Larry Summers on ABC's This Week

As we have noted before, hedge funds, private equity firms, and their employees donated nearly twice as much to the Obama campaign as they did to the McCain campaign.  After the election, the new administration appointed some of its backers and friends on Wall Street to oversee TARP bailout money.  Few have given much scrutiny to this obvious conflict of interest until now.

On Friday the White House released the financial records of some of the administration’s top advisers.  As it turns out, President Obama’s chief economics adviser, Larry Summers, “earned” $5.2 million advising a New York hedge fund one day a week for the past two years.  Though the President desperately yelped to express his “outrage” at excessive AIG bonuses, he has remained conspicuously mum on the Mr. Summers’s lavish executive pay for such little work in an industry he now oversees.

Some have wondered why the administration has been so harsh on Detroit, threatening bankruptcy and executive firings, while only gently nudging Wall Street banks.  The fact that the administration has drawn so many warm suits and generous contributions from Wall Street suggests Mr. Obama holds his friends in finance to a milder standard.

When the Bush Administration let oil companies draft energy policy and let pharmaceutical lobbyists draft the Medicare drug benefit, Democrats cried foul, and rightly so.

Now Mr. Obama surrounds himself with smart bankers and economists who frequently spin around the revolving door between government and the finance sector, having made a fortune on risky bets and now seeing that the taxpayers are left to clean up the mess.

Image source: LA Times

Much has been made of the surprise passage of California’s Proposition 8, which amended the Declaration of Rights of the state’s Constitution to state that “[o]nly marriage between a man and a woman is valid or recognized in California.”  What hasn’t received much attention, however, is that the city council of Washington, DC, may move in the coming months to extend marriage rights to same-sex couples.  In the past, the main obstacle cited is Congress; even if the city council approved a same-sex marriage bill (probably with near-unanimity), Congress, which has legislative authority to overturn any DC law, would overturn it in a heartbeat.

But since the Democrats now control Congress and the White House, the city now faces the best opportunity to introduce a marriage bill that would face the lowest chance of Federal opposition.  However, even if the measure escaped a snarling Congress, the measure would likely face stiff opposition from a large bloc of city residents.  If the civil rights measure is put to popular vote in Washington, DC, voters may in fact reject it.

Since there are no public opinion polls of District residents gauging opposition to same-sex marriage in the city, it is hard to predict how a ballot question would fare.  However, if we extrapolate November’s exit-poll results on Proposition 8 from California, the civil rights landscape in DC looks a little bleak.

In the best scenario, a DC vote would reflect the results among California’s urban voters.  Forty-five percent of California’s urban voters opposed Proposition 8.  Since all DC voters qualify as urban voters, if the proportions voting for and against held the same, a ban would lose.

(All the following data are drawn from CNN’s exit-poll of California and extrapolated based on each cohort’s share of the DC electorate as provided by MSNBC’s exit-poll of DC)

If we extrapolate from other measures, the outlook isn’t as good.  Based on income group, the results show a ban would just squeak by.  Interestingly, among all income groups, only those making less than $30,000 and those making more than $150,000 opposed Proposition 8 by a majority.  The vast middle supported it.  Now if we multiple each group’s support and opposition in California by each income group’s respective proportion of the DC electorate, a same-sex marriage ban would pass in DC by a slight majority.

It gets worse.

In California, 53% of college graduates opposed Proposition 8, whereas only 42% of those without college degrees opposed it.  Though 58% of District voters are college graduates, that is still not enough to stop a ballot measure in the city.  Based on education, a ballot measure in DC would ban same-sex marriage with a 52% majority.

Finally, race is the pink elephant in the room few want to bring up.  Traditionally, black voters, gays, and those with socially liberal views overwhelmingly vote  for Democrats.  However, on the issue of homosexuality, one Democratic constituency, blacks, holds views strong opposed to those held by other Democratic constituencies (social liberals, gays, etc.).

An astounding 70% of California’s black voters cast ballots in favor of Proposition 8 and an even more astounding 75% of black women voted in favor.  Proposition 8 only found greater support among self-identified 2004 Bush voters (80%), white evangelicals (81%), Republicans (82%), McCain voters (84%), weekly churchgoers (84%), conservatives (85%), and those who approve of the war in Iraq (85%), among others.

When we extrapolate each ethnic group’s vote in California to adjust it for each group’s proportion of the DC electorate, a same-sex marriage ban easily passes by 61% of the popular vote in the District.

Admittedly, California and DC, though both Democratic strongholds, differ in some important ways.  DC is entirely urban, whereas California is home to urbanites, a huge portion of suburbanites, and sizable rural counties.  Furthermore, unlike DC, California is more ideologically diverse and contains some very conservative areas (San Diego and Orange Counties, most notably) as well as liberal enclaves such as San Francisco, Hollywood, and Berkeley.  Washington’s singlemindedness leans decidely leftward, but in California the tilt, though still to the left, has counteracting forces that DC largely lacks.

Nonetheless, it’s premature for the city council and gay civil rights campaigners to assume that everyone shares the same view of what constitutes a civil right.  Though same-sex marriage might not raise eyebrows in upper Northwest, not all DC residents are ready to embrace a progressive view of marriage.  When the council starts to debate such a measure, don’t be surprised when you hear opponents ironically claiming civil rights for me, but not for thee.

Black voters in California voted overwhelmingly to elect Barack Obama—and to write discrimination into the state’s constitution.  The Post writes:

Any notion that Tuesday’s election represented a liberal juggernaut must overcome a detail from the voting booths of California: The same voters who turned out strongest for Barack Obama also drove a stake through the heart of same-sex marriage.

Indeed the New York Times reported earlier the worry among the proposition’s opponents that a high turn-out among California’s blacks would likely increase the measure’s passage while simultaneously ensuring Obama’s election.

Exit polls show that a bare majority of the state’s white voters voted for the measure, 53% of the state’s Latinos voters voted for the measure, and an astounding 70% of black voters voted for the measure.

One Californian discussed what drove her to vote to reduce the state’s civil rights commitment:

“I think it’s mainly because of the way we were brought up in the church; we don’t agree with it,” said Jasmine Jones, 25, who is black. “I’m not really the type that I wanted to stop people’s rights. But I still have my beliefs, and if I can vote my beliefs that’s what I’m going to do.

“God doesn’t approve it, so I don’t approve it. And I approve of Him.”

The overwhelming rejection of same-sex marriage by black voters was surprising and disappointing to gay rights advocates who had hoped that African Americans would empathize with their struggle.

The article continues with other quotations from people who wish to rework the state Constitution’s equal protection guarantees to suit their prejudices.  I’m sure many of these same people would decry any state measure that denied them rights or privileges solely on account of race, but it’s sad to see that they deem it acceptable to do the same regarding sex.

The proposition faces challenges in court (it was passed as an Amendment, though some argue that should be a Revision since it partly nullifies equal protection guarantees).

Nonetheless, Dr. King famously said that “the arc of history is long, but it bends toward justice.” Perhaps we shall overcome.

David Brooks captures two elements of Obamania.  First is its close association with privilege:

Obama is not only a member of this temperate [post-boomer] generation, but of its most educated segment. He has lived nearly his entire adult life within a few miles of one or another of the country’s top 10 universities.

His upscale, post-boomer cohort has rallied behind him with unalloyed fervor. Major college newspapers have endorsed him at a rate of 63 to 1. The upscale educated class — from the universities, the media, the law and the financial centers — has financed his $600 million campaign (which relied on big-dollar donations even more heavily than George W. Bush’s 2004 effort). This cohort will soon become the ruling class.

Second is its unpreparedness in handling the nation’s challenges.  The ruling elite will come to face problems America has not seen for decades.  Deflating asset prices, higher unemployment, and lower tax revenues will challenge any new administration, no matter who wins tonight.  Can the young Obama supports, roused to the polls by promises of hope and change, fully comprehend the pending hard-nosed politicking?

Raised in prosperity, favored by genetics, these young meritocrats will have to govern in a period when the demands on the nation’s wealth outstrip the supply. They will grapple with the growing burdens of an aging society, rising health care costs and high energy prices. They will have to make up for the trillion-plus dollars the government will spend to avoid a deep recession. They will have to struggle to keep their promises to cut taxes, create an energy revolution, pass an expensive health care plan and all the rest.

….

We’re probably entering a period, in other words, in which smart young liberals meet a stone-cold scarcity that they do not seem to recognize or have a plan for.

Indeed, the boomers continue to haunt American politics, even if one of their representatives is not in the Oval Office.  Hope and change are good talking points, but health care plans cost money and most economists agree that raising taxes right now would further damage the economy.  We can’t hold hands to make tough decisions; some constituencies will inevitably lose and if Sen. Obama wins the election, it won’t take long before some of his young naifs are disillusioned with the messiness and required compromise of democratic politics.

A President Obama may claim to represent change, but as Brooks astutely concludes, “In an age of transition, the children are left to grapple with the burdens of their elders.”

Democrat David Patterson become the governor of New York on the heels of Elliot Spitzer’s resignation over a sex scandal.  This unusual route to the governor’s mansion is just one of many unusual features of Gov. Patterson.  He has been among the few governors—Democrat or Republican— to publicly support the legalization of same-sex marriage, the third-rail of American politics.  Many politicians quietly support its legalization, but must pander to public opinion, which typically opposes the idea.

In addition to same-sex marriage we can add Ayn Rand to the list of Gov. Patterson’s unusual opinions.  The New York Post reports the governor’s admiration of Rand during his plea to Congress for a hand out:

Paterson cited Rand, a libertarian icon, and her best-seller “The Fountainhead,” noting the novel proclaimed that “our country, the greatest country in the world, was founded on the basis of individuals, where people were encouraged to adventure, not to be complacent; to be daring, not dormant; to prosper, not to plunder.”

Is Gov. Patterson a Democrat in name only?  Even few Republicans publicly cite Ayn Rand, as she is considered on the far right of economic thought.  In another sign of the governor’s unusual tilt, it seems he’s also against the redistribution of wealth from rich to poor:

“I am not here to beg. I am here to say New York doesn’t need a handout – we need a hand back,” he added, noting that New Yorkers pay far more in taxes to Washington than they get in return.

But New York is a rich state and, according to his fellow partisans, should be sharing its wealth with poorer (often redder) states.  Not only does this philosophical difference put him at odds with Sen. Obama, but so does his opposition to any tax increase:

“We have agreed that any taxation right now would only exacerbate the problem,” Paterson said.

“If anything, we need to lower taxes for some of our businesses that would hope to create jobs, so that hundreds of thousands of New Yorkers don’t leave the state, as they do every year, for other areas where the life quality is better.”

So Gov. Patterson also opposes raising taxes since it would hurt economic recovery.  Being the governor of New York puts him particularly at odds with Sen. Obama, since a disproportionate number of New Yorkers are high earners and would thus end up paying more in taxes under an Obama tax plan.

In summary, Gov. Patterson

• cites a Randian admiration of economic risk.
• believes wealth redistribution from rich to poor is unfair.
• believes that no taxes should be raised at this point.

David Patterson has unwittingly endorsed John McCain.

There I said it.

Admittedly Al Jazeera’s reporting has a bias just as all media do, but the fact that the reporter found it so easy to find such sentiments is worrying.  Let us hope such sentiments exist only on the fringe.

David Brooks, while assuming that the poll numbers will carry Obama down the street to the White House, thinks the nation is on an inevitable political swerve from the big-spending Right to the big-spending Left:

Over the past decade, liberals have mounted a campaign against Robert Rubin-style economic policies [of free-trade and balanced budgets], and they control the Congressional power centers. Even if [Obama]’s so inclined, it’s difficult for a president to overrule the committee chairmen of his own party. It is more difficult to do that when the president is a Washington novice and the chairmen are skilled political hands. It is most difficult when the president has no record of confronting his own party elders. It’s completely impossible when the economy is in a steep recession, and an air of economic crisis pervades the nation.

David, you’ve got a lot of ‘splainin to do.

First, I will concede that the Democratic Party is much more xenophobic and jingoistic on trade than it was during the Clinton years (see the recent votes on CAFTA and the trade agreement with Korea).  The party’s adherence to balanced budgets is a bit unknown, since the GOP has also found it shamefully convenient to buy political advantage through wasteful spending (the bad, the ugly).

However, it is fair to say that while the record shows that Sen. Obama is an obedient servant of the Democratic leadership, it is not fair to say that Barack Obama himself is as obedient.  While he was starting his political career in Chicago, he frequently bucked the South Side Chicago political machine in the pursuit of his own political ambitions, paying no heed for the establishment’s requests that he “wait his turn.”

To curry favor with the Left, he has established a starkly partisan voting record on the Hill, but since his nomination, he has morphed toward a more centrist view (see the FISA vote, his new-found “discovery” of the Second Amendment).

Brooks is right though.  With a wobbly economy and no shortage of government promises, if financial reality coexists with campaign promises (either Obama’s or McCain’s) the National Debt is set to explode.

With Sen. Clinton consoling herself to her extended tenure at the end of Pennsylvania Avenue she appreciates less, it wouldn’t take terribly long for the media to end its Obama love-in.  Both the New York Times and Washington Post editorial boards have blasted Obama for reneging on his promise to participate in the public campaign financing system he previously supported— that is, supported until he realized he stood to gain tens of millions of dollars by renouncing it.

The New York Times editorial board dripped acid in reminding us of Sen. Obama’s numerous previous indications that he would participate in public financing campaign.  These promises were all well and good, but

That, of course, was before Mr. Obama discovered his prodigious talent to stir private donors on the Internet and ended up raising hundreds of millions of dollars in small-bore contributions.

The Washington Post’s editorial board was equally unsympathetic to Sen. Obama’s about-face:

Mr. Obama had an opportunity here to demonstrate that he really is a different kind of politician, willing to put principles and the promises he has made above political calculation. He made a different choice, and anyone can understand why: He’s going to raise a ton of money.

Change you can believe in has turned into dollars you can believe in.  Even these smaller donors whom Sen. Obama suggests represent the public probably better represent America’s well-off, writes Jay Mandle in the Post:

In a study of $100 contributions to state campaigns in six states during 2005, the Campaign Finance Institute found that more than half of donors earned between $75,000 and $250,000 a year. The median U.S. income that year was $46,000. While it’s tricky to extrapolate to the presidential race, it is unlikely that campaign giving has suddenly become a common pursuit of working-class families.

Who needs principles when your supporters will sop up any specious sophistries you ladle out to them?

“Broken?”  That’s certainly not what he was saying to Larry King last year:

Larry King: Senator Clinton, by the way, has decided to reject public financing for her campaign. Are you going to do the same?

Sen. Barack Obama: Well, you know, this is something that, obviously, we are going to have to take a careful look at. I’m a big believer in public financing of campaigns. And I think that for a time, the presidential public financing system works.

Unfortunately, because funding has diminished relative to the cost of campaigns, I think you will see a lot of people opt out. And even as I support public financing, I think it’s very important for Democrats to be competitive in the general election. That’s a decision we are going to have to make.  (My emphasis)

In response to the Midwest Democracy Network’s Political Reform Questionnaire Obama suggested requiring presdential candidates to accept the public financing system.  He even noted that McCain had already pledged to do so and that if nominated he would “aggressively pursue an agreement with the Republican nominee to preserve a publicly financed general election.”

Question I-B:
If you are nominated for President in 2008 and your major opponents agree to forgo private funding in the general election campaign, will you participate in the presidential public financing system?

OBAMA: Yes. I have been a long-time advocate for public financing of campaigns combined with free television and radio time as a way to reduce the influence of moneyed special interests.
I introduced public financing legislation in the Illinois State Senate, and am the only 2008 candidate to have sponsored Senator Russ Feingold’s (D-WI) bill to reform the presidential public financing system. In February 2007, I proposed a novel way to preserve the strength of the public financing system in the 2008 election. My plan requires both major party candidates to agree on a fundraising truce, return excess money from donors, and stay within the public financing system for the general election. My proposal followed announcements by some presidential candidates that they would forgo public financing so they could raise unlimited funds in the general election. The Federal Election Commission ruled the proposal legal, and Senator John McCain (r-AZ) has already pledged to accept this fundraising pledge. If I am the
Democratic nominee, I will aggressively pursue an agreement with the Republican nominee to preserve a publicly financed general election. (My emphasis)

David Brooks in the New York Times sums up what has changed since then:

And the only thing that changed between Thursday and when he lauded the system is that Obama’s got more money now.

Sen. Obama is quickly learning that popularity is easier when one constrains his rhetoric to vagueries of “hope” and “change.”  When one must engage in the dirty of work of actual statecraft—voting on bills (as opposed to pulling the favorite voting “present” cop-out), or defying one’s supporters (the Obama record is scarcely bipartisan)— one has more of a record to hold to account.  Policy fodder for one’s opponents is a byproduct of serious leadership.  Sen. Obama has provided relatively little fodder so far because he has blessed himself each step of his political career by dodging difficult issues.  Campaign ethics and finance, one of the precious few areas in which the Senator from Illinois has made progress in the Senate, is now coming back to haunt him as his ideals conflict with his political convenience.

Can vague promises of change and bipartisan hand-holding really come to fruition in January? I have long held that disagreement is a healthy part of our diverse democracy, but Sen. Obama says we need not be divided. A President Obama, upon entering the White House, will quickly learn, much to his astonishment, that genuine, honest people can sharply disagree.  Exporters will not be so enthused to renegotiate NAFTA and people with 401(k)s will not be too happy to pay a higher capital gains tax.

Robert Samuelson’s column in the Post writes that

any feel-good fallout from electing Obama would soon fade. He’d have to earn popular support, and this would be made harder by a problem of his own making: He’d have to disavow much of his campaign rhetoric. The reason is that his campaign is itself a contradiction.

On the one hand, he projects himself as the great conciliator. He uses the metaphor of his race to argue that he is uniquely suited to bridge differences between liberals and conservatives, young and old, rich and poor — to craft a new centrist politics. On the other hand, his actual agenda is highly partisan and undermines many of his stated goals. He wants to stimulate economic growth, but his hostility toward trade agreements threatens export-led growth (which is now beginning). He advocates greater energy independence but pretends this can occur without more domestic drilling for oil and natural gas.

The 2006 mid-term elections finally tripped-up six uninterrupted years of the Senate and House walking in lockstep with the White House.  And now after eight years of a controversial president in the White House, GOP fatigue is certainly understandable.  Nonetheless, buying into lofty, vague rhetoric may serve  well as free political therapy, but it strikes of political naïvité.

Leave it to David Brooks to trot out Honest Abe in preparation for the fall election:

Over the course of his young adulthood, Lincoln built structures around his inner nature. He joined a traditional bourgeois marriage. He called his wife “mother” and lived in a genteel middle-class home. He engaged in feverish bouts of self-improvement, studying Euclid and grammar at all hours. He distrusted passionate politics. In the Lyceum speech that he delivered as a young man, he attacked emotionalism in politics and talked about the need for law, order and cool reason.

Self-improving Lincoln contrasts with the leaders of today:

Over the past decades, we’ve seen president after president confident of his own talents but then undone by underappreciated flaws. It’s as if they get elected for their virtues and then get defined in office by the vices — Clinton’s narcissism, Bush’s intellectual insecurity — they’ve never really faced.

And now for a jab at the naïveté of the electorate:

The central illusion of modern politics is that if only people as virtuous as “us” had power, then things would be better. Candidates get elected by telling people what they want to hear, leading them by using the sugar of their own fantasies.

Is he hinting at any candidacy in particular?

Obama Claims Historic Presidential Nomination
Becomes First Black Candidate To Head Major-Party Ticket

If our society were truly as “post-racial” as Obama supporters wish it to be, today’s Washington Post headline would have to be rewritten thusly:

Obama Claims Historic Presidential Nomination
Becomes First Black Candidate To Head Major-Party Ticket

But in a Democratic nomination campaign defined more by style than by substance, frivolous details such as the candidate’s race make the headline.

Now that Sen. Hillary Clinton’s campaign is on its deathbed, the eulogies are starting to appear.  Marie Cocco in the Post catalogs the series of sexist name-calling and belittlement Clinton faced throughout her campaign.  Though it causes little public uproar when media figures pelt misogynist epithets at Clinton, Cocco wonders what would happen had similar but racist insults been hurled at Sen. Barack Obama.

Would the silence prevail if Obama’s likeness were put on a tap-dancing doll that was sold at airports? Would the media figures who dole out precious face time to these politicians be such pals if they’d compared Obama with a character in a blaxploitation film? And how would crude references to Obama’s sex organs play?

Certainly such behavior would be scandalous, but in America race as an identity is much more sensitive than sex, and thus we are socially afforded different levels of disrespect for different identities.  Perhaps this is the result of race-consciousness, which, wishing to compensate for past transgressions (slavery, Jim Crow, etc.), places particular meaning on race.  The race-aggrieved will note that women were not enslaved for hundreds of years.  Feminists will retort that women have been enslaved since the beginning of time.  In the case of more-aggrieved-than-thou arguments, I choose not to take sides.

Clearly, though, Sen. Clinton has faced a mean, protracted, and costly campaign.  She may not be as offended as we think as she has openly admitted her excited anticipation of the mess of politics that would come.  Clinton is no shrinking violet, and therein lies the problem.

Unfortunate as it may be, the reality is that women who are assertive are frequently called “bitches” whereas equally assertive men receive social admiration.  Steadfast conviction!  Standing tough!  Staying the course!  All these have little negative connotation when applied to men, but when a woman refuses to back down (refuses to accept electoral defeat, even), she’s called a bitch.

We can avoid the issue completely if we afforded everyone the equal respect we all deserve.  However, if men were angels, as James Madison wrote, we would need no government.  Then there would be no nasty campaigns.

Two good articles from Post today.

The Manhattan Institute finds that immigrants in America adapt quickly. Though measuring economic, cultural, and civic integration is difficult, it’s useful to look at the index as a good way to compare different groups rather than interpreting 100 as a full integration (whatever that really should mean). Either way, the numbers tell a story that contrasts sharply with what one will find in the Parisian banlieues.

Despite this, sadly, there’s still plenty of racist hostility to blacks, as Sen. Obama’s campaigners are finding. It’s a story barely reported on the campaign trail over the past few months, but Sen. Clinton may have hinted at it when she discounted Obama’s electability. At first I thought she was referring to his liberal, if scant, voting record. Now I suspect she may have been referring to something else.

When it comes to the object of global scorn, China is the new America.

Authoritarian Fries?

Some in China are mad over French sympathies for Tibet. Some are boycotting French chains such as Carrefour.

The New York Times reports:

Like many young people, Ms. Zhu, a student at Beijing’s prestigious Foreign Studies University, said she had been infuriated by what she described as unfair attacks on the country’s image. “China used to be known as the sick man of Asia,” said Ms. Zhu, 19, who has been sending out tens of thousands of pro-boycott messages through QQ, a popular online chat service. “We were separated like sand. But this worldwide show of support by Chinese all over the globe illustrates we have solidarity on this issue. After 5,000 years, we’re not so soft anymore.”

Someone’s got a chip on her shoulder.

Anyway, let France be warned: you are the new America.