ZIRP - Zero Interest Rate Policy
FOMC Statement from http://www.federalreserve.gov/newsevents/press/monetary/20081216b.htm
Release Date: December 16, 2008
For immediate release
The Federal Open Market Committee decided today to establish a target range for the federal funds rate of 0 to 1/4 percent.
Since the Committee's last meeting, labor market conditions have deteriorated, and the available data indicate that consumer spending, business investment, and industrial production have declined. Financial markets remain quite strained and credit conditions tight. Overall, the outlook for economic activity has weakened further.
Meanwhile, inflationary pressures have diminished appreciably. In light of the declines in the prices of energy and other commodities and the weaker prospects for economic activity, the Committee expects inflation to moderate further in coming quarters.
The Federal Reserve will employ all available tools to promote the resumption of sustainable economic growth and to preserve price stability. In particular, the Committee anticipates that weak economic conditions are likely to warrant exceptionally low levels of the federal funds rate for some time.
The focus of the Committee's policy going forward will be to support the functioning of financial markets and stimulate the economy through open market operations and other measures that sustain the size of the Federal Reserve's balance sheet at a high level. As previously announced, over the next few quarters the Federal Reserve will purchase large quantities of agency debt and mortgage-backed securities to provide support to the mortgage and housing markets, and it stands ready to expand its purchases of agency debt and mortgage-backed securities as conditions warrant. The Committee is also evaluating the potential benefits of purchasing longer-term Treasury securities. Early next year, the Federal Reserve will also implement the Term Asset-Backed Securities Loan Facility to facilitate the extension of credit to households and small businesses. The Federal Reserve will continue to consider ways of using its balance sheet to further support credit markets and economic activity.
Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; Christine M. Cumming; Elizabeth A. Duke; Richard W. Fisher; Donald L. Kohn; Randall S. Kroszner; Sandra Pianalto; Charles I. Plosser; Gary H. Stern; and Kevin M. Warsh.
In a related action, the Board of Governors unanimously approved a 75-basis-point decrease in the discount rate to 1/2 percent. In taking this action, the Board approved the requests submitted by the Boards of Directors of the Federal Reserve Banks of New York, Cleveland, Richmond, Atlanta, Minneapolis, and San Francisco. The Board also established interest rates on required and excess reserve balances of 1/4 percent.
Ok so I havent posted in a long time. I was caught up in the post election euphoria that we actually elected Barack Obama. Well I'm back - shocked into writing again - by what else - a historic decision by the US Federal Reserve under Ben "Helicopter" Bernanke. Clearly, and I mean clearly, we're in uncharted waters now. Since the white house is not taking the proper policy actions - the Fed is throwing everything and the kitchen sink into play here. I knew that we might end up here about a year ago when I read and commented on the Calculated Risk blog - about Fed members speculating about zero bound. But to actually be here... holy crapsheet. I think the banks at some point will have no choice but to start lending again. But some of them are still insolvent. The market may bounce for now, but until the insolvency issue gets resolved - I dont think you will have a sustainable rally. But it does seem that the Fed is trying very, very hard to ring fence that issue and let the rest of the economy recover. There are still structural issues in the economy - such as the fact that manufacturing accounts for a much smaller pie in GDP and that US consumers are becoming savers - that we will need to surmount - but ring fencing the problems on Wall Street is certainly welcome. That combined with the Obama Stimulus Plan in Jan 2009 will mitigate the seriousness of this recession. With these actions, I still continue with my prior prediction of an end to this recession late 2009 / early 2010 and a possible HUGE expansion worldwide later in 2010. Time will tell.
Showing posts with label Historic Days 2008. Show all posts
Showing posts with label Historic Days 2008. Show all posts
Tuesday, December 16, 2008
Tuesday, November 4, 2008
Battle for Georgia: 2 million early voters!
from www.fivethirtyeight.com
Monday, November 3, 2008
On the Road: Atlanta, Georgia
"I got dog-tired beyond Macon and woke up Dean to resume. We got out of the car for air and suddenly both of us were stoned with joy to realize that in the darkness all around us was fragrant green grass and the smell of fresh manure and warm waters. "We're in the South!"– Jack Kerouac, “On the Road”
If there is one shocker on election night in the presidential race, cast your eyes to Georgia. 1,994,990 people voted early in Georgia. 3,301,875 total voted in Georgia's presidential race in 2004. Let that sink in.
"The pullout was greatly exaggerated," began Caroline Adelman, Georgia Communications Director, Obama for America. The pullout, of course, refers to the publicized redistribution of Obama staffers to other states when it appeared the Illinois Senator had no chance to win. Obama's skeleton staff of 53 is at least four times bigger than any other Democratic presidential effort in Georgia's history. Adelman, who's been involved here for the last five elections, estimated for us that even Bill Clinton, who won the state in 1992, only had a dozen staffers.
With 33 offices and 175 separate staging locations, at least one in every one of Georgia's 159 counties, Obama's operation seemed shockingly energetic for a state not on most pundit radars. With roughly 550,000 new voters registered and an exceptionally motivated volunteer base, the infrastructure of the organization was already in place when many organizers were shifted to other states.
Adelman credited wunderkind field operator Alex Lofton, now in Ohio, with setting up the infrastructure before he was considered too valuable not to have in a more competitive state. "He opened up all the offices, he trained all the kids, did conference calls twice a day," Adelman explained. "He was 23 and doing things in a way twice his age couldn't accomplish." Such are Obama's young brilliant organizers the campaign's great underwritten story."Really, in Georgia, that's all we needed," Adelman said. "The rest of it was neighbor to neighbor. People needed to see people in their own neighborhood" talking about Barack Obama. "The only place we were hurt was surrogate visits."Indeed, Obama is doing better with white voters in Georgia than either Kerry or Gore. In early voting, African-American voting was 35%. 25% is the historic level. As for totals after election day comes and goes, Adelman said, "anything over 30% and we're gonna win."
As the interview progressed just around the noon hour yesterday, we found ourselves pressed by a steady stream of volunteers elbowing us out of the way to get to the phones. In a flash, an already buzzing office grew packed. Volunteers think Obama is going win Georgia.We asked about the insanely long lines, and whether that would hamper voting. First, we learned, Barack Obama has "Comfort Teams," which are all volunteer forces who don't campaign, but simply bring water, hot chocolate and snacks. "No campaigning, no materials," Adelman said, just making sure the people who have to wait in long lines aren't hungry or thirsty. Second, McCain voters, who exist in smaller percentages in Obama-heavy precincts, may not have the same determination to spend all day in line the way Obama's voters have shown. That's the flip side of Republican failure to provide enough voting machines in Democratic-heavy districts when Democratic voters refuse to be deterred. It hurts some Republican vote as well, particularly since Republican base enthusiasm for John McCain (Huckabee won the Republican primary) is tepid at best.What Adelman has already seen in terms of voter determination and quiet peace at the long lines, she admitted, had already brought her and other staff to tears a time or two.
"Mayor Franklin and Congressman Lewis have been helping encourage people to stay in line," and 50-60 people in metro Atlanta alone have helped with the Comfort Teams. We pressed Adelman on why outside observers should feel confident that Georgians will stay in line, as long as it takes. Adelman paused for a moment, looking for a way to capture the intangible. Finally, with the air of a woman who'd seen early voters up close, she shrugged."I just think our voters are going to stand in line."
Monday, November 3, 2008
On the Road: Atlanta, Georgia
"I got dog-tired beyond Macon and woke up Dean to resume. We got out of the car for air and suddenly both of us were stoned with joy to realize that in the darkness all around us was fragrant green grass and the smell of fresh manure and warm waters. "We're in the South!"– Jack Kerouac, “On the Road”
If there is one shocker on election night in the presidential race, cast your eyes to Georgia. 1,994,990 people voted early in Georgia. 3,301,875 total voted in Georgia's presidential race in 2004. Let that sink in.
"The pullout was greatly exaggerated," began Caroline Adelman, Georgia Communications Director, Obama for America. The pullout, of course, refers to the publicized redistribution of Obama staffers to other states when it appeared the Illinois Senator had no chance to win. Obama's skeleton staff of 53 is at least four times bigger than any other Democratic presidential effort in Georgia's history. Adelman, who's been involved here for the last five elections, estimated for us that even Bill Clinton, who won the state in 1992, only had a dozen staffers.
With 33 offices and 175 separate staging locations, at least one in every one of Georgia's 159 counties, Obama's operation seemed shockingly energetic for a state not on most pundit radars. With roughly 550,000 new voters registered and an exceptionally motivated volunteer base, the infrastructure of the organization was already in place when many organizers were shifted to other states.
Adelman credited wunderkind field operator Alex Lofton, now in Ohio, with setting up the infrastructure before he was considered too valuable not to have in a more competitive state. "He opened up all the offices, he trained all the kids, did conference calls twice a day," Adelman explained. "He was 23 and doing things in a way twice his age couldn't accomplish." Such are Obama's young brilliant organizers the campaign's great underwritten story."Really, in Georgia, that's all we needed," Adelman said. "The rest of it was neighbor to neighbor. People needed to see people in their own neighborhood" talking about Barack Obama. "The only place we were hurt was surrogate visits."Indeed, Obama is doing better with white voters in Georgia than either Kerry or Gore. In early voting, African-American voting was 35%. 25% is the historic level. As for totals after election day comes and goes, Adelman said, "anything over 30% and we're gonna win."
As the interview progressed just around the noon hour yesterday, we found ourselves pressed by a steady stream of volunteers elbowing us out of the way to get to the phones. In a flash, an already buzzing office grew packed. Volunteers think Obama is going win Georgia.We asked about the insanely long lines, and whether that would hamper voting. First, we learned, Barack Obama has "Comfort Teams," which are all volunteer forces who don't campaign, but simply bring water, hot chocolate and snacks. "No campaigning, no materials," Adelman said, just making sure the people who have to wait in long lines aren't hungry or thirsty. Second, McCain voters, who exist in smaller percentages in Obama-heavy precincts, may not have the same determination to spend all day in line the way Obama's voters have shown. That's the flip side of Republican failure to provide enough voting machines in Democratic-heavy districts when Democratic voters refuse to be deterred. It hurts some Republican vote as well, particularly since Republican base enthusiasm for John McCain (Huckabee won the Republican primary) is tepid at best.What Adelman has already seen in terms of voter determination and quiet peace at the long lines, she admitted, had already brought her and other staff to tears a time or two.
"Mayor Franklin and Congressman Lewis have been helping encourage people to stay in line," and 50-60 people in metro Atlanta alone have helped with the Comfort Teams. We pressed Adelman on why outside observers should feel confident that Georgians will stay in line, as long as it takes. Adelman paused for a moment, looking for a way to capture the intangible. Finally, with the air of a woman who'd seen early voters up close, she shrugged."I just think our voters are going to stand in line."
Monday, November 3, 2008
Obama On Race: We the People, in order to form a more perfect union
March 18, 2008
Barack Obama’s Speech on Race
The following is the text as prepared for delivery of Senator Barack Obama’s speech on race in Philadelphia, as provided by his presidential campaign.
“We the people, in order to form a more perfect union.”
Two hundred and twenty one years ago, in a hall that still stands across the street, a group of men gathered and, with these simple words, launched America’s improbable experiment in democracy. Farmers and scholars; statesmen and patriots who had traveled across an ocean to escape tyranny and persecution finally made real their declaration of independence at a Philadelphia convention that lasted through the spring of 1787.
The document they produced was eventually signed but ultimately unfinished. It was stained by this nation’s original sin of slavery, a question that divided the colonies and brought the convention to a stalemate until the founders chose to allow the slave trade to continue for at least twenty more years, and to leave any final resolution to future generations.
Of course, the answer to the slavery question was already embedded within our Constitution – a Constitution that had at its very core the ideal of equal citizenship under the law; a Constitution that promised its people liberty, and justice, and a union that could be and should be perfected over time.
And yet words on a parchment would not be enough to deliver slaves from bondage, or provide men and women of every color and creed their full rights and obligations as citizens of the United States. What would be needed were Americans in successive generations who were willing to do their part – through protests and struggle, on the streets and in the courts, through a civil war and civil disobedience and always at great risk - to narrow that gap between the promise of our ideals and the reality of their time.
This was one of the tasks we set forth at the beginning of this campaign – to continue the long march of those who came before us, a march for a more just, more equal, more free, more caring and more prosperous America. I chose to run for the presidency at this moment in history because I believe deeply that we cannot solve the challenges of our time unless we solve them together – unless we perfect our union by understanding that we may have different stories, but we hold common hopes; that we may not look the same and we may not have come from the same place, but we all want to move in the same direction – towards a better future for our children and our grandchildren.
This belief comes from my unyielding faith in the decency and generosity of the American people. But it also comes from my own American story.
I am the son of a black man from Kenya and a white woman from Kansas. I was raised with the help of a white grandfather who survived a Depression to serve in Patton’s Army during World War II and a white grandmother who worked on a bomber assembly line at Fort Leavenworth while he was overseas. I’ve gone to some of the best schools in America and lived in one of the world’s poorest nations. I am married to a black American who carries within her the blood of slaves and slaveowners – an inheritance we pass on to our two precious daughters. I have brothers, sisters, nieces, nephews, uncles and cousins, of every race and every hue, scattered across three continents, and for as long as I live, I will never forget that in no other country on Earth is my story even possible.
It’s a story that hasn’t made me the most conventional candidate. But it is a story that has seared into my genetic makeup the idea that this nation is more than the sum of its parts – that out of many, we are truly one.
Throughout the first year of this campaign, against all predictions to the contrary, we saw how hungry the American people were for this message of unity. Despite the temptation to view my candidacy through a purely racial lens, we won commanding victories in states with some of the whitest populations in the country. In South Carolina, where the Confederate Flag still flies, we built a powerful coalition of African Americans and white Americans.
This is not to say that race has not been an issue in the campaign. At various stages in the campaign, some commentators have deemed me either “too black” or “not black enough.” We saw racial tensions bubble to the surface during the week before the South Carolina primary. The press has scoured every exit poll for the latest evidence of racial polarization, not just in terms of white and black, but black and brown as well.
And yet, it has only been in the last couple of weeks that the discussion of race in this campaign has taken a particularly divisive turn.
On one end of the spectrum, we’ve heard the implication that my candidacy is somehow an exercise in affirmative action; that it’s based solely on the desire of wide-eyed liberals to purchase racial reconciliation on the cheap. On the other end, we’ve heard my former pastor, Reverend Jeremiah Wright, use incendiary language to express views that have the potential not only to widen the racial divide, but views that denigrate both the greatness and the goodness of our nation; that rightly offend white and black alike.
I have already condemned, in unequivocal terms, the statements of Reverend Wright that have caused such controversy. For some, nagging questions remain. Did I know him to be an occasionally fierce critic of American domestic and foreign policy? Of course. Did I ever hear him make remarks that could be considered controversial while I sat in church? Yes. Did I strongly disagree with many of his political views? Absolutely – just as I’m sure many of you have heard remarks from your pastors, priests, or rabbis with which you strongly disagreed.
But the remarks that have caused this recent firestorm weren’t simply controversial. They weren’t simply a religious leader’s effort to speak out against perceived injustice. Instead, they expressed a profoundly distorted view of this country – a view that sees white racism as endemic, and that elevates what is wrong with America above all that we know is right with America; a view that sees the conflicts in the Middle East as rooted primarily in the actions of stalwart allies like Israel, instead of emanating from the perverse and hateful ideologies of radical Islam.
As such, Reverend Wright’s comments were not only wrong but divisive, divisive at a time when we need unity; racially charged at a time when we need to come together to solve a set of monumental problems – two wars, a terrorist threat, a falling economy, a chronic health care crisis and potentially devastating climate change; problems that are neither black or white or Latino or Asian, but rather problems that confront us all.
Given my background, my politics, and my professed values and ideals, there will no doubt be those for whom my statements of condemnation are not enough. Why associate myself with Reverend Wright in the first place, they may ask? Why not join another church? And I confess that if all that I knew of Reverend Wright were the snippets of those sermons that have run in an endless loop on the television and You Tube, or if Trinity United Church of Christ conformed to the caricatures being peddled by some commentators, there is no doubt that I would react in much the same way
But the truth is, that isn’t all that I know of the man. The man I met more than twenty years ago is a man who helped introduce me to my Christian faith, a man who spoke to me about our obligations to love one another; to care for the sick and lift up the poor. He is a man who served his country as a U.S. Marine; who has studied and lectured at some of the finest universities and seminaries in the country, and who for over thirty years led a church that serves the community by doing God’s work here on Earth – by housing the homeless, ministering to the needy, providing day care services and scholarships and prison ministries, and reaching out to those suffering from HIV/AIDS.
In my first book, Dreams From My Father, I described the experience of my first service at Trinity:
“People began to shout, to rise from their seats and clap and cry out, a forceful wind carrying the reverend’s voice up into the rafters….And in that single note – hope! – I heard something else; at the foot of that cross, inside the thousands of churches across the city, I imagined the stories of ordinary black people merging with the stories of David and Goliath, Moses and Pharaoh, the Christians in the lion’s den, Ezekiel’s field of dry bones. Those stories – of survival, and freedom, and hope – became our story, my story; the blood that had spilled was our blood, the tears our tears; until this black church, on this bright day, seemed once more a vessel carrying the story of a people into future generations and into a larger world. Our trials and triumphs became at once unique and universal, black and more than black; in chronicling our journey, the stories and songs gave us a means to reclaim memories that we didn’t need to feel shame about…memories that all people might study and cherish – and with which we could start to rebuild.”
That has been my experience at Trinity. Like other predominantly black churches across the country, Trinity embodies the black community in its entirety – the doctor and the welfare mom, the model student and the former gang-banger. Like other black churches, Trinity’s services are full of raucous laughter and sometimes bawdy humor. They are full of dancing, clapping, screaming and shouting that may seem jarring to the untrained ear. The church contains in full the kindness and cruelty, the fierce intelligence and the shocking ignorance, the struggles and successes, the love and yes, the bitterness and bias that make up the black experience in America.
And this helps explain, perhaps, my relationship with Reverend Wright. As imperfect as he may be, he has been like family to me. He strengthened my faith, officiated my wedding, and baptized my children. Not once in my conversations with him have I heard him talk about any ethnic group in derogatory terms, or treat whites with whom he interacted with anything but courtesy and respect. He contains within him the contradictions – the good and the bad – of the community that he has served diligently for so many years.
I can no more disown him than I can disown the black community. I can no more disown him than I can my white grandmother – a woman who helped raise me, a woman who sacrificed again and again for me, a woman who loves me as much as she loves anything in this world, but a woman who once confessed her fear of black men who passed by her on the street, and who on more than one occasion has uttered racial or ethnic stereotypes that made me cringe.
These people are a part of me. And they are a part of America, this country that I love.
Some will see this as an attempt to justify or excuse comments that are simply inexcusable. I can assure you it is not. I suppose the politically safe thing would be to move on from this episode and just hope that it fades into the woodwork. We can dismiss Reverend Wright as a crank or a demagogue, just as some have dismissed Geraldine Ferraro, in the aftermath of her recent statements, as harboring some deep-seated racial bias.
But race is an issue that I believe this nation cannot afford to ignore right now. We would be making the same mistake that Reverend Wright made in his offending sermons about America – to simplify and stereotype and amplify the negative to the point that it distorts reality.
The fact is that the comments that have been made and the issues that have surfaced over the last few weeks reflect the complexities of race in this country that we’ve never really worked through – a part of our union that we have yet to perfect. And if we walk away now, if we simply retreat into our respective corners, we will never be able to come together and solve challenges like health care, or education, or the need to find good jobs for every American.
Understanding this reality requires a reminder of how we arrived at this point. As William Faulkner once wrote, “The past isn’t dead and buried. In fact, it isn’t even past.” We do not need to recite here the history of racial injustice in this country. But we do need to remind ourselves that so many of the disparities that exist in the African-American community today can be directly traced to inequalities passed on from an earlier generation that suffered under the brutal legacy of slavery and Jim Crow.
Segregated schools were, and are, inferior schools; we still haven’t fixed them, fifty years after Brown v. Board of Education, and the inferior education they provided, then and now, helps explain the pervasive achievement gap between today’s black and white students.
Legalized discrimination - where blacks were prevented, often through violence, from owning property, or loans were not granted to African-American business owners, or black homeowners could not access FHA mortgages, or blacks were excluded from unions, or the police force, or fire departments – meant that black families could not amass any meaningful wealth to bequeath to future generations. That history helps explain the wealth and income gap between black and white, and the concentrated pockets of poverty that persists in so many of today’s urban and rural communities.
A lack of economic opportunity among black men, and the shame and frustration that came from not being able to provide for one’s family, contributed to the erosion of black families – a problem that welfare policies for many years may have worsened. And the lack of basic services in so many urban black neighborhoods – parks for kids to play in, police walking the beat, regular garbage pick-up and building code enforcement – all helped create a cycle of violence, blight and neglect that continue to haunt us.
This is the reality in which Reverend Wright and other African-Americans of his generation grew up. They came of age in the late fifties and early sixties, a time when segregation was still the law of the land and opportunity was systematically constricted. What’s remarkable is not how many failed in the face of discrimination, but rather how many men and women overcame the odds; how many were able to make a way out of no way for those like me who would come after them.
But for all those who scratched and clawed their way to get a piece of the American Dream, there were many who didn’t make it – those who were ultimately defeated, in one way or another, by discrimination. That legacy of defeat was passed on to future generations – those young men and increasingly young women who we see standing on street corners or languishing in our prisons, without hope or prospects for the future. Even for those blacks who did make it, questions of race, and racism, continue to define their worldview in fundamental ways. For the men and women of Reverend Wright’s generation, the memories of humiliation and doubt and fear have not gone away; nor has the anger and the bitterness of those years. That anger may not get expressed in public, in front of white co-workers or white friends. But it does find voice in the barbershop or around the kitchen table. At times, that anger is exploited by politicians, to gin up votes along racial lines, or to make up for a politician’s own failings.
And occasionally it finds voice in the church on Sunday morning, in the pulpit and in the pews. The fact that so many people are surprised to hear that anger in some of Reverend Wright’s sermons simply reminds us of the old truism that the most segregated hour in American life occurs on Sunday morning. That anger is not always productive; indeed, all too often it distracts attention from solving real problems; it keeps us from squarely facing our own complicity in our condition, and prevents the African-American community from forging the alliances it needs to bring about real change. But the anger is real; it is powerful; and to simply wish it away, to condemn it without understanding its roots, only serves to widen the chasm of misunderstanding that exists between the races.
In fact, a similar anger exists within segments of the white community. Most working- and middle-class white Americans don’t feel that they have been particularly privileged by their race. Their experience is the immigrant experience – as far as they’re concerned, no one’s handed them anything, they’ve built it from scratch. They’ve worked hard all their lives, many times only to see their jobs shipped overseas or their pension dumped after a lifetime of labor. They are anxious about their futures, and feel their dreams slipping away; in an era of stagnant wages and global competition, opportunity comes to be seen as a zero sum game, in which your dreams come at my expense. So when they are told to bus their children to a school across town; when they hear that an African American is getting an advantage in landing a good job or a spot in a good college because of an injustice that they themselves never committed; when they’re told that their fears about crime in urban neighborhoods are somehow prejudiced, resentment builds over time.
Like the anger within the black community, these resentments aren’t always expressed in polite company. But they have helped shape the political landscape for at least a generation. Anger over welfare and affirmative action helped forge the Reagan Coalition. Politicians routinely exploited fears of crime for their own electoral ends. Talk show hosts and conservative commentators built entire careers unmasking bogus claims of racism while dismissing legitimate discussions of racial injustice and inequality as mere political correctness or reverse racism.
Just as black anger often proved counterproductive, so have these white resentments distracted attention from the real culprits of the middle class squeeze – a corporate culture rife with inside dealing, questionable accounting practices, and short-term greed; a Washington dominated by lobbyists and special interests; economic policies that favor the few over the many. And yet, to wish away the resentments of white Americans, to label them as misguided or even racist, without recognizing they are grounded in legitimate concerns – this too widens the racial divide, and blocks the path to understanding.
This is where we are right now. It’s a racial stalemate we’ve been stuck in for years. Contrary to the claims of some of my critics, black and white, I have never been so naïve as to believe that we can get beyond our racial divisions in a single election cycle, or with a single candidacy – particularly a candidacy as imperfect as my own.
But I have asserted a firm conviction – a conviction rooted in my faith in God and my faith in the American people – that working together we can move beyond some of our old racial wounds, and that in fact we have no choice if we are to continue on the path of a more perfect union.
For the African-American community, that path means embracing the burdens of our past without becoming victims of our past. It means continuing to insist on a full measure of justice in every aspect of American life. But it also means binding our particular grievances – for better health care, and better schools, and better jobs - to the larger aspirations of all Americans -- the white woman struggling to break the glass ceiling, the white man who's been laid off, the immigrant trying to feed his family. And it means taking full responsibility for own lives – by demanding more from our fathers, and spending more time with our children, and reading to them, and teaching them that while they may face challenges and discrimination in their own lives, they must never succumb to despair or cynicism; they must always believe that they can write their own destiny.
Ironically, this quintessentially American – and yes, conservative – notion of self-help found frequent expression in Reverend Wright’s sermons. But what my former pastor too often failed to understand is that embarking on a program of self-help also requires a belief that society can change.
The profound mistake of Reverend Wright’s sermons is not that he spoke about racism in our society. It’s that he spoke as if our society was static; as if no progress has been made; as if this country – a country that has made it possible for one of his own members to run for the highest office in the land and build a coalition of white and black; Latino and Asian, rich and poor, young and old -- is still irrevocably bound to a tragic past. But what we know -- what we have seen – is that America can change. That is true genius of this nation. What we have already achieved gives us hope – the audacity to hope – for what we can and must achieve tomorrow.
In the white community, the path to a more perfect union means acknowledging that what ails the African-American community does not just exist in the minds of black people; that the legacy of discrimination - and current incidents of discrimination, while less overt than in the past - are real and must be addressed. Not just with words, but with deeds – by investing in our schools and our communities; by enforcing our civil rights laws and ensuring fairness in our criminal justice system; by providing this generation with ladders of opportunity that were unavailable for previous generations. It requires all Americans to realize that your dreams do not have to come at the expense of my dreams; that investing in the health, welfare, and education of black and brown and white children will ultimately help all of America prosper.
In the end, then, what is called for is nothing more, and nothing less, than what all the world’s great religions demand – that we do unto others as we would have them do unto us. Let us be our brother’s keeper, Scripture tells us. Let us be our sister’s keeper. Let us find that common stake we all have in one another, and let our politics reflect that spirit as well.
For we have a choice in this country. We can accept a politics that breeds division, and conflict, and cynicism. We can tackle race only as spectacle – as we did in the OJ trial – or in the wake of tragedy, as we did in the aftermath of Katrina - or as fodder for the nightly news. We can play Reverend Wright’s sermons on every channel, every day and talk about them from now until the election, and make the only question in this campaign whether or not the American people think that I somehow believe or sympathize with his most offensive words. We can pounce on some gaffe by a Hillary supporter as evidence that she’s playing the race card, or we can speculate on whether white men will all flock to John McCain in the general election regardless of his policies.
We can do that.
But if we do, I can tell you that in the next election, we’ll be talking about some other distraction. And then another one. And then another one. And nothing will change.
That is one option. Or, at this moment, in this election, we can come together and say, “Not this time.” This time we want to talk about the crumbling schools that are stealing the future of black children and white children and Asian children and Hispanic children and Native American children. This time we want to reject the cynicism that tells us that these kids can’t learn; that those kids who don’t look like us are somebody else’s problem. The children of America are not those kids, they are our kids, and we will not let them fall behind in a 21st century economy. Not this time.
This time we want to talk about how the lines in the Emergency Room are filled with whites and blacks and Hispanics who do not have health care; who don’t have the power on their own to overcome the special interests in Washington, but who can take them on if we do it together.
This time we want to talk about the shuttered mills that once provided a decent life for men and women of every race, and the homes for sale that once belonged to Americans from every religion, every region, every walk of life. This time we want to talk about the fact that the real problem is not that someone who doesn’t look like you might take your job; it’s that the corporation you work for will ship it overseas for nothing more than a profit.
This time we want to talk about the men and women of every color and creed who serve together, and fight together, and bleed together under the same proud flag. We want to talk about how to bring them home from a war that never should’ve been authorized and never should’ve been waged, and we want to talk about how we’ll show our patriotism by caring for them, and their families, and giving them the benefits they have earned.
I would not be running for President if I didn’t believe with all my heart that this is what the vast majority of Americans want for this country. This union may never be perfect, but generation after generation has shown that it can always be perfected. And today, whenever I find myself feeling doubtful or cynical about this possibility, what gives me the most hope is the next generation – the young people whose attitudes and beliefs and openness to change have already made history in this election.
There is one story in particularly that I’d like to leave you with today – a story I told when I had the great honor of speaking on Dr. King’s birthday at his home church, Ebenezer Baptist, in Atlanta.
There is a young, twenty-three year old white woman named Ashley Baia who organized for our campaign in Florence, South Carolina. She had been working to organize a mostly African-American community since the beginning of this campaign, and one day she was at a roundtable discussion where everyone went around telling their story and why they were there.
And Ashley said that when she was nine years old, her mother got cancer. And because she had to miss days of work, she was let go and lost her health care. They had to file for bankruptcy, and that’s when Ashley decided that she had to do something to help her mom.
She knew that food was one of their most expensive costs, and so Ashley convinced her mother that what she really liked and really wanted to eat more than anything else was mustard and relish sandwiches. Because that was the cheapest way to eat.
She did this for a year until her mom got better, and she told everyone at the roundtable that the reason she joined our campaign was so that she could help the millions of other children in the country who want and need to help their parents too.
Now Ashley might have made a different choice. Perhaps somebody told her along the way that the source of her mother’s problems were blacks who were on welfare and too lazy to work, or Hispanics who were coming into the country illegally. But she didn’t. She sought out allies in her fight against injustice.
Anyway, Ashley finishes her story and then goes around the room and asks everyone else why they’re supporting the campaign. They all have different stories and reasons. Many bring up a specific issue. And finally they come to this elderly black man who’s been sitting there quietly the entire time. And Ashley asks him why he’s there. And he does not bring up a specific issue. He does not say health care or the economy. He does not say education or the war. He does not say that he was there because of Barack Obama. He simply says to everyone in the room, “I am here because of Ashley.”
“I’m here because of Ashley.” By itself, that single moment of recognition between that young white girl and that old black man is not enough. It is not enough to give health care to the sick, or jobs to the jobless, or education to our children.
But it is where we start. It is where our union grows stronger. And as so many generations have come to realize over the course of the two-hundred and twenty one years since a band of patriots signed that document in Philadelphia, that is where the perfection begins.
As I wait for 6am on Nov 4th 2008 - a historic day in my lifetime - I read this speech again. If you are not inspired after reading this - then check your pulse. It may not be beating.
Barack Obama’s Speech on Race
The following is the text as prepared for delivery of Senator Barack Obama’s speech on race in Philadelphia, as provided by his presidential campaign.
“We the people, in order to form a more perfect union.”
Two hundred and twenty one years ago, in a hall that still stands across the street, a group of men gathered and, with these simple words, launched America’s improbable experiment in democracy. Farmers and scholars; statesmen and patriots who had traveled across an ocean to escape tyranny and persecution finally made real their declaration of independence at a Philadelphia convention that lasted through the spring of 1787.
The document they produced was eventually signed but ultimately unfinished. It was stained by this nation’s original sin of slavery, a question that divided the colonies and brought the convention to a stalemate until the founders chose to allow the slave trade to continue for at least twenty more years, and to leave any final resolution to future generations.
Of course, the answer to the slavery question was already embedded within our Constitution – a Constitution that had at its very core the ideal of equal citizenship under the law; a Constitution that promised its people liberty, and justice, and a union that could be and should be perfected over time.
And yet words on a parchment would not be enough to deliver slaves from bondage, or provide men and women of every color and creed their full rights and obligations as citizens of the United States. What would be needed were Americans in successive generations who were willing to do their part – through protests and struggle, on the streets and in the courts, through a civil war and civil disobedience and always at great risk - to narrow that gap between the promise of our ideals and the reality of their time.
This was one of the tasks we set forth at the beginning of this campaign – to continue the long march of those who came before us, a march for a more just, more equal, more free, more caring and more prosperous America. I chose to run for the presidency at this moment in history because I believe deeply that we cannot solve the challenges of our time unless we solve them together – unless we perfect our union by understanding that we may have different stories, but we hold common hopes; that we may not look the same and we may not have come from the same place, but we all want to move in the same direction – towards a better future for our children and our grandchildren.
This belief comes from my unyielding faith in the decency and generosity of the American people. But it also comes from my own American story.
I am the son of a black man from Kenya and a white woman from Kansas. I was raised with the help of a white grandfather who survived a Depression to serve in Patton’s Army during World War II and a white grandmother who worked on a bomber assembly line at Fort Leavenworth while he was overseas. I’ve gone to some of the best schools in America and lived in one of the world’s poorest nations. I am married to a black American who carries within her the blood of slaves and slaveowners – an inheritance we pass on to our two precious daughters. I have brothers, sisters, nieces, nephews, uncles and cousins, of every race and every hue, scattered across three continents, and for as long as I live, I will never forget that in no other country on Earth is my story even possible.
It’s a story that hasn’t made me the most conventional candidate. But it is a story that has seared into my genetic makeup the idea that this nation is more than the sum of its parts – that out of many, we are truly one.
Throughout the first year of this campaign, against all predictions to the contrary, we saw how hungry the American people were for this message of unity. Despite the temptation to view my candidacy through a purely racial lens, we won commanding victories in states with some of the whitest populations in the country. In South Carolina, where the Confederate Flag still flies, we built a powerful coalition of African Americans and white Americans.
This is not to say that race has not been an issue in the campaign. At various stages in the campaign, some commentators have deemed me either “too black” or “not black enough.” We saw racial tensions bubble to the surface during the week before the South Carolina primary. The press has scoured every exit poll for the latest evidence of racial polarization, not just in terms of white and black, but black and brown as well.
And yet, it has only been in the last couple of weeks that the discussion of race in this campaign has taken a particularly divisive turn.
On one end of the spectrum, we’ve heard the implication that my candidacy is somehow an exercise in affirmative action; that it’s based solely on the desire of wide-eyed liberals to purchase racial reconciliation on the cheap. On the other end, we’ve heard my former pastor, Reverend Jeremiah Wright, use incendiary language to express views that have the potential not only to widen the racial divide, but views that denigrate both the greatness and the goodness of our nation; that rightly offend white and black alike.
I have already condemned, in unequivocal terms, the statements of Reverend Wright that have caused such controversy. For some, nagging questions remain. Did I know him to be an occasionally fierce critic of American domestic and foreign policy? Of course. Did I ever hear him make remarks that could be considered controversial while I sat in church? Yes. Did I strongly disagree with many of his political views? Absolutely – just as I’m sure many of you have heard remarks from your pastors, priests, or rabbis with which you strongly disagreed.
But the remarks that have caused this recent firestorm weren’t simply controversial. They weren’t simply a religious leader’s effort to speak out against perceived injustice. Instead, they expressed a profoundly distorted view of this country – a view that sees white racism as endemic, and that elevates what is wrong with America above all that we know is right with America; a view that sees the conflicts in the Middle East as rooted primarily in the actions of stalwart allies like Israel, instead of emanating from the perverse and hateful ideologies of radical Islam.
As such, Reverend Wright’s comments were not only wrong but divisive, divisive at a time when we need unity; racially charged at a time when we need to come together to solve a set of monumental problems – two wars, a terrorist threat, a falling economy, a chronic health care crisis and potentially devastating climate change; problems that are neither black or white or Latino or Asian, but rather problems that confront us all.
Given my background, my politics, and my professed values and ideals, there will no doubt be those for whom my statements of condemnation are not enough. Why associate myself with Reverend Wright in the first place, they may ask? Why not join another church? And I confess that if all that I knew of Reverend Wright were the snippets of those sermons that have run in an endless loop on the television and You Tube, or if Trinity United Church of Christ conformed to the caricatures being peddled by some commentators, there is no doubt that I would react in much the same way
But the truth is, that isn’t all that I know of the man. The man I met more than twenty years ago is a man who helped introduce me to my Christian faith, a man who spoke to me about our obligations to love one another; to care for the sick and lift up the poor. He is a man who served his country as a U.S. Marine; who has studied and lectured at some of the finest universities and seminaries in the country, and who for over thirty years led a church that serves the community by doing God’s work here on Earth – by housing the homeless, ministering to the needy, providing day care services and scholarships and prison ministries, and reaching out to those suffering from HIV/AIDS.
In my first book, Dreams From My Father, I described the experience of my first service at Trinity:
“People began to shout, to rise from their seats and clap and cry out, a forceful wind carrying the reverend’s voice up into the rafters….And in that single note – hope! – I heard something else; at the foot of that cross, inside the thousands of churches across the city, I imagined the stories of ordinary black people merging with the stories of David and Goliath, Moses and Pharaoh, the Christians in the lion’s den, Ezekiel’s field of dry bones. Those stories – of survival, and freedom, and hope – became our story, my story; the blood that had spilled was our blood, the tears our tears; until this black church, on this bright day, seemed once more a vessel carrying the story of a people into future generations and into a larger world. Our trials and triumphs became at once unique and universal, black and more than black; in chronicling our journey, the stories and songs gave us a means to reclaim memories that we didn’t need to feel shame about…memories that all people might study and cherish – and with which we could start to rebuild.”
That has been my experience at Trinity. Like other predominantly black churches across the country, Trinity embodies the black community in its entirety – the doctor and the welfare mom, the model student and the former gang-banger. Like other black churches, Trinity’s services are full of raucous laughter and sometimes bawdy humor. They are full of dancing, clapping, screaming and shouting that may seem jarring to the untrained ear. The church contains in full the kindness and cruelty, the fierce intelligence and the shocking ignorance, the struggles and successes, the love and yes, the bitterness and bias that make up the black experience in America.
And this helps explain, perhaps, my relationship with Reverend Wright. As imperfect as he may be, he has been like family to me. He strengthened my faith, officiated my wedding, and baptized my children. Not once in my conversations with him have I heard him talk about any ethnic group in derogatory terms, or treat whites with whom he interacted with anything but courtesy and respect. He contains within him the contradictions – the good and the bad – of the community that he has served diligently for so many years.
I can no more disown him than I can disown the black community. I can no more disown him than I can my white grandmother – a woman who helped raise me, a woman who sacrificed again and again for me, a woman who loves me as much as she loves anything in this world, but a woman who once confessed her fear of black men who passed by her on the street, and who on more than one occasion has uttered racial or ethnic stereotypes that made me cringe.
These people are a part of me. And they are a part of America, this country that I love.
Some will see this as an attempt to justify or excuse comments that are simply inexcusable. I can assure you it is not. I suppose the politically safe thing would be to move on from this episode and just hope that it fades into the woodwork. We can dismiss Reverend Wright as a crank or a demagogue, just as some have dismissed Geraldine Ferraro, in the aftermath of her recent statements, as harboring some deep-seated racial bias.
But race is an issue that I believe this nation cannot afford to ignore right now. We would be making the same mistake that Reverend Wright made in his offending sermons about America – to simplify and stereotype and amplify the negative to the point that it distorts reality.
The fact is that the comments that have been made and the issues that have surfaced over the last few weeks reflect the complexities of race in this country that we’ve never really worked through – a part of our union that we have yet to perfect. And if we walk away now, if we simply retreat into our respective corners, we will never be able to come together and solve challenges like health care, or education, or the need to find good jobs for every American.
Understanding this reality requires a reminder of how we arrived at this point. As William Faulkner once wrote, “The past isn’t dead and buried. In fact, it isn’t even past.” We do not need to recite here the history of racial injustice in this country. But we do need to remind ourselves that so many of the disparities that exist in the African-American community today can be directly traced to inequalities passed on from an earlier generation that suffered under the brutal legacy of slavery and Jim Crow.
Segregated schools were, and are, inferior schools; we still haven’t fixed them, fifty years after Brown v. Board of Education, and the inferior education they provided, then and now, helps explain the pervasive achievement gap between today’s black and white students.
Legalized discrimination - where blacks were prevented, often through violence, from owning property, or loans were not granted to African-American business owners, or black homeowners could not access FHA mortgages, or blacks were excluded from unions, or the police force, or fire departments – meant that black families could not amass any meaningful wealth to bequeath to future generations. That history helps explain the wealth and income gap between black and white, and the concentrated pockets of poverty that persists in so many of today’s urban and rural communities.
A lack of economic opportunity among black men, and the shame and frustration that came from not being able to provide for one’s family, contributed to the erosion of black families – a problem that welfare policies for many years may have worsened. And the lack of basic services in so many urban black neighborhoods – parks for kids to play in, police walking the beat, regular garbage pick-up and building code enforcement – all helped create a cycle of violence, blight and neglect that continue to haunt us.
This is the reality in which Reverend Wright and other African-Americans of his generation grew up. They came of age in the late fifties and early sixties, a time when segregation was still the law of the land and opportunity was systematically constricted. What’s remarkable is not how many failed in the face of discrimination, but rather how many men and women overcame the odds; how many were able to make a way out of no way for those like me who would come after them.
But for all those who scratched and clawed their way to get a piece of the American Dream, there were many who didn’t make it – those who were ultimately defeated, in one way or another, by discrimination. That legacy of defeat was passed on to future generations – those young men and increasingly young women who we see standing on street corners or languishing in our prisons, without hope or prospects for the future. Even for those blacks who did make it, questions of race, and racism, continue to define their worldview in fundamental ways. For the men and women of Reverend Wright’s generation, the memories of humiliation and doubt and fear have not gone away; nor has the anger and the bitterness of those years. That anger may not get expressed in public, in front of white co-workers or white friends. But it does find voice in the barbershop or around the kitchen table. At times, that anger is exploited by politicians, to gin up votes along racial lines, or to make up for a politician’s own failings.
And occasionally it finds voice in the church on Sunday morning, in the pulpit and in the pews. The fact that so many people are surprised to hear that anger in some of Reverend Wright’s sermons simply reminds us of the old truism that the most segregated hour in American life occurs on Sunday morning. That anger is not always productive; indeed, all too often it distracts attention from solving real problems; it keeps us from squarely facing our own complicity in our condition, and prevents the African-American community from forging the alliances it needs to bring about real change. But the anger is real; it is powerful; and to simply wish it away, to condemn it without understanding its roots, only serves to widen the chasm of misunderstanding that exists between the races.
In fact, a similar anger exists within segments of the white community. Most working- and middle-class white Americans don’t feel that they have been particularly privileged by their race. Their experience is the immigrant experience – as far as they’re concerned, no one’s handed them anything, they’ve built it from scratch. They’ve worked hard all their lives, many times only to see their jobs shipped overseas or their pension dumped after a lifetime of labor. They are anxious about their futures, and feel their dreams slipping away; in an era of stagnant wages and global competition, opportunity comes to be seen as a zero sum game, in which your dreams come at my expense. So when they are told to bus their children to a school across town; when they hear that an African American is getting an advantage in landing a good job or a spot in a good college because of an injustice that they themselves never committed; when they’re told that their fears about crime in urban neighborhoods are somehow prejudiced, resentment builds over time.
Like the anger within the black community, these resentments aren’t always expressed in polite company. But they have helped shape the political landscape for at least a generation. Anger over welfare and affirmative action helped forge the Reagan Coalition. Politicians routinely exploited fears of crime for their own electoral ends. Talk show hosts and conservative commentators built entire careers unmasking bogus claims of racism while dismissing legitimate discussions of racial injustice and inequality as mere political correctness or reverse racism.
Just as black anger often proved counterproductive, so have these white resentments distracted attention from the real culprits of the middle class squeeze – a corporate culture rife with inside dealing, questionable accounting practices, and short-term greed; a Washington dominated by lobbyists and special interests; economic policies that favor the few over the many. And yet, to wish away the resentments of white Americans, to label them as misguided or even racist, without recognizing they are grounded in legitimate concerns – this too widens the racial divide, and blocks the path to understanding.
This is where we are right now. It’s a racial stalemate we’ve been stuck in for years. Contrary to the claims of some of my critics, black and white, I have never been so naïve as to believe that we can get beyond our racial divisions in a single election cycle, or with a single candidacy – particularly a candidacy as imperfect as my own.
But I have asserted a firm conviction – a conviction rooted in my faith in God and my faith in the American people – that working together we can move beyond some of our old racial wounds, and that in fact we have no choice if we are to continue on the path of a more perfect union.
For the African-American community, that path means embracing the burdens of our past without becoming victims of our past. It means continuing to insist on a full measure of justice in every aspect of American life. But it also means binding our particular grievances – for better health care, and better schools, and better jobs - to the larger aspirations of all Americans -- the white woman struggling to break the glass ceiling, the white man who's been laid off, the immigrant trying to feed his family. And it means taking full responsibility for own lives – by demanding more from our fathers, and spending more time with our children, and reading to them, and teaching them that while they may face challenges and discrimination in their own lives, they must never succumb to despair or cynicism; they must always believe that they can write their own destiny.
Ironically, this quintessentially American – and yes, conservative – notion of self-help found frequent expression in Reverend Wright’s sermons. But what my former pastor too often failed to understand is that embarking on a program of self-help also requires a belief that society can change.
The profound mistake of Reverend Wright’s sermons is not that he spoke about racism in our society. It’s that he spoke as if our society was static; as if no progress has been made; as if this country – a country that has made it possible for one of his own members to run for the highest office in the land and build a coalition of white and black; Latino and Asian, rich and poor, young and old -- is still irrevocably bound to a tragic past. But what we know -- what we have seen – is that America can change. That is true genius of this nation. What we have already achieved gives us hope – the audacity to hope – for what we can and must achieve tomorrow.
In the white community, the path to a more perfect union means acknowledging that what ails the African-American community does not just exist in the minds of black people; that the legacy of discrimination - and current incidents of discrimination, while less overt than in the past - are real and must be addressed. Not just with words, but with deeds – by investing in our schools and our communities; by enforcing our civil rights laws and ensuring fairness in our criminal justice system; by providing this generation with ladders of opportunity that were unavailable for previous generations. It requires all Americans to realize that your dreams do not have to come at the expense of my dreams; that investing in the health, welfare, and education of black and brown and white children will ultimately help all of America prosper.
In the end, then, what is called for is nothing more, and nothing less, than what all the world’s great religions demand – that we do unto others as we would have them do unto us. Let us be our brother’s keeper, Scripture tells us. Let us be our sister’s keeper. Let us find that common stake we all have in one another, and let our politics reflect that spirit as well.
For we have a choice in this country. We can accept a politics that breeds division, and conflict, and cynicism. We can tackle race only as spectacle – as we did in the OJ trial – or in the wake of tragedy, as we did in the aftermath of Katrina - or as fodder for the nightly news. We can play Reverend Wright’s sermons on every channel, every day and talk about them from now until the election, and make the only question in this campaign whether or not the American people think that I somehow believe or sympathize with his most offensive words. We can pounce on some gaffe by a Hillary supporter as evidence that she’s playing the race card, or we can speculate on whether white men will all flock to John McCain in the general election regardless of his policies.
We can do that.
But if we do, I can tell you that in the next election, we’ll be talking about some other distraction. And then another one. And then another one. And nothing will change.
That is one option. Or, at this moment, in this election, we can come together and say, “Not this time.” This time we want to talk about the crumbling schools that are stealing the future of black children and white children and Asian children and Hispanic children and Native American children. This time we want to reject the cynicism that tells us that these kids can’t learn; that those kids who don’t look like us are somebody else’s problem. The children of America are not those kids, they are our kids, and we will not let them fall behind in a 21st century economy. Not this time.
This time we want to talk about how the lines in the Emergency Room are filled with whites and blacks and Hispanics who do not have health care; who don’t have the power on their own to overcome the special interests in Washington, but who can take them on if we do it together.
This time we want to talk about the shuttered mills that once provided a decent life for men and women of every race, and the homes for sale that once belonged to Americans from every religion, every region, every walk of life. This time we want to talk about the fact that the real problem is not that someone who doesn’t look like you might take your job; it’s that the corporation you work for will ship it overseas for nothing more than a profit.
This time we want to talk about the men and women of every color and creed who serve together, and fight together, and bleed together under the same proud flag. We want to talk about how to bring them home from a war that never should’ve been authorized and never should’ve been waged, and we want to talk about how we’ll show our patriotism by caring for them, and their families, and giving them the benefits they have earned.
I would not be running for President if I didn’t believe with all my heart that this is what the vast majority of Americans want for this country. This union may never be perfect, but generation after generation has shown that it can always be perfected. And today, whenever I find myself feeling doubtful or cynical about this possibility, what gives me the most hope is the next generation – the young people whose attitudes and beliefs and openness to change have already made history in this election.
There is one story in particularly that I’d like to leave you with today – a story I told when I had the great honor of speaking on Dr. King’s birthday at his home church, Ebenezer Baptist, in Atlanta.
There is a young, twenty-three year old white woman named Ashley Baia who organized for our campaign in Florence, South Carolina. She had been working to organize a mostly African-American community since the beginning of this campaign, and one day she was at a roundtable discussion where everyone went around telling their story and why they were there.
And Ashley said that when she was nine years old, her mother got cancer. And because she had to miss days of work, she was let go and lost her health care. They had to file for bankruptcy, and that’s when Ashley decided that she had to do something to help her mom.
She knew that food was one of their most expensive costs, and so Ashley convinced her mother that what she really liked and really wanted to eat more than anything else was mustard and relish sandwiches. Because that was the cheapest way to eat.
She did this for a year until her mom got better, and she told everyone at the roundtable that the reason she joined our campaign was so that she could help the millions of other children in the country who want and need to help their parents too.
Now Ashley might have made a different choice. Perhaps somebody told her along the way that the source of her mother’s problems were blacks who were on welfare and too lazy to work, or Hispanics who were coming into the country illegally. But she didn’t. She sought out allies in her fight against injustice.
Anyway, Ashley finishes her story and then goes around the room and asks everyone else why they’re supporting the campaign. They all have different stories and reasons. Many bring up a specific issue. And finally they come to this elderly black man who’s been sitting there quietly the entire time. And Ashley asks him why he’s there. And he does not bring up a specific issue. He does not say health care or the economy. He does not say education or the war. He does not say that he was there because of Barack Obama. He simply says to everyone in the room, “I am here because of Ashley.”
“I’m here because of Ashley.” By itself, that single moment of recognition between that young white girl and that old black man is not enough. It is not enough to give health care to the sick, or jobs to the jobless, or education to our children.
But it is where we start. It is where our union grows stronger. And as so many generations have come to realize over the course of the two-hundred and twenty one years since a band of patriots signed that document in Philadelphia, that is where the perfection begins.
As I wait for 6am on Nov 4th 2008 - a historic day in my lifetime - I read this speech again. If you are not inspired after reading this - then check your pulse. It may not be beating.
Thursday, October 30, 2008
Sunday, October 26, 2008
Battle for VA: I'm voting for the n***er
Read the first and last paragraphs for the story
from http://www.fivethirtyeight.com/
On the Road: Big Stone Gap, Virginia
Last week, Julie Hensley made one of her thousands of phone calls on behalf of Barack Obama. A woman answered. As Hensley ran through her short script, the husband impatiently broke in. "Ma'am, we're voting for the n***er." And hung up. Hensley wasn't having it. "I went and made a couple other calls but chafed over this absurdity," she told us, "so I called them back, as I still had a couple questions for the wife." This time the man answered, asked pointedly who she was, and when she replied he hung up again.
We continue to hear stories like these in Appalachia. Big Stone Gap, where Barack Obama's southwesternmost field office in Virginia sits, gave us our latest version.
In Abingdon, where John McCain's Victory Center field office has been open nearly a month, we spoke with Don Carty, one of John McCain's U.S. Naval Academy '58 classmates. He strongly supported his fellow Middie in 2000, only to see "the ultraconservatives in the Republican Party (keep) him off the ticket." Remembering the days when the "Pat Robertson, Jerry Falwell crew" ignored McCain's offer to speak in this part of the state, Carty told us how he'd worked a booth at the county fair for a week prior to the Abingdon office opening where folks stopped in for bumper stickers and yard signs.Noting that this was the most he'd ever seen people express interest in the Republican campaign since he'd moved to the area in 1993, Carty offered that it was precisely because the independent voters in the area identified with McCain's maverick argument. When Sarah Palin was added to the ticket, Carty thought to himself, "John McCain just won the election."Two or three people a day drop in to make phone calls each day, Carty said, and the office was more involved with the state elections.
Another McCain volunteer, David Goldman, a native Englishman and resident of Dallas, Texas, gave us an interesting story. He'd contacted the campaign, asked where he could best volunteer, and on his own dime found his way to Abingdon, where he helps in the office every day. "I have no political experience," Goldman emphasized, "but I was so frustrated, having grown up in socialist England, I just know what Obama's going to bring." Health care, and his view that Americans didn't understand how terrible the situation was in England, was his primary concern. Highlighting the long waits for doctor visits and expensive care in England, Goldman said, "I'm just tired of hearing about how great England's health care system is. People are dying because they're not getting that treatment."Feeling compelled to help in any way he could, the middle-aged software salesman had been working since Sunday making phone calls, preparing canvass sheets, and doing whatever else he could to help. "It's just blocking and tackling.""I don't mind Democrats or Republicans," Goldman said. "This is far left wing socialism." Since he'd been volunteering, more and more folks had dropped by the office, getting involved when they wouldn't normally do so, he observed.
Goldman isn't the only native European to apply sweat labor to the Battle for Virginia. Back in Charlottesville, we encountered Alex Englehard, a German from Heidelberg pursuing his legal degree and on break after his fifth-year exams. Englehard, a dedicated full-time Obama volunteer, said many Americans "don't realize how big an impact this one election has on the rest of the world."He reported getting a few scattered complaints that a foreign citizen would get involved in American elections, but that they all came from people who told him they were supporting McCain. Nobody brought it up the day we tagged along. Though Englehard speaks English fluently and has many direct connections to America, some cultural gaps remain, which one recent incident illustrated. Englehard and a canvass partner approached a door of a house where a racist bumper sticker adorned the car parked there. Englehard had seen the sticker; his partner hadn't. Englehard hadn't understood the bumper sticker's implication, and the two avoided a possible confrontation when the door went unanswered. On the way out, the partner noticed the sticker. "He gave me a good lesson on what to watch for," Englehard chuckled.[UPDATE] Many queries. The bumper sticker said "If I'd known it'd be this much trouble, I'd have picked the cotton myself." You can see why this would go past a foreign citizen.
Mitch Stewart, Virginia State Director of Obama for America and one of the heroes of Iowa, told us in a sit-down interview that the Campaign for Change now boasted 49 offices in Virginia, with an additional 23 Virginia Coordinated Campaign party offices. 40 additional GOTV offices, not including the myriad GOTV staging locations clustered out from those offices, were already up and running.One of the cultural inside baseball games of campaign staffs, especially one as data-driven as the Obama campaign, is that everywhere you go there's a competition for numbers. Regional field directors must beat other regional field directors for doors knocked. One state must beat another for voter contacts. Individual field organizers must beat others in their office for dials. The competition is friendly but fierce. It's a pride thing.So when Stewart heard that his friend Jeremy Bird in Ohio had reported reaching 90% of his state's Neighborhood Team Leader goal, Stewart made sure to tell us that as of last Friday, Virginia's organizers had identified and trained 92% of its NTL goal. Your serve, J.B.[UPDATE] Bird was happy to inform us that Ohio is now at 93% of its NTLs trained and tested. Sorry Stewart.On a more serious note, Stewart talked about the success of the Iowa and the lessons the campaign had learned in developing its field program for the general election. "In Iowa," Stewart said, the question was, "will young voters under 30 and first time voters show up?" The answer was a resounding yes. "If you design a program and actively engage these voters" you can get the turnout you need, he said. Strong Virginia voter files are complemented by Catalist, the sophisticated datamining tool Democrats have begun to use the past two cycles. Catalist fills in holes where the voter file isn't complete. As Chris Schoenewald told us on the Republican side, good localized voter databases are better than a modeling tool, no matter how predictive the tool is. Voter Vault and Catalist predict voter behavior. Voter files are actual records of party-to-voter contact.Stewart told us that what the Obama campaign had done from the beginning of the race was more than traditional door to door and phone calls, more than just social networking, but "an extreme data acquisition" so that downstream the campaign could advertise and educate its potential voters. "It's all about education," said Stewart. Text messages and email addresses the campaign collected, for example, allowed the campaign to much more precisely aim its message as well as technical details like what to bring to the polls when voting, or where an individual's polling location was. Fundraising, of course, and pushing back against smear campaigns are included in this direct contact from the campaign.Virginia saw 438,000 newly registered voters this cycle, in large part due to the same systematic, relentless outreach to under-registered potential Democratic voters. If Virginia goes blue for the first time in 44 years at the presidential level, it shouldn't be forgotten that this race was won upstream with that effort.
By chance, we ran into James Gibbs, National Director of Organizing for the United Mine Workers of America, in Obama's Big Stone Gap office. After President of the UMWA Cecil Roberts endorsed Obama, "the membership went wholeheartedly" for the Democrat. "We want health and safety in these mines," said Gibbs. For the UMWA membership, Gibbs said, Barack Obama was the clear choice, and the membership was actively canvassing and phonebanking in nearby Castlewood and St. Paul.UMWA member Dennis R. Blagg, Sr. told us of his canvassing experiences in Big Stone Gap. Having knocked on at least 250 doors in the last two weeks, Blagg was "puzzled by some of the... slurs" aimed his way as he canvassed for Obama. Referring to the Republican ticket he viewed as responsible for fomenting racially harmful attitudes in his county, "they try to have scare tactics" to gin up division.It was Joe Biden's visit two and a half weeks prior that spurred Blagg into action. Referring to McCain, "They talk about experience... that guy's had 26 years of experience. Why hasn't he used it?"
As for Hensley, her story ended with a twist. A couple hours later during a pause in her dials, her phone rang. She recognized the number. "This is going to be good," she remembers thinking, getting ready to scrap. It was the husband. He was calling for the woman on whom he'd hung up. She then got something she didn't expect -- an apology. Calmly, Hensley told the man she'd accept his apology on one condition -- he had to tell her who he was voting for. "Oh, I don't normally talk about it but I feel like I owe you," the man said. "I am voting for Senator Obama." He asked if Hensley would like to speak to his wife, as he'd interrupted the original call. Hensley mentioned that she had been surprised when he'd called to apologize. Apparently the husband and wife had been talking the entire couple hours since the original call. "Did she get upset with you?" Hensley asked."What do you think?" the man replied.
Eleven days.
Race has been America's San Andreas fault. This historic election may finally give us a President who is neither black nor white but BOTH by parentage. Although Barack Obama identifies himself as a black man and so does most of the country - it is important to note that Barack is a child of both black and white parents. A child of love between a black man from Kenya and a white woman from Kansas. My daughter, in particular, identifies with that as she herself is of mixed heritage. As we draw ever nearer to one of the most historic days we are likely to witness in our lifetime, I am ever more hopeful about the future of this great land.
from http://www.fivethirtyeight.com/
On the Road: Big Stone Gap, Virginia
Last week, Julie Hensley made one of her thousands of phone calls on behalf of Barack Obama. A woman answered. As Hensley ran through her short script, the husband impatiently broke in. "Ma'am, we're voting for the n***er." And hung up. Hensley wasn't having it. "I went and made a couple other calls but chafed over this absurdity," she told us, "so I called them back, as I still had a couple questions for the wife." This time the man answered, asked pointedly who she was, and when she replied he hung up again.
We continue to hear stories like these in Appalachia. Big Stone Gap, where Barack Obama's southwesternmost field office in Virginia sits, gave us our latest version.
In Abingdon, where John McCain's Victory Center field office has been open nearly a month, we spoke with Don Carty, one of John McCain's U.S. Naval Academy '58 classmates. He strongly supported his fellow Middie in 2000, only to see "the ultraconservatives in the Republican Party (keep) him off the ticket." Remembering the days when the "Pat Robertson, Jerry Falwell crew" ignored McCain's offer to speak in this part of the state, Carty told us how he'd worked a booth at the county fair for a week prior to the Abingdon office opening where folks stopped in for bumper stickers and yard signs.Noting that this was the most he'd ever seen people express interest in the Republican campaign since he'd moved to the area in 1993, Carty offered that it was precisely because the independent voters in the area identified with McCain's maverick argument. When Sarah Palin was added to the ticket, Carty thought to himself, "John McCain just won the election."Two or three people a day drop in to make phone calls each day, Carty said, and the office was more involved with the state elections.
Another McCain volunteer, David Goldman, a native Englishman and resident of Dallas, Texas, gave us an interesting story. He'd contacted the campaign, asked where he could best volunteer, and on his own dime found his way to Abingdon, where he helps in the office every day. "I have no political experience," Goldman emphasized, "but I was so frustrated, having grown up in socialist England, I just know what Obama's going to bring." Health care, and his view that Americans didn't understand how terrible the situation was in England, was his primary concern. Highlighting the long waits for doctor visits and expensive care in England, Goldman said, "I'm just tired of hearing about how great England's health care system is. People are dying because they're not getting that treatment."Feeling compelled to help in any way he could, the middle-aged software salesman had been working since Sunday making phone calls, preparing canvass sheets, and doing whatever else he could to help. "It's just blocking and tackling.""I don't mind Democrats or Republicans," Goldman said. "This is far left wing socialism." Since he'd been volunteering, more and more folks had dropped by the office, getting involved when they wouldn't normally do so, he observed.
Goldman isn't the only native European to apply sweat labor to the Battle for Virginia. Back in Charlottesville, we encountered Alex Englehard, a German from Heidelberg pursuing his legal degree and on break after his fifth-year exams. Englehard, a dedicated full-time Obama volunteer, said many Americans "don't realize how big an impact this one election has on the rest of the world."He reported getting a few scattered complaints that a foreign citizen would get involved in American elections, but that they all came from people who told him they were supporting McCain. Nobody brought it up the day we tagged along. Though Englehard speaks English fluently and has many direct connections to America, some cultural gaps remain, which one recent incident illustrated. Englehard and a canvass partner approached a door of a house where a racist bumper sticker adorned the car parked there. Englehard had seen the sticker; his partner hadn't. Englehard hadn't understood the bumper sticker's implication, and the two avoided a possible confrontation when the door went unanswered. On the way out, the partner noticed the sticker. "He gave me a good lesson on what to watch for," Englehard chuckled.[UPDATE] Many queries. The bumper sticker said "If I'd known it'd be this much trouble, I'd have picked the cotton myself." You can see why this would go past a foreign citizen.
Mitch Stewart, Virginia State Director of Obama for America and one of the heroes of Iowa, told us in a sit-down interview that the Campaign for Change now boasted 49 offices in Virginia, with an additional 23 Virginia Coordinated Campaign party offices. 40 additional GOTV offices, not including the myriad GOTV staging locations clustered out from those offices, were already up and running.One of the cultural inside baseball games of campaign staffs, especially one as data-driven as the Obama campaign, is that everywhere you go there's a competition for numbers. Regional field directors must beat other regional field directors for doors knocked. One state must beat another for voter contacts. Individual field organizers must beat others in their office for dials. The competition is friendly but fierce. It's a pride thing.So when Stewart heard that his friend Jeremy Bird in Ohio had reported reaching 90% of his state's Neighborhood Team Leader goal, Stewart made sure to tell us that as of last Friday, Virginia's organizers had identified and trained 92% of its NTL goal. Your serve, J.B.[UPDATE] Bird was happy to inform us that Ohio is now at 93% of its NTLs trained and tested. Sorry Stewart.On a more serious note, Stewart talked about the success of the Iowa and the lessons the campaign had learned in developing its field program for the general election. "In Iowa," Stewart said, the question was, "will young voters under 30 and first time voters show up?" The answer was a resounding yes. "If you design a program and actively engage these voters" you can get the turnout you need, he said. Strong Virginia voter files are complemented by Catalist, the sophisticated datamining tool Democrats have begun to use the past two cycles. Catalist fills in holes where the voter file isn't complete. As Chris Schoenewald told us on the Republican side, good localized voter databases are better than a modeling tool, no matter how predictive the tool is. Voter Vault and Catalist predict voter behavior. Voter files are actual records of party-to-voter contact.Stewart told us that what the Obama campaign had done from the beginning of the race was more than traditional door to door and phone calls, more than just social networking, but "an extreme data acquisition" so that downstream the campaign could advertise and educate its potential voters. "It's all about education," said Stewart. Text messages and email addresses the campaign collected, for example, allowed the campaign to much more precisely aim its message as well as technical details like what to bring to the polls when voting, or where an individual's polling location was. Fundraising, of course, and pushing back against smear campaigns are included in this direct contact from the campaign.Virginia saw 438,000 newly registered voters this cycle, in large part due to the same systematic, relentless outreach to under-registered potential Democratic voters. If Virginia goes blue for the first time in 44 years at the presidential level, it shouldn't be forgotten that this race was won upstream with that effort.
By chance, we ran into James Gibbs, National Director of Organizing for the United Mine Workers of America, in Obama's Big Stone Gap office. After President of the UMWA Cecil Roberts endorsed Obama, "the membership went wholeheartedly" for the Democrat. "We want health and safety in these mines," said Gibbs. For the UMWA membership, Gibbs said, Barack Obama was the clear choice, and the membership was actively canvassing and phonebanking in nearby Castlewood and St. Paul.UMWA member Dennis R. Blagg, Sr. told us of his canvassing experiences in Big Stone Gap. Having knocked on at least 250 doors in the last two weeks, Blagg was "puzzled by some of the... slurs" aimed his way as he canvassed for Obama. Referring to the Republican ticket he viewed as responsible for fomenting racially harmful attitudes in his county, "they try to have scare tactics" to gin up division.It was Joe Biden's visit two and a half weeks prior that spurred Blagg into action. Referring to McCain, "They talk about experience... that guy's had 26 years of experience. Why hasn't he used it?"
As for Hensley, her story ended with a twist. A couple hours later during a pause in her dials, her phone rang. She recognized the number. "This is going to be good," she remembers thinking, getting ready to scrap. It was the husband. He was calling for the woman on whom he'd hung up. She then got something she didn't expect -- an apology. Calmly, Hensley told the man she'd accept his apology on one condition -- he had to tell her who he was voting for. "Oh, I don't normally talk about it but I feel like I owe you," the man said. "I am voting for Senator Obama." He asked if Hensley would like to speak to his wife, as he'd interrupted the original call. Hensley mentioned that she had been surprised when he'd called to apologize. Apparently the husband and wife had been talking the entire couple hours since the original call. "Did she get upset with you?" Hensley asked."What do you think?" the man replied.
Eleven days.
Race has been America's San Andreas fault. This historic election may finally give us a President who is neither black nor white but BOTH by parentage. Although Barack Obama identifies himself as a black man and so does most of the country - it is important to note that Barack is a child of both black and white parents. A child of love between a black man from Kenya and a white woman from Kansas. My daughter, in particular, identifies with that as she herself is of mixed heritage. As we draw ever nearer to one of the most historic days we are likely to witness in our lifetime, I am ever more hopeful about the future of this great land.
Friday, October 24, 2008
Quite a ringing endorsement!
from the Editorial Board of the New York Times.
October 24, 2008
Editorial
Barack Obama for President
Hyperbole is the currency of presidential campaigns, but this year the nation’s future truly hangs in the balance.
The United States is battered and drifting after eight years of President Bush’s failed leadership. He is saddling his successor with two wars, a scarred global image and a government systematically stripped of its ability to protect and help its citizens — whether they are fleeing a hurricane’s floodwaters, searching for affordable health care or struggling to hold on to their homes, jobs, savings and pensions in the midst of a financial crisis that was foretold and preventable.
As tough as the times are, the selection of a new president is easy. After nearly two years of a grueling and ugly campaign, Senator Barack Obama of Illinois has proved that he is the right choice to be the 44th president of the United States.
•
Mr. Obama has met challenge after challenge, growing as a leader and putting real flesh on his early promises of hope and change. He has shown a cool head and sound judgment. We believe he has the will and the ability to forge the broad political consensus that is essential to finding solutions to this nation’s problems.
In the same time, Senator John McCain of Arizona has retreated farther and farther to the fringe of American politics, running a campaign on partisan division, class warfare and even hints of racism. His policies and worldview are mired in the past. His choice of a running mate so evidently unfit for the office was a final act of opportunism and bad judgment that eclipsed the accomplishments of 26 years in Congress.
Given the particularly ugly nature of Mr. McCain’s campaign, the urge to choose on the basis of raw emotion is strong. But there is a greater value in looking closely at the facts of life in America today and at the prescriptions the candidates offer. The differences are profound.
Mr. McCain offers more of the Republican every-man-for-himself ideology, now lying in shards on Wall Street and in Americans’ bank accounts. Mr. Obama has another vision of government’s role and responsibilities.
In his convention speech in Denver, Mr. Obama said, “Government cannot solve all our problems, but what it should do is that which we cannot do for ourselves: protect us from harm and provide every child a decent education; keep our water clean and our toys safe; invest in new schools and new roads and new science and technology.”
Since the financial crisis, he has correctly identified the abject failure of government regulation that has brought the markets to the brink of collapse.
The Economy
The American financial system is the victim of decades of Republican deregulatory and anti-tax policies. Those ideas have been proved wrong at an unfathomable price, but Mr. McCain — a self-proclaimed “foot soldier in the Reagan revolution” — is still a believer.
Mr. Obama sees that far-reaching reforms will be needed to protect Americans and American business.
Mr. McCain talks about reform a lot, but his vision is pinched. His answer to any economic question is to eliminate pork-barrel spending — about $18 billion in a $3 trillion budget — cut taxes and wait for unfettered markets to solve the problem.
Mr. Obama is clear that the nation’s tax structure must be changed to make it fairer. That means the well-off Americans who have benefited disproportionately from Mr. Bush’s tax cuts will have to pay some more. Working Americans, who have seen their standard of living fall and their children’s options narrow, will benefit. Mr. Obama wants to raise the minimum wage and tie it to inflation, restore a climate in which workers are able to organize unions if they wish and expand educational opportunities.
Mr. McCain, who once opposed President Bush’s tax cuts for the wealthy as fiscally irresponsible, now wants to make them permanent. And while he talks about keeping taxes low for everyone, his proposed cuts would overwhelmingly benefit the top 1 percent of Americans while digging the country into a deeper fiscal hole.
National Security
The American military — its people and equipment — is dangerously overstretched. Mr. Bush has neglected the necessary war in Afghanistan, which now threatens to spiral into defeat. The unnecessary and staggeringly costly war in Iraq must be ended as quickly and responsibly as possible.
While Iraq’s leaders insist on a swift drawdown of American troops and a deadline for the end of the occupation, Mr. McCain is still talking about some ill-defined “victory.” As a result, he has offered no real plan for extracting American troops and limiting any further damage to Iraq and its neighbors.
Mr. Obama was an early and thoughtful opponent of the war in Iraq, and he has presented a military and diplomatic plan for withdrawing American forces. Mr. Obama also has correctly warned that until the Pentagon starts pulling troops out of Iraq, there will not be enough troops to defeat the Taliban and Al Qaeda in Afghanistan.
Mr. McCain, like Mr. Bush, has only belatedly focused on Afghanistan’s dangerous unraveling and the threat that neighboring Pakistan may quickly follow.
Mr. Obama would have a learning curve on foreign affairs, but he has already showed sounder judgment than his opponent on these critical issues. His choice of Senator Joseph Biden — who has deep foreign-policy expertise — as his running mate is another sign of that sound judgment. Mr. McCain’s long interest in foreign policy and the many dangers this country now faces make his choice of Gov. Sarah Palin of Alaska more irresponsible.
Both presidential candidates talk about strengthening alliances in Europe and Asia, including NATO, and strongly support Israel. Both candidates talk about repairing America’s image in the world. But it seems clear to us that Mr. Obama is far more likely to do that — and not just because the first black president would present a new American face to the world.
Mr. Obama wants to reform the United Nations, while Mr. McCain wants to create a new entity, the League of Democracies — a move that would incite even fiercer anti-American furies around the world.
Unfortunately, Mr. McCain, like Mr. Bush, sees the world as divided into friends (like Georgia) and adversaries (like Russia). He proposed kicking Russia out of the Group of 8 industrialized nations even before the invasion of Georgia. We have no sympathy for Moscow’s bullying, but we also have no desire to replay the cold war. The United States must find a way to constrain the Russians’ worst impulses, while preserving the ability to work with them on arms control and other vital initiatives.
Both candidates talk tough on terrorism, and neither has ruled out military action to end Iran’s nuclear weapons program. But Mr. Obama has called for a serious effort to try to wean Tehran from its nuclear ambitions with more credible diplomatic overtures and tougher sanctions. Mr. McCain’s willingness to joke about bombing Iran was frightening.
The Constitution and the Rule of Law
Under Mr. Bush and Vice President Dick Cheney, the Constitution, the Bill of Rights, the justice system and the separation of powers have come under relentless attack. Mr. Bush chose to exploit the tragedy of Sept. 11, 2001, the moment in which he looked like the president of a unified nation, to try to place himself above the law.
Mr. Bush has arrogated the power to imprison men without charges and browbeat Congress into granting an unfettered authority to spy on Americans. He has created untold numbers of “black” programs, including secret prisons and outsourced torture. The president has issued hundreds, if not thousands, of secret orders. We fear it will take years of forensic research to discover how many basic rights have been violated.
Both candidates have renounced torture and are committed to closing the prison camp in
Guantánamo Bay, Cuba.
But Mr. Obama has gone beyond that, promising to identify and correct Mr. Bush’s attacks on the democratic system. Mr. McCain has been silent on the subject.
Mr. McCain improved protections for detainees. But then he helped the White House push through the appalling Military Commissions Act of 2006, which denied detainees the right to a hearing in a real court and put Washington in conflict with the Geneva Conventions, greatly increasing the risk to American troops.
The next president will have the chance to appoint one or more justices to a Supreme Court that is on the brink of being dominated by a radical right wing. Mr. Obama may appoint less liberal judges than some of his followers might like, but Mr. McCain is certain to pick rigid ideologues. He has said he would never appoint a judge who believes in women’s reproductive rights.
The Candidates
It will be an enormous challenge just to get the nation back to where it was before Mr. Bush, to begin to mend its image in the world and to restore its self-confidence and its self-respect. Doing all of that, and leading America forward, will require strength of will, character and intellect, sober judgment and a cool, steady hand.
Mr. Obama has those qualities in abundance. Watching him being tested in the campaign has long since erased the reservations that led us to endorse Senator Hillary Rodham Clinton in the Democratic primaries. He has drawn in legions of new voters with powerful messages of hope and possibility and calls for shared sacrifice and social responsibility.
Mr. McCain, whom we chose as the best Republican nominee in the primaries, has spent the last coins of his reputation for principle and sound judgment to placate the limitless demands and narrow vision of the far-right wing. His righteous fury at being driven out of the 2000 primaries on a racist tide aimed at his adopted daughter has been replaced by a zealous embrace of those same win-at-all-costs tactics and tacticians.
He surrendered his standing as an independent thinker in his rush to embrace Mr. Bush’s misbegotten tax policies and to abandon his leadership position on climate change and immigration reform.
Mr. McCain could have seized the high ground on energy and the environment. Earlier in his career, he offered the first plausible bill to control America’s emissions of greenhouse gases. Now his positions are a caricature of that record: think Ms. Palin leading chants of “drill, baby, drill.”
Mr. Obama has endorsed some offshore drilling, but as part of a comprehensive strategy including big investments in new, clean technologies.
•
Mr. Obama has withstood some of the toughest campaign attacks ever mounted against a candidate. He’s been called un-American and accused of hiding a secret Islamic faith. The Republicans have linked him to domestic terrorists and questioned his wife’s love of her country. Ms. Palin has also questioned millions of Americans’ patriotism, calling Republican-leaning states “pro-America.”
This politics of fear, division and character assassination helped Mr. Bush drive Mr. McCain from the 2000 Republican primaries and defeat Senator John Kerry in 2004. It has been the dominant theme of his failed presidency.
The nation’s problems are simply too grave to be reduced to slashing “robo-calls” and negative ads. This country needs sensible leadership, compassionate leadership, honest leadership and strong leadership. Barack Obama has shown that he has all of those qualities.
October 24, 2008
Editorial
Barack Obama for President
Hyperbole is the currency of presidential campaigns, but this year the nation’s future truly hangs in the balance.
The United States is battered and drifting after eight years of President Bush’s failed leadership. He is saddling his successor with two wars, a scarred global image and a government systematically stripped of its ability to protect and help its citizens — whether they are fleeing a hurricane’s floodwaters, searching for affordable health care or struggling to hold on to their homes, jobs, savings and pensions in the midst of a financial crisis that was foretold and preventable.
As tough as the times are, the selection of a new president is easy. After nearly two years of a grueling and ugly campaign, Senator Barack Obama of Illinois has proved that he is the right choice to be the 44th president of the United States.
•
Mr. Obama has met challenge after challenge, growing as a leader and putting real flesh on his early promises of hope and change. He has shown a cool head and sound judgment. We believe he has the will and the ability to forge the broad political consensus that is essential to finding solutions to this nation’s problems.
In the same time, Senator John McCain of Arizona has retreated farther and farther to the fringe of American politics, running a campaign on partisan division, class warfare and even hints of racism. His policies and worldview are mired in the past. His choice of a running mate so evidently unfit for the office was a final act of opportunism and bad judgment that eclipsed the accomplishments of 26 years in Congress.
Given the particularly ugly nature of Mr. McCain’s campaign, the urge to choose on the basis of raw emotion is strong. But there is a greater value in looking closely at the facts of life in America today and at the prescriptions the candidates offer. The differences are profound.
Mr. McCain offers more of the Republican every-man-for-himself ideology, now lying in shards on Wall Street and in Americans’ bank accounts. Mr. Obama has another vision of government’s role and responsibilities.
In his convention speech in Denver, Mr. Obama said, “Government cannot solve all our problems, but what it should do is that which we cannot do for ourselves: protect us from harm and provide every child a decent education; keep our water clean and our toys safe; invest in new schools and new roads and new science and technology.”
Since the financial crisis, he has correctly identified the abject failure of government regulation that has brought the markets to the brink of collapse.
The Economy
The American financial system is the victim of decades of Republican deregulatory and anti-tax policies. Those ideas have been proved wrong at an unfathomable price, but Mr. McCain — a self-proclaimed “foot soldier in the Reagan revolution” — is still a believer.
Mr. Obama sees that far-reaching reforms will be needed to protect Americans and American business.
Mr. McCain talks about reform a lot, but his vision is pinched. His answer to any economic question is to eliminate pork-barrel spending — about $18 billion in a $3 trillion budget — cut taxes and wait for unfettered markets to solve the problem.
Mr. Obama is clear that the nation’s tax structure must be changed to make it fairer. That means the well-off Americans who have benefited disproportionately from Mr. Bush’s tax cuts will have to pay some more. Working Americans, who have seen their standard of living fall and their children’s options narrow, will benefit. Mr. Obama wants to raise the minimum wage and tie it to inflation, restore a climate in which workers are able to organize unions if they wish and expand educational opportunities.
Mr. McCain, who once opposed President Bush’s tax cuts for the wealthy as fiscally irresponsible, now wants to make them permanent. And while he talks about keeping taxes low for everyone, his proposed cuts would overwhelmingly benefit the top 1 percent of Americans while digging the country into a deeper fiscal hole.
National Security
The American military — its people and equipment — is dangerously overstretched. Mr. Bush has neglected the necessary war in Afghanistan, which now threatens to spiral into defeat. The unnecessary and staggeringly costly war in Iraq must be ended as quickly and responsibly as possible.
While Iraq’s leaders insist on a swift drawdown of American troops and a deadline for the end of the occupation, Mr. McCain is still talking about some ill-defined “victory.” As a result, he has offered no real plan for extracting American troops and limiting any further damage to Iraq and its neighbors.
Mr. Obama was an early and thoughtful opponent of the war in Iraq, and he has presented a military and diplomatic plan for withdrawing American forces. Mr. Obama also has correctly warned that until the Pentagon starts pulling troops out of Iraq, there will not be enough troops to defeat the Taliban and Al Qaeda in Afghanistan.
Mr. McCain, like Mr. Bush, has only belatedly focused on Afghanistan’s dangerous unraveling and the threat that neighboring Pakistan may quickly follow.
Mr. Obama would have a learning curve on foreign affairs, but he has already showed sounder judgment than his opponent on these critical issues. His choice of Senator Joseph Biden — who has deep foreign-policy expertise — as his running mate is another sign of that sound judgment. Mr. McCain’s long interest in foreign policy and the many dangers this country now faces make his choice of Gov. Sarah Palin of Alaska more irresponsible.
Both presidential candidates talk about strengthening alliances in Europe and Asia, including NATO, and strongly support Israel. Both candidates talk about repairing America’s image in the world. But it seems clear to us that Mr. Obama is far more likely to do that — and not just because the first black president would present a new American face to the world.
Mr. Obama wants to reform the United Nations, while Mr. McCain wants to create a new entity, the League of Democracies — a move that would incite even fiercer anti-American furies around the world.
Unfortunately, Mr. McCain, like Mr. Bush, sees the world as divided into friends (like Georgia) and adversaries (like Russia). He proposed kicking Russia out of the Group of 8 industrialized nations even before the invasion of Georgia. We have no sympathy for Moscow’s bullying, but we also have no desire to replay the cold war. The United States must find a way to constrain the Russians’ worst impulses, while preserving the ability to work with them on arms control and other vital initiatives.
Both candidates talk tough on terrorism, and neither has ruled out military action to end Iran’s nuclear weapons program. But Mr. Obama has called for a serious effort to try to wean Tehran from its nuclear ambitions with more credible diplomatic overtures and tougher sanctions. Mr. McCain’s willingness to joke about bombing Iran was frightening.
The Constitution and the Rule of Law
Under Mr. Bush and Vice President Dick Cheney, the Constitution, the Bill of Rights, the justice system and the separation of powers have come under relentless attack. Mr. Bush chose to exploit the tragedy of Sept. 11, 2001, the moment in which he looked like the president of a unified nation, to try to place himself above the law.
Mr. Bush has arrogated the power to imprison men without charges and browbeat Congress into granting an unfettered authority to spy on Americans. He has created untold numbers of “black” programs, including secret prisons and outsourced torture. The president has issued hundreds, if not thousands, of secret orders. We fear it will take years of forensic research to discover how many basic rights have been violated.
Both candidates have renounced torture and are committed to closing the prison camp in
Guantánamo Bay, Cuba.
But Mr. Obama has gone beyond that, promising to identify and correct Mr. Bush’s attacks on the democratic system. Mr. McCain has been silent on the subject.
Mr. McCain improved protections for detainees. But then he helped the White House push through the appalling Military Commissions Act of 2006, which denied detainees the right to a hearing in a real court and put Washington in conflict with the Geneva Conventions, greatly increasing the risk to American troops.
The next president will have the chance to appoint one or more justices to a Supreme Court that is on the brink of being dominated by a radical right wing. Mr. Obama may appoint less liberal judges than some of his followers might like, but Mr. McCain is certain to pick rigid ideologues. He has said he would never appoint a judge who believes in women’s reproductive rights.
The Candidates
It will be an enormous challenge just to get the nation back to where it was before Mr. Bush, to begin to mend its image in the world and to restore its self-confidence and its self-respect. Doing all of that, and leading America forward, will require strength of will, character and intellect, sober judgment and a cool, steady hand.
Mr. Obama has those qualities in abundance. Watching him being tested in the campaign has long since erased the reservations that led us to endorse Senator Hillary Rodham Clinton in the Democratic primaries. He has drawn in legions of new voters with powerful messages of hope and possibility and calls for shared sacrifice and social responsibility.
Mr. McCain, whom we chose as the best Republican nominee in the primaries, has spent the last coins of his reputation for principle and sound judgment to placate the limitless demands and narrow vision of the far-right wing. His righteous fury at being driven out of the 2000 primaries on a racist tide aimed at his adopted daughter has been replaced by a zealous embrace of those same win-at-all-costs tactics and tacticians.
He surrendered his standing as an independent thinker in his rush to embrace Mr. Bush’s misbegotten tax policies and to abandon his leadership position on climate change and immigration reform.
Mr. McCain could have seized the high ground on energy and the environment. Earlier in his career, he offered the first plausible bill to control America’s emissions of greenhouse gases. Now his positions are a caricature of that record: think Ms. Palin leading chants of “drill, baby, drill.”
Mr. Obama has endorsed some offshore drilling, but as part of a comprehensive strategy including big investments in new, clean technologies.
•
Mr. Obama has withstood some of the toughest campaign attacks ever mounted against a candidate. He’s been called un-American and accused of hiding a secret Islamic faith. The Republicans have linked him to domestic terrorists and questioned his wife’s love of her country. Ms. Palin has also questioned millions of Americans’ patriotism, calling Republican-leaning states “pro-America.”
This politics of fear, division and character assassination helped Mr. Bush drive Mr. McCain from the 2000 Republican primaries and defeat Senator John Kerry in 2004. It has been the dominant theme of his failed presidency.
The nation’s problems are simply too grave to be reduced to slashing “robo-calls” and negative ads. This country needs sensible leadership, compassionate leadership, honest leadership and strong leadership. Barack Obama has shown that he has all of those qualities.
Monday, October 6, 2008
Changing Battlegrounds....NC, MO, IN
Never thought I would be typing this. The new battleground states for the election now apparently are: North Carolina, Missouri and Indiana!!! OMG WTF????
Apparently Colorado, Ohio, Pennsylvania, Florida and Virginia are all trending DEM from the latest polling as per www.fivethirtyeight.com
Can you say HOOCODANODE?????
Me thinks a large Obama victory is in the cards....with a month to go. Stay tuned!
Apparently Colorado, Ohio, Pennsylvania, Florida and Virginia are all trending DEM from the latest polling as per www.fivethirtyeight.com
Can you say HOOCODANODE?????
Me thinks a large Obama victory is in the cards....with a month to go. Stay tuned!
Monday, September 22, 2008
New era on Wall Street
from nytimes.com
September 23, 2008
Starting a New Era at Goldman and Morgan
By BEN WHITE
The transformation of Wall Street picked up pace on Monday as Goldman Sachs and Morgan Stanley, the last big independent investment banks, moved to restructure into larger, less risk-taking organizations that will be subject to far greater regulation by the Federal Reserve.
The changes came after Goldman and Morgan Stanley on Sunday night received permission from the Federal Reserve to become bank holding companies. The change means they will be able finance their activities with insured deposits but in return must reduce the amount they can borrow to make the kind of big trading bets that drove huge profits, and massive bonuses for executives, over the last several years of Wall Street’s latest Gilded Age.
Morgan Stanley moved quickly into the new era on Monday, announcing that it planned to sell up to a 20 percent stake in itself to Mitsubishi UFJ Financial Group, Japan’s largest commercial bank, for about $8 billion. Mitsubishi has $1.1 trillion in bank deposits, which will help bolster Morgan’s stability of financing. Goldman Sachs is also expected to move to increase its deposit base and add more capital to its balance sheet.
The changes by Morgan Stanley and Goldman essentially bring to an end the era of the big, independent Wall Street investment bank and a return to the model that dominated before the Glass-Steagall Act of 1933 forbade commercial banks from also owning securities firms.
Both banks said they requested the change in their status. But the changes also closely follow comments from executives at both investment houses saying their business model was not broken and that transforming into deposit-funded commercial banks would not necessarily help them perform better. This raised the question of whether the change was really voluntary, which both banks insist it was, or was mandated by a Federal Reserve eager not to have to come to the rescue of another flailing financial institution.
The changes, which came as Congress and the Bush administration rushed to pass a $700 billion rescue of financial firms, amount to a blunt acknowledgment that their model of finance and investing had become too risky and that they needed the cushion of bank deposits that had kept big commercial banks like Bank of America and JPMorgan Chase relatively safe amid the recent turmoil.
It also is a turning point for the high-rolling culture of Wall Street, with its seven-figure bonuses and lavish perks for even midlevel executives.
Commercial banks tend to produce both more modest profits and payouts to top executives.
“The kind of bonuses you saw on Wall Street over the last five years are not something you are likely to ever see again, not in our lifetime,” said Charles Geisst, a Wall Street historian and professor at Manhattan College.
By becoming bank holding companies, Morgan Stanley and Goldman are agreeing to significantly tighter regulations and much closer supervision by bank examiners from several government agencies rather than only the Securities and Exchange Commission. Now, the firms will look more like commercial banks, with more disclosure, higher capital reserves and less risk-taking.
For decades, firms like Morgan Stanley and Goldman Sachs thrived by taking bold bets with their own money, often using enormous amounts of debt to increase their profits, with little outside oversight.
They were the envy of Wall Street, dominating the industry’s most lucrative businesses, landing headline-grabbing deals and advising companies and governments on mergers, stock offerings and restructurings.
But that brash model was torn apart over the last several weeks as investors lost confidence in the way they made those bets during the recent credit boom, when investment banks expanded with aplomb into esoteric securities, the risks of which were not easily understood.
Over several harrowing days, clients started pulling their money, share prices plunged and these banks’ entire enterprises were brought to the brink.
In exchange for subjecting themselves to more regulation, the companies will have access to the full array of the Federal Reserve’s lending facilities.
It should help them avoid the fate of Lehman Brothers, which filed for bankruptcy last week, and Bear Stearns and Merrill Lynch — both of which agreed to be acquired by big bank holding companies.
The decision by the banks to become a holding company also raises questions about whether the Federal Reserve will seek to regulate hedge funds, many of the largest of which closely resemble investment banks like Goldman.
Just a year ago investment banks, the titans of global finance, considered bank regulation a millstone to be avoided at all costs. Commercial banks have to subject themselves to restrictions on how much money they can borrow and what kinds of businesses they can be in. Lobbyists for firms like Goldman spent years fending off closer supervision of their business.
As bank holding companies, the two banks, whose shares have lost about half their value this year, will have to reduce the amount of money they can borrow relative to their capital.
That will make them more financially sound but will also significantly limit their profits. Today, both Goldman Sachs and Morgan Stanley have $1 of capital for every $22 of assets. By contrast, Bank of America’s has less than $11 for every $1 of capital.
JPMorgan Chase acquired Bear Stearns this spring in a fire sale brokered by the federal government, while Bank of America has agreed to buy Merrill Lynch for $50 billion.
As bank holding companies, Morgan and Goldman will have greater access to the discount window of the Federal Reserve, which banks can use to borrow money from the central bank. While they were allowed to draw on temporary Fed lending facilities in recent months, they could not borrow against the same wide array of collateral that commercial banks could. The discount window access for investment banks is expected to be phased out in January.
It will take time for Goldman and Morgan to transform into fully regulated banks because they cannot quickly reduce how much money they borrow relative to their assets. Both banks are likely to seek waivers from the Federal Reserve to give them time to comply with the capital requirements imposed on deposit-funded commercial banks.
The Fed and the Securities and Exchange Commission have had examiners at investment banks since March, giving regulators huge insight into their operations.
Both banks already have limited retail deposit-taking businesses, which they plan to expand over time. Morgan Stanley had $36 billion in retail deposits as of Aug. 31 and Goldman Sachs had $20 billion in deposits.
“We believe that Goldman Sachs, under Federal Reserve supervision, will be regarded as an even more secure institution with an exceptionally clean balance sheet and a greater diversity of funding sources,” Lloyd C.Blankfein, the chairman and chief executive of Goldman, said in a statement on Sunday night.
John J. Mack, the chairman and chief executive of Morgan Stanley, said: “This new bank holding structure will ensure that Morgan Stanley is in the strongest possible position — with the stability and flexibility to seize opportunities in the rapidly changing financial marketplace.”
In recent days, Morgan Stanley had sought other ways to bolster its capital and had been in advanced talks with China’s sovereign wealth fund and others about raising billions of dollars, people briefed on the matter said Sunday night. It had also been talking about a merger with Wachovia, a large commercial bank based in Charlotte, N.C.
With their transition to operating as bank holding companies, those talks are likely to take a different form, because now Morgan Stanley can buy a commercial bank.
How the mighty have fallen. This ends the era of Investment Banks and 30:1 leverage and brings us into a European model with a merging of deposit and investment banking where fractal banking ratios allow leverage of about 9:1. I still feel thats very high but its "manageable." About time.
September 23, 2008
Starting a New Era at Goldman and Morgan
By BEN WHITE
The transformation of Wall Street picked up pace on Monday as Goldman Sachs and Morgan Stanley, the last big independent investment banks, moved to restructure into larger, less risk-taking organizations that will be subject to far greater regulation by the Federal Reserve.
The changes came after Goldman and Morgan Stanley on Sunday night received permission from the Federal Reserve to become bank holding companies. The change means they will be able finance their activities with insured deposits but in return must reduce the amount they can borrow to make the kind of big trading bets that drove huge profits, and massive bonuses for executives, over the last several years of Wall Street’s latest Gilded Age.
Morgan Stanley moved quickly into the new era on Monday, announcing that it planned to sell up to a 20 percent stake in itself to Mitsubishi UFJ Financial Group, Japan’s largest commercial bank, for about $8 billion. Mitsubishi has $1.1 trillion in bank deposits, which will help bolster Morgan’s stability of financing. Goldman Sachs is also expected to move to increase its deposit base and add more capital to its balance sheet.
The changes by Morgan Stanley and Goldman essentially bring to an end the era of the big, independent Wall Street investment bank and a return to the model that dominated before the Glass-Steagall Act of 1933 forbade commercial banks from also owning securities firms.
Both banks said they requested the change in their status. But the changes also closely follow comments from executives at both investment houses saying their business model was not broken and that transforming into deposit-funded commercial banks would not necessarily help them perform better. This raised the question of whether the change was really voluntary, which both banks insist it was, or was mandated by a Federal Reserve eager not to have to come to the rescue of another flailing financial institution.
The changes, which came as Congress and the Bush administration rushed to pass a $700 billion rescue of financial firms, amount to a blunt acknowledgment that their model of finance and investing had become too risky and that they needed the cushion of bank deposits that had kept big commercial banks like Bank of America and JPMorgan Chase relatively safe amid the recent turmoil.
It also is a turning point for the high-rolling culture of Wall Street, with its seven-figure bonuses and lavish perks for even midlevel executives.
Commercial banks tend to produce both more modest profits and payouts to top executives.
“The kind of bonuses you saw on Wall Street over the last five years are not something you are likely to ever see again, not in our lifetime,” said Charles Geisst, a Wall Street historian and professor at Manhattan College.
By becoming bank holding companies, Morgan Stanley and Goldman are agreeing to significantly tighter regulations and much closer supervision by bank examiners from several government agencies rather than only the Securities and Exchange Commission. Now, the firms will look more like commercial banks, with more disclosure, higher capital reserves and less risk-taking.
For decades, firms like Morgan Stanley and Goldman Sachs thrived by taking bold bets with their own money, often using enormous amounts of debt to increase their profits, with little outside oversight.
They were the envy of Wall Street, dominating the industry’s most lucrative businesses, landing headline-grabbing deals and advising companies and governments on mergers, stock offerings and restructurings.
But that brash model was torn apart over the last several weeks as investors lost confidence in the way they made those bets during the recent credit boom, when investment banks expanded with aplomb into esoteric securities, the risks of which were not easily understood.
Over several harrowing days, clients started pulling their money, share prices plunged and these banks’ entire enterprises were brought to the brink.
In exchange for subjecting themselves to more regulation, the companies will have access to the full array of the Federal Reserve’s lending facilities.
It should help them avoid the fate of Lehman Brothers, which filed for bankruptcy last week, and Bear Stearns and Merrill Lynch — both of which agreed to be acquired by big bank holding companies.
The decision by the banks to become a holding company also raises questions about whether the Federal Reserve will seek to regulate hedge funds, many of the largest of which closely resemble investment banks like Goldman.
Just a year ago investment banks, the titans of global finance, considered bank regulation a millstone to be avoided at all costs. Commercial banks have to subject themselves to restrictions on how much money they can borrow and what kinds of businesses they can be in. Lobbyists for firms like Goldman spent years fending off closer supervision of their business.
As bank holding companies, the two banks, whose shares have lost about half their value this year, will have to reduce the amount of money they can borrow relative to their capital.
That will make them more financially sound but will also significantly limit their profits. Today, both Goldman Sachs and Morgan Stanley have $1 of capital for every $22 of assets. By contrast, Bank of America’s has less than $11 for every $1 of capital.
JPMorgan Chase acquired Bear Stearns this spring in a fire sale brokered by the federal government, while Bank of America has agreed to buy Merrill Lynch for $50 billion.
As bank holding companies, Morgan and Goldman will have greater access to the discount window of the Federal Reserve, which banks can use to borrow money from the central bank. While they were allowed to draw on temporary Fed lending facilities in recent months, they could not borrow against the same wide array of collateral that commercial banks could. The discount window access for investment banks is expected to be phased out in January.
It will take time for Goldman and Morgan to transform into fully regulated banks because they cannot quickly reduce how much money they borrow relative to their assets. Both banks are likely to seek waivers from the Federal Reserve to give them time to comply with the capital requirements imposed on deposit-funded commercial banks.
The Fed and the Securities and Exchange Commission have had examiners at investment banks since March, giving regulators huge insight into their operations.
Both banks already have limited retail deposit-taking businesses, which they plan to expand over time. Morgan Stanley had $36 billion in retail deposits as of Aug. 31 and Goldman Sachs had $20 billion in deposits.
“We believe that Goldman Sachs, under Federal Reserve supervision, will be regarded as an even more secure institution with an exceptionally clean balance sheet and a greater diversity of funding sources,” Lloyd C.Blankfein, the chairman and chief executive of Goldman, said in a statement on Sunday night.
John J. Mack, the chairman and chief executive of Morgan Stanley, said: “This new bank holding structure will ensure that Morgan Stanley is in the strongest possible position — with the stability and flexibility to seize opportunities in the rapidly changing financial marketplace.”
In recent days, Morgan Stanley had sought other ways to bolster its capital and had been in advanced talks with China’s sovereign wealth fund and others about raising billions of dollars, people briefed on the matter said Sunday night. It had also been talking about a merger with Wachovia, a large commercial bank based in Charlotte, N.C.
With their transition to operating as bank holding companies, those talks are likely to take a different form, because now Morgan Stanley can buy a commercial bank.
How the mighty have fallen. This ends the era of Investment Banks and 30:1 leverage and brings us into a European model with a merging of deposit and investment banking where fractal banking ratios allow leverage of about 9:1. I still feel thats very high but its "manageable." About time.
Friday, September 19, 2008
Congress Stunned by Warnings
www.nytimes.com
September 20, 2008
Congressional Leaders Were Stunned by Warnings
By DAVID M. HERSZENHORN
WASHINGTON — It was a room full of people who rarely hold their tongues. But as the Fed chairman, Ben S. Bernanke, laid out the potentially devastating ramifications of the financial crisis before congressional leaders on Thursday night, there was a stunned silence at first.
Mr. Bernanke and Treasury Secretary Henry M. Paulson Jr. had made an urgent and unusual evening visit to Capitol Hill, and they were gathered around a conference table in the offices of House Speaker Nancy Pelosi.
“When you listened to him describe it you gulped," said Senator Charles E. Schumer, Democrat of New York.
As Senator Christopher J. Dodd, Democrat of Connecticut and chairman of the Banking, Housing and Urban Affairs Committee, put it Friday morning on the ABC program “Good Morning America,” the congressional leaders were told “that we’re literally maybe days away from a complete meltdown of our financial system, with all the implications here at home and globally.”
Mr. Schumer added, “History was sort of hanging over it, like this was a moment.”
When Mr. Schumer described the meeting as “somber,” Mr. Dodd cut in. “Somber doesn’t begin to justify the words,” he said. “We have never heard language like this.”
“What you heard last evening,” he added, “is one of those rare moments, certainly rare in my experience here, is Democrats and Republicans deciding we need to work together quickly.”
Although Mr. Schumer, Mr. Dodd and other participants declined to repeat precisely what they were told by Mr. Bernanke and Mr. Paulson, they said the two men described the financial system as effectively bound in a knot that was being pulled tighter and tighter by the day.
“You have the credit lines in America, which are the lifeblood of the economy, frozen.” Mr. Schumer said. “That hasn’t happened before. It’s a brave new world. You are in uncharted territory, but the one thing you do know is you can’t leave them frozen or the economy will just head south at a rapid rate.”
As he spoke, Mr. Schumer swooped his hand, to make the gesture of a plummeting bird. “You know we’d be lucky ...” he said as his voice trailed off. “Well, I’ll leave it at that.”
As officials at the Treasury Department raced on Friday to draft legislative language for an ambitious plan for the government to buy billions of dollars of illiquid debt from ailing American financial institutions, legislators on Capitol Hill said they planned to work through the weekend reviewing the proposal and making efforts to bring a package of measures to the floor of the House and Senate by the end of next week.
Lawmakers in both parties described the meeting in Ms. Pelosi’s office on Thursday night with Mr. Paulson and Mr. Bernanke as collaborative, and that they were prepared to put politics aside to address the needs of the American people.
While Democrats initially said after the meeting that they planned to use the administration’s proposal of a huge rescue effort to win support for an economic stimulus package, they pulled back slightly on Friday morning, saying that their top priority was to help put together the bailout package and stabilize the economy.
But it was clear they continued to examine ways to make clear that the government was stepping up not just to help the major financial firms but also to protect the interests of American taxpayers and families by safeguarding their pensions and college savings, and by preventing any further drying up of consumer credit.
In addition to potential stimulus measures, which could include an extension of unemployment benefits and spending on public infrastructure projects, Democrats said they intended to consider measures to help stem home foreclosures and stabilize real estate values.
Among the potential steps Congress can take include approving legislation to allow bankruptcy judges to modify the terms of primary mortgages — authority that the bankruptcy laws do not currently allow and that the banking industry has strenuously opposed.
But the Democrats said it was too soon to discuss such details, and that they were awaiting a draft of the proposal from the Treasury Department.
“We have got to deal with the foreclosure issue,” Mr. Dodd said. “You have got to stop that hemorrhaging..If you don’t, the problem doesn’t go away. Ben Bernanke has said it over and over again. Hank Paulson recognizes it. This problem began with bad lending practices. Those are his words, not mine, and so this plan must address that or I’ll be back here in front of a bank of microphones at some point explaining the next failure.”
Even before the drafting of the plan was complete, the Bush administration and the Fed began efforts to sell the idea of a huge rescue to potentially skeptical rank-and-file members of Congress. Mr. Paulson and Mr. Bernanke held a conference call with House Republicans to explain their thinking.
Senator Richard C. Shelby of Alabama, the senior Republican on the Senate banking committee, said in a television interview that cost to the government of purchasing bad debt could run to $1 trillion — a potential warning sign since Mr. Shelby is a longtime skeptic of government intervention in the private market.
Until Mr. Shelby was interviewed on Friday morning, officials on Capitol Hill had been careful not to discuss specific figures, though the rescue envisioned by the Treasury Department clearly entails a government appropriation of hundreds of billions of dollars.
Holy cow!!!!
September 20, 2008
Congressional Leaders Were Stunned by Warnings
By DAVID M. HERSZENHORN
WASHINGTON — It was a room full of people who rarely hold their tongues. But as the Fed chairman, Ben S. Bernanke, laid out the potentially devastating ramifications of the financial crisis before congressional leaders on Thursday night, there was a stunned silence at first.
Mr. Bernanke and Treasury Secretary Henry M. Paulson Jr. had made an urgent and unusual evening visit to Capitol Hill, and they were gathered around a conference table in the offices of House Speaker Nancy Pelosi.
“When you listened to him describe it you gulped," said Senator Charles E. Schumer, Democrat of New York.
As Senator Christopher J. Dodd, Democrat of Connecticut and chairman of the Banking, Housing and Urban Affairs Committee, put it Friday morning on the ABC program “Good Morning America,” the congressional leaders were told “that we’re literally maybe days away from a complete meltdown of our financial system, with all the implications here at home and globally.”
Mr. Schumer added, “History was sort of hanging over it, like this was a moment.”
When Mr. Schumer described the meeting as “somber,” Mr. Dodd cut in. “Somber doesn’t begin to justify the words,” he said. “We have never heard language like this.”
“What you heard last evening,” he added, “is one of those rare moments, certainly rare in my experience here, is Democrats and Republicans deciding we need to work together quickly.”
Although Mr. Schumer, Mr. Dodd and other participants declined to repeat precisely what they were told by Mr. Bernanke and Mr. Paulson, they said the two men described the financial system as effectively bound in a knot that was being pulled tighter and tighter by the day.
“You have the credit lines in America, which are the lifeblood of the economy, frozen.” Mr. Schumer said. “That hasn’t happened before. It’s a brave new world. You are in uncharted territory, but the one thing you do know is you can’t leave them frozen or the economy will just head south at a rapid rate.”
As he spoke, Mr. Schumer swooped his hand, to make the gesture of a plummeting bird. “You know we’d be lucky ...” he said as his voice trailed off. “Well, I’ll leave it at that.”
As officials at the Treasury Department raced on Friday to draft legislative language for an ambitious plan for the government to buy billions of dollars of illiquid debt from ailing American financial institutions, legislators on Capitol Hill said they planned to work through the weekend reviewing the proposal and making efforts to bring a package of measures to the floor of the House and Senate by the end of next week.
Lawmakers in both parties described the meeting in Ms. Pelosi’s office on Thursday night with Mr. Paulson and Mr. Bernanke as collaborative, and that they were prepared to put politics aside to address the needs of the American people.
While Democrats initially said after the meeting that they planned to use the administration’s proposal of a huge rescue effort to win support for an economic stimulus package, they pulled back slightly on Friday morning, saying that their top priority was to help put together the bailout package and stabilize the economy.
But it was clear they continued to examine ways to make clear that the government was stepping up not just to help the major financial firms but also to protect the interests of American taxpayers and families by safeguarding their pensions and college savings, and by preventing any further drying up of consumer credit.
In addition to potential stimulus measures, which could include an extension of unemployment benefits and spending on public infrastructure projects, Democrats said they intended to consider measures to help stem home foreclosures and stabilize real estate values.
Among the potential steps Congress can take include approving legislation to allow bankruptcy judges to modify the terms of primary mortgages — authority that the bankruptcy laws do not currently allow and that the banking industry has strenuously opposed.
But the Democrats said it was too soon to discuss such details, and that they were awaiting a draft of the proposal from the Treasury Department.
“We have got to deal with the foreclosure issue,” Mr. Dodd said. “You have got to stop that hemorrhaging..If you don’t, the problem doesn’t go away. Ben Bernanke has said it over and over again. Hank Paulson recognizes it. This problem began with bad lending practices. Those are his words, not mine, and so this plan must address that or I’ll be back here in front of a bank of microphones at some point explaining the next failure.”
Even before the drafting of the plan was complete, the Bush administration and the Fed began efforts to sell the idea of a huge rescue to potentially skeptical rank-and-file members of Congress. Mr. Paulson and Mr. Bernanke held a conference call with House Republicans to explain their thinking.
Senator Richard C. Shelby of Alabama, the senior Republican on the Senate banking committee, said in a television interview that cost to the government of purchasing bad debt could run to $1 trillion — a potential warning sign since Mr. Shelby is a longtime skeptic of government intervention in the private market.
Until Mr. Shelby was interviewed on Friday morning, officials on Capitol Hill had been careful not to discuss specific figures, though the rescue envisioned by the Treasury Department clearly entails a government appropriation of hundreds of billions of dollars.
Holy cow!!!!
Calculated Risk on the Bailout
from calculatedrisk.blogspot.com
Friday, September 19, 2008
The Price of the Bailout
by CalculatedRisk
Secretary Paulson said: "We're talking hundreds of billions."The NY Times DealBook has other estimates: Putting a Price Tag on a Government Bailout
“It’s probably $500 [billion] to a trillion dollars, and that’s going to visit the taxpayers sooner or later,” [Sen. Richard Shelby] said. “It’s either going to be a debt charged to all of us or to all our children.”...Bloomberg News ... reported that the government is considering establishing an $800 billion fund to purchase so-called failed assets and a separate $400 billion pool at the Federal Deposit Insurance Corporation to insure investors in money-market funds.
However buying the assets isn't enough. These asset sales will lead to substantial write-downs, and that will reduce the regulatory capital at the banks. So how do the banks recapitalize?The hope is that by making the assets transparent, and selling off the toxic waste, that will rebuild confidence with investors. Maybe.
But the U.S. Government might also have to help recapitalize the banks to keep them lending (like the Reconstruction Finance Corporation (RFC) did during the Depression). Either way, it appears the current shareholders face massive dilution.
Also - as an aside - when the banks make their assets transparent (should be a requirement for participation), we will discover if any executives misrepresented their assets and filed false reports with the SEC. That could be prosecuted under Sarbanes-Oxley, and perhaps a few executives spending time in jail might help with the moral hazard issues.
I am not sure I would want to be a long term shareholder of some Financial firms with large Tier 3 assets.
Friday, September 19, 2008
The Price of the Bailout
by CalculatedRisk
Secretary Paulson said: "We're talking hundreds of billions."The NY Times DealBook has other estimates: Putting a Price Tag on a Government Bailout
“It’s probably $500 [billion] to a trillion dollars, and that’s going to visit the taxpayers sooner or later,” [Sen. Richard Shelby] said. “It’s either going to be a debt charged to all of us or to all our children.”...Bloomberg News ... reported that the government is considering establishing an $800 billion fund to purchase so-called failed assets and a separate $400 billion pool at the Federal Deposit Insurance Corporation to insure investors in money-market funds.
However buying the assets isn't enough. These asset sales will lead to substantial write-downs, and that will reduce the regulatory capital at the banks. So how do the banks recapitalize?The hope is that by making the assets transparent, and selling off the toxic waste, that will rebuild confidence with investors. Maybe.
But the U.S. Government might also have to help recapitalize the banks to keep them lending (like the Reconstruction Finance Corporation (RFC) did during the Depression). Either way, it appears the current shareholders face massive dilution.
Also - as an aside - when the banks make their assets transparent (should be a requirement for participation), we will discover if any executives misrepresented their assets and filed false reports with the SEC. That could be prosecuted under Sarbanes-Oxley, and perhaps a few executives spending time in jail might help with the moral hazard issues.
I am not sure I would want to be a long term shareholder of some Financial firms with large Tier 3 assets.
Thursday, September 18, 2008
This is how you squeeze an Investment Bank
Bank of America Said to Cut Off Merrill Before Deal (Update1)
By Bradley Keoun and David Mildenberg
Sept. 18 (Bloomberg) -- Merrill Lynch & Co. Chief Executive Officer John Thain told employees that Bank of America Corp. ``cut our trading lines'' in the days before it bought the firm, signaling a loss of confidence in the brokerage's ability to pay.
Thain made the comments while explaining his decision to sell Merrill, according to five employees who attended the event at the company's New York headquarters. The Sept. 15 remarks were rebroadcast on an internal system to all 60,000 employees.
``Before the trade was done Bank of America cut our trading lines,'' Thain said at the meeting, according to the people, who declined to be named because they weren't authorized to discuss the internal meeting. ``We did get them to put it back.''
The disclosure shows how close at least one of Merrill's trading partners was to reducing its credit after a 36 percent decline in the firm's stock price last week. The shares tumbled on speculation Merrill might be the next securities firm to collapse following Lehman Brothers Holdings Inc., which filed for bankruptcy protection on Sept. 15 after investors and trading partners lost confidence in the New York-based company.
Since the Bank of America agreement was announced on Sept. 14, Merrill has gained 17 percent in New York trading. The second-biggest U.S. securities firm by market value rose 55 cents, or 2.8 percent, to $19.91 in composite trading today as of 11:14 a.m.
Merrill spokeswoman Jessica Oppenheim declined to elaborate on the Bank of America moves or say whether other firms had pulled back their trading lines. Scott Silvestri, a spokesman for Charlotte, North Carolina-based Bank of America, declined to comment, citing a policy of not discussing client matters.
Trading Lines
Trading lines include credit or liquidity sources that securities firms use to facilitate transactions or to meet cash needs.
Merrill began its talks with Bank of America on Sept. 13, even as the bank was considering a bid for Lehman, and struck a deal by nightfall the next day.
Since then, Merrill's stock was one of only two gainers -- the other is Jefferies Group Inc. -- in the 10-company Amex Securities Broker-Dealer Index. Morgan Stanley, the third-biggest firm, is down 46 percent this week, while No. 1 Goldman Sachs Group Inc. has tumbled 31 percent.
To contact the reporters on this story: Bradley Keoun in New York at bkeoun@bloomberg.net; David Mildenberg in Charlotte at dmildenberg@bloomberg.net. Last Updated: September 18, 2008 11:21 EDT
By Bradley Keoun and David Mildenberg
Sept. 18 (Bloomberg) -- Merrill Lynch & Co. Chief Executive Officer John Thain told employees that Bank of America Corp. ``cut our trading lines'' in the days before it bought the firm, signaling a loss of confidence in the brokerage's ability to pay.
Thain made the comments while explaining his decision to sell Merrill, according to five employees who attended the event at the company's New York headquarters. The Sept. 15 remarks were rebroadcast on an internal system to all 60,000 employees.
``Before the trade was done Bank of America cut our trading lines,'' Thain said at the meeting, according to the people, who declined to be named because they weren't authorized to discuss the internal meeting. ``We did get them to put it back.''
The disclosure shows how close at least one of Merrill's trading partners was to reducing its credit after a 36 percent decline in the firm's stock price last week. The shares tumbled on speculation Merrill might be the next securities firm to collapse following Lehman Brothers Holdings Inc., which filed for bankruptcy protection on Sept. 15 after investors and trading partners lost confidence in the New York-based company.
Since the Bank of America agreement was announced on Sept. 14, Merrill has gained 17 percent in New York trading. The second-biggest U.S. securities firm by market value rose 55 cents, or 2.8 percent, to $19.91 in composite trading today as of 11:14 a.m.
Merrill spokeswoman Jessica Oppenheim declined to elaborate on the Bank of America moves or say whether other firms had pulled back their trading lines. Scott Silvestri, a spokesman for Charlotte, North Carolina-based Bank of America, declined to comment, citing a policy of not discussing client matters.
Trading Lines
Trading lines include credit or liquidity sources that securities firms use to facilitate transactions or to meet cash needs.
Merrill began its talks with Bank of America on Sept. 13, even as the bank was considering a bid for Lehman, and struck a deal by nightfall the next day.
Since then, Merrill's stock was one of only two gainers -- the other is Jefferies Group Inc. -- in the 10-company Amex Securities Broker-Dealer Index. Morgan Stanley, the third-biggest firm, is down 46 percent this week, while No. 1 Goldman Sachs Group Inc. has tumbled 31 percent.
To contact the reporters on this story: Bradley Keoun in New York at bkeoun@bloomberg.net; David Mildenberg in Charlotte at dmildenberg@bloomberg.net. Last Updated: September 18, 2008 11:21 EDT
Subscribe to:
Posts (Atom)