pjpolitics

The obtuseness of the government and the financial industry on the subject of executive compensation is best summed up by one of the bonus defenders, who complains: “It’s suddenly a crime to make money, it seems.” Leaving aside the telling stupidity of assuming that the mere act of “making money” obliterates any attached misdeed, there is little doubt in many people’s minds that AIG’s behavior, and Bank of America’s, and Merrill Lynch’s, and Goldman Sachs’s, and countless others should, in fact, be a crime.

That bonuses for executives of bailed-out companies are wrong and possibly criminal is clearly illustrated by the many explanations we have been given for why bailed out financial industry executives should be compensated despite their performance. Bonuses help retain the best and the brightest (ha!), they are a contractual obligation, they are a “risk consideration” (ie blackmail), New York City would disappear without them, etc. These laughable variations are a sure sign that, in fact, there is no good reason for the oversized salaries and bonuses at rescued companies: the real motive is that the money should continue to flow to executives because it always has and, actually, the primary purpose of the bailout, from the executives’ perspective, is to keep them profitably employed, or happily retired. Bankers in New York and London would not be able to believe their luck if they were not so arrogant as to think it was their shrewdness (the best and the brightest!) that is being rewarded, not their luck.

This fortune, though, may finally be turning, as financiers watch in terror as governments everywhere are pushing for publicizing the list of bonus recipients at bailed out companies. Predictably, the executives’ advocates, along with Rush Limbaugh, express outrage that they are “private sector workers [who] do not expect that their salaries and bonuses are going to be in the newspaper.” Where have these people been for the past six months, besides counting their ill-gotten coins? They are most definitely no longer “private sector workers.” They are, for all intents and purposes, federal government employees, and should be subject to the same limitations and disclosures as their new colleagues in government. A choice they do have, of course, is to walk away and get an actual private-sector job, bonus and all. Shocked by the level of our anger, however, they are cowering in anonymity, supposedly fearing for their families. That may well be the case and, if so, they have nobody to blame but themselves. In any event, there is an easy solution to their predicament: they can return the money, and no one will ever need to know that they were on The List to begin with. Or they can join Bernie Madoff where they most likely belong: in a high security jail for mobsters, safe, sound, and away from public scrutiny.

Financial industry executives are hardly the only culprits here, although they are the greediest ones. From the beginning Tim Geithner, supported by the president-elect and backed by Congressional leaders, pussyfooted around the issue of executive compensation in bailed out companies. This is not surprising, considering his incestuously close ties to the financial industry. It is also not shocking that Sen. Chris Dodd, Chairman of the Senate Banking Committee and top recipient of AIG funds, and Sen. Chuck Schumer, for instance, were remarkably late in figuring out that bonuses at bailed out companies were wrong. Bankers have financed these people for decades and it surely cannot be easy to turn on your masters on a dime, even if that would be the right thing to do (the truly right thing to do, of course, would be not to have taken money from them, but it’s too late for that now). Barack Obama, in the meanwhile, has had a months-long tin-ear moment, as late as this week calling the popular anger a “tizzy,” probably because he too is in debt to and in awe of these cardboard Masters of the Universe. This is a crisis that has been openly brewing for so long, it is unfathomable that Obama is now literally resting a big chunk of his political capital on it. Clearly he, and Geithner, and many members of Congress, not to say the financial industry recipients of the government largesse, surely all hoped the anger would simply boil over. They did not count on the fact that the greed and superciliousness of banking and insurance executives that resulted in the need for bailouts would push them to overreach for an ever-bigger piece of the bailout pie. That is how these people are wired and unless they are smacked down with all the people’s strength, they will try, and try, and try again to find a way to get one over us.

Now, Congress and the White House are in a panic, as they should be. Where was the outrage six months ago, three months ago, two weeks ago? It is hard to take any of the government actors in this farce seriously, and not only because they haven’t seemed to much care what happens to taxpayers’ investments in these shells of companies, but because many of them lack credibility to begin with. Obama’s pick of Geithner despite the latter’s “tax problem” (ie he knowingly evaded taxes) was one of the ugliest moments of his presidency so far. Besides this and possibly more to the point, Geithner has been completely unable to distance himself from the very industry he is supposed to police. Not surprisingly, Ben Bernanke, Chairman of the Fed, has a share in this too: how is it possible that the AIG CEO does not know the three Fed officials supposed to keep a watch on his sinking ship (should they not be camped in his office? should they not be reporting back to the Treasury?). Sen. Dodd’s career could well be coming to an end next year, so sick are his Connecticut constituents of his sweetheart mortgages and his lack of bailout leadership. Democrats better hope that they can find an appropriate replacement in time for 2010, even if it means a bitter primary battle. If we are lucky, Schumer too will face a credible primary opponent next year, preferably one who can eloquently highlight the New York Senator’s dreadful ties to the securities industry and to AIG. Not coincidentally, Schumer has been all but invisible in the compensation debacle, too busy sabotaging the nomination of the head of the National Intelligence Council, whom he deemed not sufficiently friendly to Israel. Talk of misplaced priorities. And how can we expect repeat tax-dodger Rep. Charlie Rangel to make any sense on the issue, despite being in charge of taxation for the House (really). The best he could muster on the issue this week was to reassure AIG bonus recipients that the tax code would not be used as “a political weapon.” Of course that was just a day before the lopsided vote on applying punitive taxes to AIG bonus recipients. As for Republicans, they are so profoundly guilty in this banking catastrophe that try as they may to stand up and be relevant, they just keep falling back into the mud that spawned them. In truth, they have been serving a purpose, providing welcome comic relief as they battle one another for leadership of their party, an entity that is about as substantial as Citibank would be without government money.

That does not leave many people on our side, including the President. His complaint that Geithner has been too busy rescuing the economy to focus on executive compensation rings uncharacteristically hollow. Making sure public funds which are, believe it or not, limited, are used appropriately is not a small part of Geithner’s mission, it is an essential one. More broadly, the abuse of bonuses is a piece of the culture of misplaced greed and corruption in the financial industry that has resulted in the current economic havoc. It is not a peripheral issue, it is the issue. It may be that politicians are so deeply unfamiliar with the banking culture that they can’t fathom the insatiable depths of greedy depravity that rule the industry and have lead us to the brink of economic destruction. It may be that all they know about financial types is that they are the ones who write the biggest checks at election time, do so most often, and require the least amount of time and attention: all in all a good return on a politician’s investment, at least until now. It seems to have finally dawned on government leaders that bonus recipients are not the only ones who should be afraid, and that there is enough of this brutal and eminently rational anger to go around both houses of Congress and the White House, after we are done with the bankers.

Attorney General Eric Holder’s assessment that the United States is a “nation of cowards” on issues of race was perhaps off-puttingly blunt but results from the recent Presidential election support his call for Americans to talk more about race. And while Holder was presumably not singling out a particular group in asking for more focus on race, white voters’ attitudes towards Barack Obama’s candidacy is as good a place as another to begin: buried in the self-congratulating joy at Obama’s historic win and its racial significance, there are disturbing signs that warrant more debate.

Chief among these is the extraordinarily low percentage of the white vote Obama received in the Deep South. Even as white voters nationally moved more or less in the same direction as voters overall, in a number of Southern states, the trend was strikingly reversed. In Alabama, Obama received half the white votes John Kerry did, ending with just 10% (!) of that group. In Mississippi, he received 11%. In Louisiana, where Kerry got a quarter of white voters’ ballots, Obama was down to 14%. It is also striking that all but one congressional district for which data is available in those three states voted more Republican than normally. The lone holdout is an African-American district in Mississippi. This means that from urban New Orleans, to suburban Birmingham and to these states’ large rural swaths, white voters abandoned the Democratic candidate for President in numbers far larger than usually. Perhaps more chillingly, the youngest of white voters in these states were equally as adverse as older generations to vote for Obama. Meanwhile, voters in four districts in the Deep South did manage to send white Democratic representatives to Washington.

It is of course true that Southern white Democrats have moved towards the Republican Party in droves since the 1960s, when the Democratic Party embraced civil rights and the GOP seized the opportunity to develop its racist “Southern strategy.” (How those voters will react to the Republican leader’s call for more hip hop in politics is an issue for another day). Beyond that historical shift, though, it is impossible to see in some of the results in the Lower South anything but racial prejudice towards Obama. It can hardly be argued that Kerry, for instance, was less liberal, especially on the social issues that seem to consume many of the voters in the region, or more charismatic than Obama, a far better campaigner and uniter. And so we are left with one way to explain swings of as much as 17% away from the Democratic presidential candidate this year in the Deep South: that even among the few white Democrats in those states willing to vote for Senator Kerry from Massachusetts, nearly half could not get themselves to cast a ballot for an African-American presidential candidate. It may seem naive to highlight this, so ingrained in the national consciousness is the idea of the pervasive racism that afflicts the Deep South. Is it not patronizing, though, to simply take this at face value and move on? Does it not warrant a little more discussion than a shrug and a smirk at people whose bigotry many of us take for granted?

Perhaps the hope is that time will heal some of these cavernous fractures and there are signs that change is on the march, with North Carolina and Virginia leading the way. Both voted for Obama, the first time since 1964 that Virginia voted for a Democratic presidential candidate. In both states, white voters did choose John McCain, but he received a much smaller share of their vote than George W. Bush did. Conventional wisdom is that the population growth in Virginia and North Carolina, fed by internal and international immigration, and both states’ educational levels explain the shift. This seems plausible when compared to states further South, all lagging in educational achievement and with little inwards migration. Nonetheless, even in the Deep South, there was progress. In South Carolina, for instance, Obama increased the Democratic percentage of white voters in line with the national average. This achievement is not meaningless as it, together with a large black turnout, allowed the Democrat to score the best presidential result for his party in the state since Jimmy Carter in 1980. In Georgia, Obama came within 5% of winning the state, and would have done so if white voters there had moved to him as much as their peers nationally; nonetheless, he did achieve the same percentage of the white vote as Kerry did, even if it was a meager 23%.

Appalachia was the subject of much focus during the Democratic primary, as the region became the means to Hillary Clinton’s attempted comeback in Ohio, Pennsylvania and smaller states. In the general election too, Appalachia, along with Arkansas, and Oklahoma, turned away from Obama. In fact, it did so in proportions sometimes even more striking than in the Deep South. In a spine of states from West Virginia to Oklahoma, including Kentucky, Tennessee and Arkansas, Obama vastly underperformed Kerry in all but two Congressional districts (in Memphis and Nashville). For instance, in districts that are overwhelmingly white and rural, such as Kentucky’s 2nd, in the central part of the state, there was a swing of 24% away from Obama when compared to the national average. Even in districts represented by Democrats, such as Oklahoma’s 2nd and Arkansas’ 4th, Obama had some of his worst results anywhere. Again, the assumption here is that of course isolated, poor, rural white voters will never vote for a black man, so why even bother talking about it? Is it really that simple, and is it not, again, worthy of a little more prodding?

If the majority of areas in which Obama underperformed are indeed in the Deep South, Appalachia and the South Central US, that does not mean there were not pockets of reluctance elsewhere, and not all of it due to demographic shifts favoring Republicans. For instance, in Florida, three heavily Jewish and elderly Congressional districts centered around Palm Beach and Broward counties performed poorly for Obama when compared to Kerry or Al Gore. In rural Northern Minnesota, Obama also struggled relatively, especially as the rest of the state went strongly for him. Some New York City and Philadelphia suburbs in Pennsylvania, Northern New Jersey and Long Island, both Republican and Democratic, also showed some reluctance towards Obama compared to the nation as a whole, at least in predominantly white areas such as Suffolk, Morris and Montgomery counties. In New York City itself, Obama saw one of the biggest swings against him anywhere, in the predominantly white Brooklyn and Queens district of Rep. Anthony Weiner, a candidate for mayor this year. Obama also lagged in some older rust belt suburbs of St. Louis, Cleveland, Pittsburgh and in Upstate New York. Most of these places have little in common besides their disproportionately large white populations and, it would appear, a relative discomfort with voting for an African-American candidate for President.

Conversely, in the mostly white and Latino West, Obama relatively outperformed his Democratic predecessors in every single Congressional district except for a couple in Northern California, in San Francisco, for instance, where there was little room to grow from Kerry’s 85% of the vote. One of the major lessons of this election was, in fact, learned in Western states, as well as other areas with large Latino populations that swung decisively to Obama. This was not a given, at least according to the DC conventional wisdom, spun by the Clinton campaign: the idea was that a) Latinos would be reluctant to vote for an African-American candidate for reasons unnamed but presumably having to do with racism; b) the problem would be compounded because Clinton was so idolized among Latinos that they could not possibly muster the enthusiasm to vote for Obama. The results have, hopefully, cleared up this nonsense once and for all. In Texas, for instance, voters in predominantly Mexican-American districts voted in far higher numbers for Obama than they did for Kerry or Gore. Latino flight from the Republican Presidential candidate appears to have accounted for the bulk of Texas’s overall shift towards the Democrat in 2008. In mostly white districts of the state, especially in rural and exurban areas, voters were, if anything, even relatively more likely to vote for McCain than for Bush or, more accurately, even less likely to vote for Obama than for Kerry.

Not all rural white voters turned away from Obama. In fact, Iowa, which launched Obama’s epic journey to the presidency, is a rural state with a population that is over 90% white. Ironically, for all its unrepresentative lack of diversity, Iowa has replaced Missouri as a presidential bellwether, having voted for the winner of the popular presidential vote in every election since 1988. It is also one of nineteen states in which white voters chose Obama over McCain, from Colorado to New Hampshire and Oregon to Michigan. It is worth keeping in mind that in 2004 Kerry received a majority of the white vote in just nine states, most of them small Northeastern neighbors of his home state of Massachusetts. Notably, white voters in California and New York, presumed bastions of liberalism, were not among them. In 2008, white voters in both states decisively cast their ballot for Obama.

Interesting tests already loom in a number of states in which African-American politicians, perhaps emboldened by Obama’s win, are looking for a larger platform next year. One candidate, Democratic Rep. Artur Davis of Alabama, an early and vocal supporter of Obama, is running for the governorship of his state. In most respects he is a good fit for Alabama, with moderate to conservative stances on social issues, and an engaging demeanor. Clearly, though, he will need to get more than 10% of white voters’ ballots to be competitive in a general election, should he make it that far. In Florida, another Congressman, Kendrick Meek is running for an open Senate seat. He is sure to face a challenging primary, probably from at least one elected official from South Florida districts lukewarm towards Obama. In California, San Francisco District Attorney Kamala Harris is vying for State Attorney General, the top law enforcement officer in the nation’s most populous state. She was an early organizer for Obama in Iowa.

The complicated picture of how America came to vote for its first black president reflects the country’s multifarious attitude towards race. Holder is right to call for a better understanding of Americans’ way of thinking about the issue: we may assume that we know what prompts others’ attitudes and why, say, voters in places as varied as New Orleans, rural Mississippi, Brooklyn, Boca Raton, Pittsburgh, Kentucky, suburban Philadelphia or Duluth reacted to Obama the way they did, but surely it is worth digging a little deeper, past our own prejudices and conjectures. Perhaps we will even learn something about our own smug selves, unless we are thwarted less by cowardice than by simple intellectual laziness.

There is John McCain, the Republicans’ failed presidential candidate, as incapable since the election as he was before. There is John Boehner, the party’s leader in the House and Ohio’s own George Hamilton (the tan, not the affair with his stepmother when he was 12). We now also have Michael “Drill Baby Drill” Steele, the party’s inspiration-challenged chairman, who is supposed to lead the GOP back to victory despite his own electoral incompetence. And Eric Cantor, the party’s shiny new star who idolizes Newt Gingrich, presumably for shutting down the government in an ego-driven tizzy, not for leaving his cancer-ridden first wife or dumping his second one for a Congressional aide 23 years his junior.

With the kind of inept leadership that would make even Merrill Lynch shudder, the Republican Party has nowhere to go but down, even though, at 19% approval, there is not much of a cushion left. More worrisome for Republicans are their recruiting prospects: if you were, say, a bright young thing in your 20s or 30s, would you rather hitch yourself to Mitch McConnell’s star or Barack Obama’s? Is there anything that the Republicans have said or done in the past few months that would inspire anyone who has a choice to join their crusade to nowhere? Do you know anyone who proudly supports the GOP? Actually, do you know anyone who understands what the GOP is even about?

And that is precisely the problem: there is so little substance to the Republican Party that, like Citibank, it would wither into oblivion before merging with, say, the Alaska Independence Party, were it not too big to fail. The US electoral system is rigged so that no matter how much it deserves to disappear, the Republican Party will be propped up. It has been so for over 150 years, and is likely to remain so for another 150,000. And so we are stuck with them. This is sad because we do deserve a spirited, intelligent debate about the ominous issues that face the country and the world. Forget even about solutions to the economic crisis or any kind of practical positions on anything of importance, Republicans are unable to begin to articulate the underlying values justifying their existence. And no, “lowering taxes” and “defending traditional marriage” are NOT philosophies. The former is, at best, a means to an end, and the latter a short-term tactic.

Perhaps Republicans were inspired by Obama’s enchantingly vague promises of hope and change, not realizing that behind them was a solid set of beliefs in the role of government, and a deep understanding of the American experience. The lack of foundation of the Republican Party is a bigger problem than many of us realize because it means there is no constructive opposition and, thus, little discussion of any value. A number of people are dubious about the success of the stimulus package and would have liked to see arguments from both sides about the consequences of spending close to $1 trillion, or of doing nothing. But with a moribund, intellectually lazy Republican Party, we heard little more than sniping about an earmark here and there, and a fetishistic mantra about lower taxes. What we would like to hear is what role the GOP sees for the government in a crisis of this magnitude, and what role the government could have played to prevent it. It’s that simple, and until Republicans can develop coherent answers to such basic questions, they will not regain power.

For eight years, the GOP has been an ugly knot of extreme contradictions, unable to find even the slightest thread of consistency in policies that called for financial rigor but grew public spending to record levels; resisted “nation-building,” but drained $25,000 from each American household to attempt to recreate a country 6,000 miles away; wanted the government out of our lives, but proceeded to try to control our conversations, our relationships and our bodies. This utter fiasco is now described by party leaders as a time during which the GOP “lost its way.” America is the land of endless redemption, normally a reasonably healthy process, but right now the salvation thing is over the top: from Republican leaders to Wall Street bankers to auto industry executives, everyone seems to realize that they had “lost their way,” and that this new consciousness is enough to lead them back to the righteous path. No, it’s not: they are all corrupt losers who need to be replaced and sent into internal exile, or worse. It goes without saying that we need new leadership in banking and industry (and perhaps compensation caps will achieve that), but we also need strong, smart, new leadership in the GOP, no matter how much we enjoy the prospect of another Republican electoral disaster in 2010. Without an adequate opposition, there is a noxious lack of rational debate, and endless risks to the democratic process. Also, it’s not fun: do we really want to be the basketball team that won 100 to 0?

Barack Obama, just a couple of weeks into his presidency, has already squeezed one person too many into his big tent, Judd Gregg, his new Commerce Secretary, a right-wing Republican who once wanted to dismantle the department he is about to run. Now if Obama’s intention was in fact to get rid of the Commerce Department because it serves no purpose, the appointment would perhaps have made sense, but it appears that is not the plan, and so Gregg is just a redundant clown in Obama’s circus.

There are two other Republicans in the Cabinet, Secretary of Defense Robert Gates, a remnant of the Bush administration, and Ray LaHood, the Transportation Secretary. Time will tell whether keeping Gates was a good idea, but LaHood, a man from a party whose strategy for improving transportation involves more cars, more roads and more gas? Surely, the Democratic Party is not lacking in far more visionary people on this issue than the moderately interesting LaHood.

Perhaps the current national crisis is at the root of Obama’s persistence in reaching out to Republicans, a sort of multi-party War Cabinet focused on the economy. But that misses the point: the country is not under attack from outside forces, at least as far as the economy goes; it is under attack from within, and more specifically from the Republicans themselves, who are intent on sabotaging any effort at stanching the bleeding. There is room to disagree on the nature of and even the need for a stimulus package, or a banking bailout, but the alternatives need to be both realistic and not destined to repeat the country’s most recent failures. On that count, Republicans have made themselves irrelevant, and there should simply be no room at the table for them.

As it is, even without adding redundant Republicans to the Cabinet and otherwise reaching out to the GOP, Obama and the Democratic Party have a struggle ahead of them. They are remarkably unified at this point, but that’s what happens when your leader has a 70% approval rating: it’s kind of hard to dissent too strongly. At most you throw a tiff here and a tiff there, Dianne Feinstein-style, but really you try your best to toe the line. Sooner or later, though, Obama will be less popular and, at that point, he will be dealing with a party that is very large and very diverse, and whose many voices will want to be heard, especially at election time.

The Democrats’ size and range are both the cause and the result of their recent electoral successes. Their candidates are by and large well suited to their constituencies and far more pragmatic than their Republican counterparts, a narrow band of increasingly hard-line conservative extremists. The new Democratic Senator from New York, Kirsten Gillibrand, is a perfect example of this. She was sent to Congress by a conservative upstate district, favoring a range of positions that are anathema to progressives, perhaps most injuriously her preposterous support for the English Only movement. Now a Senator running for statewide election next year, she has already switched radically on the issue of same-sex marriage (which she now favors) and she will also “evolve” on guns and immigration, or go down to defeat in New York’s Democratic primary. Gillibrand’s neck-twisting conversions are distasteful and not particularly convincing, but they are indicative of a Democratic Party intent on surviving and on thriving in power. They also demonstrate the wide ideological gaps in a party that has seen gains across nearly all demographics and geographies.

In fact, many of the party’s new members of Congress are precisely from districts and states that were not particularly friendly territory until recently, in rural and exurban districts, and in the interior West and the South. That they find common ground with their urban and suburban elders on the Coasts is remarkable, and is fraught with risk in the long run. For that reason, it would seem like a much better idea to focus on those potential stray centrist Blue Dog Democrats than on wildly untrustworthy Republicans whose every instinct is understandably to regain power at the expense of the current President. Perhaps more to the point, shouldn’t Obama be focusing on what he was elected, actually mandated, to do, which is to change things, and to do so in a progressive manner? It is hard to imagine that the independents, crossover Republicans and moderate Democrats who voted for Obama would be stunned if the man named the most liberal Senator set out to implement policies that are, well, liberal.

Of course, all of the bipartisan posturing by Obama may well simply be a way for him to be able to say that he tried and the Republicans did not cooperate, but it all seems like a dreadful waste of time and energy. The Republican Party needs to find its way back to some kind of even vaguely mainstream place, at which point it may be a more useful partner for Obama, but now is not the time (nor will it be soon judging by the rhetoric from the party’s new leader.) The moment will also come when the Democratic cats of many stripes will need to be herded, and we know Obama will be up to the task. But for now, if the President believes the United States is in a crisis that threatens its very foundation, as he has intimated, then surely he should not worry about losing the Ben Nelsons and Susan Collins of the world. Time will tell if Obama is right about his plan to save the US economy, but hopefully he would rather be blamed for having acted decisively in a crisis and been wrong than for wasting time seducing one more reluctant politician into a tent that is already feeling way too cramped.