Tuesday, May 17, 2016

Adapting to Change Requires Curiosity and Creativity

Our 24/7 news cycle that is addicted to the crisis of the moment and the horse race of electoral politics doesn't do a good job of recognizing the tectonic shifts of change that are undergirding our lives.

The attacks of 9/11 followed by the Great Recession changed the way a lot of (mostly white) people feel about America in ways that aren't articulated often enough. We are experiencing demographic change that is unprecedented, are nearing the end of two terms for our first African American president and are likely on the cusp of electing our first female president. All of that is happening as we are experiencing the effects of globalization and automation in our economy while technology becomes more central to how we live our everyday lives. Finally, we are just beginning to feel the effects of climate change - with effects that most of us are unable to predict.

We can play the political parlor game of trying to suss out which of these is the most responsible for the dynamics of our current politics, or we can notice that the combination of those changes is affecting all of us. When Kevin Drum wonders why both political parties are afraid to talk about an improving economy and Gregg Easterbrook asks when optimism became uncool, I suspect that it is the weight of all of these changes that is the answer. But Easterbrook makes an interesting observation.
Though candidates on the right are full of fire and brimstone this year, the trend away from optimism is most pronounced among liberals. A century ago Progressives were the optimists, believing society could be improved, while conservatism saw the end-times approaching. Today progressive thought embraces Judgment Day, too...

Pessimists think in terms of rear-guard actions to turn back the clock. Optimists understand that where the nation has faults, it’s time to roll up our sleeves and get to work.
The Tea Party responded to these changes by saying that they wanted to "take our country back." When Donald Trump talks about "making America great again," that's essentially what he is saying too. That is a pretty common reaction among human beings to change...it is something to be feared and avoided.

Traditionally progressives have faced challenges like this by working on ways to move forward rather than pinning for days past. To do so requires things like curiosity and creativity. The past can be examined objectively, but the future is still uncertain. Ideologues too often stand in the way of curiosity and creativity. Here is how then-Senator Barack Obama talked about that back in 2005:
...the degree that we brook no dissent within the Democratic Party, and demand fealty to the one, "true" progressive vision for the country, we risk the very thoughtfulness and openness to new ideas that are required to move this country forward. When we lash out at those who share our fundamental values because they have not met the criteria of every single item on our progressive "checklist," then we are essentially preventing them from thinking in new ways about problems.
I believe that this is why the President so often says that it is young people who inspire his optimism. They tend to be free of the ideologies and baggage of the past. Instead, they bring fresh eyes to the challenges we face going forward. Progressives need not fear the changes we are experiencing today when we tap into all of that.

Monday, May 16, 2016

How Hillary Clinton's Foreign Policy Will Differ From President Obama's

As I've said before, the concern I hear most often about Hillary Clinton from Democrats is her more "hawkish" views on foreign policy. On the campaign trail, that isn't addressed by her opponents when they resort to soundbites about how she is simply in favor of "regime change." That is an attempt to use an old frame to describe something that is much more complex when it comes to the challenges we face in the world today.

That is why I was interested in a discussion between Jeffrey Goldberg and Mark Landler where they delve into the differences between Clinton and Obama on foreign policy.  I suspect that they might be on to something here:
Landler: But my argument is that if you look at their instincts and reflexes and the way that they are apt to respond to a crisis, they just come at it very differently, and this is in part because they come from very different places both in terms of time and geography. Obama grew up in the ’70s, and he had this itinerant existence, living in Indonesia for a period—

Goldberg: Looking at America from the outside in -

Landler: Looking at America from outside in, as sort of an expatriate’s view of America -

Goldberg: And Hillary is literally in the middle of America looking out -

Landler: Yes. She’s in the heartland, but also in the 1950s, with a conservative Navy petty officer father. And so she viewed America as a country that was a force for good, that American interventions generally could be a positive rather than a negative thing. And I think Obama was much more skeptical about that.
That was reminiscent of something Clinton said to Goldberg in their interview back in 2014 when discussing the current "jihadist" threats (her words) in the Middle East.
I’m thinking a lot about containment, deterrence, and defeat. You know, we did a good job in containing the Soviet Union, but we made a lot of mistakes, we supported really nasty guys, we did some things that we are not particularly proud of, from Latin America to Southeast Asia, but we did have a kind of overarching framework about what we were trying to do that did lead to the defeat of the Soviet Union and the collapse of Communism. That was our objective. We achieved it.
That was her attempt to suggest the need for an "organizing principle" in our foreign policy beyond "Don't do stupid stuff." While it is important that she acknowledged that "we made a lot of mistakes," she seems to suggest that they were justified because we won the Cold War. But it was the myopic vision of seeing struggles for democracy as nothing more than communist threats (the organizing principle) that led us to make some of the biggest mistakes in our country's history. After 9/11, the Bush/Cheney administration introduced another organizing principle - the Global War on Terror - that was their justification for everything from the Iraq War to torture to Guantanamo. In light of all that, "Don't do stupid stuff" is not a bad alternative when it comes to organizing principles.

From there, it was disappointing to see both Goldberg and Landler consistently employ the Washington Playbook to analyze the similarities and differences between Obama and Clinton. I won't point to a specific example because it permeates the entire discussion. For both of them, the assumption is that any form of U.S. intervention in global affairs can only take the form of military intervention. In discussing what a Clinton presidency would do differently than Obama when it comes to Syria, it is presented as a matter of whether or not she will change course and attempt to implement a military solution.

In order to understand why that is such a shallow view of the alternatives, it is important to keep three things in mind when it comes to the civil war in Syria:

1. It began during the Arab Spring when the people of Syria rose up in protest against the dictatorial abuses of the Assad regime.

2. Once Assad responded by using the military to violently suppress the people, the civil war became a proxy war, with Russia and Iran joining the regime to fight against what was viewed as a Sunni uprising supported by many of the Gulf States.

3. That chaos gave ISIS an opening in Syria.

What President Obama knows is that even the U.S. military can do little other than escalate the situation in Syria - especially when it comes to how Russia and Iran would respond. So what is the alternative? The key to long-term success in Syria is ending it as a proxy war being engaged by Russia, Iran and the Gulf States. That means diplomacy takes center stage with things like the Iran nuclear deal and the Syrian peace talks. Those can be seen as "interventions" in the Syrian civil war, but were unaddressed as such by Goldberg and Landler.

What would be interesting to explore with Hillary Clinton is whether or not she agrees with President Obama's goal (as expressed to David Remnick) of a "new equilibrium" in the Middle East.
Ultimately, he envisages a new geopolitical equilibrium, one less turbulent than the current landscape of civil war, terror, and sectarian battle. “It would be profoundly in the interest of citizens throughout the region if Sunnis and Shias weren’t intent on killing each other,” he told me. “And although it would not solve the entire problem, if we were able to get Iran to operate in a responsible fashion—not funding terrorist organizations, not trying to stir up sectarian discontent in other countries, and not developing a nuclear weapon—you could see an equilibrium developing between Sunni, or predominantly Sunni, Gulf states and Iran in which there’s competition, perhaps suspicion, but not an active or proxy warfare.
What is clear is that, if elected to be our next president, Hillary Clinton's approach to foreign policy will be different in some complex ways from what we've seen from Obama. But it is difficult for many of us to understand what that will look like if all we hear are either campaign soundbites or analysis that is limited to the assumptions dictated by the Washington playbook.

Thursday, April 28, 2016

Playing the Woman Card on Foreign Policy

After the recent primaries, Donald Trump accused Hillary Clinton of playing the woman card. In response, she said "deal me in." The examples Clinton used in connection to that remark were all related to domestic policy. But as I've suggested in the past, we also need to aspire to a more feminist foreign policy.

When I talk with my Democratic friends about the 2016 presidential election, this is the concern about Clinton that always comes up: is she too much of a hawk on foreign policy? That question was confirmed recently by Mark Landler's article in the New York Times Magazine titled: How Hillary Clinton Became a Hawk. It only heightened the concern about Clinton's tendency to favor military intervention - especially as the Middle East continues to be such a global hot-spot.

What is interesting to note about Landler's article is that it is entirely constructed around what President Obama called the "Washington playbook." In other words, it assumes that the best way to judge Clinton's approach to foreign policy is to focus on her views about the military. That is especially interesting given that she was Secretary of State (as opposed to Secretary of Defense), where her role was primarily diplomacy. In order to get a full picture of what a Clinton presidency might look like with regards to foreign policy, it is important to look at her full record in that office.

Here is what Secretary Clinton said on International Women's Day in 2012:
The United States is committed to making women and their advancement a cornerstone of our foreign policy not just because it’s the right thing to do. Investing in women and girls is good for societies, and it is also good for the future prosperity of countries. Women drive our economies. They build peace and prosperity and political stability for everyone—men and women, boys and girls. So let us recommit ourselves to a future of equality.
In her book Hard Choices, Clinton talked about the role of women in forging peace.
When women participate in peace processes, they tend to focus discussion on issues like human rights, justice, national reconciliation, and economic renewal that are critical to making peace. They generally build coalitions across ethnic and sectarian lines and are more likely to speak up for other marginalized groups. They often act as mediators and help to foster compromise.
That aspect of Clinton's work as Secretary of State has gotten much less press. But one of the things she and President Obama developed was the first-ever National Action Plan on Women, Peace and Security. Here is a description from the introduction:
The goal of this National Action Plan on Women, Peace, and Security is as simple as it is profound: to empower half the world’s population as equal partners in preventing conflict and building peace in countries threatened and affected by war, violence, and insecurity. Achieving this goal is critical to our national and global security.

Deadly conflicts can be more effectively avoided, and peace can be best forged and sustained, when women become equal partners in all aspects of peace-building and conflict prevention, when their lives are protected, their experiences considered, and their voices heard.

As directed by the Executive Order signed by President Obama entitled Instituting a National Action Plan on Women, Peace, and Security, this Plan describes the course the United States Government will take to accelerate, institutionalize, and better coordinate our efforts to advance women’s inclusion in peace negotiations, peacebuilding activities, and conflict prevention; to protect women from sexual and gender-based violence; and to ensure equal access to relief and recovery assistance, in areas of conflict and insecurity.
Clinton described her work on that plan in Hard Choices:
I spent years trying to get generals, diplomats, and national security policymakers in our own country and around the world to tune in to this reality. I found sympathetic allies at the Pentagon and in the White House, including Under Secretary of Defense for Policy Michele Flournoy and Admiral Sandy Winnefeld, Vice Chairman of the Joint Chiefs of Staff. State, USAID, and Defense got to work on a plan that would change the way diplomats, development experts, and military personnel interact with women in conflict and postconflict areas. There would be new emphasis on stopping rape and gender-based violence and empowering women to make and keep peace. We called it a National Action Plan on Women, Peace, and Security.
As Gayle Tzemach Lemmon documented back in 2011, much of this work relied on what she called "Clinton’s knack for personalizing foreign policy." She gave examples of how the SoS made it a centerpiece of everything from online discussion groups in Egypt during the Arab Spring to conversations with heads of state and interagency task force meetings with other members of the Cabinet. But here is how Clinton defined one of her main challenges (from Hard Choices):
We had to push tradition-bound bureaus and agencies to think differently about the role of women in conflicts and peacemaking, economic and democratic development, public health, and more. I didn’t want [the Office of Global Women’s Issues] to be the only place where this work was done; rather I wanted it to be integrated into the daily routine of our diplomats and development experts everywhere.
Lemmon discussed one of the ways Clinton addressed that:
For her part, Clinton says that her ambition now is to move the discussion beyond a reliance on her own celebrity. She must, she says, take her work on women’s behalf “out of the interpersonal and turn it into the international.” At the State Department, that goal is reflected in a new and sweeping strategic blueprint known as the Quadrennial Diplomacy and Development Review (QDDR), which establishes priorities over a four-year horizon. Women and girls are mentioned 133 times across the 220 pages of the final QDDR document.
That sounds a lot like the leg work her successor John Kerry put in to developing a focus on climate change in the State Department - something that eventually led to the Paris Agreement.

I am not suggesting any of this in order to completely dismiss the concerns people have about Clinton's view on the role of the military. But to focus only on that is the build a caricature of a very complex woman. If she is elected president, we have no way of knowing what kind of foreign crises she might face. We can rest assured that she will focus much of her work on engaging women both here and at home and abroad in the process of forging peace and ensuring security around the globe. That has been her commitment since she said this back in 1995 at the World Conference on Women:
If there is one message that echoes forth from this conference, let it be that human rights are women’s rights and women’s rights are human rights once and for all. As long as discrimination and inequities remain so commonplace everywhere in the world, as long as girls and women are valued less, fed less, fed last, overworked, underpaid, not schooled, subjected to violence in and outside their homes—the potential of the human family to create a peaceful, prosperous world will not be realized.

Tuesday, April 19, 2016

How Change Happens

Over the weekend I watched the HBO movie Confirmation about the Clarance Thomas/Anita Hill hearings. It was painful to live through that period - and almost as painful to re-live it via this film. But the one benefit of hindsight is that we know what happened as a result of the ordeal Ms. Hill endured.
Her appearance became a catalyst for change. The following year was designated the "Year of the Woman" after women across the political spectrum ran for public office in record numbers. This was seen as a direct response to the treatment Hill received from the Senate, which was then 98 percent male...

And the spike in sexual harassment claims showed Hill was not alone. Hill's testimony helped other women identify the unwanted sexual advances they'd experienced. In 1992, the EEOC saw a 71 percent increase in sexual harassment claims, continuing throughout the decade and peaking in 2000 with 15,836 claims.
I doubt that Senator Patty Murray is the only one who responded this way:
Self-labeled as “the only preschool teacher in the United States Senate,” Murray claims she never wanted to get into national politics, but was moved to run by what she saw as blatant sexism in the Anita Hill hearings.
That story captures many of the elements for how change happens. Millions of women (and the men who care about them) were mobilized by watching an everyday injustice that often happened in secret get played out on national television for the whole world to see. It had a similar impact as video of Sheriff Bull Conor's dogs and water hoses and nightly pictures of the horror in Vietnam.

What is interesting about those examples is that none of them involved a POTUS (much less any other politician) leading the charge. As a matter of fact, most politicians don't sign on to change - much less have any success at it - until it is taken up by what Evert Rogers called the "late majority" in his theory about the "diffusion of innovation."


People like Harvey Milk and Rosa Parks were the innovators. Early adopters are the community organizers and activists who took action to highlight an issue - first garnering support from the early majority, and then finally reaching the late majority. That is the point at which politicians can take up the cause and push for change. As the saying goes, "when the people lead, the leaders will follow." That isn't a sign of cowardice, as some would claim, but the way things are supposed to work in a representative democracy.

Over the last few years I've reviewed most (not all) of Martin Luther King, Jr's speeches. What I have noticed is that not once does he direct his remarks to a president or any other politician. In other words, you never hear from him what is a common refrain in activist circles these days: "Tell Obama to ________." MLK always addressed himself to citizens - not politicians. He knew that's how change happens.

Some people were a bit aghast when Barack Obama said this during the 2008 election. It appeared as though he was comparing himself to Ronald Reagan.


But if you listen to what he's actually saying, he is validating that this is how change happens. His analysis is that Reagan changed the trajectory of our politics "because the country was ready for it." Obama dismisses himself as a "singular figure," and instead implies that the country is - once again - ready to change its trajectory. The seeds of that were visible when Democrats re-took the majority in the House in 2006. That was followed up by the election of Obama, along with (for a few months at least) a 60 vote majority in the Senate.

Of course, Republicans met that movement for change with fear-mongering, obstruction and gerrymandering of House districts following the 2010 election. Those tactics worked to not only halt progress, but to discourage people who eventually became cynical instead of hopeful about change.

But the overall principle still stands. It is not a POTUS who will lead change. Pressuring them to adopt the policies we want to see enacted is a byproduct of winning over the late majority to our cause. In other words, instead of sending a message to a politician, try talking to your co-worker or neighbor or family member. That's how change happens.

Sunday, April 17, 2016

Southern States Do Not Distort the Primary

At the end of the last Democratic debate, Dana Bash asked Sanders whether he will take the contest to the convention in Philadelphia if neither candidate clinches the nomination via pledged delegates. Sanders responded by saying that he plans to win the nomination outright. But then he injected something that both he and his campaign staff have said frequently.
Look, let me acknowledge what is absolutely true. Secretary Clinton cleaned our clock in the Deep South. No question about it. We got murdered there. That is the most conservative part of this great country. That's the fact.
For the last several weeks, this is a contention the Sanders campaign has made in various forms. Most recently, the candidate told Larry Wilmore that having the Southern states vote early in the primary "distorts reality." If we combine that statement with what he said last night, the argument becomes: having Southern states vote early in the primary distorts reality because it is the most conservative part of the country. Of course, if that were true, it would hurt Sanders as the candidate who consistently lays claim to being the more progressive of the two.

I would propose that the Mountain West (where Sanders has notched up big wins lately) could challenge the claim that the Deep South is the most conservative part of the country. An analysis by The Hill on the five most conservative states turns up a mix of these two regions, giving us: Alabama, Alaska, Idaho, Kansas and Mississippi. Were the primaries in Alaska, and Idaho distorted by their conservatism? The other question this assertion raises is: do more conservative Republicans in a state mean that Democratic primaries there are "distorted?"

Ultimately, the elephant in the room about this claim is that the difference between conservative Mountain and Southern states is that the Democratic electorate in the latter is made up largely of people of color - with whom Sanders performs poorly. Do people of color distort reality because they are more conservative?

It is very possible that the answer to that question is "yes." The truth is...we don't have a lot of data on that. But I would suggest that anyone who asserts that argument is assuming that a political continuum from conservative to liberal is, by default, based on how white people would construct it. For example, I would imagine that liberals in the Mountain West states would prioritize things like repealing Citizens United and challenging Wall Street, whereas African Americans in the South would prioritize voting rights, ending systemic racism and programs to lift people out of poverty. How progressive one is would be measured by their record and platform on those issues.

The whole dismissal of the South by some Democrats is also very short-sighted. Not only are Hispanics becoming a key voting bloc in many of those states, it ignores the fact that the great migration of African Americans out of that area during the Jim Crow days is now being reversed.
The quiet return of African-American retirees and young professionals has the potential to reshape the South again over the next few decades, much as the exodus to northern cities reshaped it in the 20th century.
Years ago I was taught a lesson in the different ways that white and black liberals view the South. After having been raised primarily in Texas, I decided to settle in Minnesota. That decision was influenced by a desire to escape the racism that was so blatant in the South. I was shocked and confused when my African American friends up here talked about longing to return to the South. They patiently explained two things to me. First of all, the South is "home." It's where their people are. And they long to return to that sense of community. Secondly, many of them actually prefer to deal with the outright racism of the South rather than the subtle form they experience from so-called friends and allies in the North.

The fact that Bernie Sanders insinuates that Democratic voters in the South are more conservative and distort the primary process indicates that he hasn't spent much time hearing from or thinking about the perspective of African Americans in that part of the country. That is probably true for a lot of Northern liberals. But if he's looking for an answer to the question about why he is not winning their support, this is part of the reason.

I'm Ready For This Primary to be Over

As I watched the Democratic presidential debate in New York, I wondered if anyone who was doing so was still in the process of making up their mind about who to support. Of course, we don't yet know how many people actually watched. But it's likely that most Americans didn't. Those of us who did are probably die-hard political junkies who made up our minds long ago.

The reason I was thinking about that is because this one was a lot more contentious than previous debates. While issues were discussed, no real new ground was broken about where they stand - but both candidates spent a lot of time pointing the finger at each other to identify flaws in their past and/or present positions. The object seemed to be to score a "hit" on your opponent. In other words, it shed more heat than light.

I suppose that is to be expected at this point in a campaign. But it sure seemed like the kind of debate that each candidate's supporters will score as a "win" for their side, while I'm not sure there were any real winners. The contentiousness was aimed at people who have already made up their minds and are looking for a reason to dig in their heels against the opposition...no uncertainty allowed.

To the extent that this debate was aimed at New Yorkers, the burden was on Sanders to win over voters in order to reduce Clinton's lead in that state. Polling averages have her ahead by over 13 points and are likely to be pretty accurate given that this is a closed primary. I doubt that a "dig in your heels and attack your opponent" debate will change that very much.

That is why I went to bed last night thinking that I'm really ready for this primary to be over. No, that doesn't mean that I am advocating for Bernie Sanders to drop out. I've always felt that he should stay in this race as long as he wants to. I also appreciate that there are a lot of people in states to come that deserve to have their say in choosing a nominee. But when it comes to things like debates and the back-and-forth between the candidates on the trail, we've reached the point of diminishing returns and are running the risk of damaging the eventual nominee in the upcoming general election.

Speaking of November, my other thought last night was about the gulf between what Sanders and Clinton were sparring about and what the conversation will look like after the conventions. For example, the question about who is more progressive with their proposals to fight climate change is going to be a distant memory when the Democratic candidate squares off in a debate with a climate change denier who scoffs at the idea that it is more of a threat to our security than ISIS. The question about whether to raise the minimum wage to $12 or $15 will become a question about whether to raise it at all. We're in a state of suspended animation right now and reality is going to break through sometime around the end of July.

Incentivizing Change in the Largest Financial Institutions

After writing this morning about the "living wills" required from large financial institutions via Dodd-Frank, I've read some additional information about the fact that the Federal Reserve and FDIC rejected five of them yesterday. I hope you'll stick with me and follow this trail of information. The topic is sure to come up in tonight's Democratic presidential debate and it's always good to be informed.

Senator Warren released a statement yesterday about the rejection of the living wills. Here is how she begins:
Today, after an extensive, multi-year review process, federal regulators concluded that five of the country's biggest banks are still - literally - Too Big to Fail. They officially determined that five US banks are large enough that any one of them could crash the economy again if they started to fail and were not bailed out.
Based on what I've read so far, that last sentence is a bit of an overstatement of what the federal regulators did yesterday. Matt Levine provides some very helpful clarification. First of all, he gives some examples of the issues the regulators found with the living wills. JP Morgan was faulted for providing cash flow projections for the first 7 days after filling bankruptcy and the last four - but not the days in between. If you've ever worked with federal regulators, this kind of thing will come as no surprise. But it hardly rises to the level of suggesting that JP Morgan would require a tax payer bail out should they go into bankruptcy.

Levine goes on to say that projecting this kind of detail for an unknown date in the future triggered by an unknown event is not going to lead to quantifiable procedures that would ever actually be implemented. So the question becomes: why require living wills in the first place? What purpose do they serve? I found his answer fascinating from the prospective of what it takes to change the culture of a huge organizational structure.

Levin suggests that what these regulations are designed to do is force these financial institutions to - as his title suggests - "think about death."
The great purpose of the living wills, it seems to me, is to re-focus banks' attention. It's to make sure that banks, at their most senior levels, are thinking deeply and carefully and critically about the things that regulators are worried about. It's to change how bankers think. The natural state of a chief executive officer is one of optimism, growth, aggressiveness. In the current regulatory environment, they are supposed to think a bit more about pessimism, decay, defensiveness. The living wills are a way to make them think sad, nervous thoughts -- and to punish them if they don't think those thoughts as rigorously as they should.
It is interesting to compare that to how banking regulations have typically worked (or not) in the past.
...much of the rest of the banking regulatory apparatus involve substituting the judgment of regulators for the judgment of bankers, at least to some extent. The bankers think that something is a good idea, the regulators think it's risky, and the regulators make banks cut it out, or at least make it more expensive for them to keep doing it. But this is a difficult game for the regulators to win, since the bankers will always be better paid, and better staffed and more motivated. It's hard for regulators to get into bankers' heads; the bankers can always stay a bit ahead.
Levine contrasts that with what these regulations are designed to do.
The new approach isn't (just) to have regulators second-guess bankers, though obviously there's a lot of second-guessing going on when seven out of eight banks get failing grades on their living wills. The new approach is to make the bankers get into the regulators' heads, to fill banks with people who spend so much time worrying about bankruptcy that those worries bleed into the banks' regular operations.
I have no idea if this is what lawmakers had in mind when they crafted the provisions of Dodd-Frank. But as a student of both human nature and effective management, this is a much more effective way to incentivize structural change.

Dodd-Frank Continues to Work as Planned

Key portions of the Dodd-Frank bill were devoted to identifying and regulating "Systemically Important Financial Institutions" (SIFI's), which are sometimes referred to as "too big to fail banks" following the Great Recession. Throughout this post I will refer to them as financial institutions because the list of those identified includes insurance companies (i.e., AIG). The reforms contained in Dodd-Frank imposed three regulations on these companies once they have been identified.

1. Capital requirements - which require these financial institutions to fund themselves with a minimum amount of equity rather than debt. They are designed to ensure that they bail themselves out in the event of problems rather than rely on American taxpayers. Avoiding these requirements is the reason cited for why GE and MetLife recently downsized themselves.

2. Stress tests - every year these financial firms are tested for how they would perform in the event of a global recession. In 2015, 28 of them passed unconditionally, Bank of America passed conditionally and two (Deutsche Bank and Santander) failed. Firms that fail their stress tests are required to either re-submit their capital plans or are restricted in payment of dividends to their shareholders.

3. Resolution plans - these are typically called "living wills." They "must describe the company's strategy for rapid and orderly resolution under the Bankruptcy Code in the event of material financial distress or failure of the company." In April 2014, the Federal Reserve Board and the Federal Deposit Insurance Corporation (who are tasked with approving these resolution plans) rejected those submitted by 11 of the largest companies. They were required to re-submit their plans in 2015.

The results of the review of those revised plans came yesterday:
U.S. regulators gave a failing grade to five big banks on Wednesday, including JPMorgan Chase & Co and Wells Fargo & Co, on their plans for a bankruptcy that would not rely on taxpayer money, giving them until Oct. 1 to make amends or risk sanctions.
The move officially starts a long regulatory chain that could end with breaking up the banks.
Some are suggesting that the failure of these financial institutions to submit an adequate living will demonstrates that Wall Street reforms are not working. But I would point out two things: First of all, critics of Dodd-Frank often say that regulatory agencies are too close to Wall Street to adequately implement its provisions. There is certainly a lot of room for that critique in the past. But yesterday's result suggests that the Fed and the FDIC aren't hesitating to hold these firms accountable.

Secondly, this is the process that was put in place by Dodd-Frank to break up the "too big to fail banks" when/if they failed any of the three items above and posed a threat to American taxpayers. The proposal Bernie Sanders is putting forward would pre-empt this process and break them up regardless of whether or not they pose a risk. Perhaps that is something to be considered if your goals are about reducing their political power or punishing them for their past misdeeds. But to the extent that Americans are worried about having to bail them out again, it is important to know the steps that have already been put in place to prevent that from happening.

Obama Administration Forgives Student Debt for the Disabled

We've been hearing a lot about the rising problem of student debt. For Americans who couple that challenge with a disability, the Obama administration brought some good news yesterday.
Hundreds of thousands of student loan borrowers will now have an easier path to getting their loans discharged, the Obama administration announced Tuesday.
The Department of Education will send letters to 387,000 people they’ve identified as being eligible for a total and permanent disability discharge, a designation that allows federal student loan borrowers who can’t work because of a disability to have their loans forgiven. The borrowers identified by the Department won’t have to go through the typical application process for receiving a disability discharge, which requires sending in documented proof of their disability. Instead, the borrower will simply have to sign and return the completed application enclosed in the letter.
If every borrower identified by the Department decides to have his or her debt forgiven, the government will end up discharging more than $7.7 billion in debt, according to the Department...
About 179,000 of the borrowers identified by the Department are in default on their student loans, and of that group more than 100,000 are at risk of having their tax refunds or Social Security checks garnished to pay off the debt.
Obviously this step doesn't solve the problem of student debt that is facing millions of Americans. But it is yet another example of an effective use of President Obama's ongoing pen and phone strategy that is slowly but surely making a big difference for a lot of people.

Sanders and Clinton on Climate Change

Recently two liberal activists have publicly stated their positions in the Democratic presidential primary: Bill McKibben endorsed Sanders and Tom Hayden endorsed Clinton. With the campaigns moving into territory like New York, Pennsylvania and eventually California, it is interesting to compare what these two men said about the candidate's positions on climate change (especially fracking).

McKibben mostly critiques Clinton for her "evolution" on issues.
Ties to the past define Hillary Clinton’s campaign. She’s run on her experience, and she’s relied on senior voters for her margins of victory. Her call is for slow and evolutionary change, for a “realism” that rejects the supposedly romantic and idealistic hopes of her competitor.
At least on climate change, slow and evolutionary change is another way of giving up. Because the world is changing so damned fast.
Here's why he supports Sanders.
...mostly it’s because there’s never been any need for his positions on these issues to evolve. Keystone? “No” in September 2011, not in September 2015. He co-sponsored the bill to stop fossil fuel extraction on public lands. Fracking? Nothing complicated, just a simple, “No.”
Hayden discusses other issues in his endorsement. But here is what he said about the candidate's positions on climate change.
Hillary wants limits on fracking: a ban where individual states have blocked it, like in New York; safeguards against children’s and family exposures; a ban where releases of methane or contamination of ground water are proven; and full disclosure of the chemicals used in the process. Bernie’s position is that he’s simply against all fracking.
But Hillary’s position goes beyond what virtually any state has done. The New York Times writes that she “has pledged to end subsidies to the fossil fuel industry to pay for her ambitious climate plan” and intends to install 500 million solar collectors in four years. If and when Obama’s Clean Power Plan is upheld in the federal courts, now a likelihood after Justice Scalia’s death, that will bring a even greater change.
Meanwhile, Bernie’s total fracking ban leaves the question of how to do so unaddressed. His energy platform is comprehensive, but he offers no strategy to implement the Paris Summit in the short term. Instead, Bernie will call his own summit of experts in the first hundred days he is president. There is no recognition of the overwhelming wall of opposition from the Republican Congress, which can only be broken on state-by-state organizing. The climate clock is ticking towards doomsday. Where are we moving next, beyond waiting for the overthrow of Citizens United?
I've become accustomed to hearing that Sanders is more "progressive" on climate change than Clinton. So after reading these two endorsements, I decided to compare what their campaign web sites say about this issue (Clinton and Sanders). Other than the differences on fracking discussed above, I found very little daylight between the two of them. They both want to transition away from fossil fuels, invest in clean energy development and infrastructure, end tax subsidies for oil and gas companies and lead the world in combating climate change.

As Hayden notes, Sanders' plan includes one unique proposal:
Convene a climate summit with the world’s best engineers, climate scientists, policy experts, activists and indigenous communities in his first 100 days. The United Nations Paris climate talks in December are an important milestone toward solving climate change, but even optimistic outcomes of these talks will not put the world on the path needed to avoid the most catastrophic results of climate change. We must think beyond Paris. In the first 100 days of Bernie’s Presidency, he will convene a summit of the world’s best climate experts to chart a course toward the healthy future we all want for our families and communities.
Clinton's plan also includes one unique proposal.
Building a 21st century clean energy economy will create new jobs and industries, protect public health, and reduce carbon pollution. But we can’t ignore the impact this transition is already having on coal communities. Hillary’s $30 billion plan to revitalize coal communities will ensure coal miners, power plant operators, transportation workers, and their families get the respect they deserve and the benefits they have earned; invest in economic diversification and job creation; and make coal communities an engine of US economic growth in the 21st century, as they have been for generations.
In the end, unless you base your decision on the differences between these candidate's position on fracking or the importance of supporting those who are being impacted by the death of coal, I don't see how either of them lays claim to being more progressive on this issue.

Young Arabs Are Rejecting ISIS

Joby Warrick brings some interesting news today in the Washington Post.
Two years after proclaiming a new “caliphate” for Muslims in the Middle East, the Islamic State is seeing a steep slide in support among the young Arab men and women it most wants to attract, a new poll shows.
Overwhelming majorities of Arab teens and young adults now strongly oppose the terrorist group, the survey suggests, with nearly 80 percent ruling out any possibility of supporting the Islamic State, even if it were to renounce its brutal tactics.
A year ago, about 60 percent expressed that view, according to the 16-country survey released Tuesday.
“Tacit support for the militant group is declining,” concludes a summary report by the poll’s sponsor, ASDA’A Burson-Marsteller, a public relations firm that has tracked young Arabs’ views in annual surveys for the past eight years. Other recent surveys have found similarly high disapproval rates for the Islamic State among general populations in Muslim-majority countries.
The article doesn't attempt to describe why this is happening. But I immediately thought of what Eli Berman and Jacob Shapiro wrote about President Obama's containment strategy with ISIS.
We’re fighting a failed state in the making, one that will implode if merely contained, and will collapse even faster under coordinated economic and military pressure from its neighbors...
As the Soviet Union was to communism, so ISIL is to jihadism: the purest articulation of a noxious ideology of governance, which incidentally has little connection to Islam. If we allow it to fail, then it will be clearly a failure of ISIL as an idea. The same is not true of a military defeat at the hands of Western forces. Given its deep structural weaknesses and its symbolic value in the global war of ideas, our best strategy is almost surely one based on containment, allowing the group’s motivating ideology to destroy the group from the inside—and thus more rapidly find its proper place in the dustbin of history.
The containment strategy involved more than simply using U.S. air power to support the coalition of Arab states fighting on the ground to deny territory to ISIS. It also included efforts to starve the group of financial resources and new recruits to carry on it's agenda.

What we might be witnessing is the kind of success on that last front that would not have been possible if we had implemented the kind of strategy Republicans tend to support and "carpet bombed" major territories in the Middle East.

As Warrick goes on to report, there are still places where Arab youth have no love lost for the United States.
Arab youth were generally mixed in their views of the United States. More than 60 percent saw Washington as an ally, with the strongest positive rankings coming from Persian Gulf states such as Saudi Arabia and the UAE. By contrast, more than 90 percent of Iraqis regarded the United States as an enemy. Dislike for Washington was nearly as high in Yemen and in the Palestinian territories, and more than half of Lebanese youth said they saw the United States as an enemy.
To the extent that the United States had done what ISIS wants and engaged in a holy war with Islam, we would have made the terrorist group a much more attractive draw to many of these young people. One need only contemplate what led 90% of Iraqi youth to see us as an enemy. The legacy of the Bush/Cheney war lives on.

President Obama has rejected the Washington Playbook when it comes to defeating ISIS. As a result, the "noxious ideology" of ISIS is becoming apparent and destroying the group from within.

Cost Control Measures in Obamacare

Prior to Obamacare, there were two big problems in our health care delivery system: access and affordability. Most of what people know about what has changed since the reforms were passed in 2010 have to do with access. Other than expansion of Medicaid and subsidies, there hasn't been much discussion about what Obamacare put in place to tackle the affordability problem.

For example, I find that very few people are aware of the provision related to medical loss ratios (what Rick Ungar once called "the bomb buried in Obamacare"). They limit the amount of premium dollars that insurance companies can collect to pay for administration and profit to 15% (20% for those who market to individuals and small groups*). If insurance companies collect more than that limit in any given year - they are required to provide refunds to their customers.

Of course, that is a reform to the way health insurance is provided. I remember that when Obamacare originally passed, Ezra Klein pointed out that when it comes to cost control related to actual health care, there wasn't a lot of consensus on what would work. And so just about every idea was captured in the law as an experiment (sounds exactly like how Kloppenberg described Obama's philosophical pragmatism which, "embraces uncertainty, provisionality, and the continuous testing of hypotheses through experimentation").

As Michael Grunwald writes, the administration is about to launch another one of those experiments.
The experiment the administration will announce today, a program called Comprehensive Primary Care Plus, is intended to shake up the way 20,000 doctors and clinicians treat more than 25 million patients when it goes into effect in January 2017. In a sharp departure from the current “fee-for-service” system, which offers reimbursements per visit or procedure, providers who volunteer to participate will received fixed monthly fees for every patient and bonuses for meeting various quality goals. When their patients stay healthier and require less-expensive care, many primary care doctors will also share in the savings to Medicare, Medicaid or private insurers.
As someone who comes from Minnesota where "managed care" was invented as an alternative to "fee for service," it is important to point out how this incentive program is different.
Studies have shown that about a third of all healthcare is a waste of money; the joke in the medical world is that nobody knows which third. The “managed care” craze that flamed out in the late 1990s basically empowered HMOs to try to figure it out. In some ways, CPC-Plus uses a similar per-patient payment model, except the primary care doctor rather than the insurer will be responsible for managing the care.
We've already seen how incentives in Obamacare have dramatically reduced hospital readmissions - another one of the "experiments" contained in the bill. So it will be important to keep an eye on this one.

Is Uncertainty a Liberal Value?


When the Obamas moved in to the White House, they made some changes to the artwork that decorated their new home. The painting above by Ed Ruscha titled "I Think I'll..." was one they chose. At the time, a friend of mine told me that he thought it said something important about our new president. James Kloppenberg, who wrote the book Reading Obama, would probably agree.
It has become a cliche to characterize Obama as a pragmatist, by which most commentators mean only that he has a talent for compromise - or an unprincipled politician’s weakness for the path of least resistance. But there is a decisive difference between such vulgar pragmatism, which is merely an instinctive hankering for what is possible in the short term, and philosophical pragmatism, which challenges the claims of absolutists…and instead embraces uncertainty, provisionality, and the continuous testing of hypotheses through experimentation.
Elsewhere he wrote:
After almost two years as president, Obama has failed to satisfy the left for the same reason that he has antagonized the right. He does not share their self-righteous certainty.
Having grown up in a family and community where questioning was discouraged in favor of dogma handed down by those in positions of authority, I learned that an embrace of difficult questions and uncertainty was the only path available to me if I wanted to sort through what I truly believed. It was a terrifying journey to learn to think for myself and admit that I didn't always have the answers. In the end, it left me extremely wary of anyone who presented themselves as an ideologue enveloped in certainty. We tend to think that people like that inhabit the right wing of the political spectrum. But it is not their domain exclusively. In addressing liberal bloggers at Daily Kos, the President himself once wrote:
...to the degree that we brook no dissent within the Democratic Party, and demand fealty to the one, "true" progressive vision for the country, we risk the very thoughtfulness and openness to new ideas that are required to move this country forward. When we lash out at those who share our fundamental values because they have not met the criteria of every single item on our progressive "checklist," then we are essentially preventing them from thinking in new ways about problems. We are tying them up in a straightjacket and forcing them into a conversation only with the converted.
I think about all that these days as I watch the political discussions taking place during this presidential primary. Of course, a competition like the one between Hillary Clinton and Bernie Sanders tends to crowd out questions and uncertainty. As a result, no one is really listening and any discussion that happens merely leads to defensiveness and digging in to established positions.

I've come to believe that listening requires a suspension of certainty - at least long enough to hear what the other person is saying and attempt to empathize with where they are coming from. It also requires some curiosity about perspectives different from our own. It is in that spirit that I ask the question: Are things like uncertainty, listening, curiosity and empathy liberal values?

President Obama Lets His Nerd Flag Fly

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One of the lesser-discussed controversies about President Obama is whether or not he qualifies as a jock or a nerd. We all know that he loves sports (both as a spectator and participant) and is quite competitive. But I remember that early on in his presidency, the nerds of the world were pretty excited about finally having one of their own in the White House. That was true for a resident blogger at Political Animal.
For the record, President Obama has collected Spider-Man comics; he knows the name of Superman’s father; he’s a fan of Star Trek; and can, rather effortlessly, offer a Vulcan salute.
Ezra Klein (noted nerd) was impressed as well.
Obama is by far the most culturally awesome president this country has witnessed. That doesn't mean his presidency won't be a catastrophic failure. But, if anything, the press has been much too restrained in their commentary on Obama's virtues. Forget beers: This is a president I could play Halo 3 with.
But perhaps the greatest disquisition on President Obama's nerdiness came from John Hodgman's speech at the 2009 Radio and TV Correspondent's Dinner. It was hilarious with a powerfully serious kicker at the end.


This week, the President sets out to let his nerd flag fly. First of all, he will host the 6th annual White House Science Fair this week. That will, no doubt, lead to more photos like this one from the 2012 event (seriously...only a true geek gets this excited about a marshmallow air canon).


Secondly, comes this:
Having survived his first interview as POTUS on Fox News’ Chris Wallace-hosted Sunday Beltway show, Obama will guest present five segments for the network’s nightly science news coverage, Science Presents DNews, which airs weeknights at 9PM. His updates will cover a wide range of innovations in public health, space, and technology.
On a more serious note, President Obama has done a lot to promote science during his administration - particularly when it comes to encouraging the next generation of scientists, engineers, mathematicians, and innovators. He has even gone so far as to suggest that they deserve as much attention as our famed jocks.
“As a society, we have to celebrate outstanding work by young people in science at least as much as we do Super Bowl winners. Because superstar biologists and engineers and rocket scientists and robot-builders… they’re what’s going to transform our society. They’re the folks who are going to come up with cures for diseases and new sources of energy, and help us build healthier, more successful societies.” -President Obama

Grover Norquist's Plan to Stop Hillary...Seriously

Over the last few years there has been a lot of discussion about the Rising American Electorate (unmarried women, millennials and people of color) that Barack Obama tapped into in order to win two presidential elections. Back in November, Stan Greenberg cautioned that these voters weren't being engaged in the 2016 election. But in a more recent poll, he found that things had changed.
The disengagement pall has been lifted. Our focus groups with white unmarried women, millennials and African Americans showed a new consciousness about the stakes in November. In this poll, the percentage of Democrats giving the highest level of engagement has increased 10 points.
The result is that the country might be heading for an earthquake election in November.

Rather than embrace the recommendations of the RNC autopsy report following the 2012 presidential election, the response of Republicans has typically been to drill down on the idea that there are millions of white voters they can tap into who didn't show up to vote for Mitt Romney. But even Sean Trende, whose original article spurred that discussion, says that there aren't enough missing white voters available to swing an election.

Into this breach comes Grover Norquist with...what can I say...a "creative" solution. He has identified six new voting blocs that have developed over the last 30 years that won't want Hillary Clinton in the White House. Between the lines, his contention is that she is just so out of touch with what is happening in the world that she's missed them.

Either this revelation is so ground-breaking that no one in the political world is as in-touch as Norquist, or it's a load of huey put out by someone who is desperately grasping at straws rather than face the fact that his predictions about a "permanent Republican majority" are drowning in a bathtub.

Here are Norquist's six voting blocks that will challenge the Rising American Electorate:

1. Home schoolers
2. Charter school supporters
3. Concealed-carry permit holders
4. Fracking workers
5. Users of e-cigarettes and vapor products
6. Uber drivers

I kid you not! Those are the voting blocs Grover Norquist said the Republicans can tap into in order to stop Clinton in November. We could spend some time deconstructing each one. But that would give this nonsense from Norquist more attention than it deserves. I merely point this out in order to show how vacuous Republican attempts are these days to deal with the fact that they are in the midst of alienating large swaths of the American electorate. If the best they've got to combat that reality is mobilizing people like e-cigarrette users, you know they're in big trouble.