Kilroy's K Street Love

The most predictable act of the OH-15 congressional race has taken place: incumbent Congresswoman Mary Jo Kilroy has attacked Lt. Colonel Steve Stivers with a negative TV ad. With her past history of running negative campaigns, the fact that she aired a negative ad isn't itself worth discussing, but the hypocrisy of the message contained in the ad is well worth highlighting.

The ad decries the number of lobbyists in Washington, D.C., but fails to mention that under the Obama Administration and the Pelosi Congress lobbyists are thriving like never before. The Weekly Standard calls the current Democrat-created environment in Washington a "golden age" for lobbyists. And they're correct in doing so: 2009 set a record as the most profitable year ever for the lobbying industry with a walloping $3.47 billion dollars being spent on lobbying the federal government. And they couldn't have done it without Mary Jo Kilroy and her liberal ilk in Congress.

"Lobbyists love it ... when you've got an activist agenda like this," said James Thurber, the director of American University's Center for Congressional and Presidential Studies, of the Obama-Pelosi agenda. And the lobbyists who are thriving aren't Republicans either--they're Democrats. The much-decried "army of lobbyists" President Obama and Congresswoman Kilroy carp about include many faces friendly and familiar to them: former Obama administration officials, prominent Democratic donors, former lawmakers, and former staff members of the current Congressional Democrats. People like Obama's failed Secretary of Health and Human Services nominee and tax-dodger Tom Daschle; Obama transition team co-chair John Podesta's BP lobbyist brother Tony and sister-in-law Heather; Goldman Sachs's Michael Paese, formerly an aide to House Financial Services Committee Chairman Barney Frank (as in Dodd-Frank Wall Street Reform and Consumer Protection Act).

Kilroy's Army

What's worse is that the anti-lobbyist rhetoric of Kilroy and Obama is pushing lobbying into a black market. The Huffington Post brands the new trend "influence laundering". To get around the scorn and disclosure requirements of being publicly known as a lobbyist many Washington influence peddlers are deregistering themselves. Effectively, this sends much of the lobbying industry underground to a world free of transparency and accountability for both lobbyists and Kilroy lawmakers alike. (Remember when Congresswoman Kilroy inserted a provision into the financial reform bill that sent bond deals underground? --It's like she's got an ax to grind with the very ideas of transparency and accountability.) For his part, President Obama has found his own clever way around the transparency requirements he instated.

In truth the only way to curb the influence of the "army of lobbyists" is to cut the size of government; if the beast starves it will die. President Obama and Congresswoman Kilroy have kept the beast well-fed with Obamacare, the Dodd-Frank "reform" bill, and cap-and-trade. It's time for the lobbyists' "golden age" to end!

Mary Jo Kilroy did get one line right in her attack ad: With big lobbyist enablers like her in Washington, it is no wonder our voices never get heard.

Democrats: The "D" Stands for Dishonest

According to Democratic Senatorial Campaign Committee Chairman Sen. Robert Menendez, the Democratic strategy for this fall is to run away from the Democrats' legislative record and try to make the election a choice between political parties. In support of this strategy, President Obama offered up a cutesy little metaphor:

"I do want to point out, when you get in your car, when you go forward, what do you do? You put it in 'D.' When you want to go back, what do you do? You put it in 'R.' We don't want to go into reverse back in the ditch."

Effectively, the strategy is to run against George W. Bush.

"Blame Bush" is hardly a new strategy. One might even say it's a worn-out dogma that has, for far too long, strangled our politics. It's like President Obama's mind is stuck in reverse. And it's because of this brand of childishness that the president's once-soaring popularity has declined, by the way.

Far worse, however, is that it's dishonest. The groundwork for the financial crisis was laid before George W. Bush took office. In the last month of his presidency, President Bill Clinton signed the Commodity Futures Modernization Act, which exempted the toxic mortgage-backed securities from government regulation. And before that Clinton signed the Financial Services Modernization Act which allowed the creation of the mega-banks, the banks that were "too big to fail".

So by the time President Bush (43) took office big banks were getting bigger and had been equipped with the financial instruments that Warren Buffett described as "weapons of financial mass destruction". The car was already in overdrive when George W. Bush first sat in the driver's seat.

But blaming President Clinton is overly simplistic; it's the sort of thing the Democrats would do, and I most certainly will not stoop to their level. The global financial crisis was a complex occurrence, and the guilty parties are many. (Besides, the former president has had the decency to admit his error in creating the climate for the collapse.) However, when doling out blame, there are some very guilty people who mustn't escape notice: former Clinton advisers who now, coincidentally, are Obama's advisers.

As it turns out, we can't put the car in reverse because we've already gone backward.

Liberal columnist Paul Krugman asserts, dejectedly, that all of Obama's economic advisers are "proteges of [Clinton Treasury Secretary] Robert Rubin, the apostle of financial deregulation". And Krugman is right to do so. Beyond being mere proteges, Obama's economic advisers were in the room with Rubin as he pushed for the Financial Services Modernization Act before bailing government service for a $15-million-a-year job at Citigroup. (Citigroup itself having been created in a merger made legal by the Financial Services Modernization Act--it's dealings like that which earned Rubin a spot on Market Watch's 10 most unethical people in business.)

Let's take a look at the Rubin proteges who shape Obama's thinking:

• Larry Summers, Rubin's Deputy Treasury Secretary and successor, is now Obama's Director of the National Economic Council. Summers pushed Congress to deregulate the derivatives market on the basis that financial institutions are "eminently capable of protecting themselves from fraud and counterparty insolvencies"--financial speak for "they can police themselves". As it turns out, they couldn't.

• Timothy Geithner was Under Secretary of the Treasury for International Affairs in the Clinton Treasury Department and is now Obama's Secretary of the Treasury. According to a Wall Street Journal bio, Geithner "learned from Treasury Secretaries Robert Rubin and Lawrence Summers". As previously reported in this blog, Geithner was in the room with Lehman Brothers as they engaged in fraud, knew it, and failed to take commensurate action. What a stand-up guy.

• Gary Gensler's official biography as Obama's Chairman of the Commodity Futures Trading Commission states that, as Under Secretary of the Treasury, "Chairman Gensler was the principal advisor to Treasury Secretary Robert Rubin and later to Secretary Lawrence Summers on all aspects of domestic finance." Ah, so he was Rubin's Rubin. According to The New York Times, Gensler also played a "significant role in shepherding through Congress deregulation measures that led to the explosive growth of the over-the-counter derivatives market."

And, of course, there are more, lower-profile Clinton era (read as: deregulation era) economic advisers surrounding President Obama. Not quite the "Change" we were promised.

President Obama has oft-repeated a line about Republicans driving the country into a ditch. He ought to level with us and mention that the car had faulty steering and brake lines, and that they were installed by his own economic team. That doesn't make for a very rousing stump speech, however.

Sadly, our local trial lawyer won't press our case and demand restitution from the negligent technicians who put us here. Apparently, the Democratic cause has already paid her a hefty retainer for her services.

We can take heart that the tow truck is coming this November.

Mary Jo, Nancy, and The Pimp

Congresswoman Mary Jo Kilroy gets her money from some disreputable places. As previously reported in this blog, Kilroy has received money from the man who modernized the prostitution industry, Craigslist Founder Craig Newmark. Yesterday, Third Base Politics highlighted a CNN investigation into the role of Craigslist in the underage sex trade and suggested Congresswoman Kilroy should donate the money she received from Craig Newmark to charity. When you think about the flow of cash used to make this particular donation, it's impossible not to agree.

Craigslist makes nearly one third of its $122 million in revenues from "adult services" ads--that's more than $36 million of revenues earned from what are, essentially, pimping fees. With his company raking in pimping revenues hand over fist, it's safe to say a good chunk of Craig Newmark's net worth came in the form of sweaty, fluid-encrusted cash from the hands of gratified johns.

According to the CNN investigation, "A 20-year-old identified only as 'Jessica' works out of low-rent hotels on Washington's busy Interstate 95 corridor. She posts [Craigslist] ads mid-morning for $10 and says she earns up to $250 from each man who answers and shows up."

$250--that's the exact amount of money Craig Newmark has donated to Congresswoman Kilroy so far this election cycle. It's almost as though the john was paying Kilroy directly. Sleazy. And it's all happening right there in our nation's capital, right under Kilroy's nose.... I thought they were going to drain the swamp?

Over the course of the Congresswoman's career Newmark has basted her with $2,000 in direct donations. Indirectly, Newmark has furnished Kilroy with even more money by donating $15,500 to the Democratic Congressional Campaign Committee, Barack Obama's Hopefund, Inc., Al Franken's Midwest Values PAC, and Howard Dean's Democracy for America, all of which have given sizable donations to Kilroy over the course of her career as a politician.

I don't know how many sex acts that all translates into, but I'm sure it's more than enough to have crushed the spirits of more than a few young women. The flow of money is sickening:

Sweaty, gratified palms of a john --> involuntary prostitute --> Craigslist/Craig Newmark --> Mary Jo Kilroy

What's particularly disgusting is Mary Jo Kilroy's hypocrisy. The Congresswoman has accepted a lot of money from well-meaning "Women's Issues" groups. She has two daughters; we've seen them in her ads. Congresswoman Kilroy should be out front showing some leadership to stop sex trafficking. Instead, she and her party are all but supporting it by accepting donations from the world's most notorious pimp.

Of course, as in everything, Mary Jo Kilroy is just following the example of her mentor, Speaker Nancy Pelosi. Pelosi has also accepted graft from Newmark. Together they're making a mockery of women's empowerment by abandoning the truly helpless to a cruel fate. Apparently, the Pelosi-Kilroy bond is strengthened by a mutual willingness to be blind to anything so long as it helps them gain the cash they need to stay in power.

Birds of a Feather
(Original photo from http://www.flickr.com/photos/speakerpelosi/3748460352/in/photostream/)

The issue shows a stark and meaningful contrast between Congresswoman Kilroy and her opponent, Lt. Colonel Steve Stivers. Stivers, while a State Senator, voted to strengthen anti-human trafficking laws by mandating prison terms for persons found guilty of human trafficking and payment of restitution to victims.

Steve Stivers knows what is right, and he does it.

Mary Jo Kilroy doesn't care what is right. She cares about cash for her re-election, and she'll accept it from anyone--even a pimp.

Will the Democrats Claim It's Just a "Wide Stance" Too?

The Democrats' public professions of enmity towards Wall Street remind me of the anti-gay rhetoric of disgraced former Senator Larry “Wide Stance” Craig. In his public life, Senator Craig was very outspoken in his condemnations of homosexuality; in their public life, the Democrats are very outspoken in their condemnations of Wall Street. As we learned after a revealing incident in an airport bathroom, Senator Craig’s public mask and his private face were vastly different. The Democrats are every bit as two-faced as the former Senator, and just like him when they’re out of the public view they’re cruising for under-stall action with the object of their public animosity: Wall Street.

Take Senate Banking Committee Chris Dodd, for example: Earlier this week, on the Senate floor, Dodd railed against Goldman Sachs and Magnetar (the hedge fund hijinks of each firm having been previously discussed in this blog here and here, respectively) culminating with the punchline:

"So the problem is not that these executives got rich without contributing to America. The problem is that these executives got rich betting against America."

Watch his indignation:



"Betting against America" is a pretty strong indictment. The Senator must have been so proud of himself for making it in full public view that he forgot to mention that after the investment banks bet against America they shared their winnings with him. From Goldman Dodd received $273,466, and from the relative upstart Magnetar he accepted at least $6,900. Not too shabby. I can't help but wonder if the Senator and his donors ever sing this Magnetar-inspired song to each other:

Bet Against the American Dream from Alexander Hotz on Vimeo.

And Chris Dodd's not the only one having a closeted love affair with Wall Street--not by a long shot! It's widespread: Kirsten Gillibrand, Barack Obama, Rahm Emanuel, Charles Schumer, Harry Reid, former House Democratic Leader Dick Gephardt is now a Goldman Sachs lobbyist, our Congresswoman Mary Jo Kilroy has accepted $52,736 from the Securities and Investment industry--and that doesn't even include the Magnetar money laundered to her by Rahm Emanuel--the list goes on and on and on. So many Democrats, so hot for Wall Street cash, but also, so very ashamed to admit their hearts' desire.

Can you imagine the scenes?

--

A flustered and slightly sweaty Rahm Emanuel popping out of a coat closet after an afternoon quickie cell-phone call to Magnetar Capital CEO Alec Litowitz.

--

Senator Chris Dodd getting his war chest stuffed in the back of a Citigroup executive's limousine.

--

Senate Majority Leader Harry Reid sitting on a bench in a secluded section of a public park smiling coyly at a cute jogger in a Goldman Sachs t-shirt.

"Oh yes! He winked at me! More cash for Harry!" he congratulates himself after the encounter.

--

Congresswoman Mary Jo Kilroy buttoning up her purse with a freshly cut check from Goldman Sachs Managing Director David P. Solomon inside as she leaves his New York office.

"But Mary Jo, what if your constituents find out?" the breathless banker asks.

Emphatically the Congresswoman replies, "They won't!" And then, unleashing even more of her passion for Wall Street cash, "They could never understand OUR LOVE!"

--

Of course those were dramatizations. In reality, the Democrats surely have a far more sophisticated and organized method of setting up Wall Street bankers with the politicians who love them than the ol' Larry Craig tap-and-whistle. The major difference as I see it, is that Senator Craig is deserving of pity for the tortured life he surely had. The Democrats, however, deserve only contempt for their deception. In stepping out on us to dally with Wall Street bankers the Democrats are inflicting great harm on our country and our future. We should help them come out of the closet by kicking them out of the Congress.

Obama: Looking Tough, Staying Cozy

On Friday the Securities and Exchange Commission filed a civil suit against the investment bank Goldman Sachs for creating and selling a financial instrument secretly designed to capitalize on the collapse of the housing market. According to the SEC complaint, prominent hedge fund manager John Paulson paid Goldman Sachs to structure the instrument in question, known as Abacus 2007-AC1, to fail. Mr. Paulson subsequently earned an estimated $3.7 billion in 2007 by correctly betting on the failure of Abacus and the collapse of the housing market.

The Abacus deal may remind some of you of the Magnetar trade discussed in the April 14 posting of this blog in that they are, essentially, the same: hedge fund managers composed of equal parts savvy and sleaze with a penchant for donating to Democratic politicians shorted the market for massive personal gain and widespread loss to run-of-the-mill investors.

Yes, you read correctly: Just like Magnetar CEO Alec Litowitz who bankrolled White House Chief of Staff Rahm Emanuel, John Paulson is a heavy Democratic donor. Mr. Paulson generously shared tens of thousands of dollars of his housing market collapse money with seven cash-needy Democratic United States Senators: Minority Leader Harry Reid ($2,300), Banking, Housing, and Urban Affairs Committee Chairman Christopher Dodd ($4,800), Finance Committee Chair Max Baucus ($4,600), Senator Carl Levin ($4,600), Senator Dick Durbin ($4,600), Senator Arlen Specter ($4,600), and Senator Frank Lautenberg ($4,600). And for good measure he also gave a walloping $30,400 of housing collapse money to the Democratic Senatorial Campaign Committee.

Given the Democrats’ tired refrain that Republicans are the “party of Wall Street” one might expect to be surprised to find that so many hedge fund moguls are Democratic donors. The fact of the matter is that the Democrats receive 62% of the securities and investment industry’s campaign contributions to the Republicans’ 37%. In the presidential election Barack Obama raised $14,891,735 from the securities and investment industry compared to John McCain’s $8,698,635. The Democrats are shrieking that the Republicans are too well fed by Wall Street, but compared to the Democrats the Republicans are eating off the dollar menu.

Goldman Sachs, the bank charged with defrauding investors over the Abacus deal and the Democrats’ No. 1 business donor in the 2008 election, gave seventy-five percent of its political donations to the Democrats. That’s 3-1 in favor of the Democrats! What overwhelming ratio do the Democrats need to reach before they will freely admit to the plainly obvious fact that they are betrothed to Wall Street?

Oh how their hearts must ache that their love can never see the light of day! The Democrats and their Wall Street backers must keep their love closeted, for President Obama has been losing his grasp on the false narrative that he and his party are working hard to protect the ordinary Americans injured by the economic meltdown.

The Democrats will use the SEC complaint against Goldman Sachs as a springboard for them to “get tough” (read as “look tough”) on Wall Street. What’s coming is a new era of derivatives regulation. This should happen. Derivatives, heretofore widely unregulated, played a critical role in creating the global financial crisis. It’s asinine that with bipartisan support, a supermajority, and the years-old knowledge that derivatives were a major cause of the financial train wreck that the Democrats have waited this long to act—but hey, they haven’t wanted to bite the hand that feeds!

The mainstream media will be unable to resist the desire to credit President Obama and his Democrats for getting “tough” by dragging the derivatives market into the daylight of public trading. He’ll surely have a grand signing ceremony, senators will give big speeches, and they’ll posture as though they’ve ended Wall Street shenanigans forever.

But this will all be done with a wink and a nod to Wall Street. Because both the Democrats and Wall Street know what’s coming: grand new opportunities for Wall Street elites to win big off of the little guys and a rushing new river of campaign donations for the Democrats.

Wall Street will be upset about the loss of their black box derivatives playground, to be sure. However, any despondence they feel will be tapered by an exhilarating new financial boon on their horizon—the coming of cap-and-trade! (Barack Obama is far too skillful of a politician to slap one of his biggest donors in the face without apologizing profusely by offering up a deeply valuable gift.)

Under a cap-and-trade system, the government issues permits which grant companies the right to emit a certain amount of greenhouse gases. Companies that emit more than permitted then must either buy allowances from other companies that have emitted less than their granted limit or purchase carbon offsets, investments in a project that cuts greenhouse gas emissions someplace else (such as a developing country).

As one can infer from the “trade” part of cap-and-trade, there would be a lot of allowances changing hands. And guess where all that allowance trading would be going down. That’s right: Wall Street.

The passage of a climate change bill such as the one soon to be unveiled in the U.S. Senate, which is said to retain the cap-and-trade structure of a bill that cleared the House of Representatives last June, would create a $2 trillion commodities market—“the largest commodity market ever” according to the U.S. Commodity Futures Trading Commission.

Before its demise Enron executives salivated that cap-and-trade “would do more to promote Enron's business than almost any other regulatory initiative outside of restructuring the energy and natural gas industries in Europe and the United States.” Wall Street bankers also know how much the Obama-approved policy would enrich their bottom line. That’s why they have been employing over one hundred climate change lobbyists to influence their friends in government to create a cap-and-trade system.

Cap-and-trade is a win-win for Obama and Wall Street, but it’ll be a major loss for you and me. The carbon allowances businesses would be required to purchase are nothing more than a tax by another name and that tax will be passed on to us as consumers. Furthermore, the offset provisions encourage businesses to move their operations—and jobs—overseas to countries with laxer emission standards.

So Wall Street gets a $2 trillion market, the Democrats get rewarded by Wall Street campaign donations, and we get increased costs and job destruction. When Barack Obama said he was going to “spread the wealth around” I didn’t realize he meant like that!

This November, let’s cap the Democrats’ political careers and trade them for legislators who will be on our side—not their banker’s.

The President Has Poor Posture

It’s all fine and good if President Obama wants to have a beer and wax philosophical with his friends about how the world would be a better place without nuclear weapons. The topic would even make for a nice speech at a Miss America pageant. The reality, however, is that nuclear weapons do exist. They’ve been invented—the Pandora’s Box is opened! We can’t uninvent them. They’re here, they’re nuclear, get used to it.

American nuclear policy should reflect reality. Unfortunately, last week President Obama reversed our country’s longstanding nuclear policy which had effectively secured peace for sixty-five years.

The previous policy, supported by every president since Harry Truman, was designed to give potential aggressors pause before attacking the United States or one of our allies. Mess with us, and anything may happen—you might even get nuked. A case study in the effectiveness of this policy is illustrated by former Secretary of State James Baker in his memoir, The Politics of Diplomacy. Baker wrote that in a meeting with Iraqi Foreign Minister Tariq Aziz on the eve of the Gulf War he “purposely left the impression that the use of chemical or biological agents by Iraq could invite tactical nuclear retaliation.” No chemical weapons were confirmed to have been used during the war.

Under the new Obama policy, we’ve lost the “calculated ambiguity” that Secretary Baker credits with preventing the use of chemical weapons in the Gulf War. We’ve put all of our cards on the table. The policy states: “the United States will not use or threaten to use nuclear weapons against non-nuclear weapons states that are party to the [Nuclear Non-Proliferation Treaty] and in compliance with their nuclear non-proliferation obligations.” So if anyone who’s treaty-compliant and not openly nuclear wants to gas any of our major cities, the official U.S. stance is “That’s okay.” We’ll still respond to be sure, but it’ll be a slower, more tepid, limited response of conventional bombs and bullets. Obama’s new policy sucks the “super” out of “superpower.”

Ohio Congressman Mike Turner, senior Republican on the House Armed Services Subcommittee on Strategic Forces, has it exactly right:

When it comes to defending the United States against a devastating attack, our message should be clear and simple: If our nation is attacked, we will use all means necessary to defend ourselves. Period. This is the essence of nuclear deterrence: The message should be that the cost of attacking the United States will be greater than the benefit.

Obama’s slumped nuclear posture not only gambles with our safety in the present, it gambles with our nation’s safety in the future as well. Under the new policy, the United States “will not develop new warheads or add military capabilities.” So as China and Russia advance we’ll be staying back in the past. We’ll be fighting with the equivalent of spears and stones as the rest of the world advances. God forbid another war breaks out; we’ll have to change our national anthem to “Livin’ on a Prayer.”

Foreign relations are unpredictable. During World War II, the Russians were our allies. Shortly thereafter we were facing off against them in the Cold War. We don’t know what tomorrow will bring. There’s no crystal ball to gaze into to know what dangers we may face. We do know, however, that it’s best to be prepared. In his first annual message to Congress (the “State of the Union” by today’s terms), George Washington advised, “To be prepared for war is one of the most effectual means of preserving peace.” Peace through strength. The first forty-three presidents understood that.

Barack Obama promised us change. He’s definitely delivering.