Coming Soon: The Clean Government Alliance

Dear Friends and Fellow Citizens,

I know that we have been quiet these past few months.  Please be patient. 

We are still recruiting prominent leaders from Left to Right to join us.  We have some big names behind us and are looking for more. 

We will soon be re-branding ourselves as "The Clean Government Alliance."  We hope you like the name as much as we do.

We are still - as far as we know - the only true Left - Right alliance for reform in the country.  If you believe in our approach, please contribute

Thanks and best wishes,

Stephen Erickson






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Common Sense from the Right and Left

Lew, who?

As pointed out by conservative columnist Tim Carney of the Washington Examiner, our potential next Treasury Secretary, Jack Lew, is a Wall Street insider, former lobbyist and bailout beneficiary.  Carney writes:

"By all accounts, Jack Lew is a serious, smart hard worker. But his resume is everything Barack Obama ran against."

So there's little to no hope that Lew would undo Wall Street's control of the Treasury Department, the capture of which is well documented in former TARP  Inspector General Neil Barofsky's fine book, Bailout. 

On the progressive show, Young Turks, Barofsky predicted back in December that only another - and almost surely bigger - banking crisis has any chance of ending "too big too fail."   Big bankers are instead "too big to jail."


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Fiscal Cliff Legislation Rewards Special Interests

For all of the talk about taxing the rich, some wealthy special interests are getting goodies as reported by the Wall Street Journal.

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Election Reflection (Part 2): It's the System, Stupid

Political pundits are all remarking about how much money was spent in the 2012 election but how little has changed.  It shouldn't surprise anyone.  American government suffers from structural gridlock.  Most incumbent career politicians have no realistic chance of being defeated.  They have rigged the system to benefit themselves.  We can't "throw the bums out."  We simply can't.

In this past election voters got the usual result.  Around 95% of all House incumbents will have been re-elected (a few races are still undecided but not enough to affect the percentage very much), even though poll after poll shows public approval of Congress scraping bottom around 10%.   Over the course of a century incumbents have created more and more advantages for themselves.  Only during the Great Depression did the House incumbent re-election rate dip below 85%.  

Usually the US Senate is capable of undergoing somewhat greater change in a single election than the US House because incumbent advantages in the Senate are sometimes diminished.  In a Senate race, the stage is bigger and there's more press coverage, which gives the public a chance to get to know the challenger who would otherwise remain obscure in a House race. 

But not so this year.  Senate incumbent power was overwhelming.  Only two Senate incumbents lost, and they are the exceptions that prove the rule. Longtime Indiana Senator Richard Lugar got ambushed by the tea party in his Republican primary.  Intra-party insurgencies like the tea party are rare.  You can be sure that the Republican party will learn how to deal with its tea party faction and that Republican incumbents will again be protected during their primaries. 

The only other incumbent senator to lose was Republican Scott Brown of Massachusetts, who was defeated by Democrat Elizabeth Warren.  Brown had won in a special election for the late Ted Kennedy's seat (Kennedy was there so long that we regularly use this possessive language, as if he owned that seat) in 2009, when rising anti-Democrat sentiment brought a relatively high percentage of Republican-leaning voters to the polls in a low-turnout situation.  A presidential election year in Massachusetts with the usual Democrat turnout was fated to be far different.  The temporary success of Republican Senator Scott Brown from deep blue Massachusetts was a freakish anomaly.

None of this is what the founding fathers intended.  The US House was supposed to be highly changeable and the most sensitive to shifting public opinion.  With elections held frequently, the House was intended to be the people's steering wheel and brakes.  When government was going in the wrong direction, the founders expected that House elections would force a course correction.  If anything, they worried that the House would make government too changeable.  But today the US House of Representatives is a bastion of careerism, far less responsive to the will of the people than the Senate or the presidency.  The people's steering wheel and brakes have seized up.

Some will say that with the nation so closely divided between Democrats and Republicans, divided government is appropriate.  Perhaps. But divided government is promoting collective irresponsibility.  When the economy does not improve or when the nation's debt problem goes unsolved, each side points the finger at the other.  No one person or party is held responsible. 

Career politicians avoid taking responsibility at all costs.  Ideally, if ordinary citizens – people who loved their country more than their own political offices –were running things, then things would be different.  Civic duty would trump partisanship, and though principles are important, compromises would be forthcoming.  If the compromise resulted in too much government, or perhaps too little government, a remedy would be waiting at the time of the next election.  One side or the other would lose seats, and the policy could then be adjusted one way or the other.  But for this to happen – and for government to work as it should – it must be realistically possible to defeat incumbents and create a Congress capable of addressing the nation's real challenges.


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Election Reflection (Part 1): Micro-Targeting Voters

It's  being said that the nation just spent $6 billion and we are right back where we started, with President Obama still in the White House, a Democrat Senate and a Republican House.  But in fact all that money surely had some effect.  It tossed gasoline on the bonfires of partisanship.  Money can't buy happiness, but it can buy hate.

President Obama took the only path open to him if he wanted to get re-elected.  He went negative and personal in a big way.  Politicians want to win, and making Mitt Romney unacceptable was probably the only way for him to get re-elected, given the current state of the economy. Yes, the strategy violated the spirit of his first campaign, but Barack Obama's choice was to demonize his opponent or lose.  So he did what most politicians would do.  He's hardly the first and he won't be the last.  But I think, in this election, something more ominous took place.

One reason that the Obama campaign was so successful was because it "micro-targeted" voters and contributors, using cutting-edge marketing techniques.  They test-messaged to sample audiences to see what approach was most effective at moving voters and contributors, then, once they knew,  they precisely targeted a particular group, say single young women, African Americans, or even pet owners (this is true!) .They also test-marketed who should deliver the message.  It was extremely sophisticated, and hats off to the Obama campaign for being smart.

But such micro-targeting encourages the worst kind of negative campaigning.  Each micro-group gets a tested and tailor-made hate message targeting the campaign's political opponent.  Each group is told specifically why it will suffer horribly if the other candidate is elected.  Unlike traditional advertising, the micro-targeted message is under the radar; it comes in an e-mail, is distributed through electronic social networks, or delivered by a neighbor or colleague in person who already buys into the fearful, mendacious or hate-driven rhetoric.  The Obama campaign mastered the technique this time around, but you can bet the Republicans will be quick to catch on. 

Nothing good will come of this.  Fear and loathing spread through micro-targeting will make our already polarized society even more so.  The cost of sophisticated micro-targeting is probably considerable.  Campaigns will need more money from special interests, including micro-interests.  Candidates will learn that they need not run on powerful themes designed to lead a nation to solve great problems or achieve national goals.  Rather, micro-targeting will keep our leaders thinking small and encourage voters to elect small-minded men and women.  Welcome to the brave new world of micropolitics.

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Lessons from the 2012 Elections

Throwing Mud (notice that they have no clothes!)Election Day is not quite yet here, but mercifully, we are getting close.   It's not too soon to consider the 2012 election in all of its ugliness and dysfunction.  The current election can be characterized as relentless negativity and attacks, thin policy discussion, and complete polarization.  What can we learn from this mess?

Most striking this political season is the hate-driven political polarization.  Part of this is just Machiavellian political strategy, but that strategy is enabled by the tidal wave of money being poured into negative advertising.  And it's not just that these ads are negative.  It's that they are untruthful or that competing ads utterly contradict each other.  The media is of little help, for each side has its own media, its own news stories, its own "fact checkers," and its own "facts."  The cumulative effect is a blizzard of character defamations, information blackouts, selective information, and grotesque distortions.  Many of us throw our hands up in the air and fall back on political tribalism.  We seem to hate each other more than ever.  That might be good for politicians, but it's not good for us as a people or as "one nation, indivisible."

It's become pro forma to say that the Citizens United case "opened the floodgates"  to money pouring in from all kinds of self-interested sources.  And it's true.  So now, the negative attacks are multiplied and more gas is thrown onto the pyre of partisan acrimony.  The country is clearly not better off for this.  But it should be recalled that the extra money which Super PACs put into the Republican primaries made those primaries more competitive.  If it were not for the Super PACs, Mitt Romney would have had almost a free ride after New Hampshire.  "Get the money out" campaigns always seem to favor incumbent politicians and the very rich.  We need a solution that eliminates the political pollution but keeps turning the gears of competitive elections.

In contrast to the negative advertising, debates held during this election have been helpful.  The Republican primary debates were numerous and watched by many.  Their chief failing was arbitrary inclusion of some candidates and exclusion of others, namely Buddy Roemer and Gary Johnson.  Mitt Romney, in one evening's debate, offset millions of dollars in negative ads deployed against him.  Democrats are surely unhappy with this outcome, but more debates begun earlier in the process would have given the president a better chance to reverse the impressions made in an early first debate.

In thinking about clean elections solutions, handing candidates wads of cash so they can spend it smearing their opponents is less than ideal.  A system that requires numerous debates and first-person essays would be preferable.  Candidates won’t say the same nasty things to each others’ faces that they do in ads, and if they do, their opponent is there to respond.  If the public is going to get behind campaign sponsorship, then we have a right to insist on the most civil and constructive formats for getting to know the candidates.  Such events could be paid for in lieu of taxes and fees currently levied on media. 

One of the beautiful aspects of a series of mandatory debates is that debates automatically put challengers on the same level as incumbents.  Most often, an incumbent member of Congress will completely ignore a challenger until or unless that challenger raises enough money and is polling well enough to become a real threat.  Put the challenger on the stage right away, however, and that challenger has stature and a chance to become competitive based on the power of ideas and persuasion, rather than money raised.  

Americans are generally unhappy with their political leadership, and for many good reasons.  We have a right as citizens and taxpayers to demand a system that not only gets the corrupting influence of money out of legislation and promotes competitive elections, but encourages civility and constructive engagement in our political process. 

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Leadership from that Sliver of Common Ground

Differences are much more eye-catching and dramatic than commonalities.  If there is a sliver of overlap or common ground, it's usually unwanted and ignored. The clash, the smashing together of opposites is much more entertaining, and I should know, as a sometime playwright. Ted Turner, for good or bad, discovered with CNN that dramatic news could make money. And then the world became VERY polarized, and the sliver was eclipsed.

I joined the board of directors of Americans to Rebuild Democracy, because in the sliver resides true leadership. There are a number of us coming to this meme. Others call it the convergence, or transformation: even the “mad as hell and not going to take it anymore” moment. I seek out and try to connect folk with similar proclivities.

I am the editor of aGREATER.US, an internet platform to uncover a new political platform for a greater U.S. Not left, right, or moderatebut the sliver. Surprisingly enough there are lots of great ideas out there. If you get a chance read a few, submit one, write an op-ed, maybe tell a friend.

Some of the ideas are nonpartisan, which I like to refer to as “everyone loves it.” Then there are bipartisan ideas which “no one hates.” The general structure put forth by AURD is a threefold package; ending gerrymandering (nonpartisan), campaign finance reform (somewhere between nonpartisan and bipartisan), and Term Limits (ditto). The brilliance of the package is that generally speaking ”individualists” would compromise on CFR to get TL, and “communitarians” vice-versa.

Take Campaign Finance Reform, the left’s drama has been made to be ALL money in politics is bad. Well, without sufficient money the public cannot vet the candidates. The right’s drama is corporations have to have enough free speech to protect themselves from an overreaching government interfering in capital markets. The obvious, well at least to me, solution is to “Ban corporate political contributions to or for, or against, candidates, elected officials, and political parties, but in no way infringe upon free speech rights of corporation (people gathered together for a common interest) when it comes to issues.

If the Koch Brothers and Soros want to frack the frack out of whether there should be fracking or not in America, in the media, I for one am going to grab some popcorn and pull up a chair. It creates jobs, and informs the public the same way a prosecutor and a defender do in a trial. And I’m on the jury by nature that—I vote.

Gerrymandering is a marvelous grievance. On aGREATER.US it is the #1 rated idea, with (at the time of this writing) 98% tripartisan support. The problem here is what the solution is. Should districts be decided by an “independent” (if there is such a thing) judiciary or by algorithm, or a hybrid of the two? State by state, or federally mandated? I lean towards competing algorithmic proposals presented to a citizens jury chosen at random, or for its maximum diversity—but that’s just me.

And finally, Term Limits:  this polls the lowest of the three on my website, dancing just above or below the magical 75% approval rating. The reasoned argument against Term Limits goes like this: if you have a great employee why would you fire her or him? The flip side of that argument is intractable problems are only reinforced by the same polarized opinions year after year, Congress after Congress. Here I tend to favor a barbell approach (or dumbbell if you’re a cynic), the elected official can come back after a meaningful hiatus, my reasoning is —where would the world be if Churchill had been term limited? Sometimes you really do need an elder statesman to do the heavy lifting. But that’s just me.

I hope you will seek out a consensus idea or group of your own to support. I frequently say, “policy work is really hard.” Because of that a lot of folks don’t want to do it, give up too soon, get frustrated, or wonder “why bother anyway, it not going to change anything.”

But we’re going to, it’s called manifest destiny, and it just takes a lot of reading, listening, trial balloons, wordsmithing, and passion. Sounds like great fun to me.

These AURD reforms individually and collectively poll nationally, and on my site with tripartisan ratings (fiscal conservatives, social liberals, and independents given equal say), at or above the 75% threshold needed to pass a constitutional amendment. Yet, our elected officials can’t seem to exhibit the #1 rule of leadership which is to see which way the crowd is going, dash ahead, and yell “FOLLOW ME!”

Why don't they do this?  It should be obvious.  It's not in their interests.  But reform is crucially in the public 's interest.  We are going to have to lead this one ourselves. 

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Political Campaigns Invite Illegal Foreign Donations via Credit Card

The Government Accountability Institute has discovered a wide open loophole that potentially allows campaign contributions from foreign interests.  A simple fix is to make all campaigns require donors to type in their card's CVV code,  a three or four number sequence found on the back.  Use of this code as a security measure has become so commonplace that almost all web-based transactions require it now.  Are not campaigns that fail to require the CVV code essentially telling us that their candidate is looking to commit fraud or get around the law?  Read more and discover which politicians do not require basic credit card security when processing donations.

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Jon Corzine: The Cat Who Ate the Canary

In December of 2011 Jon Corzine, CEO of the recently bankrupt MF Global, had some explaining to do.   Not only was the firm broke, but $1.6 billion of its customers' money was missing. 

The situation was apparently a real head scratcher for Mr. Corzine, who is best known as a former New Jersey governor, US senator and onetime CEO of Goldman Sachs.  He declared before a congressional committee, "I simply do not know where the money is . . .”

It was just gone.  In all of the "chaos" $1.6 billion had simply vanished into thin air.  Surely this sort of thing happens all of the time.  One minute you have $1.6 billion in the investment funds of a customer - in this case a bunch of farmers and ranchers - and the next minute that money has been inexplicably spent to try to stabilize your own sinking business.  There was a pile of money, which looked like lots of other piles of money, you were accustomed to moving big piles of money around, and this $1.6 billion pile just got put in the wrong place.  It could happen to anyone, right?  All of the farmers’ and ranchers’ money held by MF Global just sort of rode off into the sunset.

Jon Corzine did not become the CEO of Goldman and MF Global for being an idiot (See here for the excellent PBS Frontline video report on Corzine and the demise of MF Global). Corzine was known as a shrewd, active, hands-on trader and an incredibly ambitions man.  Even while at the top of the top of the Wall Street food chain, he maintained a desk down on the trading floor.  As head of MF Global he borrowed heavily to make a $6.3 billion bet on the sovereign debt of the so-called PIIGS (Portugal, Italy, Ireland, Greece and Spain).  In so doing, MF Global became highly leveraged. The strategy wasn't as crazy as it seems in hindsight, but the scale of the bet in relation to MF Global was unprecedented.   As reported by Richard Finger writing in Forbes, default on the kind of short term bonds on which Corzine was betting was highly unlikely.  Indeed, the bonds proved ultimately sound, but unfortunately for Corzine, the crisis in Greece exploded all over the media while MF Global held the bonds.  Word soon got out just how big Corzine's bet was.  As a result, Moody's downgraded MF Global’s credit rating to a near junk level, causing a run on the firm's reserves.  Corzine needed some fast cash.

Enter Edith O'Brien, the Assistant Treasurer who in late October 2011 transferred, in several installments, the $6.3 billion out of the customer accounts held at JP Morgan and into MF Global's account.  It was perfectly legal for MF Global to borrow from its own customers, so long as the money was returned in twenty-four hours.  But in what other business situation is it acceptable for the custodian of someone else's funds to borrow from those funds even for a minute?  It's handy when one's pals in government make and enforce the rules.  Unfortunately, MF Global returned none of its clients’ money, not in twenty-four hours, and not ever.  And testifying before Congress in late December, Corzine just had no idea where all of that money had gone.

Naturally an investigation ensued, but by August the New York Times announced that prosecution against Corzine was unlikely.  The chaos that reigned inside MF Global during its meltdown is being used as a justification to get nearly everyone at the firm off the hook for the loss of the $1.6 billion.  It's confusing when so much money is flying around (Did you ever try the chaos excuse with the IRS:  "But my files were so messy!").  The Times reviewed an e-mail in which it says that O'Brien explicitly told Corzine that the funds being used belonged to the firm and not its customers.  Nothing else to report here.  Please move on.

But wait.  A another report from Bloomberg cites another e-mail written by O'Brien stating that she was passing on "direct instructions" from Corzine to use the customers’ funds three days before MF Global collapsed.  Similarly, Fox Business reports that the Chief Financial Officer for North America, Christine Serwinski, “told investigators that her boss, MF Global’s chief executive, Jon Corzine, was well aware of the use and possible misuse of the customer funds during the firm’s final days."  In spite of this apparent evidence, the Justice Department seems ready to give Corzine a pass. 

It's probably just a coincidence that Corzine was a former client of Attorney General Holder's former law firm, Covington and Burling.  Or that the head of the Justice Department's criminal division, Assistant Attorney General Lanny Breuer, also worked at Covington and Burling, which had business with MS Global during the doomed firm's final days.  Peter Schweizer has documented this amazing but surely unrelated serendipity.

Schweizer adds that, in another crazy coincidence, "Tony West, who helped raise an estimated $65 million in his role as the co-chairman of Mr. Obama’s campaign, came to the Department of Justice from Morrison & Foerster" and MF Global’s trustee for the Chapter 11 bankruptcy has retained Morrison & Foerster as its general bankruptcy counsel." What a small world we live in!

Pity Mr. Corzine for all of his troubles.  It's nice for him that he has friends in high places and hobbies to keep him occupied during what must be a stressful period while his failed firm is under investigation.  A favorite hobby for Mr. Corzine appears to be fundraising for President Obama, for whom Corzine raised $500,000 during the first quarter of 2012.  One would think that it might be illegal for someone whose firm is under criminal investigation to fundraise for the President whose Justice Department is investigating him, but politicians and special interests see no reason to be prudish in these matters. 

During the ongoing presidential campaign, the President will talk and talk about how he has reformed Wall Street.  All the while Mr. Corzine, the cat who ate the canary, spits out feathers and bundles more dollars for Barack.  

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Super PACs Have Already Raised $374 Million for 2012

As reported by the Huffington Post, super PACs have already raised $374 million during the 2012 election cycle, 68% of which came from individuals, corporations, or unions giving in excess of $500,000.   The nation's next leaders are going to be very indebted to very few.

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