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Maricopa County Supervisor Don Stapley's legal troubles provide an instructive window into much of what's wrong with Arizona. He was indicted by a grand jury on 118 felony counts for properly failing to disclose his real-estate dealings. The first "tell" on the case is that it's being pushed by Sheriff Joe Arpaio and County Attorney Andrew Peyton Thomas, who are hardly the most reliable figures in law enforcement. As New Times' Sarah Fenske pointed out:
That's right. The sheriff of one of the most populous counties in America had deals for shopping strips going on the side.
Fact and fiction about Arizona university funding, per Michael Crow (and I agree):
Based on some of the responses I’ve received recently regarding the state budget proposal, I wanted to forward a few key facts to counter the lingering inaccuracies and misperceptions I continue to encounter. The information below provides important clarification related to pending budget concerns and the magnitude of the challenges ASU is facing.
Fiction: The cut to ASU in the proposed legislative budget
is a small fraction (between 4 and 12 percent) of the university’s
Fact: The actual percentages are 35 percent of the 2009 state General Fund budget that is remaining for the year and when the proposed 2010 cuts are added, it totals 40 percent of the university’s state General Fund appropriation in 2008 on a (either a full-time student or its equivalent of two part-time students) basis.
Renegade -- the president's secret service code name -- is pushing hard for "his" stimulus bill as it reaches the House floor today. What's in is? That's difficult to tell as the horse-trading continues, and as Obama tries to rope in at least some Republican support. FDR and the Democratic Congress in 1933 simply steamrolled the Republicans who demanded balanced budgets and reactionary policies -- but never mind. In the end, this will be a package crafted not only by 535 lawmakers, but countless lobbyists and staff. My biggest fear is that it will not be a renegade stimulus -- transformative and focused on the future.
Let me count the ways:
1. Tax cuts in the current environment won't provide help. U.S. tax rates and dodges are already generally at lows not seen since the Coolidge years. Obama promised a working-class tax cut. Fine. He's bowed to Grassley to provide more alternative-minimum tax relief. OK. But these should be different bills. They're not stimulative. Individuals will squirrel away their checks or use them to pay down credit-card debt. Corporations are already paying nothing in many cases. As for "investors and risk-takers" -- the Bush years demonstrated that tax cuts on investments merely fuel speculation while encouraging job-killing mergers and offshoring. Not for nothing did wages stagnate during those halcyon years. Perhaps worst of all, it continues the destructive "tax cut" entitlement mindset that Americans can get something for nothing.
It's worth noting, from a story in today's Wall Street Journal, that the three flight attendants on the USAirways flight forced to ditch into the Hudson, with all aboard surviving, brought 90 years of collective experience in their jobs. Doreen Welsh, Sheila Dail and Donna Dent each had at least 26 years of flying. These kind of employees, along with pilot Capt. Sully Sullenberger, are the very ones targeted for layoff -- and hiring discrimination -- by an increasing number of American employers. Where's that Baby Boomer revolt?
The $750 billion financial bailout is turning into a scam rivaled only by the practices of the financial sector that precipitated this signal disaster. The geniuses overseeing this "rescue" thought it would be dandy to save Bear, Sterns -- but then let Lehman Brothers collapse. They pumped $45 billion into Citigroup -- which went out and bought a $50 million corporate jet. Merrill's "savior" CEO was redecorating his office to the tune of more than $1 million while headed into a shotgun marriage with Bank of America -- which is now begging for more bailout billions because of Merrill's disastrous bets. AIG and the rest of the gang handed out billions in bonuses while their hands were out for the taxpayers money. And the system is still sick, reeling afresh with any day's new shock.
Maybe $300 billion of the TARP money has been committed -- maybe more. Then there are perhaps trillions in dollars printed out and essentially given to the big banks through Federal Reserve "lending facilities" -- which the Fed is keeping secret. Behind the scenes, the big banks continue to lobby and squeeze members of Congress. In exchange for the taxpayer money, it's unclear what the taxpayers get in return, whether any of the bailout money will ever be paid back. These guys make Bernie Madoff look like the Better Business Bureau.
Now the cognoscenti are talking about nationalization as the answer -- whatever "nationalization" means. As the New York Times reports,
That has already happened; taxpayers are now the biggest shareholders in Bank of America, with about 6 percent of the stock, and in Citigroup, with 7.8 percent. But the government’s influence is far larger than those numbers suggest, because it has guaranteed to absorb the losses of some of the two banks’ most toxic assets, a figure that could run into the hundreds of billions of dollars.
As one of many who were punked by Paulson in the original panicked rush to pass the bailout, I say let's take a deep breath, stop, look and consider:
Pardon me if I'm not excited about the Arizona Cardinals going to the Super Bowl. This is a team deliberately from nowhere. It doesn't have the city's name. This is more than a matter of Phoenician pride. Cities are the competitive players of the 21st century, and if the sun-addled residents of the Salt River Valley don't even know their city name -- and what a magical name it is -- it's one more indication of how unprepared the region is for the future. Hell, call them the Glendale Cardinals -- except they don't really even play in Glendale, a place so amorphous that it lacks an "in."
The team plays in a stadium plopped into a cotton field. The stadium was built with taxpayer money as part of a land deal to enable sprawl development and enrich sprawl developers. It's virtually inaccessible by mass transit. In other words, here's a team that embodies everything that's wrong with metro Phoenix. As for taking the name "Arizona," the Cards sound like a college team -- and to the rest of Arizona Phoenix is an expanding cancer, ruining what's left of a once magical place. Go Steelers!
Sweet irony: As the network searches for lead-in shots -- which in real cities show shimmering skylines by downtown stadiums -- they will be left to show endless crapola subdivisions creeping into the fields, the "deliverables" financed by Wall Street swindles that caused the recession now hammering the NFL.
It was probably not a good sign when the email from ASU President Michael Crow -- subject line "Proposed budget cuts and the future of Arizona" -- landed in my spam folder. Of course, this was not an email from Crow's private address, but a mass mailing to Arizona State University alumni and supporters. Still, not a good omen.
The Kookocracy is now in charge, from the governor's office right down to Arpaio's gulag lite. Whatever the budget situation, their antipathy to education, especially those "socialist professors," is well known. While Janet Napolitano was governor, their worst tendencies were constrained. Now the extreme reactionaries have total power and the excuse of a budget deficit. They want to slash $600 million from Arizona universities, singling out higher ed to take the biggest hit from state cutbacks.
Crow is not overstating the stakes when he says the cuts threaten to give Arizona a "Third World education and economic infrastructure." Yet despite an emotional backlash against the Regents, I wonder if the extremist juggernaut can be stopped. Even without the further cuts, the damage is deep -- and couldn't come at a worse time.
Talking Points Memo did more digging to find out why mass transit and Amtrak were getting so little of the proposed stimulus. It's bad enough that $30 billion will go for "roads and bridges," most of which will worsen global warming, increase our dependency on imported oil and increase the environmental and urban damage of sprawl. But apparently these critical transportation choices -- a given in most advanced nations, and critical to face a future of expensive energy and global warming -- were sold out for tax cuts. It's also galling that mass transit and rail go begging while we sink trillions into the hole of the "financial services industry" swindles.
Urbanites -- and suburbanites who want alternatives to endless driving -- put Obama over the top. It's time they reminded him of their issues. Next up for enterprising reporters: What sprawl industries are pushing this for their financial benefit?
The more I learn about the $750 billion bailout of derivatives, tranches and collateralized debt obligations, the more I think about drunks. The true drunk will do anything to keep drinking. Cheat. Steal. Betray. No one is above his treachery. He will destroy his family to get the next drink. On a binge, he will spend the wealth it took his family generations to accumulate, right down to the treasured mementos. He can be clever, fun, charismatic. Behind this mask he is a monster. At his most destructive, he wraps his addiction in layers of complexity and opacity, which non-drunks would simply call lies.
Substitute "banker" for "drunk" and I think we have a better understanding of the mess we're in. Consider State Street Bank. Its shares plunged 59 percent Tuesday as it revealed previously "unrealized losses." That's the drunk telling his wife he's wiped out the family savings. Citigroup and Bank of America shares are cheaper than value meals at McDonald's -- territory we saw with the late Washington Mutual on the way to failure. That's the drunk in the gutter. The difference is they don't know they've hit bottom and must fundamentally change. They just want another drink.
They call it capital, and the last bar open is the federal Treasury.
Tomorrow and tomorrow and tomorrow creeps in this petty pace from day to day to the last syllable of recorded time; and all our yesterdays have lighted fools the way to dusty death... Yet sometimes grace bestows a tomorrow of soaring magic and hope, and so it will be with the inauguration of Barack Obama on Tuesday. Whether it began with his moving rhetoric or much of America's desire to simply be rid of George W. Bush, Obama has captivated this nation. The vast majority of people believe in him and, if polling is right, are willing to give him time to fix the disasters produced by the past eight years.
Just to have a president who can speak well and intelligently, who reads books and newspapers, who seems to have an interior life, calm center and an open mind, who's smart, who won't embarrass us in the world. A man who is willing to change his mind when the facts change. Just these things will mean much. America will no longer use torture as an instrument of national policy. Science will come center stage in guiding policy. Diplomacy will once again be worthy of a great power. This president's Christianity will be made manifest through humility and witness, not as a creepy "God talks to me in the Oval office" or as tactic of division and inciting the mob. This constitutional scholar will know about separation of church and state and separation of powers. His vice president will be a vice president. Just these things will be healing tectonic shifts from the scoundrel time we have endured. I, for one, will see the flag raised and hear the national anthem with tears of renewed pride rather than sorrow.
So you can stop reading here. Or come back after the inauguration and read further. Otherwise, we must brace ourselves for the extremely difficult work that will follow tomorrow.
The "all hands on deck" moment for the Obama administration is emerging now. Ironically, as the president-elect and VP-elect "Amtrak Joe" begin their rail journey from Philadelphia to Washington, it's becoming clear that rail and mass transit will be the poor match girls of the giant Obama stimulus. According to the Wall Street Journal, only $10 billion out of $825 billion would go to rail and mass transit projects.
Meanwhile, most states will line up for their "shovel-ready" infrastructure projects building roads. For example, South Carolina wants more than $2 billion for an interstate through the most rural part of the state. There can be only one reason: to enable sprawl, enrich developers, house builders and land bankers, and hollow out existing urban areas.
Talking Points Memo provides some details on competing proposals, adding:
This is not a small matter. Offering Americans 21st century transportation options is essential not only to providing jobs but to creating the infrastructure to allow us to compete. It doesn't really matter if most Americans blithely motor about in a 1965 transport system, the reality is that we're decades behind most advanced nations, not only in passenger rail but in freight capacity. It is only through providing rail and transit in our congested urban areas and retrofitting some of suburbia that we will be positioned to weather the enormous shock of peak oil and ameliorate global warming (and simply live more civilized lives). These are foundational to a sustainable economy and society. Yet they lack the powerful constituency of big oil, bankers, sprawl barons, etc. that would have us to go bankrupt trying to save the unsustainable.
If Obama will fold on such a basic matter, what does it say about the next four years? He promised to listen. Let's see if he does, and to more than the entrenched interests.
I can't help but point out with satisfaction that the pilot who perfectly glided the stricken US Airways plane into the Hudson, saving all aboard, is one of those experienced Baby Boomers who has spent a lifetime perfecting his skills, doing something real and productive, rather than pushing financial swindles. He's also a union member. These are the people our economy can't dump fast enough. And we wonder why America is in trouble.
Then there's Timothy F. Geithner, President-elect Obama's choice to be the next Treasury secretary. I've been uncomfortable with Geithner since his selection, chiefly because he has been president of the New York Federal Reserve Bank, the mother ship of the Fed, since 2003. This means he was in a position of significant influence as the financial portion of the Great Disruption was emerging. He apparently raised no alarms or did anything to stop the outright fraud running like a river of manure on Wall Street. He has been, as the New York Times put it, "a central player" in the $750 billion financial bailout. So he was a co-pilot who ditched the financial system, but unfortunately it keeps taking on water and the casualty toll is mounting.
Then there's the wee little problem with his taxes.
The financial implosion that wrecked America was largely cooked up by Citigroup, not only in its kitchens of "innovation" but especially in its wide influence over the industry. Now what was once touted as the largest "financial services" company in the world is being dismantled. Among other things, it will sell its Smith Barney unit, credit-card business and consumer finance units. The Wall Street Journal observes that the final result will look much like the old Citicorp before Sandy Weill got his hands on it in 1998. Only without the integrity, market value and perhaps safety and soundness.
Unfortunately, the American taxpayers own a 7.8 percent stake in this dog (the Treasury alone gave a $45 billion infusion -- 45 times the annual Amtrak budget). Maybe -- who the hell knows what we're on the hook for, considering the secrecy with which the bailout has been handled. Who knows how many hundreds of billions of dollars have been thrown down the Citi-rathole by TARP and the Federal Reserve. And all for what? Did we also pay for the cheap undercoating and worthless extended warranty?
This institution that was deemed too big to fail has failed to unfreeze credit markets. Citigroup has succeeded in lavishly compensating its top executives and big-time traders, who jet away from the calamity with no consequences. In 2007, as the crisis became undeniable, then CEO Charles Prince, who had performed abysmally for shareholders, nevertheless made some $25 million. Robert Rubin, the Democrat brain trust on economics, was paid $17 million. This year, aided by "rescue" money from the taxpayers, Citi reportedly set aside $3 billion in bonuses.
Obviously the Citi never slept.
I keep getting emails from friends asking if I'm okay. The national news has been saturated with reports of the flooding in western Washington. I'm fine, largely because I live within the long-established urban footprint of Seattle (downtown, happily). Most of the damage has come in the exurbs, and much of it is human-caused. This is our second straight year of unusual flooding. It won't be the last.
This reminds me of my return to Arizona in 2000. Every year forest fires would erupt threatening cabins on the Mogollon Rim (pronounced Mug-e-on) in the High Country. One particularly devastating fire began in 2002 when a woman had a fight with her boss (boyfriend?) while they were on a trip to service his vending machines (I am not speaking in euphemism here). She stalked off into the forest, wearing only shorts, tank top and flip-flops, carrying a towel, cigarettes and lighter -- a survival kit I never learned about as a Boy Scout. When she became lost, she lit a "signal fire" that turned into one of the worst conflagrations in state history. (And you wonder why Arizona is rated America's dumbest state). Comedy aside, I was puzzled because these areas of the High Country had been mostly uninhabited National Forest land when I was a boy. Then I drove up and saw the "cabins" were mostly subdivisions plopped down amid stands of combustible pine trees.
These disasters, repeated around the West and indeed the nation, bring large public burdens, from relief efforts and firefighting, to higher insurance costs. Yet nothing is being done to address the cycle of disaster. And with climate change and other environmental degradation, we ain't seen nothing yet.
Do even the most sober-minded Phoenicians realize how deep a hole they're in? The depression caused by the housing collapse is undeniable. So the answer is merely to reinflate the housing bubble and happy days are here again, right? More "master planned communities." More paving over Pinal and Yavapai counties and rolling over Wickenburg with lookalike tract houses. More boobs from the Midwest who will put up with anything as long as they don't have to shovel snow.
Indeed, a major effort will be made to craft the Obama stimulus to do just this. Sustainability has no powerful political base. Sprawl does. Even the nominally progressive radio talker Ed Schultz is pushing for a bailout of the house builders -- and no wonder: he also owns a small construction company and drives 50 miles each way to work from his suburban home. With progressives like these, who can understand that the old sprawl model is hopelessly broken? Trying to revive it will only increase and lengthen the pain of transition -- or leave the country too bankrupt to even get there. Reviving it in Arizona will only hasten the inevitable water emergency.
But Phoenix faces crises beyond the housing depression. As one of America's least literate and most poorly educated big cities -- if it can even be called a city -- it's not surprising that no one is talking about them. And even the "smart people" assume the growth machine will revive, simply because it always has. Call them the road kill of the Great Disruption, the new era of discontinuity.
I keep waiting for the great Baby Boomer revolt.
It's not just that my generation is taking the brunt of the massive layoffs, replaced, if at all, by "lower cost" employees in their twenties. Or just that, even without a recession, we would face a hostile, age-biased job market at a time when many of us should be in our peak earning years. It's not just that we're the ones who lost the pension protection enjoyed by our parents, to be replaced by now decimated 401(k)s just as retirement nears. Or that we've spent a lifetime paying for the Social Security and Medicare of others to find that the nation sees our turn for this social compact a "looming danger" to be curtailed or stopped altogether. It's not just that the experience and skills many of us spent decades amassing are arbitrarily deemed worthless in "the marketplace."
It's all this, but more.
Throughout time people have awakened in a foreign country, whether they traveled anywhere: it's called old age. For many Boomers, this discontinuity has arrived much sooner compared with previous generations. And all the electronic distractions can't compensate for a simple fact: What happened to our country?
Much of the details of the new stimulus have yet to be known. What's emerging so far is cause for concern. For one thing, the $300 billion in tax cuts may be smart politics, but it's questionable economics and policy. Then there's the issue of how federal dollars might be used to prime the pump, with so much going to backfill basic programs being defunded by cash-strapped states, and lobbyists of the powerful highway-sprawl consortium lining up for the "roads and bridges" money.
George W. Bush and eight years of Republican misrule -- really more than a quarter century -- are leaving the new administration with the worst mess in nearly 80 years. And remember, all this was validated over and over by a majority of Americans at the polls (maybe not in 2000 and 2004). It's an open question whether any president can lead the changes really necessary to address the Great Disruption, of which the economic collapse is only part. We'll see. But the barriers to real change we can believe in are mammoth.
Much has been made of the candidate for Republican National chairman, Chip Saltsman, circulating a CD with the song, "Barack the Magic Negro": maybe it's racist, it's certainly bad taste. But most of all it's a sign that a party that has become a largely Southern/rural Western regional party has no inclination to change. Today, Paul Krugman writes about the larger collapse of the Southern Strategy and how Republicans still haven't realized the magnitude of their failure.
I'm fascinated by what we might call The Strange Case of Mark Sanford. The South Carolina governor was prepared to let 77,000 of his fellow citizens go without (meager) unemployment benefits, refusing to ask for $146 million in assistance from the federal government. He finally relented, with only hours to spare, under pressure from citizens, politicians and those still-important newspapers. This case tells us more about the prevailing Republican mindset than Saltsman's song.