Bet On Hypocrisy - Rangel Stays in The Hen House!

Kornacki supports my previous comments in his ending statement that: 'Democrats would rather take the heat from Republicans than go to war with themselves.' So much for "change" in ethics under Pelosi. Rangel is a sly fox and he will, most assuredly, be allowed to remain in the hen house - bet on it. (See 1 below.)

Barney Frank somewhat displeased with Obama's decision not to be as engaged as Frank thinks Obama should be. (See 2 below.)

This from a fellow memo reader regarding the market outlook. (See 3 below.)

If you want the height of hypocrisy you should have watched the Congressional Auto hearings chaired by Sen. Dodd. Here you have elected officials who are bankrupting the country by either their outrageous management skills and/or piggish self dealing grilling executives who ran businesses largely crippled by political decisions that favored union constituents.

I have been critical of auto management for years and there is enough mismanagement and blame to go round. However, the industry was subject to anti-trust laws while the unions were not, so the unions played one company off against each other. That said, the government imposed all kind of dumb laws, beginning with CAFE, on the industry forcing them to make cars no one would buy and even if they did they lost money making and selling them.

Now Congress holds hearing and the auto executives come hat in hand and are being humiliated by Senators who are interested in grandstanding and laying off blame. What these executives should be doing is telling the American people the truth about why the industry is in its current plight but beggars cannot bite the hand that feeds them.

These executives were also accused earlier of flying to DC in private jets, which was stupid on their part, while Congress does it all the time. These hearings are the height of hypocrisy and do more to demonstrate the problem than will lead a way to a solution.

Watching an arrogant Nardelli (formerly ran Home Deot into the ground) humbled wasn't all bad I must admit.(See 4 and 4a below.)

Syria back in nuclear business? Water samples reveal yes! (See 5 below.)

Have a great weekend.

Dick


1) Why Charlie Rangel Is Still Smiling
By Steve Kornacki


Charlie Rangel's perch as the chairman of the mighty House Ways and Means Committee is in danger. Supposedly.

The 78-year-old Harlem Democrat, a fixture on Capitol Hill since 1971, has been the subject of a stream of revelations about potential financial and ethical improprieties, the sort of never-ending scandal that would pose a serious threat to his electability if he represented a marginally competitive district. But New York's 15th District is tailor-made for an entrenched Democratic incumbent to stay in office as long as he wants, so Rangel need not fear the wrath of the voters.

The only real threat to a congressional lifer like Rangel is internal, from within the ranks of his fellow Democrats in the U.S. House. If they want to strip him of his powerful Ways and Means gavel, they can. And, technically, that is what they are now mulling, with the House Committee on Standards of Official Conduct -- otherwise known as the ethics committee -- set to report back on his supposed misdeeds just before the new Congress convenes in early January. But don't hold your breath waiting for any drama.

Even if Speaker Nancy Pelosi and a majority of the Democratic caucus were inclined to remove Rangel from his post -- and, as of now, it doesn't seem that they are -- numerous obstacles, including the obstinate chairman and his allies and some recent history within the Democratic caucus, would make it a trying experience for them.

Start with the the ethics committee itself. It's no accident that Rangel is the one who actually requested that the panel review his case, or that he declared this week, "Am I confident? You're damn right. I'm the one who asked for it."

The House ethics committee has a richly earned reputation for giving its colleagues the benefit of the doubt. Rangel has found the perfect body to hear out his various denials and explanations. Very likely, the panel will either clear Rangel or, at worst, declare him guilty of a slight, venial infraction or two. It will be a surprise if the report includes any real ammunition for those hoping to push him out.

Then there are the realities of the Democratic caucus, which, much more than the G.O.P. side, is divided into several powerful camps. One of the most powerful is the Congressional Black Caucus, of which Rangel is among the most senior members. And within the C.B.C., issues of committee chairmanships and assignments are particularly sensitive now, after Pelosi targeted several of the group's members over the past few years.

An ugly fight nearly erupted, for instance, in the summer of 2006, when Pelosi, then the minority leader, decided to take on William Jefferson, the since-indicted New Orleans congressman whose home had just been raided by the F.B.I. -- which discovered $90,000 in cash in his freezer. Republicans accused the Democrats, who had been profiting mightily from a series of ethical scandals involving Congressional Republicans, of hypocrisy. With the November election months away and her party in its best position in years to reclaim the House, Pelosi considered it essential to make an example out of Jefferson and began pushing for his expulsion from his seat on the Ways and Means Committee.

To the general public, the move might have seemed like a no-brainer, but she was met with stiff resistance from many C.B.C. members, who pointed out that no formal rules existed for kicking members off committees, and who accused Pelosi of creating an arbitrary standard to go after a black member.

When, as required by caucus rules, she brought the matter to the full Democratic caucus that June, chaos erupted, with C.B.C. members and their allies offering a motion that would table the Jefferson matter until formal guidelines were established for committee expulsions. After lengthy debate, the matter was rejected, and then, after some more debate, Jefferson's ouster was finally approved, with nearly 60 Democrats voting against it.

What's noteworthy about the Jefferson fight is that he had previously alienated many of his colleagues and didn't enjoy the full support of the C.B.C. Rangel and other influential members, like South Carolina's James Clyburn, sat on their hands while Pelosi pursued Jefferson, refusing to add their voices. As a result, the conflict didn't explode into a full-fledged public fight. But it also served as a warning to Pelosi: If going after someone like Jefferson caused her that much grief, then she'd better not try to touch anyone with real support.

A few months later, though, she did - but the rules were a little different. After the '06 elections, when her party won back the majority, Pelosi decided to deny her California rival, Jane Harman, the chairmanship of the House Intelligence Committee, a panel that operates under a slightly different set of rules than other House committees. Next in line for the gavel, in terms of seniority, was Florida's Alcee Hastings, a one-time federal judge who had been impeached and convicted on bribery and perjury charges by Congress in 1989. Still eligible to run for office, he went on to win a House seat from Florida in 1992 and then began racking up seniority.

Appointing Hastings to run the Intelligence Committee, which deals with sensitive national security information, would have been a public relations disaster for the incoming speaker and her Democratic colleagues, so she passed him over in favor of Texas' Silvestre Reyes (who promptly flunked a reporter's pop quiz on whether Al Qaeda is a Sunni or Shiite group). This time, Pelosi didn't need to go through the full caucus for approval, but by moving against a second C.B.C. member in a few months, she made doing so in the future that much tougher.

Which brings us to Rangel's case. Unlike Jefferson, he enjoys deep and enduring support from the C.B.C., not to mention many senior colleagues outside of the group. The full-fledged fight that Pelosi managed to avoid in Jefferson's case would almost certainly break out if she turned her guns on Rangel, creating potentially crippling divisions within the Democratic caucus just as Barack Obama takes office. For the C.B.C., giving up Jefferson and Hastings was one thing; Rangel would be an entirely different matter.

Plus, Democrats just went through an ugly committee fight, with Henry Waxman successfully dethroning John Dingell as the Energy and Commerce chairman. Pelosi was publicly neutral in the race, but few doubt that she was with Waxman, her longtime ally and ideological soul mate from California, behind the scenes. Democrats in the House do not take targeting committee chairmen, and by extension the seniority system, lightly. Especially if the ethics committee's report isn't too harsh, Rangel would stand to get the benefit of the doubt from many of them.

Given the historic opportunity that waits Democrats on January, when a president willing to sign their legislation will take office, it probably won't make sense for Pelosi to embark on a protracted and highly public chairmanship fight that would pit members of her own caucus against one another. It's also worth noting that she decided last year to maintain the three-term committee chairmanship limit imposed by Republicans in 1995. That means she'll be rid of Rangel by 2012, if he hangs on now.

The most likely outcome of this fiasco, then, is that Republicans will spend the early weeks of the new Congress shouting to the heavens about Rangel's ethics, offering resolutions to strip him of his chairmanship, and challenging Democrats to join them. As theater, it won't be bad. But Democrats will probably decide that they'd rather take the heat from the G.O.P. than go to war with themselves.

2) Democrats: Obama needs hands-on economic approach
By JIM KUHNHENN

WASHINGTON – Democrats are growing impatient with President-elect Barack Obama's refusal to inject himself in the major economic crises confronting the country. Obama has sidestepped some policy questions by saying there is only one president at a time. But the dodge is wearing thin. "He's going to have to be more assertive than he's been," House Financial Services Committee Chairman Barney Frank, D-Mass., told consumer advocates Thursday.

Frank, who has been dealing with both the bailout of the financial industry and a proposed rescue of Detroit automakers, said Obama needs to play a more significant role on economic issues.

"At a time of great crisis with mortgage foreclosures and autos, he says we only have one president at a time," Frank said. "I'm afraid that overstates the number of presidents we have. He's got to remedy that situation."

Obama has maintained one of the most public images of any president-elect. He has held half a dozen press conferences, where he has entertained question after question about the economy, the mortgage crisis, and the flailing auto industry. He called for passage of extended unemployment benefits — which has passed — and even a stimulus package if possible before Jan. 20. But he has stayed away from trying to dictate remedies for the toughest problems Congress is confronting: the auto industry's troubles and how to spend the $700 billion bailout.

Frank's remarks came as the Bush administration considers whether it needs the second half of the $700 billion of the Troubled Asset Relief Program aimed at helping the financial sector before Obama takes office on Jan. 20.

An Obama official said the Bush administration reached out to the transition team about tapping into the money. The official, speaking on the condition of anonymity because of the sensitivity of the talks, said Obama's transition team urged the administration to talk to bipartisan congressional leaders and assemble a meeting between the White House and Congress. The official said the Obama team offered to participate in a bipartisan meeting if it would be helpful.

Earlier this week, Obama was asked whether he worried that Treasury Secretary Henry Paulson might begin spending the next installment of the money before he assumes the presidency. Obama demurred.

"Until Secretary Paulson indicates publicly that he's drawing down the second tranche, the second half of the TARP money, it would be speculation on my part to suggest that that money's going to be used up," he told reporters at a Chicago news conference Wednesday.

Obama did stress that a significant component of the fund should be used to reduce the number of foreclosures. But he did not specify a particular remedy.

He also declined to take a stand in a debate over the source of money for an auto loan package. The dispute has divided Democrats and hindered progress on assistance for the industry. At issue is whether to take money from the $700 billion designated for the financial sector or to take it from a previously approved loan aimed at manufacturing more energy efficient cars.

"I think it's premature to get into that issue," Obama said at the conference.

Presidents-elect typically spend the transition period assembling their cabinets, their White House staff and preparing to take the reins of power. But this transition is occurring at an extraordinary time, with bad economic news mounting by the day and with one of the country's major industries begging for a hand to keep from collapsing.

Two Democratic senators involved in trying to salvage the auto companies have said Obama could help move the process along and should become more engaged.

"The Obama team has to step up," Sen. Christopher Dodd, chairman of the Senate Banking Committee and one of the lead negotiators, said Nov. 21 in Hartford, Conn. "In the minds of the people, this is the Obama administration. I don't think we can wait until January 20."

Two days later, Sen. Carl Levin of Michigan, a point man in helping his state's main industry, called on Obama to help resolve the dispute over money for the auto loan package.

"It would be very helpful if the president-elect would become more involved in resolving the issue over the source of the funds," he said. "I want him to offer his assistance. He is a person who can really bring people together."

Frank, shrewd and quick-witted, also poked fun at Obama's calls for a "post-partisan" governing environment in Washington. Frank predicted that regulatory legislation aimed at preventing abuses related to subprime mortgages and credit cards stood a much better chance next year, when Democrats have greater majorities in the House and Senate.

"It is a grave mistake to assume that parties are irrelevant to this process," he said. "My one difference with the president-elect, about whom I am very enthusiastic, is when he talks about being post-partisan.

"Having lived with this very right wing Republican group that runs the House most of the time, the notion of trying to deal with them as if we could be post-partisan gives me post-partisan depression," Frank said.

3)I received this from one of the finest accountants in the USA who is spending two years in Shanghai, China. He suggests various articles in Portfolio.com.


Wall street really stuck it to the American Public in spades!!


Best regards,




This financial debacle we are currently experiencing just got a whole lot more frightening. Thomas Friedman, a New York Times columnist and one of the very few media writers I trust, wrote a great article today about the financial mess. In his article, he referred to another article in Portfolio.com.( http://www.portfolio.com:80/news-markets/national-news/portfolio/2008/11/11/The-End-of-Wall-Streets-Boom ) Wow. Really opened my eyes. I thought I understood CDOs. I didn't. You really should read these articles; I think they will open your eyes, also. I don't think this financial mess is anywhere close to being over. I am very afraid we have just seen the tip of the iceberg.


When we lost enough money to buy a nice house in Texas, I converted more of my equity investments into CDs. When we lost enough to buy a nice house in the Bay Area, I decided (yesterday) that I better call my Certified Financial Planner in California, who has always given me good advice. (These losses were not caused by wild speculation or an imbalanced portfolio. Our portfolio is more than 50% cash and bonds, and our equities, except for a major stake in PG, are all Morningstar 5 rated funds). Our CFP said that they thought that, while there might be more losses, they did not expect any more major losses, although they did not expect a real turnaround for about a year out. That being said, they recommended holding our highly-rated equities so we would not miss the rebound, when it finally occurs, and since we are not currently using any of our investments for living expenses, we could expect, in the long run, to recoup some of the losses.(Of course, in the long run, I'll be dead). They convinced me to hold on to our equities for the long term.


Then, I read articles in Portoflio.com. It appears there are a lot more questionable assets in major financial institutions than the current bail-out money will begin to cover. I am, by most definitions, a 'sophisticated investor', and I am really starting to get worried. Read the following articles, and I think you'll be worried, too.


As most of you know, I am not a dooms-day predictor but I am truly becoming worried. For what it's worth.


Thomas Friedman, NYT < http://www.nytimes.com/2008/11/26/opinion/26friedman.html?ref=opinion > http://www.nytimes.com/2008/11/26/opinion/26friedman.html?ref=opinion


Portfolio.com < http://www.portfolio.com/news-markets/national-news/portfolio/2008/11/11/The-End-of-Wall-Streets-Boom > http://www.portfolio.com/news-markets/national-news/portfolio/2008/11/11/The-End-of-Wall-Streets-Boom

4)Auto aid deal dicey as Senate skeptics grill GM, Chrysler execs and Dems urge Bush to tap Wall Street rescue funds.
By Christine Tierney and David Shepardson

The chief executives of Detroit's automakers returned to Congress on Thursday offering new concessions in a desperate plea for emergency loans to keep their companies afloat but encountered fresh resistance from lawmakers.

General Motors Corp. appeared to be facing the greatest peril as the CEOs of the Big Three left the Capitol no closer to obtaining the $34 billion they have requested.

As hopes for congressional approval dimmed, House Speaker Nancy Pelosi, D-Calif., and Sen. Majority Leader Harry Reid, D-Nev., urged President George W. Bush late Thursday to tap the Wall Street rescue funds to help the automakers.

In a letter that was also signed by the heads of the committees holding hearings this week, the lawmakers said they were hopeful that they could work "cooperatively" with the administration to "provide urgent assistance and support our domestic auto industry."

The Detroit News has learned that the White House held discussions as recently as Wednesday among various Cabinet departments about how the administration could aid automakers in the event Congress cannot agree on providing funding, but Bush has not decided whether he would step in.

One issue under discussion is whether the administration could shift some of the $700billion Wall Street bailout money to automakers if Congress doesn't act to prevent their collapse.

During a six-hour hearing Thursday, many members of the Senate Banking Committee praised the recovery plans the automakers had submitted to justify federal aid. They also acknowledged that the collapse of an auto company would have grave economic consequences.

Committee Chairman Sen. Chris Dodd, D-Conn., said doing nothing would be tantamount to playing "Russian roulette with our entire economy."

But Dodd told reporters after the hearing that he wasn't certain any deal could be made, and time was running out. "We've got to be a lot further along than where we are today" to call Congress back in session on Monday for a possible vote next week. "I don't want to raise expectations that this is going to be easy... This is a tall order to get done in three or four days."

Some Capitol Hill aides said Congress may end up approving $10 billion in aid next week, delaying a decision on the rest of the money until President-elect Barack Obama takes office. But even that might be difficult to achieve.

President Bush was noncommittal in an NBC interview Thursday: "No matter how important the autos are to our economy, we don't want to put good money after bad," he said. "We want to make sure that the plan they develop is one that ensures their long-term viability for the sake of the taxpayer."

Among Republican lawmakers, several remained adamant in their opposition to a bailout despite dire warnings about the consequences of inaction.

"I believe that we could lose General Motors by the end of this month," said United Auto Workers President Ron Gettelfinger, who joined the Big Three CEOs for the second congressional hearings in a month. The UAW agreed Wednesday to make new concessions to help save the industry.

GM and Chrysler are most urgently in need of a cash infusion. GM said it needed $4 billion this month to stay afloat as part of its $18 billion request in loans and a line of credit.

Chrysler said it needs $4 billion to get through the first quarter of 2009, while Ford Motor Co. has asked for a $9 billion "stand-by" line of credit.

The CEOs received a warmer reception than they did last month, when they were criticized for flying in corporate jets and other lavish perks and for asking for money without offering detailed plans for how they would use and repay it.

Congressional leaders opted not to vote on the loan request two weeks ago but gave the automakers 11 days to return with plans emphasizing fuel-economy and shared sacrifices at all levels.

For Thursday's hearing, GM CEO Rick Wagoner, Ford CEO Alan Mulally and Chrysler LLC CEO Robert Nardelli drove from Michigan in hybrid vehicles and pledged to return home the same way. In the restructuring plans they submitted to Congress, Wagoner and Nardelli agreed to take $1-a-year salaries, and Mulally said he'd do the same if Ford had to access the line of credit it seeks.

Several lawmakers regretted the apparent double-standard between the treatment of the financial firms that were given money with few questions asked and the demands made of the automakers. "You're paying the price because of the way some other matters were handled," Dodd said.

Of the three companies, GM offered the most comprehensive plan, proposing to restructure debt, reduce labor costs, win new labor concessions and close, shrink or sell four brands. GM also pledged to cut 21,000 to 31,000 more jobs by 2012 and close nine more factories.

Lawmakers treated Chrysler as a case apart from the other two, saying they believed the privately owned automaker was trying to stay in business long enough to attract a merger partner. Ford is in comparatively better financial shape than its crosstown rivals.

GM's plight overshadowed the hearing. The 100-year-old automaker is rapidly running out of options. "GM is the reason that we're here," Corker said.

The company has lost more than $70 billion since 2004 and its market share has slumped.

Wagoner, the CEO since 2000, sounded weary as he faced fresh questioning on whether the company needed new management. "I think the leadership team we have is the right one, but I serve at the pleasure of the board," he said.

He conceded that the company was partly to blame for its misfortunes. He even agreed to take the company into bankruptcy if an aid package required GM to meet loan conditions set by the government by March 31 and it failed to do so. Bankruptcy is an option he has repeatedly described as disastrous for GM.

"We're sorry to be asking for this support," Wagoner said. "We're here today because forces beyond our control have pushed us to the brink."

As the senators mulled various options, Robert Bennett, R-Utah, asked GM and Chrysler whether they would agree to merge to get money -- a "shotgun wedding," in his words, aimed at saving money. Wagoner said GM's liquidity needs were the top priority, while Nardelli said he would agree if a merger were a condition for receiving the loans.

Sen. Charles Schumer, D-N.Y., expressed a view common among Democrats when he said the failure of the automakers "would make a sick economy sicker".

He called for the appointment of one person -- such as the Treasury secretary -- to ensure that all stakeholders, including dealers and debt holders, make concessions in the next three or four weeks as a condition of aid. "I don't trust the car company leadership," Schumer said.

The Republican ranking member on the Senate committee, Richard Shelby of Alabama, said he still had serious doubts about aiding automakers, adding he was concerned that the request had grown from $25 billion to $34 billion in just two weeks.

Mark Zandi, chief economist of the Moody's rating agency, said he believed the cost of bailing out the industry would range between $75 billion and $125 billion -- including $25 billion in loans already approved by Congress specifically to help automakers develop more fuel-efficient cars. But the automakers received some understanding from Sen. Sherrod Brown, D-Ohio, who also noted that Wall Street banks had received much larger sums without having to go through what the auto executives CEOs have.

"We are asking extraordinary things of our witnesses today," Brown said. "We did not ask those CEOs of the banks to drive into town in a Wells Fargo armored truck" to collect tens of billions of dollars and they weren't asked for detailed plans.

Wagoner drove up to a Senate office building for the hearing in a prototype plug-in Chevy Volt.

4a)The Concord Coalition's Executive Director Robert Bixby has an Op-Ed in today's Washington Post entitled "Congress in a Glass House." In the article, Bixby draws an analogy between the struggling automobile industry and the nation's long-term fiscal outlook.
It can be viewed online by visiting: http://www.washingtonpost.com/wp-dyn/content/article/2008/12/03/AR2008120302891.html

5) Covert marine operation uncovers Syria's return to plutonium production


In the face of Damascus' refusal to allow UN inspectors access to three suspect "research laboratories, Western agents recently carried out a daring covert operation to collect water samples from the Orontes river in Syria where it drains into the Mediterranean. Intelligence sources report the discoveries were presented to a closed session of the Vienna-based International Atomic Energy Agency's board on Nov. 27-28.

Situated on the river bank near Homs is one of the three research institutes where Syrian, Iranian and North Korean technicians and scientists are suspected of reprocessing plutonium for Syria's clandestine military nuclear program. The Orentes samples confirmed the suspicion that Syria has gone back to the plutonium project which was cut short when Israeli destroyed its reactor at Al Kibar in September 2007.

The Orontes rises at Tal al Musa north of Damascus and south of Homs. It flows into the sea near Antakya, which is north of Latakiya and west of Aleppo, not far from the Turkish border.

The IAEA board meeting was told in general teams how the tainted river samples were obtained. Military sources add that western nuclear technicians collected them from a boat which sailed surreptitiously up to the river mouth in Syria. To make sure of their finding, they collected river water on three different dates in the last two months.

Their discovery tied in with a separate report reaching the nuclear watchdog board that Iran and North Korea were frantically drafting in nuclear specialists to help Syria revive its plutonium reprocessing project. The product is to be stored in protected hideouts.

It was the view of some board members that Tehran and Pyongyang had determined to prove that the Israeli attack had not put Syria off its nuclear program. Both were even more insistent on showing the world that the Iranian nuclear program of which the Syrian project was a part was unstoppable.

Syria and North Korea accordingly renewed their clandestine nuclear cooperation accord on Oct. 22, so making sure of an uninterrupted flow from Pyongyang of nuclear materials, technology and experts for Syria's covert nuclear facilities