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CounterPunch Diary

T’was a Famous Victory

by ALEXANDER COCKBURN

"Cleopatra’s nose, had it been shorter, the whole face of the world would have been changed.” So wrote Pascal, remembering how Caesar and Mark Anthony, those mighty generals of the Roman Empire, were captivated by Cleo’s commanding schnozz. This time Cleopatra’s nose took the form of Ted Kennedy’s brain tumor.

If the tumor hadn’t finally done in Massachusett’s senior senator last August, then there wouldn’t have been a special race for his seat. A former Cosmo nude pinup called Scott Brown wouldn’t have stunned the Democrats by capturing the seat for the Republicans this past January.

Obama wouldn’t have been hauled rudely from the supposed security of a filibuster-proof majority in the U.S. senate and, instead, faced with the prospect that the health insurance bill on which he’d squandered more than half his first year in office was about to go down to defeat, leaving the victorious Republicans to trample him and his party to death in the fall elections this year.

It was a very, very close thing. 

Why did Obama blow his first year? Politicians have a touching trait of often coming to believe their own campaign rhetoric, even when it’s being greeted with cynical guffaws by the cognoscenti. Having made his name and won his votes by pledging to rise above faction and draw the American people together, Obama extended the hand of bipartisanship to the Republicans and spent the following months seemingly fuddled as the Republicans chewed off his arm, inch by inch.

The whacking they gave his stimulus package in February of 2009, cutting it in half, unnerved the White House. Just when they should have been drawing lines in the sand, they opted for pliancy. It’s debatable whether they should have touched health reform at all in 2009, but suppose Obama and House Democrats had put forward a tough, progressive plan, centered on a government-underwritten “single payer” model and then challenged the Republicans to come at them, forcing them to go through the arduous exercise of actual filibusters, item by item. The whole terms of the debate would have been different.

Instead of which, Obama handed off reform to Congressional Democrats who came up with five plans. The Republicans wheeled their artillery into position and opened up with heavy salvoes about “death panels.” John McCain and other Republicans like Senator Chuck Grassley started denouncing as “Obamian socialism” the very provisions they themselves had advanced a year earlier. The left, furious at the dumping of single-payer, or even a vestigial public option, was deeply demoralized.

Then, as the year turned, came three strokes of immense good fortune. The first was Republican Scott Brown’s defeat of Democratic favorite Martha Coakley in Massachusetts, leading to the blare of panic klaxons in the White House. Next came a February announcement by Anthem, California’s largest for-profit insurer, to hike individual rates by as much as 39 per cent, vividly dramatizing the extortions of the present system and giving the Obama administration the cue to call on Anthem to justify the hikes. Finally, Jim Bunning, a Republican senator from Kentucky and former big league pitcher, heading into retirement, single-handedly blocked or five days a measure to extend eligibility for enhanced unemployment benefits for laid-off workers. “Tough shit” was Bunning’s retort to complaints that his unfeeling obstinacy would plunge hundreds of thousands into truly desperate straits. Finally, amid a firestorm of public rebukes, the Republican leadership forced Bunning to back down. 

It was a reprise of the face-off that gave Bill Clinton his great victory against Newt Gingrich and the Republicans in November of 1995. Gingrich, Republican speaker of the House, said he’d shut down the government unless Clinton agreed to budget cuts in social services. Clinton refused. Without necessary funds voted by Congress, federal workers started to get laid off. Then Gingrich destroyed himself and Bob Dole’s chances in 1996 to be president. He told reporters that he forced the shutdown because Clinton had made him and Bob Dole sit at the back of Air Force One House. A stand on principle shriveled into pettiness, as with Bunning.

By early March of this year, the Republicans were looking not only mean-spirited – the Party of No – but also the Party of Nutsos, hooked to the Tea Baggers who themselves have been getting crazier by the hour.

The tide turned. At last the Democrats played hardball. Nancy Pelosi, Speaker of the House, twisted arms, stacked up votes. The long-brandished, never used filibustering weapon stayed in the armory as Democrats rediscovered procedural weapons to push the bill forward. The Tea Baggers spat on a black congressman, John Lewis, and taunted Barney Frank, the senate’s only openly gay member. On Thursday night, they threw in the towel.

The struggle commenced last June has produced, by way of health insurance reform, a Republican bill – mostly bad, with a couple of positive features. It’s certainly not reform of health care. Its decent provisions could have been passed easily early last year. It could all have been different. 

But now Obama and the Democrats have put a big one up on the board. It’s still a long way to the fall elections, but Obama may last have learned the benefits of partisanship – even populist partisanship. Next comes financial reform, which is what Obama should have started with last year. But at least he has a win. As Robert Southey’s poem “After Blenheim” put it:

“It was the English.” Kaspar cried
Who put the French to rout;
But what they fought each other for
I could not well make out.
But everybody said,” quoth he,
“That t’was a famous victory.”

Moody’s is at it again 

The bond-rating service, of which billionaire Warren Buffett owned quite recently a dominant 20 per cent slice, has once again announced that the U.S. has moved “substantially” closer to losing its top-drawer, triple A rating for its Treasury bonds. This came in the same week that doomsayers relayed the claim – analyzed by Dave Lindorff on this site today – that the Social Security “crisis” is upon us at last, since payouts from the system to beneficiaries have this year exceeded receipts into the system from the payroll tax. 

A little over two years ago, on January 10, 2008, Moody’s was more explicit in its attack. It issued an astonishing demand that the U.S. government “reform” Social Security and Medicare: “In the very long term, the rating could come under pressure if reform of Medicare and Social Security is not carried out as these two programs are the largest threats to the long-term financial health of the United States and to the government’s AAA rating.”

Steven Hess, Moody’s top analyst for the U.S. economy, spelled it out even more explicitly to the London Financial Times: “If no policy changes are made, in 10 years from now, we would have to look very seriously at whether the U.S. is still a triple-A credit. The U.S. rating is the anchor of the world’s financial system. If you have a downgrade, you have a problem.”

As I wrote at the time, U.S. interrogators torture men in secret prisons seeking to catch those members of al-Qaeda still at large, starting with Osama bin Laden and Aiman al-Zwahiri. Yet, here’s Moody’s man calmly threatening to destroy the U.S. government’s credit ranking unless it follows his agenda, and he strolls around Lower Manhattan unmolested, even if his threats could add up to the financial equivalent of a thermonuclear device planted under the Statue of Liberty.

Moody’s runs a protection racket. It issues credit ratings (in 2007, no less than 39 per cent of the global credit rating market by revenue, according to Bloomberg) based on public data and private information made available by those clients that have “voluntarily” retained their services. The price of not volunteering can be high, since Moody’s can (and has) exact swift revenge by blackjacking the uncooperative business by hammering its rating.

Of course the terrorists in lower Manhattan want Wall Street to get its mitts on the pools of money held in the Social Security trust funds. But if Moody’s is going to present itself as a major political player, presuming to dictate national policy down the barrel of a financial gun, its executives and analysts should be called to give a public account of themselves and their designs.

Here’s a fine opportunity in the upcoming hearings on financial reform. Let Senator Dodd’s committee haul in Moody’s execs for a grilling. Have them explain their own role in the financial crisis by giving positive ratings to the debt instruments that blew the system apart with the collapse of the housing bubble and its impact on the home mortgage market.

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ALEXANDER COCKBURN can be reached at alexandercockburn@asis.com.

 

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