Lawrence Summers is frighteningly good at surviving his failures. Not quite as good as Alan Greenspan, who had a knack for disappearing before the failures even surfaced, but close. Among a certain group of politically calculating neoliberals, Larry Summers has a good chance of being appointed Federal Reserve Chairman. It’s breathtaking that he’s even being considered, but Larry has a kind of zombie ability; a can’t-be-killed-cat with at least nine lives despite catastrophic performances throughout his career.
1999 alone should have doomed him. That was when, during the Clinton administration, Summers helped convince Congress to repeal the Glass-Steagall Act of 1933. That’s the economic equivalent of lighting a fuse to a stick of dynamite. For decades the Glass-Steagall act successfully forced banks to keep their commercial and investment activities separate. The idea was that banks that hold customer deposits insured by the FDIC (namely us, the American taxpayer) should not be making wild bets with that money. Repeal of the law allowed commercial banks to get into the mortgage-backed securities market that came crashing down during the financial crisis. To put this more bluntly, Summers lit the fuse to the dynamite that helped blow up our financial markets. Not something you would normally reward.
And he learned nothing from the experience. Holding fast to deregulation and ‘free market’ principle, even in the wake of the 2008 fiscal disaster, Summers was the “most vocal internal opponent” of the Volcker Rule, a watered down Glass-Steagall in principle, which forbids banks from making risky bets with taxpayer money, according to Mother Jones magazine. In 2009 and 2010, as Congress was drafting up the Dodd-Frank financial reform law aimed at preventing another financial collapse—the Volcker Rule was seen as key. Three years after Dodd-Frank passed, the Volcker rule has yet to be finalized because Wall Street is waging an all-out war against the law—and Larry Summers is on their side.
Additionally, Summers was hostile to a proposed addition to the Dodd-Frank law that would have broken up mega-banks into smaller banks. Summers objected to the measure because, he said, it would mean smaller banks “would be at greater risk of failing.” But if they aren’t small enough to fail, they are too large to fail, and tax payers have to foot the bill. And we’ve all seen what success our economy achieves when banks are too large to fail.
Also unfortunate, while he was president at Harvard University between 2001 and 2006, Summers invested billions of dollars of the school’s money in a risky mix of stocks, bonds, hedge funds, and private equity. As a result, when the financial crisis hit, the university ended up losing 27 percent—or $1.8 billion—of its $6 billion in cash assets.
All of this goes without mentioning his utter political tone deafness. Remember the abstruse warnings Greenspan gently prodded fund managers with, that wonderfully subtle phrase, ‘over exuberance’ or Bernanke’s coyly playing around with positive growth estimates? There’s a reason for that. The Fed Chairman holds the heart of Wall Street in his/her hands; when the Fed whispers, Wall Street swoons.… But, alas, Larry is anything but subtle. He’s a bull in the bull market, so to speak. Or the bear in the bull market.
During his tenure at Harvard he managed to piss off approximately half the human race by insisting that women couldn’t really make top-tier scientists. Summers told a meeting about the status of women in science that “three broad hypotheses” could explain the “very substantial disparities regarding the presence of women in high-end scientific professions…”
With his usual panache, he explained that women don’t like the “80-hour work-weeks”, that small differences in average math or science aptitude translate into a large disparity at the intellectual level needed to do world-class science, and finally that girls and young women are socialized away from science and engineering into ‘softer’ disciplines.
No mention, of course, of male hegemony or male preferential treatment, because why would that ever enter into it?
A little tone-deaf, like I say, such that he managed to provoke his own public denunciation from the Harvard faculty. On March 15, he received a no-confidence vote from the faculty of arts and sciences, apparently for the first time since the Great and General Court of the Massachusetts Bay Colony spawned Harvard in 1636.
But he is a cat with the proverbial nine lives. After he was an insensitive clod at Harvard, Larry Summers moved on to become an insensitive cad at the World Bank. On December 12, 1991, he authored a memo that has since become infamous, arguing that the less developed countries [LDC] should essentially service the waste from the first world because their health costs were lower. “From this point of view a given amount of health impairing pollution should be done in the country with the lowest cost, which will be the country with the lowest wages. I think the economic logic behind dumping a load of toxic waste in the lowest wage country is impeccable and we should face up to that.”
He also goes on to note sadly that, “I’ve always though that under-populated countries in Africa are vastly UNDER-polluted…” As if pollution were a ‘fixed’ cost of doing business and if you wanted to be all grown up, you needed to go out and get yourself some.
And besides, he added, his third bullet point of impeccable logic, poor people don’t really live that long.
“The concern over an agent that causes a one in a million change in the odds of prostrate cancer is obviously going to be much higher in a country where people survive to get prostrate cancer than in a country where under 5 mortality is 200 per thousand.”
If you’re reading this and thinking that Larry Summers is a moral troglodyte, you’re not alone. After the memo became public in February 1992, Brazil’s then-Secretary of the Environment Jose Lutzenburger wrote back to Summers: “Your reasoning is perfectly logical but totally insane… Your thoughts [provide] a concrete example of the unbelievable alienation, reductionist thinking, social ruthlessness and the arrogant ignorance of many conventional ‘economists’ concerning the nature of the world we live in… If the World Bank keeps you as vice president it will lose all credibility. To me it would confirm what I often said… the best thing that could happen would be for the Bank to disappear.”
Sadly, Mr. Lutzenburger was fired shortly after writing this letter.
Mr. Summers, on the other hand, was appointed the U.S. Treasury Secretary on July 2nd, 1999, and served through the remainder of the Clinton Administration.
And so it goes.
But in some ways, maybe Larry Summers has done us a favor. He embodies all that is wrong with the nexus of our political and economic system in one man—no small feat. If he’s chosen for the Federal Reserve Chairmanship it will become infinitely easier for historians to pinpoint at least one of the missteps that led to our national decline.
Only our usual cartel of Wall Street players, neoliberal acolytes and a few lazy historians would applaud his appointment, the rest I should think would look to the alternative candidate, Janet Yellen (whom Elisabeth Warren has recently endorsed), and hope she gets the nod.
The scary part is, no one really knows how many lives Larry has left.
Last week Governor McDonnell took a long deserved vacation. No more late night calls to get lawyered up. No more side stepping those embarrassing conversations about yet ANOTHER bundle of cash funneled to his wife and family by his Star Scientific best bud Jonnie Williams, bringing the grand total of reported Williams-to-McDonnell-family gifts to $145,000. Presumably, of course, for doing nothing at all.
Besides a slight sense of jealously (let’s face it, netting $145000 for doing nothing at all is a sweet gig), there’s always the possibility that Governor McDonnell actually did do something for that amount of money even though he staunchly assures otherwise:
“I think it’s important that the people of Virginia know that nothing has been done with regard to my relationship with Mr. Williams or his company, Star Scientific, to give any kind of special benefits to him or his company — or frankly any other person or any other company during the time that I’ve been governor.”
But his words and the reality are getting a little out of line. For example, the Virginia Executive Mansion played host to a rollout of Star Scientific’s anti-inflammatory supplement, Anatabloc (that nicotine cum medicine oil thing that best bud Jonnie Williams has been hustling all over the state). And Maureen McDonnell also took a trip to Florida on the state’s dime to speak about the wonders of Anatabloc. And she was listed as a ‘feature speaker’ for Anatabloc in lovely downtown Richmond. And travel records indicate she journeyed to Flint, Mich., later in the year at the same time Star Scientific had another Anatabloc rollout at a nearby country club. And McDonnell did arrange a meeting between our Secretary of Health and Jonnie Williams at a time when it would be truly convenient for Jonnie’s ‘supplement’ to have the blessing of the state Board of Health.
Also, we should note, Attorney General Ken Cucinnelli, the fellow whose office was supposed to prosecute these shenanigans—and never did—has received at least $18,000 from Star Scientific, for which he curiously missed a disclosing deadline (since amended); and one major investment, which, you guessed it, was for Star Scientific. And not too shoddy either. In October, Cuccinelli purchased 5,060 shares of Star Scientific stock at $1.98 share. Or about $10,000. Did I mention this is his ONLY stock investment?
Speaking of investment, last night we learned that the Virginia Retirement System lost some $87,000 dollars to investments in Star Scientific. The manager of the investment team claims the purchase was not influenced by the Governor nor the Attorney General at the time “the decisions were made.” The VRS stock assessment program and the five member review team just picked a dog stock. It’s unfortunate, said R. Ronald Jordan, executive director of the Virginia Governmental Employees Association, that it was “this particular dog.”
Unfortunate, indeed – Star Scientific hasn’t made a profit for ten years.
And then there’s this other odd, late breaking item about free dental work Maureen received from a dentist named Perkinson, who, as it happens, just had a $20 million dollar VCU building named after him by the Governor. McDonnell appointed Perkinson to the VCU board of visitors in July 2010.
So this sounds like a pattern. Or let’s call it ‘learned behavior’…
Lucky for McDonnell and Cuccinelli, they have both successfully survived state legal audits. Thursday, January 18, Michael Herring finished an independent investigation and concluded Cuccinelli had not broken any specific state laws. In April, Cuccinelli appointed former Attorney General Anthony Troy as special counsel to audit McDonnell, and the audit concluded that “he found no proof of any public funds, grants, contract awards or appointments benefiting Williams or his corporate interests.”
I’m no lawyer so I’ll leave it up to our legal profession to discern the rightness of these decisions, but we should keep in mind this is really only part 1.
What Troy and Herring were looking at was state law, and our state law is lax in the area of political gifting. Under Virginia law, officials have to annually disclose any gifts to themselves worth more than $50 but they do not have to notify the state about gifts to immediate family members—at all.
So, it should come as no surprise that the overwhelming beneficiary of all these gifts ($145,000+) have been members of McDonnell’s family and not McDonnell himself. But that’s state law, and Virginia, as noted elsewhere, is one of the most corruptible states in our union, 47th out of 50!
Part 2 is Federal law. This involves something called the Hobbs Act, one section of which makes it illegal for a public official “to obtain a payment to which he is not entitled knowing that it was made in exchange for official acts.” In short, a bribe. Needless to say, Federal rules are a wee bit tougher than those set forth by the 47th most corruptible state in the union.
So while the Governor is finally on vacation, away from this maddening scandal which has plagued the poor man, I suspect there will be some bad dreams and night sweats when he is startled awake and stares at the ceiling, and wonders about the other shoes waiting to drop —the results of that ongoing federal inquiry, whatever revelations may still linger, and, oh yes, the trial that’s coming up shortly.
Not his trial, though. At least not yet, but the trial of a chef. Master Chef Tom Schneider to be exact. You wouldn’t think a man of destiny like McDonnell would care so much about the fate of a lowly chef. But their fates are intertwined, along with our own State Attorney General, Ken Cuccinelli.
To understand this piece of the puzzle, turn back to last February. At that time, governor’s mansion chef Todd Schneider was first accused of embezzling state-bought food. But Schneider claimed in a court filing by his lawyers that he had tried to blow the whistle on the first family nearly a year prior to the embezzlement allegations. He said that he was the first family’s “personal shopper and private caterer” and was called upon to perform duties “far beyond the scope” of his employment, work for which he was not paid, but was later told to ‘take out in trade.’ He also noted that he was only accused of stealing after he brought these matters to the attention of the Attorney General’s office.
In the context of the other revelations regarding the McDonnell’s behavior and their laissez-faire attitude toward the use of state property, a betting man would lay better than even odds on the allegation being true. Who told Schneider to take it out in trade is a different matter—no one knows that yet, but if it was someone in official capacity at the Governor’s office (like say, Maureen McDonnell or a staff member, then there’s some serious law breaking). In an effort to prove his innocence, Schneider provided documents to a lawyer with the Virginia Office of the Attorney General and Virginia State Police troopers showing that Williams paid $15,000 for the catering at the 2011 wedding of the daughter of Gov. McDonnell, even though McDonnell had signed the contract. McDonnell did not disclose the gift, which he said was a wedding present for his daughter. That’s where the scandal really took root. The Attorney General’s office however did not act on these revelations, but instead charged Tom Schneider with four counts of embezzlement.
Later that summer, after charging Tom Schneider with embezzlement, Ken Cuccinelli took advantage of a $3000 vacation at Jonnie William’s lake house. It was time to relax, apparently. Only McDonnell, needless to say, didn’t stop his activities, and Tom Schneider took his accusations to the street.
Since the judge refused to dismiss his case, Tom Schneider’s trial is set for October, in other words, just before the November gubernatorial elections. I’m sure Bob McDonnell is not happy about that. But there’s someone else who is probably even less happy, Ken Cuccinelli.
Like Bob McDonnell he’s probably lying in bed having night sweats thinking of all those other shoes that are out there, ready to drop, wishing it were all just a dream.
If you followed the Zimmerman case at all, you could see the verdict that was coming, that was in some ways inevitable. Remember Sanford, Florida is the town where the cops were ready to set George Zimmerman free rather than bother with the niceties of a trial in the first place. Consider that, and the subsequent trial and its outcome really aren’t surprising. Of course, it’s been pointed out by many a pundit, armchair and otherwise, that if the colors were reversed for defendant and victim, the verdict would have likely been reversed, too.
True enough, and it should come as no surprise, despite the ridiculous dance the law profession put on for us in Sanford to claim otherwise: this IS about race. It’s also about the easy access to guns and gun laws such as Stand Your Ground. As Scott Price, President of The Alliance for Progressive Values noted, “… if race in America with all its myriad codes, triggers and signals made up the tinder and kindling of this tragedy, it was Zimmerman’s easy access to a gun and the cheap bravado it provided that acted as the accelerant, turning a racially charged altercation into a murder. ”
But, even more broadly, the verdict was about fear.
Last night, fear won. Fear tucked a revolver into its back pocket and walked out into the Florida eve, talking tough and looking for punks. Fear reclaimed the landscape of Sanford, and it was as if nothing had changed there at all. George Zimmerman, smiling, maybe even a little relaxed, certainly relieved, reclaimed his life. He can go on with his cop wannabe antics, and the good people of Sanford can comfortably close their eyes, because the protector of their domestic tranquility, a reckless white man with a gun, has been set free. Contra the expertise of our punditocracy, the problem from this acquittal isn’t going to be riots, but exactly what it allows: more George Zimmermans.
And if white fear must always be soothed with the balm of cold weapons and colder hearts, can we imagine, for one instance, the fear this decision produces in the black community?
A local actor in Richmond, DL Hopkins, put it this way:
“With the George Zimmerman, Marissa Alexander, and Lionel Tate verdicts, to me, a very clear message is being communicated. The State of Florida, if allowed, will stop at nothing to destroy my family.”
White fear prefers not to recognize this reality; in the honeysuckle suburbs it’s much easier to talk about the application of the law and the rule of order and how the prosecution’s case overshot the mark by not trying to get an involuntary manslaughter conviction. All true, maybe, but beside the point. The black community for centuries has understood that we are two nations. Our laws get applied unequally and unfairly. So the Zimmerman acquittal is not so much a surprise, but a confirmation of those differences, of the separateness of our two worlds.
And how does that confirmation, in turn, weigh on the black community?
In Florida, Nik Nicholson had this to say:
“I feel like crying, not because someone got off but because I expected it. Because it is 2013 and we are still niggers, watching our young get hung and we will go to sleep tonight… And our FB statuses are the end of our revolution. Myself included. Some of us will go to church tomorrow, and pray and maybe dance and continue living to die…Living to die, letting them kill us like 1865. Then turn the other cheek and pray for our enemies. I am ashamed. That I will be [at] work on Monday, when I should be in the street ready to fight to death, instead of on my knees waiting for someone to save me. God, I am so ashamed.”
If the verdict was predictable for a white man, the sense of impotence, rage and shame is equally understandable for the black community.
But the prediction of riots from those on the right are misguided. A vigil was held tonight at the John Marshall Courts building in Richmond. There were probably close to 400 people there, sitting on the steps with signs and candles. And the nicest thing about that moment was the deep diversity in the crowd: blacks, whites, Latinos, young, old, male, female and in between.
As one person yelled from the steps: “We are all one race! Black and white, we look pretty good together!”
And they did.
Speakers from the NAACP, local politicians like Delegate Delores Mcquinn and school board member Shonda Harris-Muhammed and activists like Lilli Estes and Ana Edwards took turns addressing the crowd.
There were chants of “No Justice, no peace,” but the vigil was imbued with a deeper sense of mourning, a sense of hurt and determination.
“Get mad, but after you get mad, do something, but don’t go to jail. That’s not the box we want to fill. We don’t need to fill that box anymore!”
Delegate Delores McQuinn urged folks to take practical action, “So, first of all, you go to the right box, the POLL box in November, and you vote!”
A spokesperson for the NAACP urged everyone to sign a petition to open a civil rights case against George Zimmerman.
And there were prayers. Lots of prayers.
“Oh heavenly father, open our hearts, open our eyes. We need you now more than ever.”
A rendition of “We Shall Overcome” ended a short march around the building. And the words “We’ll walk hand and hand.. someday…” hung in the air as a kind of grace note for the evening.
If there are problems in the days to come, they’ll be symptoms of the far deeper malaise that still divides us. But I suspect what we really need to fear now is how far we still have to go.
Wedged somewhere between the SCOTUS decision dismantling section 4 of the Voting Rights Act and the other decisions from last week that more wisely struck down DOMA and Proposition 8 and just before Wendy Davis’ remarkable filibuster against a draconian Texas Bill (SB5) that would have closed abortion clinics across the state of Texas was a speech that might just save the planet. Naturally, the major cable outlets decided not to cover it.
At Georgetown University, last Tuesday, Obama delivered a true stemwinder on climate change, outlining the man made causes and reconfirming the scientific consensus. More importantly he emphasized the moral dimension of fighting climate change, arguing that preserving the environment for our children and our children’s children takes precedence over the convenient politics of today.
“Those of us in positions of responsibility, we’ll need to be less concerned with the judgment of special interests and well-connected donors and more concerned with the judgment of posterity,” Obama said, “because you and your children, and your children’s children, will have to live with the consequences of our decisions.
In an odd way, despite the awkward timing of his speech, landing smack in the middle of one of the busiest news cycles of the season, his argument is fitting, and consistent with the DOMA ruling and even Wendy Davis’ marvelous filibuster. They all spring from a similar sense of moral outrage.
Since the beginning of the Obama administration, main stream environmentalists have been playing a kind of hide and seek game with the administration who wanted to make the argument that environmentalism was economically efficient, without necessarily relying on the far more important point that lack of carbon caps could effectively destroy our planet.
In his big Tuesday speech, however, the President went full climate hawk, with an extensive discussion of climate science, extreme weather impacts, the absurdity of denial, and the moral urgency of action.
“The question is not whether we need to act,” Obama said in his speech at Georgetown University. “The question is whether we will have the courage to act before it’s too late.”
Couched within that context, Obama went on to strike a blow at polluting industries by announcing that the Executive branch EPA would start capping carbon output, regulating carbon like any other pollutant.
“Today about 40 percent of America’s carbon pollution comes from our power plants,” said the president, “Right now there are no limits to the amount of carbon pollutions those plants can dump into the air. None.”
“We’ve got to fix that… So today for the sake of our children and the health and safety of all Americans, I’m directing the Environmental Protection Agency to put an end to the limitless dumping of carbon pollution from our power plants and complete new pollution standards for both new and existing power plants.”
All over the country, you could hear oil and coal executives’ anguished screams.
The really nice thing about this? It depends on Congress doing exactly nothing; which is excellent news since that has been their default position for the last 5 years. Instead, the EPA, an executive branch agency will carve into the carbon levels of new and existing plants forcing them to use carbon neutral technologies.
“We don’t have time for a meeting of the Flat Earth Society,” Obama quipped.
There’s more. Obama also called for an end to the public financing of new coal plants overseas:
“Today I’m calling for an end of public financing for new coal plants overseas, unless they deploy carbon capture technologies, or there’s no other viable way for the poorest countries to generate electricity. And I urge other countries to join this effort. I’m directing my administration to launch negotiations toward global free trade in environmental goods and services, including clean energy technology, to help more countries skip past the dirty phase of development and join a global, low-carbon economy.”
Sierra Club Executive Director Michael Brune was cautiously optimistic, “President Obama is finally putting action behind his words.” He said, but he remained steadfast in his call for an end to the Keystone XL Pipeline, which wasn’t explicitly ruled out by the president, who said, “I know there’s been… a lot of controversy surrounding the proposal to build the pipeline, the Keystone pipeline that would carry oil from Canadian tar sands down to refineries in the Gulf. And the State Department is going through the final stages of evaluating the proposal. That’s how it’s always been done.
But I do want to be clear. Allowing the Keystone pipeline to be built requires finding that doing so would be in our nation’s interests.
And our national interest will be served only if this project does not significantly exacerbate the problem of carbon pollution. The net effects of the pipeline’s impact — the net effects of the pipeline’s impact on our climate will be absolutely critical to determining whether this project is allowed to go forward. ”
To give you a sense of the stakes, the Keystone XL pipeline is not only a symbolic heart for the environmental movement in the U.S., but former NASA researcher and climate scientist James Hansen told the New York Times that if the Keystone pipeline were to go through it would be “game over for the climate.”
Outside of the Keystone Pipeline which remains an open question, environmentalists are also concerned about existing and upcoming trade agreements and what the President’s language on trade actually means. Again, it’s open for interpretation and the historical precedents aren’t favorable. The fact that no specific mention was made of the Trans-Pacific Partnership agreement which will likely be voted out this fall may be cause for concern. Sometimes what you don’t say is as important as what you do say.
Traditionally, free trade agreements like the kind the US is currently seeking to implement on the Pacific rim, the so-called TPP or Trans-Pacific Partnership grant foreign investors the power to sue governments in international tribunals for enforcing environmental laws. This is a problem. It’s also one reason why the Trans-Pacific Partnership is barely mentioned by this administration or the courtier press, even in speeches that explicitly address environmental issues. In fact, when the TPP is presented to congress it will likely be as a ‘fast-track’ piece of legislation which means no modifications will be allowed to the treaty and not much time for review of its thousand plus pages.
Again, this is a problem because such trade agreements have traditionally elevated individual corporations and investors to equal standing with each signatory country’s government.
For example, what’s known of the TPP so far would empower corporations to skirt national courts and sue our governments before tribunals of private sector lawyers under WTO jurisdiction; they could sue on such grounds as loss of ‘expected future profits.’
Most environmentalists can list on both hands the negative impact such rulings might have. The Department of Energy could lose its authority to regulate exports of natural gas to countries that have signed a “free trade” agreement with the U.S. The TPP could eliminate the government’s prerogative to determine whether the mass export of natural gas to TPP countries – including Japan, the world’s largest natural gas importer – is in the public interest. The resulting surge in natural gas exports would not only raise gas and electricity prices for consumers, but would ramp up the dangerous, chemical-laden practice of fracking.
But it’s actually worse than that. Not only could domestic agencies lose their teeth to effectively regulate. Such agencies, protectors of our public resources, our commons, can also be sued by corporations for interfering in profit driven trade.
Under current trade agreements, for example, governments have paid over $3 billion to foreign corporations in investor-state disputes under existing U.S. trade and investment deals. Over 85% has been handed to corporations attacking oil, mining, gas, and other environmental and natural resource regulatory policies. Exxon-Mobil just won a case over a Canadian province’s offshore oil regulations and a case has been filed against Quebec’s moratorium on fracking.
Corporations have also used investor-state cases as pressure tactics to avoid having to pay for environmental damages. Even the mere threat of an investor-state loss can pressure governments to weaken environmental and health policies.
In the 1990s, U.S. based Ethyl Corporation challenged a Canadian environmental ban of the gasoline additive MMT, considered a dangerous toxin, under the North American Free Trade Agreement (NAFTA) investor-state provisions. Although many U.S. states ban the substance and the investor-state tribunal made no final ruling, an intermediate loss was enough to push the Canadian government to revoke the ban, settle with the foreign corporation for $13 million in taxpayer compensation and issue a public statement that the chemical was safe. No scientific evidence needed, apparently.
So it’s good to remember that along with Obama’s soaring rhetoric about our children’s future, and our moral obligation to ensure it, there are huge systemic issues at play, like the Trans-Pacific Partnership and Free Trade Agreements, in general, that are still not being talked about openly—in very specific ways.