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1. The private sector will create enough jobs, if the government gets out of the way. Possibly, but when? Right now more than 2.7 percent of our entire population has been unemployed for more than 26 weeks -- an all time-record since the government began compiling that data in 1948. No one is predicting that the private sector is about to go on a hiring spree. In fact, many analysts think it'll take more than a decade for the labor market to fully recover. You can't tell the unemployed to wait ten years. Counting on a private sector market miracle is an exercise in faith-based economics. There simply is no evidence that the private sector can create on its own the colossal number of jobs we need. If we wanted to go down to a real unemployment rate of 5% ("full employment"), we'd have to create about 22.4 million jobs. (See Leo Hindery's excellent accounting.) We'd need over 100,000 new jobs every month just to keep up with population growth. It's not fair to the unemployed to pray for private sector jobs that might never come through. 2. We can't afford it. Funding public sector jobs will explode the deficit and the country will go broke: This argument always makes intuitive sense because most of us think of the federal budget as a giant version of our household budget - we've got to balance the books, right? I'd suggest we leave that analogy behind. Governments just don't work the same way as families do. We have to look at the hard realities of unemployment, taxes and deficits. For instance, every unemployed worker is someone who is not paying taxes. If we're not collecting taxes from the unemployed, then we've got to collect more taxes from everyone who is working. Either that, or we have to cut back on services. If we go with option one and raise taxes on middle and low income earners, they'll have less money to spend on goods and services. When demand goes down, businesses contract--meaning layoffs in the private sector. But if we go with option two and cut government services, we'll have to lay off public sector workers. Now we won't be collecting their taxes, and the downward cycle continues. Plus, we don't get the services. Or, we could spend the money to create the jobs and just let the deficit rise a bit more. The very thought makes politicians and the public weak in the knees. But in fact this would start a virtuous cycle that would eventually reduce the deficit: Our newly reemployed people start paying taxes again. And with their increased income, they start buying more goods and services. This new demand leads to more hiring in the private sector. These freshly hired private sector workers start paying taxes too. The federal budget swells with new revenue, and the deficit drops. But let's say you just can't stomach letting the deficit rise right now. You think the government is really out of money--or maybe you hate deficits in principle. There's an easy solution to your problem. Place a windfall profits tax on Wall Street bonuses. Impose a steep tax on people collecting $3 million or more. (Another way to do it is to tax the financial transactions involved in speculative investments by Wall Street and the super-rich.) After all, those fat bonuses are unearned: The entire financial sector is still being bankrolled by the taxpayers, who just doled out $10 trillion (not billion) in loans and guarantees. Besides, taxing the super-rich doesn't put a dent in demand for goods and services the way taxing other people does. The rich can only buy so much. The rest goes into investment, much of it speculative. So a tax on the super rich reduces demand for the very casino type investments that got us into this mess.

3. Private sector jobs are better that public sector jobs. Why is that? There is a widely shared perception that having a public job is like being on the dole, while having a private sector job is righteous. Maybe people sense that in the private sector you are competing to sell your goods and services in the rough and tumble of the marketplace--and so you must be producing items that buyers want and need. Government jobs are shielded from market forces. But think about some of our greatest public employment efforts. Was there anything wrong with the government workers at NASA who landed us on the moon? Or with the public sector workers in the Manhattan project charged with winning World War II? Are teachers at public universities somehow less worthy than those in private universities? Let's be honest: a good job is one that contributes to the well-being of society and that provides a fair wage and benefits. During an employment crisis, those jobs might best come directly from federal employment or indirectly through federal contracts and grants to state governments. This myth also includes the notion that the private sector is more efficient than the public sector. Sometimes it is, but mostly it isn't. Take health care, which accounts for nearly 17 percent of our entire economy. Medicare is a relative model of efficiency, with much lower administrative costs than private health insurers. The average private insurance company worker is far less productive and efficient than an equivalent federal employee working for Medicare. (See study by Himmelstein, Woolhandler and Wolfe) 4. Big government suffocates our freedom. The smaller the central government, the better -- period, the end. This is the hardest argument to refute because it is about ideology not facts. Simply put, many Americans believe that the federal government is bad by definition. Some don't like any government at all. Others think power should reside mostly with state governments. This idea goes all the way back to the anti-federalists led by Thomas Jefferson, who feared that yeomen farmers would be ruled (and feasted upon) by far-away economic elites who controlled the nation's money and wealth. In modern times this has turned into a fear of a totalitarian state with the power to tell us what to do and even deny us our most basic liberties. A government that creates millions of jobs could be seen as a government that's taking over the economy (like taking over GM). It just gets bigger and more intrusive. And more corrupt and pork-ridden. (There's no denying we've got some federal corruption, but again the private sector is hardly immune to the problem. In fact, it lobbies for the pork each and every day.) It's probably impossible to convince anyone who hates big government to change their minds. But we need to consider what state governments can and cannot do to create jobs. Basically, their hands are tied precisely because they are not permitted by our federal constitution to run up debt. So when tax revenues plunge (as they still are doing) states have to cut back services and/or increase taxes. In effect, the states act as anti-stimulus programs. They are laying off workers and will continue to do so until either the private sector or the federal government creates many more jobs. Unlike the feds, states are in no position to regulate Wall Street. They're not big enough, not strong enough and can easily be played off against each other. While many fear big government, I fear high unemployment even more. That's because the Petri dish for real totalitarianism is high unemployment -- not the relatively benign big government we've experienced in America. When people don't have jobs and see no prospect for finding them, they get desperate -- maybe desperate enough to follow leaders who whip up hatred and trample on people's rights in their quest for power. Violent oppression of minority groups often flows from high unemployment. So does war. No thanks. I'll take a government that puts people to work even if it has to hire 10 million more workers itself. We don't have to sacrifice freedom to put people to work. We just have to muster the will to hire them.

For most of the last 1,500 years, the river supported a sustainable salmon economy. Salmon were at the heart of all the Klamath’s tribal cultures, and Indians were careful not to over-harvest them. Each summer, the lower Klamath’s Yurok and Hoopa tribes blocked the upstream paths of spawning salmon with barriers; then, after ten days of fishing, they removed the barriers, allowing upstream tribes to take their share. As the salmon completed their lifecycle, dying in the waters where they’d been spawned, they enriched the watershed with nutrients ingested during years in the ocean. Among the beneficiaries were at least 22 species of mammals and birds that eat salmon. Even the salmon carcasses that bears left behind on the riverbanks fertilized trees that provided shade along the river’s banks, cooling its waters so that the next generation of vulnerable juvenile salmon could survive. “We tried to go to court, to go through the political process, but it didn’t work. …The big issues were still out there, and we still had to resolve them.” Salmon’s biological family may have started in the age of dinosaurs a hundred million years ago. They’ve survived through heat waves and droughts, in rivers of varying flow, temperature, and nutrient load – but they were as ill-prepared for Europeans’ arrival as the Indians themselves. Gold miners who showed up in the mid-nineteenth century washed entire hillsides into the river with high-pressure hoses and scoured the river’s bed with dredges. Loggers dragged trees down streambeds, causing massive erosion, and dumped sawdust into the river, smothering incubating salmon eggs. Cattle grazed at the river’s edge, causing soil erosion and destroying shade-giving vegetation. Farmers diverted water to feed their crops. The dams were the crowning blows. Between 1908 and 1962, six dams were built on the Klamath. The tallest, the 173-foot-high Iron Gate, is the farthest downstream, and definitively blocked salmon from the river’s upper quarter – after it was built, the river’s salmon population plummeted. In addition, the dams devastated water quality by promoting thick growths of toxic algae in the reservoirs. For Klamath basin farmers, however, the dams were deemed indispensable, as they generated hydropower that made pumping of their irrigation water possible.To the farmers, the potential loss of the dams’ hydropower was considered no less crippling than an end to Klamath-supplied irrigation.

For most of the last century, the farmers were oblivious to the damage that dams and water diversions caused downstream, while the tribes and commercial fishermen quietly seethed. The annual salmon run, once so abundant that people caught fish with their hands, was roughly pegged at more than a million fish at its peak; in recent years it has dropped to perhaps 200,000 in good years, and as low as 12,000 – below the minimum believed necessary to sustain the runs – in bad years. Spring Chinook, which once comprised the river’s dominant salmon run, entirely disappeared. Two fish species – the Lost River sucker and the shortnose sucker – that once supported a commercial fishery, were listed as endangered in 1988. Coho salmon were listed as threatened nine years later. All this has had a devastating impact on the tribes. Traditionally able to sustain themselves throughout the year on seasonal migrations of the river’s salmon, trout, and candlefish, tribal members suffered greatly as the runs declined or went extinct. For four decades beginning in 1933, the tribes were barred from fishing the river even as commercial fishermen went unrestricted. Members of the Karuk tribe once consumed an estimated average of 450 pounds of salmon a year; a 2004 survey found that the average had dropped to five pounds a year. The survey linked salmon’s absence to epidemics of diabetes and heart disease that now plague the Karuk. The 2001 cutoff left farmers without irrigated water for the first time in the Klamath Project’s history. Over the next four months, many farmers performed repeated acts of civil disobedience, most notably when a bucket brigade passed pails of banned water from its lake storage to an irrigation canal while thousands of onlookers cheered. The protests attracted Christian-fundamentalist, anti-government, and property rights advocates from throughout the West; former Idaho Congresswoman Helen Chenoweth-Hage likened the farmers’ struggle to the American Revolution.

University of Edinburgh law lecturer Andres Guadamuz wrote a blog entry this week highlighting some particularly troubling aspects of the IIPA's 301 recommendations. The organization has condemned Indonesia and several other countries for encouraging government adoption of open source software. According to the IIPA, official government endorsements of open source software create "trade barriers" and restrict "equitable market access" for software companies. The profound absurdity of this accusation is exacerbated by the fact that Indonesia's move towards open source software was almost entirely motivated by a desire to eliminate the use of pirated software within the government IT infrastructure. It's important to understand that Indonesia has not mandated the adoption of open source software or barred government agencies from purchasing proprietary commercial software. The Indonesian government issued a statement in 2009 informing municipal governments that they had to stop using pirated software. The statement said that government agencies must either purchase legally licensed commercial software or switch to free and open source alternatives in order to comply with copyright law. This attempt by Indonesia to promote legal software procurement processes by endorsing the viability of open source software has apparently angered the IIPA. In its 301 recommendations for Indonesia, the IIPA demands that the government rescind its 2009 statement. According to the IIPA, Indonesia's policy "weakens the software industry and undermines its long-term competitiveness" because open source software "encourages a mindset that does not give due consideration to the value to intellectual creations [and] fails to build respect for intellectual property rights." The number of ways in which the IIPA's statements regarding open source software are egregiously misleading and dishonest are too numerous to count. The IIPA seems to have completely missed the fact that there is a very robust ecosystem of commercial software vendors in the open source software market and that open source software is at the heart of some of the most popular consumer electronics products that are sold in the United States. It has clearly become an important part of the US software economy and increasingly serves as an enabler of innovation and technological progress. In light of the profitability of Red Hat and other open source leaders, it seems absurd to contend that open source software adoption will weaken the software industry or reduce its competitiveness. In fact, the emergence of open source software has contributed to creating a more competitive landscape in the software industry by offering alternative business models that enable smaller companies to gain traction against the dominant incumbent players. The IIPA's position is profoundly hypocritical, because many parts of the US government, including the Department of Defense, have issued their own memos endorsing open source software adoption. The IIPA's disingenuous move to equate open source software with piracy reeks of desperation. The BSA and other IIPA members are likely losing sleep over open source software because that development model and approach to licensing will empower developing countries to build their own domestic IT industries, eliminating the need for them to tithe to American software giants. It's another failing of the 301 review, which Big Content wants used to coerce other countries into adopting ever-more-stringent copyright laws.

We know that the Obama administration will not go after the banksters that created this global financial calamity. It has been thoroughly co-opted by Wall Street's fifth column, who hold most of the important posts in the administration. Europe has even more at stake and has shown somewhat more willingness to take action. Perhaps our only hope for retribution lies there.

Some might believe the term "banksters" is too mean. Surely Wall Street was just doing its job -- providing the financial services wanted by the world. Yes, it all turned out a tad unfortunate but no one could have foreseen that so many of the financial innovations would turn into black swans. And hasn't Wall Street learned its lesson and changed its practices? Fat chance. We know from internal emails that everyone on Wall Street saw this coming -- indeed, they sold trash assets and placed bets that they would crater. The crisis was not a mistake -- it was the foregone conclusion. The FBI warned of an epidemic of fraud back in 2004 -- with 80% of the fraud on the part of lenders. As Bill Black has been warning since the days of the Saving and Loan crisis, the most devastating kind of fraud is the "control fraud," perpetrated by the financial institution's management. Wall Street is, and was, run by control frauds. Not only were they busy defrauding the borrowers, like Greece, but they were simultaneously defrauding the owners of the firms they ran. Now add to that list the taxpayers that bailed out the firms. And Goldman is front and center when it comes to bad apples. Lest anyone believe that Goldman's executives were somehow unaware of bad deals done by rogue traders, William Cohan reports that top management unloaded their Goldman stocks in March 2008 when Bear crashed, and again when Lehman collapsed in September 2008. Why? Quite simple: they knew the firm was full of toxic waste that it would not be able to continue to unload on suckers -- and the only protection it had came from AIG, which it knew to be a bad counterparty. Hence on March 19, Jack Levy (co-chair of M&As) sold over $5 million of Goldman's stock and bet against 60,000 more shares; Gerald Corrigan (former head of the NY Fed who was rewarded for that tenure with a position as managing director of Goldman) sold 15,000 shares in March; Jon Winkelried (Goldman's co-president) sold 20,000 shares. After the Lehman fiasco, Levy sold over $6 million of Goldman shares and Masanori Mochida (head of Goldman in Japan) sold $56 million worth. The bloodletting by top management only stopped when Goldman got Geithner's NYFed to produce a bail-out for AIG, which of course turned around and funneled government money to Goldman. With the government rescue, the control frauds decided it was safe to stop betting against their firm. So much for the "savvy businessmen" that President Obama believes to be in charge of Wall Street firms like Goldman.

From 2001 through November 2009 (note the date -- a full year after Lehman) Goldman created financial instruments to hide European government debt, for example through currency trades or by pushing debt into the future. But not only did Goldman and other financial firms help and encourage Greece to take on more debt, they also brokered credit default swaps on Greece's debt-making income on bets that Greece would default. No doubt they also took positions as the financial conditions deteriorated-betting on default and driving up CDS spreads. But it gets even worse: An article by the German newspaper, Handelsblatt, ("Die Fieberkurve der griechischen Schuldenkrise", Feb. 20, 2010) strongly indicates that AIG, everybody's favorite poster boy for financial deviancy, may have been the party which sold the credit default swaps on Greece (English translation here). Generally, speaking, these CDSs lead to credit downgrades by ratings agencies, which drive spreads higher. In other words, Wall Street, led here by Goldman and AIG, helped to create the debt, then helped to create the hysteria about possible defaults. As CDS prices rise and Greece's credit rating collapses, the interest rate it must pay on bonds rises-fueling a death spiral because it cannot cut spending or raise taxes sufficiently to reduce its deficit. Having been bailed out by the Obama Administration, Wall Street firms are already eyeing other victims (and for allowing these kinds of activities to continue, the US Treasury remains indirectly complicit, another good reason why one shouldn't expect any action coming out of Washington). Since the economic collapse is causing all Euronations to run larger budget deficits and at the same time is raising CDS prices and interest rates, it is easy to pick off nation after nation. This will not stop with Greece, so it is in the interest of Euroland to stop the vampires now. With Washington unlikely to do anything to constrain Goldman, it looks like the European Union, which is launching a major audit, just might banish the bank from dealing in government debt. The problem is that CDS markets are essentially unregulated so such a ban will not prevent Wall Street from bringing down more countries-because they do not have to hold debt in order to bet against it using CDSs. These kinds of derivatives have already brought down an entire continent -- Asia -- in the late 1990s , and yet authorities are still standing by and basically doing nothing when CDSs are being used again to speculatively attack Euroland. The absence of sanctions last year, when we had a chance to deal with this problem once and for all, has simply induced even more outrageous and fundamentally anti-social behavior. It has pitted neighbor against neighbor -- with, for example, Germany and Greece lobbing insults at one another (Greece has requested reparations for WWII damages; Germany has complained about subsidizing what it perceives to be excessive social spending in Greece). Of course, as far as Greece goes, the claim now is that these types of off balance sheet transactions in which Goldman and others engaged were not strictly "illegal" under EU law. But these are precisely the kinds of "shadow banking transactions" that almost brought down the global financial system 18 months ago. Literally a year after the Lehman bankruptcy -- MONTHS after Goldman itself was saved from total ruin, it was again engaging in these kinds of deals. And it wasn't exactly a low-level functionary or "rogue trader" who was carrying out these transactions on behalf of Goldman. Gary Cohn is Lloyd "We're doing God's work" Blankfein's number 2 man. So it's hard to believe that St. Lloyd did not sanction the activities as well in advance of collecting his "modest" $9m bonus for last year's work.

"People tend to conform their factual beliefs to ones that are consistent with their cultural outlook, their world view," Braman says. The Cultural Cognition Project has conducted several experiments to back that up. Participants in these experiments are asked to describe their cultural beliefs. Some embrace new technology, authority and free enterprise. They are labeled the "individualistic" group. Others are suspicious of authority or of commerce and industry. Braman calls them "communitarians." In one experiment, Braman queried these subjects about something unfamiliar to them: nanotechnology — new research into tiny, molecule-sized objects that could lead to novel products. "These two groups start to polarize as soon as you start to describe some of the potential benefits and harms," Braman says. The individualists tended to like nanotechnology. The communitarians generally viewed it as dangerous. Both groups made their decisions based on the same information. "It doesn't matter whether you show them negative or positive information, they reject the information that is contrary to what they would like to believe, and they glom onto the positive information," Braman says.

"Basically the reason that people react in a close-minded way to information is that the implications of it threaten their values," says Dan Kahan, a law professor at Yale University and a member of The Cultural Cognition Project. Kahan says people test new information against their preexisting view of how the world should work. "If the implication, the outcome, can affirm your values, you think about it in a much more open-minded way," he says. And if the information doesn't, you tend to reject it. In another experiment, people read a United Nations study about the dangers of global warming. Then the researchers told the participants that the solution to global warming is to regulate industrial pollution. Many in the individualistic group then rejected the climate science. But when more nuclear power was offered as the solution, says Braman, "they said, you know, it turns out global warming is a serious problem."And for the communitarians, climate danger seemed less serious if the only solution was more nuclear power.

The "Facebook Subpoena/Search Warrant Guidelines" from the Cryptome site are dated 2008, so there's a chance they've been superseded. The document spells out how law enforcement and intelligence agenices should go about requesting information about Facebook users, and details what information is turned over. Following is what Facebook will turn over about you, taken verbatim from the guide: Types of Information Available User Neoprint The Neoprint is an expanded view of a given user profile. A request should specify that they are requesting a “Neoprint of used Id XXXXXX”. User Photoprint The Photoprint is a compilation of all photos uploaded by the user that have not been deleted, along with all photos uploaded by any user which have the requested user tagged in them. A request should specify that they are requesting a “Photoprint of user Id XXXXXX”. User Contact Info All user contact information input by the user and not subsequently deleted by the user is available, regardless of whether it is visible in their profile. This information may include the following: Name Birth date Contact e-mail address(s) Physical address City State Zip Phone Cell Work phone Screen name (usually for AOL Messenger/iChat) Website With the exception of contact e-mail and activated mobile numbers, Facebook validates none of this information. A request should specify that they are requesting "Contact information of user specified by [some other piece of contact information]". No historical data is retained. Group Contact Info Where a group is known, we will provide a list of users currently registered in a group. We will also provide a PDF of the current status of the group profile page. A request should specify that they are requesting "Contact information for group XXXXXX". No historical data is retained. IP Logs IP logs can be produced for a given user ID or IP address. A request should specify that they are requesting the "IP log of user Id XXXXXX" or "IP log of IP address xxx.xxx.xxx.xxx". The log contains the following information: * Script – script executed. For instance, a profile view of the URL http://www.facebook.com/profile.php?id=29445421 would populate script with "profile.php" * Scriptget – additional information passed to the script. In the above example, scriptget would contain "id=29445421" * Userid – The Facebook user id of the account active for the request * View time – date of execution in Pacific Time * IP – source IP address IP log data is generally retained for 90 days from present date. However, this data source is under active and major redevelopment and data may be retained for a longer or shorter period. Special Requests The Facebook Security Team may be able to retrieve specific information not addressed in the general categories above. Please contact Facebook if you have a specific investigative need prior to issuing a subpoena or warrant.

Comcast The Comcast document is labeled "Comcast Cable Law Enforcement Handbook," and is dated 2007, so there's a possibility that it, too, has been superseded. As with the other documents, it explains how law enforcement agenices can get information, and details what information is available. There's a great deal of detail in the 35-page document, which describes what Internet, phone, and television information will be turned over. For example, here's the IP information it will make available: Comcast currently maintains Internet Protocol address log files for a period of 180 days. If Comcast is asked to respond for information relating to an incident that occurred beyond this period, we will not have responsive information and can not fulfill a legal request. (Comcast can process and respond to preservation requests as outlined below in this Handbook.) As expected, Comcast will also turn over the emails, including attachments, of those who use Comcast's email service, but "In cases involving another entity’s email service or account, Comcast would not have any access to or ability to access customer email in response to a legal request." Information Comcast turns over to law enforcement agencies varies according to the request. For example, a grand jury subpoena will yield more information than a judicial summons, as you can see in the excerpt below. Comcast notes, though, that this is just a sample, and that "Each request is evaluated and reviewed on a case by case basis in light of any special procedural or legal requirements and applicable laws." So the examples "are for illustration only."

For those who worry about privacy, though, all of this information is small potatoes. The real worry is about the use of what are called pen registers or trap-and-trace devices, which essentially capture all of your Internet activity --- the Web sites you visits, the emails you send and receive, IM traffic, downloads, and so on. Here's what the document says about them: Pen Register / Trap and Trace Device Title 18 U.S.C. § 3123 provides a mechanism for authorizing and approving the installation and use of a pen register or a trap and trace device pursuant to court order. All orders must be coordinated prior to submission to Comcast. Law enforcement will be asked to agree to reimburse Comcast's reasonable costs incurred to purchase and/or install and monitor necessary equipment. See "Reimbursement," below.

So in coming to this meeting of some of the very best in the field -- from Elizabeth Warren to George Soros -- I was keen to hear just what the strategy was to restore us to some sort of financial sanity. How could we avoid it again? Yet through the course of the morning, I was struck by two very different and very depressing points. The first is that things are actually much worse than anyone ever talks about. The pivot points of our financial system -- the infrastructure that lets free markets produce real wealth -- have become profoundly corrupted. Balance sheets are "fictions," as Professor Frank Partnoy put it. Trillions of dollars in liability hide behind these fictions. And as expert after expert demonstrated, practically every one of the design flaws that led to the collapse of the past few years remains essentially unchanged within our financial system still. That bubble burst, but we can already see the soaring profits of the same firms that sucked billions in taxpayer funds. The cycle has started again. But the second point was even worse. Expert after expert spoke as if the problems we faced were simple math errors. As if regulators had just miscalculated, like a pilot who accidentally overshoots the run way, or an engineer who mis-estimates the weight of cargo on a plane. And so, because these were mere errors, people spoke as if these errors could be corrected by a bunch of good ideas. The morning was filled with good ideas. An angry earnestness was the tone of the day.

There were exceptions. The increasingly prominent folk-hero for the middle class, Elizabeth Warren, tied the endless list of problems to the endless power of "the banking lobby." But that framing was rare. Again and again, we were led back to a frame of bad policies that smart souls could correct. At least if "the people" could be educated enough to demand that politicians do something sensible. This is a profound denial. The gambling on Wall Street was not caused by the equivalent of errors in arithmetic. It was caused by a corruption of the system by which we regulate those markets. No true theorist of free markets -- and certainly none of the heroes of even the libertarian right -- believe that infrastructure markets like financial systems can be left free of any regulation, including the regulation of rules against fraud. Yet that ignorant anarchy was the precise rule that governed a large part of our financial system. And not by accident: An enormous amount of political influence was brought to bear on the regulators of these core institutions of a free market to get them to turn a blind eye to Wall Street's "innovations." People who should have known better yielded to this political pressure. Smart people did stupid things because "the politics" of doing right was impossible. Why? Why was their no political return from sensible policy? The answer is so obvious that one feels stupid to even remark it. Politicians are addicts. Their dependency is campaign cash. And in their obsessive search for campaign funds, they let these funders convince them that for the first time in capitalism's history, markets didn't need the basic array of trust-producing regulation. They believed this insanity because it made it easier for them -- in good faith -- to accept the money and steer financial policy over the cliff. Not a single presentation the whole morning focused this part of the problem. There wasn't even speculation about how we could build an alternative to this campaign funding system of pathological dependency, so that policy makers could afford to hear sense rather than obsessively seek campaign dollars. The assembled experts were even willing to brainstorm about how to educate ordinary Americans about the intricacies of financial regulation. But the idea of changing the pathological economy of influence that governs how Washington governs wasn't even a hint. We need to admit our (democracy's) problem. We need to get beyond this stage of denial. We need to recognize that until we release our leaders from a system that forces them to ignore good sense when there is an opportunity for large campaign cash, we won't have policy that makes sense. Wall Street continues unchanged because the Congress that would change it is already shuttling to Wall Street fundraisers. Both parties are already pandering to this power, so they can find the fix to fund the next cycle of campaigns. Throughout the morning, expert after expert celebrated the brilliance in Franklin Roosevelt's response to the Nation's last truly great financial collapse. They yearned for a modern version of his system of regulation. But we won't get to Franklin Roosevelt's brilliance till we accept Teddy Roosevelt's insight -- that privately funded public elections tend inevitably towards this kind of corruption. And until we solve that (eminently solvable) problem, we won't make any progress in making America's finances safe again.

Why haven't the President and Senate Democrats pulled the reconciliation trigger before now? I haven't spoken directly with the President or with Harry Reid but I've spent the last several weeks sounding out contacts on the Hill and in the White House to find an answer. Here are the theories. None of them justifies waiting any longer. Reconciliation is too extreme a measure to use on a piece of legislation so important. I hear this a lot but it's bunk. George W. Bush used reconciliation to enact his giant tax cut bill in 2003 (he garnered only 50 votes for it in the Senate, forcing Vice President Cheney to cast the deciding vote). Six years before that, Bill Clinton rounded up 51 votes to enact the Children's Health Insurance Program (CHIP), the largest expansion of taxpayer-funded health insurance coverage for children in the U.S. since Medicaid began in the 1960s. Through reconciliation, we also got Medicare Advantage. Also through reconciliation came the COBRA act, which gives Americans a bit of healthcare protection after they lose a job ("reconciliaton is the "R" in the COBRA acronym.) These were all big, important pieces of legislation, and all were enacted by 51 votes in the Senate. Use of reconciliation would infuriate Senate Republicans. It may. So what? They haven't given Obama a single vote on any major issue since he first began wining and dining them at the White House. In fact, Senate Minority Leader Mitch McConnell and company have been doing everything in their power to undermine the President. They're using the same playbook Republicans used in the first two years of the Clinton administration, hoping to discredit the President and score large victories in the midterm elections by burying his biggest legislative initiative. Indeed, Obama could credibly argue that Senate Republicans have altered the rules of the Senate by demanding 60 votes on almost every initiative - a far more extensive use of the filibuster than at any time in modern history - so it's only right that he, the President, now resort to reconciliation. Obama needs Republican votes on military policy so he doesn't dare antagonize them on health care. I hear this from some quarters but I don't buy it. While it's true that Dems are skeptical of Obama's escalation of the war in Afghanistan and that Republicans are his major backers, it seems doubtful R's would withdraw their support if the President forced their hand on health care. Foreign policy is the one area where Republicans have offered a halfway consistent (and always bellicose) voice, and Dick Cheney et al would excoriate them if they failed to back a strong military presence in the Middle East. This is truer now than ever. Reid fears he can't even get 51 votes in the Senate now, after Scott Brown's win. Reid counts noses better than I do, but if Senate Democrats can't come up with even 51 votes for the health care reforms they enacted weeks ago they give new definition to the term "spineless." Besides, if this is the case, Obama ought to be banging Senate heads together. A president has huge bargaining leverage because he presides over an almost infinite list of future deals. Lyndon Johnson wasn't afraid to use his power to the fullest to get Medicare enacted. If Obama can't get 51 Senate votes out of 58 or 59 Dems and Independents, he definitely won't be able to get 51 Senate votes after November. Inevitably, the Senate will lose some Democrats. Now's his last opportunity. House and Senate Democrats are telling Obama they don't want to take another vote on health care or even enact it before November's midterms because they're afraid it will jeopardize their chances of being reelected and may threaten their control over the House and Senate. I hear this repeatedly but if it's true Republicans have done a far better job scaring Americans about health care reform than any pollster has been able to uncover. Most polls still show a majority of Americans still in favor of the basic tenets of reform - expanded coverage, regulations barring insurers from refusing coverage because of someone's preexisting conditions and preventing insurers from kicking someone off the rolls because they get sick, requirements that employers provide coverage or pay into a common pool, and so on. And now that many private insurers are hiking up premiums, co-pays, and deductibles, the public is even readier to embrace reform.