"I’m Sorta Holding My Nose For Two Years"

Even minority leader turtle's campaign manager thinks he's the worst:

Senate Minority Leader Mitch McConnell's (R-KY) campaign manager said he's begrudgingly working in his current capacity to help the presidential prospects of Sen. Rand Paul (R-KY), according to an explosive phone recording that surfaced Thursday.

In the recording, obtained by Economic Policy Journal, Jesse Benton — who ran Paul's successful 2010 campaign before joining McConnell's team — told conservative activist Dennis Fusaro that he has an ulterior motive in working the GOP leader's 2014 campaign.

"Between you an me, I'm sorta holding my nose for two years," Benton said in the recording, "'cause what we're doing here is gonna be a big benefit to Rand in '16."

The campaign manager's description of his apology is even more hilarious:

"He wasn't angry, he wasn't upset, but I could see the hurt in his eyes," Benton told WHAS, according to tweets by reporter and political editor Joe Arnold.

"He asked me how I could say something like that, and I just didn't have a good answer. ... I apologized from the bottom of my heart [and] I told him it's not what I believe [and] that I am here because I believe in him."

The hurt in his eyes. Too funny.

Train of Thought Lounge: Freeway

I'll be in philly this weekend, so it was only natural:

Train of Thought Lounge: NaS & Lauryn Hill

This week has reached a being busy level normally associated with the end of the sememster, even though it is summer. Until then, this is such a good song:

Goddamit People

I'm really not a huge fan of lefties trashing the south just for the sake of doing so and such but Jesus Christ this poll

Favorability ratings with Georgia Republicans: Paula Deen 73/11, Martin Luther King Jr. 59/28
— PublicPolicyPolling (@ppppolls) August 7, 2013

Bring Back Glass-Steagall

It's a case I've made here plenty of times before, but Dean Baker is very good at articulating the specifics of why:

The ending of Glass-Steagall removed the separation between investment banks and commercial banks, raising the possibility that banks would make risky investments with government-guaranteed deposits. In principle, even after the ending of Glass Steagall banks were supposed to keep a strict separation between their commercial banking and the risky bets taken by their investment banking divisions, but this depends on the ability of regulators to enforce this restriction.

The Volcker Rule provision in Dodd-Frank was an effort to re-establish a Glass Steagall type separation but the industry is making Swiss cheese out of this regulation in the rule-writing process. Serious people cannot believe that this will keep the Wall Street banks from using their government-guaranteed deposits as a cushion to support their speculative game playing.    
If anyone questions how this story is likely to play out in practice, we need only go back a few years to the financial crisis of 2008-2009. At that time, most of the major banks, Bank of America, Citigroup, Goldman Sachs and Morgan Stanley, almost surely would have failed without government support.

In fact, some of the top economic advisors in the Obama administration wanted to let them fail and have the government take them over, as the FDIC does all the time with insolvent banks. However Larry Summers managed to carry the day by arguing that such a move would be far too risky at a time when the financial markets were so unsettled. As a result, the big banks got their government money and were allowed to consolidate so that they are now bigger than ever.

This was primarily a problem of banks that are too big and too interconnected to fail, not just a problem of commercial banks merging with investment banks. But these mergers certainly help banks to reach too-big-to-fail status.

Some may argue that the crisis of 2008-2009 involved extraordinary circumstances. However when banks fail it is generally because the economy faces a crisis. They do not typically fail in good times. And it is a safe bet that there will always be a smart and belligerent Larry Summers on the scene aggressively arguing the case against anyone who wants to subject the banks to market discipline.

What is striking about the argument on re-instating Glass-Steagall is that there really is no downside. The banks argue that it will be inconvenient to separate their divisions, but companies sell off divisions all the time.

The arguments against bringing back Glass-Steagall seem to always come down to some form of how those advocating for it don't understand the complexities of the modern banking system and blah blah blah. I genuinely don't care. There is no reason a rule that worked will for a ton of years can't work again if designed properly. Bring it back and let the banks cry all they want while the deal with the consequences. As Dean Baker says, there really is no downside.

Obama Campaign Leader Takes His Austerity Pushing Abroad

Probably not satisfied that Obama was only able to enact the sequester rather than even more severe ways of hurting the economy on purpose, Obama Campaign manager Jim Messina is taking his talents to England to help the Tories:

The Conservative Party has hired Barack Obama's campaign manager Jim Messina for its general election campaign team, BBC Newsnight has learned.

Sources confirmed that he would act as a campaign strategy adviser to the Conservative party.

A lifelong Democrat, Mr Messina masterminded the US president's successful 2012 re-election campaign.

The political parties in Westminster are readying themselves for the general election, now under two years away.

The Conservatives hired Australian strategist Lynton Crosby, known as the Wizard of Oz, in November. The Conservative Party hired Australian strategist Lynton Crosby in November.

The Tories are hoping to emulate Mr Obama's re-election against a backdrop of economic problems. Many other governments that have sought re-election during economic turbulence have been punished by voters at the ballot box.

The Conservatives are also thought to hope that Mr Messina will bring to their operation the same binding marriage of social media and political organisation that many in the US credit with securing Mr Obama a second term.

Speaking of his appointment, Mr Messina told Newsnight:

"I have long admired Prime Minister Cameron. While I will not be moving to London, nor will I be managing any type of day to day political operations, I will be offering strategic campaign advice leading up to 2015."

The Conservative leadership will have to work hard to ensure their 2015 campaign does not fall victim to the same issues as the 2010 general election strategy, when, observers believe, there was a problem with too many important voices at the top of the campaign, including Steve Hilton, George Osborne and Andy Coulson.

In fairness, how could Messina not admire Prime Minister Cameron? All he's done is purposely hurt the British economy for no reason, leading to misery for many, many people. If he helps them win re-election despite them trying to destroy the economy on purpose, he can hurt more people, for many more years. A noble cause if there ever was one.

Fast Food Strikes Keep Spreading

Inspiring stuff:

From New York to several Midwestern cities, thousands of fast-food workers have been holding one-day strikes during peak mealtimes, quickly drawing national attention to their demands for much higher wages.

What began in Manhattan eight months ago first spread to Chicago and Washington and this week has hit St. Louis, Kansas City, Detroit and Flint, Mich. On Wednesday alone, workers picketed McDonald’s, Taco Bell, Popeye’s and Long John Silver’s restaurants in those cities with an ambitious agenda: pay of $15 an hour, twice what many now earn.

These strikes, which are planned for Milwaukee on Thursday, carry the flavor of Occupy Wall Street protests and are far different from traditional unionization efforts that generally focus on a single workplace. The national campaign, underwritten with millions of dollars from the Service Employees International Union, aims to mobilize workers — all at once — in numerous cities at hundreds of restaurants from two dozen chains.

The amount of courage it takes to go out on strike with no protections from a minimum wage job is jaw dropping.