Rand Paul's Performance Art

By Frank Rich, New York Magazine

07 March 13

Every week, New York Magazine writer-at-large Frank Rich talks with contributor Eric Benson about the biggest stories in politics and culture. This week: Rand Paul's filibuster, Jeb Bush's immigration snafu, and Nate Thayer's righteous freelance anger.

and Paul engaged in a classic Mr. Smith Goes to Washington–style filibuster yesterday, opposing the administration’s drone policy by droning on for nearly thirteen hours to hold up the Senate vote confirming John Brennan as CIA chief. What did you think of Paul's old-fashioned intransigence? And is Paul's long-windedness on behalf of civil liberties (and his own self-regard, no doubt) an argument against filibuster reform?

A stopped clock is right twice a day, and though Rand Paul may be a flake, his all-too-short-lived piece of performance art was admirable for several reasons. First, he actually stimulated some debate about the Obama administration’s murky and arguably extralegal use of drones. Second, he made a case for, not against, filibuster reform. If filibusters required those blocking Senate action to actually give old-school Jimmy Stewart–style speeches, they’d be few and far between, and we’d possibly have a less dysfunctional Senate. By ending his filibuster only when he finally had to take a leak, Paul made a powerful case for the proposition that our government might function far more smoothly if our elected representatives’ bladders rather than their brains called the shots. Finally, the Paul filibuster was a graphic demonstration of the power of the radical tea-party right in the GOP. Though what remains of the Republican Establishment turned up its nose at his show - it served only to "fire up impressionable libertarian kids in their college dorms," according to The Wall Street Journal editorial page - rising young party stars like the Florida’s Marco Rubio and Texas’s Ted Cruz showed up on the Senate floor to express their solidarity and bask in the #StandWithRand Twitter glow. So, revealingly, did the Establishment lion Mitch McConnell, who only three years ago backed Rand Paul's opponent in the Republican Senatorial primary in their home state of Kentucky. Such is the power amassed by the GOP's tea-party wing ever since that McConnell now has to pander to Paul to avoid risking a primary challenge from the radicals in his own 2014 reelection bid.

Post-sequester, President Obama has reached out to Republican lawmakers, hosting a dinner last night for a dozen GOP senators, among them perennial "gang" leaders John McCain and Lindsey Graham. Beltway wisdom has it that Obama took his case to the people on sequestration and lost, and now he's back-tracking to a pre-election strategy of trying to negotiate a "grand bargain" with Republicans. What's Obama's plan here? And is there any reason to think it'll work?

Obama will never be on a ballot again, and it’s hard to imagine that a one-week fall-off in his approval ratings prompted this outreach, which also includes a White House lunch with Paul Ryan today. It’s also hard to imagine that these efforts will lead to a "grand bargain." There were no Senate leaders at the dinner, and with the exception of Graham, the invitees are not up for reelection in 2014, thereby freeing them to pal around with this president without risking an immediate revolt by their own base. That’s hardly a representative or powerful sampling of the GOP caucus. But the dinner does throw a bone to all those Beltway pundits who are forever suggesting that Obama and his adversaries could work out a deal if only they had an alcohol-lubricated after-hours soiree, as Ronald Reagan and Tip O’Neill once did. Now we can see how that theory plays out when actually put to the test.

Jeb Bush plunged into the immigration debate this week with the release of his book Immigration Wars. In it, he argues against providing undocumented immigrants with a path to citizenship while advocating for a mechanism by which they could achieve legal non-citizen status. But he quickly backtracked in interviews, saying, "I have supported both - both a path to legalization or a path to citizenship." Was the book his attempt to outflank Marco Rubio on the right for the 2016 campaign? And will his immediate reversal be judged a "for it before I was against it" moment?

Wasn’t Jeb Bush supposed to be the "smart" Bush? It’s hard to imagine anything dumber than disowning the views expressed in your own book during the week of its publicity rollout. Bush was justly admired for being a moderate on immigration issues by GOP standards, so his move to the right in Immigration Wars certainly looks like a cynical attempt to reposition himself for a possible presidential run. Alas for him, politics moves faster than book publishing, and so now with equal cynicism Bush is racing back to his more progressive position, in line with the GOP’s post-defeat rebranding effort to prove that it really likes Latinos more than Mitt Romney did. Somehow I feel that Jeb Bush is not going to be a presidential candidate in 2016, or at least a successful one - not least because in his heart of hearts he, like Chris Christie, is just too moderate for his own party.

Vanity Fair published excerpts from a biography of Roger Ailes yesterday in which the Fox News head disses Obama as "lazy," Joe Biden as "dumb as an ashtray," and Newt Gingrich as "a prick." Ailes is a world-class showman with a shrewd understanding of image control. What's he trying to project with these quotes? And how does it show how he's thinking about his legacy?

We can’t judge a book before we’ve read the whole thing, but everyone knows that Ailes cooperated with the author of this biography to preempt the Ailes biography that our colleague Gabriel Sherman is now completing without Ailes’s participation. The author of this one, Zev Chafets, is best known for Rush Limbaugh: An Army of One, a sympathetic 2010 biography, also written with the subject’s cooperation. That book did nothing to halt the decline of Limbaugh’s reputation, including on the right, in the time since its publication, and if the Ailes book is similarly lacking in punch it, too, will have no effect other than telling Ailes fans what they already know. If the insults in the Vanity Fair excerpt are the best the book can offer - and excerpts of books like this usually do cherry-pick highlights - it doesn’t seem to be bursting with news. It’s all been heard many times on Fox News except for the Gingrich putdown, and it’s hardly a stop-the-presses revelation that even conservatives regard Newt as "a prick." That said, Ailes is a fascinating figure, and for now the best account of him can be found in Joe McGinniss’s behind-the-scenes classic The Selling of the President 1968, in which we meet the young Ailes taking on the seemingly impossible task of humanizing Richard Nixon for public consumption and miraculously pulling it off.

On Monday, the veteran journalist Nate Thayer published an e-mail correspondence in which an editor at The Atlantic asked Thayer if she could re-post one of his articles with no compensation. Thayer was indignant and the post went viral. Unpaid content in the age of HuffPo is hardly new. Why do you think Thayer's post struck a chord now? And what's your take on the issue in general?

I really hope readers will read Thayer’s full post of his e-mail correspondence with the editor at The Atlantic because its plaintive content is the best explanation of why it went viral. An abstract issue becomes personal when we see a professional like Thayer not only be asked to republish a previously published piece without payment but to do additional work on it gratis besides. This is soul-killing to any writer or anyone who aspires to be a writer. As for the issue in general, let me quote Thayer: "I am a professional journalist who has made my living by writing for 25 years and am not in the habit of giving my services for free to for profit media outlets so they can make money by using my work and efforts by removing my ability to pay my bills and feed my children." He goes on to ask how publications "can expect to try to retain quality professional services without compensating for them." The answer: They can’t.

Eric Holder: 'Some Banks Are Too Big to Prosecute'

By Robert Borosage, AlterNet

07 March 13

or years, the Obama Administration has been pummeled for failing to bring criminal charges against a single major Wall Street bank or a single leading Wall Street banker for what the FBI termed an "epidemic of fraud" that blew up the entire economy.  Investigations revealed the banks committed routine fraud in peddling mortgage securities they knew were garbage, trampled basic property laws, laundered money from Iran, Libya and Mexican drug lords, conspired to game the basic measure of interest rates and more.  Yet, time after time, the Justice Department and regulatory agencies settled for sweetheart deals, with no admission of guilt, no banker held accountable, and fines that were the equivalent in earnings of a speeding ticket to the average family.

Yesterday Attorney General Holder stated openly what was already apparent.  The Justice Department believes that Too Big to Fail Banks are Too Big to Jail.  Criminal indictments against banks or leading bankers might endanger the economy and thus were too big a risk.

Here's what Holder said

"I am concerned that the size of some of these institutions becomes so large that it does become difficult for us to prosecute them when we are hit with indications that if you do prosecute, if you do bring a criminal charge, it will have a negative impact on the national economy, perhaps even the world economy," he said. "And I think that is a function of the fact that some of these institutions have become too large."

Holder was responding to questions by Republican Senator Charles Grassley about why the Justice Department brought no criminal charges against the large British bank HSBC after it admitted laundering money for parties in Iran, Libya and Mexican drug lords.  The Attorney General acknowledged that the sheer size of the big banks "has an inhibiting impact on our ability to bring resolutions that I think would be more appropriate.  That is something you (members of Congress) all need to consider."

Foam the Runway

Allowing the big banks to operate above the law is at one with the philosophy that guided both the Bush and the Obama administrations during the financial collapse.  Tim Geithner, former head of the New York Federal Reserve bank under Bush and Treasury Secretary under Obama, would preach that it was necessary to "foam the runway" to protect the banks from total crackup.  That "foam" included literally trillions in the backdoor bailout of banks organized by the Federal Reserve, abandoning the underwater homeowners who were victimized by Wall Street's wilding, while neutering any regulatory or criminal accountability.

Above the Law

Holder's outrageous admission means that bankers operate - and know they operate - above the law.  That renders all the argument about regulations and legal limits risible.  Bankers spend tens of millions lobbying to weaken regulations and starve regulators of authority and resources.  But when the action gets hot, the bubble starts to build, the music keeps playing, they can trample the laws, mislead the regulators and defraud their customers, bolstered by the confidence that the laws will not apply to them.

Holder's argument, however, is indefensible.  There is no reason a bank with billions of assets could not survive the indictment of its CEO or CFO.  If the Fed and Treasury can "foam the runway" to protect otherwise insolvent banks from collapse, they surely could insure that a bank survives while its executives are held personally responsible for their crimes.  Putting a few bankers in jail and holding them personally accountable for their frauds would do much to bring sobriety back to Wall Street.

The Campaign for a Fair Settlement, of which the Campaign for America's Future is a partner, has called on the president to repudiate Holder's statement, and to direct the Justice Department to prosecute those who violated the law.  But Holder's position forces a bigger issue.

Too Big to Be

So big banks operate above the law.  And as the conservative head of the Dallas Federal Reserve Bank Richard Fischer and many others have argued, they are not disciplined by the market.  They know their losses are covered, while they pocket their winnings.  They have multi-million dollar personal incentives to leverage up, use other people's money to make big bets on high risk operations that offer big rewards.  Their excesses blew up the economy, but they got bailed out and emerged bigger and more concentrated than ever.

And, of course, since investors know the big banks can't fail, the big banks can attract money at much lower rates than smaller banks, a subsidy worth about $83 billion a year according to recent calculations by Bloomberg News.

Clearly, institutions that are above the law and beyond the discipline of the market cannot exist in their current form.  The Congress has only two choices.  The big banks can be nationalized and treated as public utilities.  The public would pocket their profits and cover their losses.  Or the big banks can be broken up, and be accountable to both the law and the market.

Senators Sherrod Brown and Jeff Merkley have spearheaded the drive to break up the big banks.  This takes remarkable courage.  Brown had to overcome torrents of big money poured into the effort to defeat him when he ran for re-election last year.

Now they are gaining unlikely allies.  George Will has called on conservatives to follow Brown to the barricades.  Republican Senator David Vitter has joined in calling for study of the subsidy big banks enjoy.  Retired bankers like John Reed, former president of Citibank have joined with Dallas Fed President Fischer and others to call for breaking up the banks.

Can the big banks be held accountable?  Wall Street is a leading source of funds for both parties.  The revolving door between Wall Street and Washington spins no matter what administration is in power.  The Obama administration has opposed every effort to break up the big banks.  Republicans in Congress have shamelessly offered themselves as Wall Street's protectors in exchange for campaign money.

But Holder's admission makes action - however improbable - imperative.  A nation of laws and markets cannot abide huge private financial institutions that are accountable to neither.