What Caused The Financial Crisis?

From James K. Galbraith: "There Is No Return To Self-Sustaining Growth" by Lars Schall:

The principal cause of the crisis was the dismantling of the system of regulation and supervision in the financial sector which had for much of the post-war period kept the most dangerous elements of that sector in check. In the absence of an appropriate system of effective supervision and regulation, what happens is that the actors in the system, who are intent upon taking the greatest degree of risk — including actors who are intent upon using fraudulent methods to increase their returns — come to dominate parts of the system. As they do that, the general methods of assessing performance in the market, specifically stock-market valuations, become counter-productive. That is to say, they invariably reward the worst actors, while they force more traditional actors, who are still respecting the old norms of conduct, into a competitively disadvantaged position. Thus the bad actors, the fraudulent actors, and the speculative extremists quickly take over.

Some Things Don't Seem To Change

Does this sound familiar?

From The Intelligent Investor by Benjamin Graham:

The Bankers Securities Corporation was floated as an “investment trust” in 1928, in the heyday of financial legerdemain. Investors and speculators, who in those days were even more indistinguishable than they are now, were convinced that financiers could create values miraculously by merely forming a new investment fund or by shuffling old ones around. The miracles proved to be mirages. The disillusionment of the investors was a bitter thing, and it still shows itself in what we would style a wholesome mistrust of the ability of financiers to perform tricks with other peoples money.   

Here’s what gets me. You would think that anybody who is anyone in the financial world would have actually read The Intelligent Investor. Perhaps they just keep it on their bookshelves.

Surprise Surpise

True democracy is simply not possible when moneyed lobbyists call the shots.

From Banks with political ties got bailouts, study shows by Steve Eder:

U.S. banks that spent more money on lobbying were more likely to get government bailout money, according to a study released on Monday.

The system is broken.

The Worst And The Dimmest

From The "best and the brightest"? Spare me by Michael Lind:

"Is President Obama trying to kill Wall Street and drive its talent to London?" asked one blogger, Scott Reeves. Scott Talbott, head of government affairs for the Financial Services Roundtable, has warned that "top salespeople, the lifeblood of any company" could be driven by TARP restrictions to work for overseas banks.

Where will the best and the brightest of the financial sector flee, to get away from regulation and earn obscenely high salaries? Not Canada, where tight regulation of banks prevented the kind of meltdown that has occurred in the U.S. Nor Australia, where similar strict banking regulations also spared that country's financial sector. London, Singapore or Dubai are sometimes mentioned as possible rival financial centers that would be eager to welcome the kind of overpaid financiers who wrecked the U.S. and global economy. Most Americans, I think, would agree that it is worth the risk. The voluntary expatriation of leading Wall Street geniuses might help to restore the U.S. economy and wreck potential rival financial capitals at the same time. The thought brings to mind the observation by a wag on the defection in the 1970s by John Connally from the Democrats to the Republicans: "He raised the IQ of both parties."

And No, It Would Not Be Socialism, It Would Not Be Fascism

Extremely rich people gambling with other people’s money is what got us into the financial mess we are currently in. I’m in favor of something that would encourage the richest amongst us to invest more wisely, rather than gamble speculatively. And if it helps pay for the mess we are in, all the better.

From The Need to Tax the Wealthy by Dean Baker:

The vast majority of the income gains in the United States over the last three decades have gone to the richest 5% of the population, largely as a result of policies that were explicitly designed to redistribute income upwards. Therefore it is far more appropriate to tax the richest 5%t of families who have prospered than the broad middle class who have suffered.

Of course taxes can be designed in a better or worse manner. The best way to increase taxes on the wealthy, in addition to allowing the Bush tax cuts to expire, would be to apply a modest financial transactions tax (FTT).

There is a long history in both the United States and the rest of the world with FTT. Until 1964, the United States imposed a tax of 0.12% on new stock issues and 0.04% on stock trades. Britain still has a tax of 0.25% on each stock sale or purchase, raising five billion pounds a year. This would be equivalent to roughly $30 billion a year in the American economy.

Robert Pollin and I calculated that a scaled set of FTT on stock, futures, options and other financial instruments could raise approximately $150 billion a year. This would go far towards bringing the long-term budget deficit down to a manageable level.

A FTT would be hugely progressive. While many middle income families own stock, their holdings are dwarfed by the holdings of the wealthy. Furthermore, few middle income families are active traders. Their intention is to hold their stock to support their retirement or their kids' education, not to shuffle it around on a daily or hourly basis. Some mutual funds do engage in frequent trading. An FTT would encourage investors to move their money to funds that are less active traders, thereby allowing them to escape most of the impact of the FTT.

Most of the burden of the FTT will fall on wealthy individuals who are active traders and also on the financial industry itself. Either way, the tax will be overwhelmingly borne by the wealthy. By raising the cost of trading, the tax will discourage the trading that provides the revenue for the financial industry. A well-designed tax should also discourage the creation of exotic assets that may serve little useful purpose, since it could lead to the tax being paid multiple times. For example, the holder of an option on a stock would both pay the tax on the purchase and sale of the option and also on the purchase and sale of the stock itself, if the option was ever exercised.

While most taxes impose some economic cost in addition to the revenue raised, a FTT may actually increase economic efficiency. By discouraging financial transactions that are entirely rent-seeking in nature, a FTT will reduce the resources used up by the financial sector, without affecting at all its ability to serve the productive economy. The reduction in trading volume will of course reduce liquidity to some extent, but American financial markets will still be quite liquid. Even with a 0.25% tax on a stock sale or purchase, transaction costs will still only be raised back to their mid-80s levels. And, the United States had a large and very liquid stock market in the 80s.

There also is a powerful element of justice in imposing a FTT in the current situation. The main reason that the budget situation has deteriorated so much in the last two years has been the damage caused by the irresponsibility and greed of the financial industry. In this way, a FTT can be seen as sort of a user tax, where the industry is effectively forced to pay for some of the damage caused by its practices, just as we might like to tax the output of industries that pollute our air or water.

In short, there is a very good argument for increasing taxes on the wealthy given the current budget situation. The alternative is taxing those who are not wealthy. And, there is no better way to tax the wealthy than to tax their gambling in financial markets. A financial transactions tax will raise revenue at the same time that it makes the economy more productive. This is a genuine win-win situation.

William Black

From William Black: "There Are No Real Stress Tests Going On" by Yves Smith:

By way of background, William Black is a former senior bank regulator, best known for his thwarted but later vindicated efforts to prosecute S&L crisis fraudster Charles Keating. He is currently an Associate Professor of Economics and Law at the University of Missouri - Kansas City.

More germane for the purpose of this post, Black held a variety of senior regulatory positions during the S&L crisis.He managed investigations with teams of examiners reporting to him, redesigned how exams were conducted, and trained examiners.

Via e-mail, he has confirmed our suspicions about the bank stress tests announced by Treasury Secretary Timothy Geithner: they simply cannot be adequate, given the number and experience of the staff, and perhaps as important, their relationship with the banks…

Read the rest here.

From William K. Black on The Prompt Corrective Action Law by William K. Black:

My comments in the Bill Moyers Journal interview about the “Prompt Corrective Action” (PCA) law (adopted in 1991) have sparked considerable comment in the blogsphere. Here is the portion of the interview transcript that discusses the PCA law.

WILLIAM K. BLACK: Well, certainly in the financial sphere, I am. I think, first, the policies are substantively bad. Second, I think they completely lack integrity. Third, they violate the rule of law. This is being done just like Secretary Paulson did it. In violation of the law. We adopted a law after the Savings and Loan crisis, called the Prompt Corrective Action Law. And it requires them to close these institutions. And they're refusing to obey the law.

BILL MOYERS: In other words, they could have closed these banks without nationalizing them?

WILLIAM K. BLACK: Well, you do a receivership. No one -- Ronald Reagan did receiverships. Nobody called it nationalization.

BILL MOYERS: And that's a law?

WILLIAM K. BLACK: That's the law.

BILL MOYERS: So, Paulson could have done this? Geithner could do this?

WILLIAM K. BLACK: Not could. Was mandated-

BILL MOYERS: By the law.

WILLIAM K. BLACK: By the law.

I first published an article about the PCA law over a month ago entitled: “Why is Geithner Continuing Paulson’s Policy of Violating the Law?” (February 23, 2009).

Read the rest here.

AIG Bonuses

This all seems to be so absurd. Where would AIG be today without the bailout money? Would they go further into debt simply to pay bonuses? Would they even exist as a company? If they didn’t exist, would they still be “obligated” to pay bonuses?

From Obama Administration Must Stop Bonuses to AIG Ponzi Schemers by Miles Mogulescu:

It's time for some righteous populist anger from the Obama administration--not just in words, but in deeds--to stop the looting of the Federal Treasury by Wall Street executives using taxpayer money to pay bonuses to the very people who manipulated markets and were instrumental in bringing the international financial system crashing down on the heads of hundreds of millions of people in America and around the world. If the Obama administration doesn't stop AIG from paying hundreds of billions of dollars in bonuses, it will enable a popular uprising (led, unfortunately, by hypocritical Republicans posing as populist leaders) which will block the Obama administration from taking the actions necessary to save the financial system. It could destroy Obama's Presidency and lead to a decade-long depression.

Instead, while AIG prepares to use hundreds of millions of dollars in taxpayer money to pay bonuses to the very executives at AIG's Financial Products Unit who designed, managed and marketed the credit default swaps which were little more than a Ponzi scheme, the Obama administration sends out Tim Geithner, Austan Goolsbee, and Larry Summers to lamely express fake anger to the media while defending the payments on the grounds of the "sanctity of contracts". As Larry Summers timidly told George Stephanopoulos, "The easy thing would be to just say...off with their heads, violate the contracts. But you have to think about the consequences of breaking contracts for the overall system of law, for the overall financial system."

Read the rest here.

Madoff vs Mortgages

The last several months have been filled with reporting about Bernard Madoff. We’ve also heard a lot about mortgages. Many seem to want to crucify the people who took out a mortgage to buy a home and now are having trouble making their payments. Why are these people not considered to be victims of a corrupt system? Rick Santelli considers them to be “losers.” And why are the people who invested in Madoff seen as victims of a corrupt system? Why isn’t Santelli labeling them as “losers” as well?

The people who invested in Madoff should have known better. Perhaps there are many who invested in Madoff and didn’t lose all of their money. The news media does not tell us of these investors, however I assume that they exist. The news media does focus on those investors who lost everything with Madoff. Why did these investors do this? They broke several of the most basic rules of investing. They did not diversify (they put all of their money with Madoff) and they did not invest only money that they could afford to lose.

Don’t get me wrong, Madoff is a crook and deserves what is probably coming to him. I am simply wondering why these two groups of victims have been treated differently by the news media. Is it because one group is poor and the other group is/was rich?

Let's Disinfect Wall Street

Wall Street needs to have some very bright sunlight shone on it.

From Commentary: Investigate Wall Street by Julian E. Zelizer:

Partisan warfare in the 1990s, including the impeachment proceedings against President Bill Clinton, made many Americans cynical about congressional investigation, as it seemed to be just another tool in the bitter culture of Capitol Hill.

But Congress can help us learn. We need another Pecora Commission, another Fulbright Committee, another Sam Ervin to use the power of Congress to shed light on the causes of our current economic meltdown.

Congress needs to learn more, not only about the kind of criminal activity for which Bernard Madoff is being charged, but also the legal practices -- such as risky home loans -- that created dangerous bubbles and put families at risk.

If voters and politicians are going to be able to evaluate legislation that is being proposed on a weekly basis, citizens must understand what has gone wrong.

This will be the first step toward restoring the confidence that the country needs if it is to start a better day.

Numbers

From Math Wizards Working on Spells to 'Cure' by Scott Patterson:

The financial engineers are at it again.

Critics may complain that these math wizards started the trouble in the first place by designing securities that couldn't withstand the market's turbulence. But they also may have the expertise to help fix the problem.

"Airplanes fail, too," says Peter Cotton, founder of Julius Finance, a structured-finance firm in New York. "That doesn't mean you don't fix them."

Mr. Cotton is one of many such engineers trying to solve a seemingly intractable problem before the government: how to design a system for buying up assets shunted into a massive "bad bank." The government doesn't want to pay too much and banks don't want to sell for too little.

Mr. Cotton says the models most banks and ratings firms used to price CDOs were poorly designed. "They are superficial," he says, and "often spit out prices that don't capture the underlying value of the assets."

Using those same failed models now, says Mr. Cotton, most banks are "essentially just making up numbers."

Real Talent

Hank Greenberg thinks that the majority of Americans are not talented.

From Hank Greenberg's latest targets: salary curbs, AIG fire sale by Colleen McCarthy:

Former American International Group chairman Maurice R. "Hank" Greenberg criticized the Obama administration’s steps to restrict executive compensation for firms that receive federal aid, saying the move will result in an exodus of talent.

“What kind of people are you going to get for $500,000? Anyone with real talent will just go elsewhere,” Mr. Greenberg told an audience in New York Thursday. He spoke as part of a panel discussion, sponsored by New York-based Source Communications, on the current financial crisis.

Isn’t greed what got us into the mess we are in right now? Perhaps “real talent” might be found in a person who thinks of ethics, morality, and the good of the country as being more important than how much money he can make. Or should I say, how much money he can steal?

By the way, just exactly how talented is Mr. Greenberg? I mean, AIG has just been such a rousing success, after all.

Taleb And Krugman

From U.S. must 'save capitalism' from the banks: Nassim Taleb:

And a bit like an Old Testament prophet, Mr. Taleb is angry and wants those he thinks are responsible to suffer.

“I want them poor and they deserve to be poor. You can’t have capitalism without punishment.”

Oh, and another thing, he wants Bob Rubin, who trousered millions while chairman of Citigroup, to cough up.

“I want Bob Rubin to return his $110 million dollars to the American taxpayer.”

What about Sandy Weill? What about Chuck Prince? What about Vikram Pandit?

From Bailouts for Bunglers by Paul Krugman:

Question: what happens if you lose vast amounts of other people’s money? Answer: you get a big gift from the federal government — but the president says some very harsh things about you before forking over the cash.

Am I being unfair? I hope so. But right now that’s what seems to be happening.

Just to be clear, I’m not talking about the Obama administration’s plan to support jobs and output with a large, temporary rise in federal spending, which is very much the right thing to do. I’m talking, instead, about the administration’s plans for a banking system rescue — plans that are shaping up as a classic exercise in “lemon socialism”: taxpayers bear the cost if things go wrong, but stockholders and executives get the benefits if things go right.

When I read recent remarks on financial policy by top Obama administration officials, I feel as if I’ve entered a time warp — as if it’s still 2005, Alan Greenspan is still the Maestro, and bankers are still heroes of capitalism.

Bailing And Stimulating

Put simply, I think that I am more in favor of stimulus and less in favor of bailouts. Sometimes I wonder if the news media even bothers to make any distinctions between the two. It also seems to me that the Republicans are more in favor of bailouts and less in favor of stimulus.

From Sen. Graham on the Stimulus: 'This Bill Stinks ... We're Not Being Smart'

VAN SUSTEREN: All right. We only have about 45 seconds left. Is this going to pass? I mean, the president has -- there are a lot of Democrats in the Senate and the House.

GRAHAM: I think...

VAN SUSTEREN: They own the two houses.

GRAHAM: If we can make sure that Republicans will insist on a better process, where Republicans ideas are heard, there are enough Republicans that will meet Democrats in a responsible way to get a spending bill that cuts -- a bill that cuts taxes and spends on infrastructure and help people who (are) out of a job. If this bill passes, I think the Obama administration has governed completely different than the way they campaigned, and the Democratic Congress will be reinforcing the public's view of them in a very bad way. We can do better. I want a bipartisan bill, not this bill.

VAN SUSTEREN: And so if this passes, you're going to get a bumper sticker that says, "Don't blame me."

Republican ideas have been forced down our throats for what seems like an eternity. As far as the economy goes, make that idea, rather than ideas. Tax cuts, tax cuts, tax cuts… Other than tax cuts and obstructionism and whining, what are the Republicans offering? What are the great ideas that they want people to listen to?

The Too-Big-To-Fail Doctrine

From Free Market Myth by Dean Baker:

In the context of a too-big-to-fail principle, the removal of restrictions on leverage (investment banks were allowed to leverage their capital at a ratio of forty-to-one compared to just ten-to-one for commercial banks) and the relaxation of other prudential regulation (the nominal value of credit default swaps, a new class of derivative instruments, grew to more than $70 trillion in a nearly unregulated market) essentially gave the banks a license to wager with taxpayers’ money.

Banks did exactly what economic theory predicts. They took huge risks, leveraging themselves to the hilt with questionable assets, knowing that they would gain as long as the housing bubble held up. And the banks did so with willing accomplices among pension funds, hedge funds, and other investors because these investors knew that the government would rescue them if things went badly.

Deregulation can be a principled position held by true believers in a free market. But Wall Streeters all wanted one-sided regulation that provided them with an enormous government security blanket without any costs or conditions. None of the Citigroup, Goldman Sachs, J.P. Morgan crew ever went to lobby Congress for an explicit repeal of the too-big-to-fail doctrine. And while many on Wall Street lost their jobs when the bubble burst, the tens or hundreds of millions of dollars that banking executives earned during the good times are theirs to keep. Even with the market collapse, the vast majority of them are almost certainly better off than they would have been had they done honest work over the last decade.

Stimulus Response Behaviour

From Idaho Republican thinks he woke up in 'Bizarro World' by David Neiwert:

Republicans are having a tough time dealing with the realities of not having even a shred of remaining power. There's been a lot of gnashing of teeth the past few days as Democrats have proceeded to impose their political will in the form of Barack Obama's economic stimulus package.

Meanwhile, what seems to have him (Rep. Mike Simpson of Idaho) most irate is that America is no longer a "center right" nation and we are moving forward to fix our problems with progressive solutions. All Mike Simpson and his fellow Republicans had to offer as an alternative was more of the same old garbage that wreaked this mess in the first place -- tax cuts, tax cuts, tax cuts, and oh did we mention tax cuts?

From Ownership by digby:

The Republicans are hedging their bets. They want to be able to use the stimulus as a bludgeon (just think of the pork stories!) and want to be on record against it for 2010. But just in case the pointy headed economists are right, they do need to take care of their rich benefactors. If America's owners really didn't want this to pass they would have twisted some corporate Democrats' arms. (Conversely, if they really wanted it to be bipartisan, they would have twisted some Republicans' arms.)

The Gross Bust

From How We Can Restore Confidence by Charles T. Munger:

Our situation is dire. Moderate booms and busts are inevitable in free-market capitalism. But a boom-bust cycle as gross as the one that caused our present misery is dangerous, and recurrences should be prevented. The country is understandably depressed -- mired in issues involving fiscal stimulus, which is needed, and improvements in bank strength. A key question: Should we opt for even more pain now to gain a better future? For instance, should we create new controls to stamp out much sin and folly and thus dampen future booms? The answer is yes.

Sensible reform cannot avoid causing significant pain, which is worth enduring to gain extra safety and more exemplary conduct. And only when there is strong public revulsion, such as exists today, can legislators minimize the influence of powerful special interests enough to bring about needed revisions in law.

Read more here.

Weary

I am weary of indignant Congresspeople holding hearings where they “question” those involved in our economic problems. Congress is as much to blame as anyone. In fact, they probably deserve the most blame. They changed the regulations and rules of the money game. They allowed Wall Street to go berserk. They voted for two illegal wars that have consumed huge amounts of taxpayer money. I wish they would stop grandstanding and acting holier-than-thou. If they don’t like the way that the Wall Streeters have behaved then put some of them in jail, stop giving them more money, and shut the hell up.

From What Did the Banks Do With Your Cash? by Matthew Jaffe:

"We have a bunch of idiots on Wall Street that are kicking sand in the face of the American taxpayer," Sen. Claire McCaskill, D-Mo., recently said from the Senate floor.

"I'm mad," she said. "Everyone I work for is mad."

Congress is the problem. I’m mad at them. Congress has allowed Wall Street to kick sand in the face of the American taxpayer. Instead of reminding us of what we already know, Congress should stop the sand kicking. If they don’t have the power to do this, who the hell does?

Stimulating Thoughts

From Wanted: Personal Economic Trainers. Apply at Capitol. by Steven Pearlstein:

Equally specious is the oft-heard complaint that even some of the immediate spending is not stimulative.

"This is not a stimulus plan, it's a spending plan," Nebraska's freshman senator, Mike Johanns (R), said Wednesday in a maiden floor speech full of budget-balancing orthodoxy that would have made Herbert Hoover proud. The stimulus bill, he declared, "won't create the promised jobs. It won't activate our economy."

Johanns was too busy yesterday to explain this radical departure from standard theory and practice. Where does the senator think the $800 billion will go? Down a rabbit hole? Even if the entire sum were to be stolen by federal employees and spent entirely on fast cars, fancy homes, gambling junkets and fancy clothes, it would still be an $800 billion increase in the demand for goods and services -- a pretty good working definition for economic stimulus. The only question is whether spending it on other things would create more long-term value, which it almost certainly would.

And then there is Sen. Tom Coburn (R-Okla.), complaining in Wednesday's Wall Street Journal that of the 3 million jobs that the stimulus package might create or save, one in five will be government jobs, as if there is something inherently inferior or unsatisfactory about that. (Note to Coburn's political director: One in five workers in Oklahoma is employed by government.)

In the next day's Journal, Coburn won additional support for his theory that public-sector employment and output is less worthy than private-sector output from columnist Daniel Henninger. Henninger weighed in with his own list of horror stories from the stimulus bill, including $325 million for trail repair and remediation of abandoned mines on federal lands, $6 billion to reduce the carbon footprint of federal buildings and -- get this! -- $462 million to equip, construct and repair labs at the Centers for Disease Control and Prevention.

"What is most striking is how much 'stimulus' money is being spent on the government's own infrastructure," wrote Henninger. "This bill isn't economic stimulus. It's self-stimulus."

Actually, what's striking is that supposedly intelligent people are horrified at the thought that, during a deep recession, government might try to help the economy by buying up-to-date equipment for the people who protect us from epidemics and infectious diseases, by hiring people to repair environmental damage on federal lands and by contracting with private companies to make federal buildings more energy-efficient.

What really irks so many Republicans, of course, is that all the stimulus money isn't being used to cut individual and business taxes, their cure-all for economic ailments, even though all the credible evidence is that tax cuts are only about half as stimulative as direct government spending.

Spending is stimulus, no matter what it's for and who does it. The best spending is that which creates jobs and economic activity now, has big payoffs later and disappears from future budgets.

Don't Be Distracted By Those Shiny Republicans

It’s the slime that makes them so shiny.

From It's the Stupid, Stupid by Josh Marshall:

The campaign isn't over. November 5th was just a big hurdle. The arguments still have to be made for the direction we want to take the country. We need the big picture or we'll run again on distractions and the efforts of discredited malefactors.

Here’s an example of an utterly stupid distraction and waste of taxpayers money:


From What GOP Leaders deem wasteful in Senate stimulus bill:

On Monday, House Republican leaders put out a list of what they call wasteful provisions in the Senate version of the nearly $900 billion stimulus bill that is being debated:

• $2 billion earmark to re-start FutureGen, a near-zero emissions coal power plant in Illinois that the Department of Energy defunded last year because it said the project was inefficient.

• $448 million for constructing the Department of Homeland Security headquarters.

• $248 million for furniture at the new Homeland Security headquarters.

• $600 million to buy hybrid vehicles for federal employees.

• $400 million for the Centers for Disease Control to screen and prevent STD's.

• $1.4 billion for rural waste disposal programs.

• $200 million for public computer centers at community colleges.

• $75 million for salaries of employees at the FBI.

The Republicans seem to be in favor of pollution, global warming, terrorists, more pollution, sexual transmitted diseases, water and soil pollution, stupid/ignorant people, and more terrorists. Not to mention petty partisan bickering while the rest of the country goes down and down into the abyss.

Look at that list again. Why is money that would go to construction jobs, computer manufactures, federal employees who help keep us safe, auto manufacturers, engineers, and health professionals a bad thing? We need people to be working. All except these dimwitted Republican Congresspeople. Let's fire them.

Why is it OK to send money to Wall Street but not anywhere else?

Off Center

From Fetishizing off-center centrism by Jamison Foser:

From the way the media have covered this week's stimulus package vote, you would think the goal of the legislation was to get Democrats and Republicans to sit together for lunch in the House cafeteria, rather than to turn around an economy in free fall.

After the House passed the stimulus package by a comfortable margin, much of the media reacted not by examining the bill's contents and the likelihood that it would provide a much-needed boost to the economy, but by focusing on the fact that it passed without a single Republican vote.

Why the GOP's unanimity in opposing the stimulus package should be surprising is anybody's guess; the last time we had a newly elected Democratic president, in 1993, congressional Republicans were unanimous in opposing his economic package, too. Then-Rep. John Kasich went so far as to promise that if Bill Clinton's plan worked, Kasich would switch parties. (It did; he didn't.) Point being: Congressional Republicans do not have a strong track record of working with Democratic presidents in recent memory. Perhaps because they were too busy trying to subpoena the White House cat.

Nonetheless, the Democrats' purported failure to get Republican support for the bill was, according to many reporters, the story.

Read the rest here.