elections. The vast majority of those not voting are low-income people who have given up on America. The whole quality of life in America is based on greed. I believe in the redistribution of wealth in this nation.
We are demonstrating in Burlington the peoples’ contempt for conventional old-fashioned Democratic and Republican politics. The good news here is that the two-party system and corporate establishment are not invincible.
---
Here is where that creates problems for Sanders (and many of his supporters): if the sole reason for our political disagreements is that our opponent has been bought out by the corporate establishment, it becomes impossible (and unnecessary) to actually discuss those disagreements. Hence, when organizations like Planned Parenthood and the Human Rights Campaign endorse Clinton, they are simply dismissed as part of the rigged establishment (I know Sanders walked that one back a bit. But it is interesting to note his instinctive initial response).
As the primary race heats up, a lot of the back-and-forth between Clinton and Sanders supporters online and on twitter has taken on this tone. For example, when Mike Konczal .. http://rooseveltinstitute.org/why_shadow_banking_is_still_key/ .. continues to suggest that it is important to regulate shadow banking (as Clinton proposes to do), he is accused of “echoing the arguments of financial lobbyists.” But he’s probably used to that kind of thing. For someone who hasn’t been in the limelight to that extent, perhaps you’ve heard of Charles Gaba. He made a name for himself by tallying sign-ups for Obamacare and initially started writing about that at Daily Kos before he established his own site .. http://acasignups.net/ . About a week ago he published a diary at Daily Kos titled: On Healthcare, I Have to Side With Hillary .. http://www.dailykos.com/story/2016/01/21/1472738/-On-healthcare-I-have-to-side-with-Hillary . Here’s an example of the kind of the comments he got from Sanders supporters:
---
Congratulations on your achievement. Evidently that confirms to me that you are a literate shill of the insurance companies…
He is a paid ACA expert and advocate. He’s intimately familiar with its intricacies and gains professionally from detailing them. And now he states he wants that system to continue as is, or maybe get more intricate and expand slowly and profitably? That is not surprising.
---
Unsurprisingly, people don’t like being told that they are part of a rigged establishment or that they are a shill of the insurance companies - it is pretty much guaranteed to end any reasonable discussion on actual issues. To the extent that charge is thrown at Congressional Democrats, it probably explains why so few of them have endorsed Sanders.
This is unfortunate because it creates divisions rather than coalitions. Of course it is no more true to assume that money plays no role in political differences than it is to say that it is the only reason for them. Life is never that black and white. Developing a real movement for change requires that we actually listen to each other and sometimes make the tough call on who we can work with and who we can’t. It’s hard work. There are no easy outs and sometimes you get burned. But simply assuming that anyone who disagrees with you is bought and paid for is childish and divisive.
_____________________
Nancy LeTourneau is a contributing writer for the Washington Monthly and frequently blogs at Political Animal.
http://www.washingtonmonthly.com/political-animal-a/2016_01/what_sanders_means_when_he_say059421.php
===
What Republicans and Bernie Sanders get wrong about Wall Street
By Matt O'Brien February 3
A U.S. flag hangs above the door of the New York Stock Exchange August 26, 2015. Wall Street racked up its biggest one-day gain in four years on Wednesday as fears about China's economy gave way to bargain hunters emboldened by expectations the U.S. Federal Reserve might not raise interest rates next month. REUTERS/Lucas Jackson
Nothing gets less respect than incremental change.
Opponents attack it as only the first step in your plan to remake the world, and supporters attack it as, well, the only step in your plan that doesn't actually remake the world. And so the truth gets forgotten somewhere in the middle.
Take the Dodd-Frank financial reform. If you listen to Republicans .. http://www.breitbart.com/video/2015/07/18/hensarling-repeal-dodd-frank/ , it's a job-killing overreach that —did I mention? — has killed jobs, killed banks and killed lending. And if that doesn't scare you enough, they also say it's institutionalized bailouts and will send a robot back in time to retroactively lay you off by destroying wherever you work. (Okay, that last part might be an exaggeration, but only a slight one.) If you listen to Bernie Sanders .. http://www.bloomberg.com/politics/articles/2015-05-06/sanders-proposes-bill-to-break-up-big-banks-and-pressure-clinton , though, Dodd-Frank has been borderline ineffectual since it "did not end much of the casino-style gambling" and let the big banks stay even bigger than they were before the crisis. Or, as he has put it over and .. http://www.huffingtonpost.com/entry/bernie-sanders-wall-street-fraud_us_5647fb78e4b08cda3489294a .. over again .. http://www.vox.com/2016/2/2/10892752/bernie-sanders-iowa-speech , it hasn't changed the fact that "the business model of Wall Street is fraud."
So there you have it. Dodd-Frank has either done so much that it's crippled the economy or done so little that it's barely clipped the banks. But what does the actual evidence say? Well, first off, the idea that we should go back to the way things were before Lehman became a four-letter word ignores a lot of easy-to-remember history. The fact, as Barry Ritholtz .. http://ritholtz.com/2011/11/fannie-freddie-and-the-foreclosure-crisis/ .. points out, is that it was the big banks, not mortgage giants Fannie Mae and Freddie Mac, who started making so many of the subprime loans that ultimately doomed the economy. So sure, Dodd-Frank has probably slowed the economy down a tad, but for the good reason that it's trying to keep the banks from loaning money to people who can't afford to pay it back.
Indeed, if Dodd-Frank hasn't changed Wall Street, somebody forgot to tell Wall Street that. You can see that in the chart below. It shows how much the financial system as a whole has borrowed the past 35 years. The simple story is that the more debt the banks have, the more vulnerable they are to even small losses. Think about it like this: If you have $10 and borrow $90 more, it'd take a 10 percent loss for you to be bankrupt, but if you only have $3 and borrow $97 instead, then it'd just take a 3 percent loss for you to be wiped out. Bankers, though, love leverage, because it supercharges their returns —and, as a result, their bonuses. That's why banks have borrowed more and more and more whenever the economy was good, and sometimes even when it wasn't.
Until now, that is.
Source: Absolute Return Partners
Now, on the one hand, it's not surprising that bank borrowing crashed during the, well, crash. But on the other, it's at least a little surprising that leverage has continued to contract since then despite the fact that the economy's been expanding and there hasn't been another crisis. That hasn't happened at any other time in recent memory. So why do I say that's only a little surprising? Because that's what you would expect when you tell banks that they can't borrow as much — which is part of what Dodd-Frank did. It increased capital requirements, and, lo and behold, banks are reducing their leverage. Wall Street, in other words, isn't allowed to take as many or as big risks as before. The result is a smaller financial system — the big banks cut another 100,000 jobs last year — and a safer one, too.
But does safer mean safe enough? Maybe not. The big banks, after all, are even bigger than they were in 2008 because of all the shotgun marriages back then between banks that were failing and banks that were about to fail. Sanders, for his part, thinks that the best way to deal with this is to break them up based on what kind of business they're in. So instead of having megabanks that take in deposits and sell stocks and bonds, you'd have commercial banks that just did the first part and investment banks that just did the second. That's the same system we had between 1933 and 1999 — what's known as Glass-Steagall — a time when we had precisely zero financial crises. So wouldn't it work again?
Not if we leave the financial system so susceptible to runs. The easiest way to think about this is to realize that there are really two kinds of banks. First, there are the regulated ones that are actually called "banks" and have a safety net to stop any runs from starting. And second, there are the unregulated ones that are called other things — money-market funds, hedge funds, private equity funds and broker-dealers — that are one self-fulfilling panic away from losing your money. The 2008 crisis, then, was the result of a run on this so-called shadow banking system that turned into a run on the regular banking system. Glass-Steagall wouldn't have prevented that. Indeed, it was standalone investment banks such as Bear Stearns and Lehman Brothers that almost dragged down everyone else.
[ Insert: Then there is the point that Lehman Bros. was not part of a big bank.
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=120373151 ]
That doesn't mean breaking up the big banks isn't a good idea. It might be — but only insofar as that keeps them from having the clout to roll back other reforms. It's about power, not economics. If we want to make banks safe enough to fail, though, we should do more of what's already working. That might mean bigger capital requirements for bigger banks — which might persuade them to break themselves up — or telling shadow banks that they have to play by the rules, too, and hold more capital themselves. But to do any of that, we have to admit that what's already working is, in fact, working.
What do we want? Incremental change. When do we want it? As soon as there's a president and Congress to give it to us.
Matt O'Brien is a reporter for Wonkblog covering economic affairs. He was previously a senior associate editor at The Atlantic.
https://www.washingtonpost.com/news/wonk/wp/2016/02/03/what-republicans-and-bernie-sanders-both-get-wrong-about-wall-street/
===
Bernie Sanders’s idealism and Hillary Clinton’s pragmatism clash in debate
By Paul Waldman January 18
(Andrew Burton/Getty Images)
[...]
Clinton’s theory of change is practical, realistic and born of hard experience. But it’s also not particularly inspiring. It takes opposition from Republicans as a given and seeks to avoid direct confrontation with certain powerful interests. It’s essentially the same theory Obama operated on in 2009, when his administration set about to co-opt the insurance and pharmaceutical industries instead of fighting them. And it worked — after half a century of Democratic failure on health care, they passed sweeping reform.
Sanders’s theory of change starts from the unspoken presumption that the ACA was in its own way a failure, because it didn’t change the system enough — there are still people left out, and though costs have been reined in, we still spend far more than countries with single-payer systems, and always will as long as we have a system based in private insurance. The problem with Sanders’s theory, however, is that it’s vague on getting from where we are to where he wants to go. He talks about the need to “stand up” to special interests and create a “revolution,” but standing up isn’t a plan.
https://www.washingtonpost.com/blogs/plum-line/wp/2016/01/18/bernie-sanderss-idealism-and-hillary-clintons-pragmatism-clash-in-debate/
See also:
As well as the fact Bernie has denounced both parties over
years, this bit from Starr's says something about Bernie's political integrity
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=120400908
Bernie Sanders Isn’t Electable, and Here’s Why
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=120395374
Don't exaggerate what Claire said as she was right and I think you know she was right.
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=120380592
Sedition in the Name of Patriotism
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=111568828
Soros: Big money can’t buy elections – influence is something else
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=111059945
shtsqsh, For Hillary Clinton at 50, Yet Another Beginning
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=120356173
January 28, 2016 7:38 AM
"Bernie Sanders’s single-payer plan isn’t a plan at all"
By Nancy LeTourneau
Phil Roeder/flickr
The more I listen to and read about Bernie Sanders, the clearer it becomes that there is one central theme we need to understand about him on which almost everything else rests. It is what he clarified in the last Democratic debate .. http://www.washingtonmonthly.com/political-animal-a/2016_01/democratic_debate_visions_clar059317.php .
---
In all due respect, you’re missing the main point. And the main point in the Congress, it’s not the Republicans and Democrats hate each other.
That’s a mythology from the media. The real issue is that Congress is owned by big money and refuses to do what the American people want them to do.
---
Notice that he didn’t say that “Republicans are owned by big money.” Sanders believes that ALL of Congress is owned by big money. That’s what he means when he says that the system is rigged. His view is that the gridlock we are witnessing right now is not a result of ideological differences. It is because big money is in charge and that makes Congress oblivious to the needs of the American people.
This explains why Sanders has never formally joined the Democratic Party. And why he hasn’t stumped for many Congressional Democrats - much less help them raise money for their campaigns. It’s why he thinks the only way to change things is via a revolution of the people.
When it comes to this central belief of Sanders, it is not something new for him. Thirty years ago when he was Mayor of Burlington, VT, here’s what he told the LA Times .. http://articles.latimes.com/1985-04-28/news/vw-21595_1_vermonters/2 :
---
I think from one end of this country to the other people are ripe for political revolution. Fifty percent of the people do not bother voting in the presidential and statewide elections. The vast majority of those not voting are low-income people who have given up on America. The whole quality of life in America is based on greed. I believe in the redistribution of wealth in this nation.
We are demonstrating in Burlington the peoples’ contempt for conventional old-fashioned Democratic and Republican politics. The good news here is that the two-party system and corporate establishment are not invincible.
---
Here is where that creates problems for Sanders (and many of his supporters): if the sole reason for our political disagreements is that our opponent has been bought out by the corporate establishment, it becomes impossible (and unnecessary) to actually discuss those disagreements. Hence, when organizations like Planned Parenthood and the Human Rights Campaign endorse Clinton, they are simply dismissed as part of the rigged establishment (I know Sanders walked that one back a bit. But it is interesting to note his instinctive initial response).
As the primary race heats up, a lot of the back-and-forth between Clinton and Sanders supporters online and on twitter has taken on this tone. For example, when Mike Konczal .. http://rooseveltinstitute.org/why_shadow_banking_is_still_key/ .. continues to suggest that it is important to regulate shadow banking (as Clinton proposes to do), he is accused of “echoing the arguments of financial lobbyists.” But he’s probably used to that kind of thing. For someone who hasn’t been in the limelight to that extent, perhaps you’ve heard of Charles Gaba. He made a name for himself by tallying sign-ups for Obamacare and initially started writing about that at Daily Kos before he established his own site .. http://acasignups.net/ . About a week ago he published a diary at Daily Kos titled: On Healthcare, I Have to Side With Hillary .. http://www.dailykos.com/story/2016/01/21/1472738/-On-healthcare-I-have-to-side-with-Hillary . Here’s an example of the kind of the comments he got from Sanders supporters:
---
Congratulations on your achievement. Evidently that confirms to me that you are a literate shill of the insurance companies…
He is a paid ACA expert and advocate. He’s intimately familiar with its intricacies and gains professionally from detailing them. And now he states he wants that system to continue as is, or maybe get more intricate and expand slowly and profitably? That is not surprising.
---
Unsurprisingly, people don’t like being told that they are part of a rigged establishment or that they are a shill of the insurance companies - it is pretty much guaranteed to end any reasonable discussion on actual issues. To the extent that charge is thrown at Congressional Democrats, it probably explains why so few of them have endorsed Sanders.
This is unfortunate because it creates divisions rather than coalitions. Of course it is no more true to assume that money plays no role in political differences than it is to say that it is the only reason for them. Life is never that black and white. Developing a real movement for change requires that we actually listen to each other and sometimes make the tough call on who we can work with and who we can’t. It’s hard work. There are no easy outs and sometimes you get burned. But simply assuming that anyone who disagrees with you is bought and paid for is childish and divisive.
_____________________
Nancy LeTourneau is a contributing writer for the Washington Monthly and frequently blogs at Political Animal.
http://www.washingtonmonthly.com/political-animal-a/2016_01/what_sanders_means_when_he_say059421.php
===
What Republicans and Bernie Sanders get wrong about Wall Street
By Matt O'Brien February 3
A U.S. flag hangs above the door of the New York Stock Exchange August 26, 2015. Wall Street racked up its biggest one-day gain in four years on Wednesday as fears about China's economy gave way to bargain hunters emboldened by expectations the U.S. Federal Reserve might not raise interest rates next month. REUTERS/Lucas Jackson
Nothing gets less respect than incremental change.
Opponents attack it as only the first step in your plan to remake the world, and supporters attack it as, well, the only step in your plan that doesn't actually remake the world. And so the truth gets forgotten somewhere in the middle.
Take the Dodd-Frank financial reform. If you listen to Republicans .. http://www.breitbart.com/video/2015/07/18/hensarling-repeal-dodd-frank/ , it's a job-killing overreach that —did I mention? — has killed jobs, killed banks and killed lending. And if that doesn't scare you enough, they also say it's institutionalized bailouts and will send a robot back in time to retroactively lay you off by destroying wherever you work. (Okay, that last part might be an exaggeration, but only a slight one.) If you listen to Bernie Sanders .. http://www.bloomberg.com/politics/articles/2015-05-06/sanders-proposes-bill-to-break-up-big-banks-and-pressure-clinton , though, Dodd-Frank has been borderline ineffectual since it "did not end much of the casino-style gambling" and let the big banks stay even bigger than they were before the crisis. Or, as he has put it over and .. http://www.huffingtonpost.com/entry/bernie-sanders-wall-street-fraud_us_5647fb78e4b08cda3489294a .. over again .. http://www.vox.com/2016/2/2/10892752/bernie-sanders-iowa-speech , it hasn't changed the fact that "the business model of Wall Street is fraud."
So there you have it. Dodd-Frank has either done so much that it's crippled the economy or done so little that it's barely clipped the banks. But what does the actual evidence say? Well, first off, the idea that we should go back to the way things were before Lehman became a four-letter word ignores a lot of easy-to-remember history. The fact, as Barry Ritholtz .. http://ritholtz.com/2011/11/fannie-freddie-and-the-foreclosure-crisis/ .. points out, is that it was the big banks, not mortgage giants Fannie Mae and Freddie Mac, who started making so many of the subprime loans that ultimately doomed the economy. So sure, Dodd-Frank has probably slowed the economy down a tad, but for the good reason that it's trying to keep the banks from loaning money to people who can't afford to pay it back.
Indeed, if Dodd-Frank hasn't changed Wall Street, somebody forgot to tell Wall Street that. You can see that in the chart below. It shows how much the financial system as a whole has borrowed the past 35 years. The simple story is that the more debt the banks have, the more vulnerable they are to even small losses. Think about it like this: If you have $10 and borrow $90 more, it'd take a 10 percent loss for you to be bankrupt, but if you only have $3 and borrow $97 instead, then it'd just take a 3 percent loss for you to be wiped out. Bankers, though, love leverage, because it supercharges their returns —and, as a result, their bonuses. That's why banks have borrowed more and more and more whenever the economy was good, and sometimes even when it wasn't.
Until now, that is.
Source: Absolute Return Partners
Now, on the one hand, it's not surprising that bank borrowing crashed during the, well, crash. But on the other, it's at least a little surprising that leverage has continued to contract since then despite the fact that the economy's been expanding and there hasn't been another crisis. That hasn't happened at any other time in recent memory. So why do I say that's only a little surprising? Because that's what you would expect when you tell banks that they can't borrow as much — which is part of what Dodd-Frank did. It increased capital requirements, and, lo and behold, banks are reducing their leverage. Wall Street, in other words, isn't allowed to take as many or as big risks as before. The result is a smaller financial system — the big banks cut another 100,000 jobs last year — and a safer one, too.
But does safer mean safe enough? Maybe not. The big banks, after all, are even bigger than they were in 2008 because of all the shotgun marriages back then between banks that were failing and banks that were about to fail. Sanders, for his part, thinks that the best way to deal with this is to break them up based on what kind of business they're in. So instead of having megabanks that take in deposits and sell stocks and bonds, you'd have commercial banks that just did the first part and investment banks that just did the second. That's the same system we had between 1933 and 1999 — what's known as Glass-Steagall — a time when we had precisely zero financial crises. So wouldn't it work again?
Not if we leave the financial system so susceptible to runs. The easiest way to think about this is to realize that there are really two kinds of banks. First, there are the regulated ones that are actually called "banks" and have a safety net to stop any runs from starting. And second, there are the unregulated ones that are called other things — money-market funds, hedge funds, private equity funds and broker-dealers — that are one self-fulfilling panic away from losing your money. The 2008 crisis, then, was the result of a run on this so-called shadow banking system that turned into a run on the regular banking system. Glass-Steagall wouldn't have prevented that. Indeed, it was standalone investment banks such as Bear Stearns and Lehman Brothers that almost dragged down everyone else.
[ Insert: Then there is the point that Lehman Bros. was not part of a big bank.
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=120373151 ]
That doesn't mean breaking up the big banks isn't a good idea. It might be — but only insofar as that keeps them from having the clout to roll back other reforms. It's about power, not economics. If we want to make banks safe enough to fail, though, we should do more of what's already working. That might mean bigger capital requirements for bigger banks — which might persuade them to break themselves up — or telling shadow banks that they have to play by the rules, too, and hold more capital themselves. But to do any of that, we have to admit that what's already working is, in fact, working.
What do we want? Incremental change. When do we want it? As soon as there's a president and Congress to give it to us.
Matt O'Brien is a reporter for Wonkblog covering economic affairs. He was previously a senior associate editor at The Atlantic.
https://www.washingtonpost.com/news/wonk/wp/2016/02/03/what-republicans-and-bernie-sanders-both-get-wrong-about-wall-street/
===
Bernie Sanders’s idealism and Hillary Clinton’s pragmatism clash in debate
By Paul Waldman January 18
(Andrew Burton/Getty Images)
[...]
Clinton’s theory of change is practical, realistic and born of hard experience. But it’s also not particularly inspiring. It takes opposition from Republicans as a given and seeks to avoid direct confrontation with certain powerful interests. It’s essentially the same theory Obama operated on in 2009, when his administration set about to co-opt the insurance and pharmaceutical industries instead of fighting them. And it worked — after half a century of Democratic failure on health care, they passed sweeping reform.
Sanders’s theory of change starts from the unspoken presumption that the ACA was in its own way a failure, because it didn’t change the system enough — there are still people left out, and though costs have been reined in, we still spend far more than countries with single-payer systems, and always will as long as we have a system based in private insurance. The problem with Sanders’s theory, however, is that it’s vague on getting from where we are to where he wants to go. He talks about the need to “stand up” to special interests and create a “revolution,” but standing up isn’t a plan.
https://www.washingtonpost.com/blogs/plum-line/wp/2016/01/18/bernie-sanderss-idealism-and-hillary-clintons-pragmatism-clash-in-debate/
See also:
As well as the fact Bernie has denounced both parties over
years, this bit from Starr's says something about Bernie's political integrity
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=120400908
Bernie Sanders Isn’t Electable, and Here’s Why
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=120395374
Don't exaggerate what Claire said as she was right and I think you know she was right.
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=120380592
Sedition in the Name of Patriotism
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=111568828
Soros: Big money can’t buy elections – influence is something else
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=111059945
shtsqsh, For Hillary Clinton at 50, Yet Another Beginning
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=120356173
It was Plato who said, “He, O men, is the wisest, who like Socrates, knows that his wisdom is in truth worth nothing”
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