J.P Morgan Said WHAT?

August 1st, 2011

Outside of knee-jerk radicals like Grover and Heritage and Cato, what problem do actual, on the ground and presumptively conservative financial organizations have with the debt deal? It might surprise you. One of the biggest failings in this hyper-partisan plan is...

no stimulative spending.

From the J.P. Morgan analysis

"4) Impending fiscal drag for 2012 remains intact. The deal does nothing to extend the various stimulus measure which will expire next year: we continue to believe federal fiscal policy will subtract around 1.5%-points from GDP growth in 2012. Its possible the fiscal commission could do something to extend some measure such as the one-year 2% payroll tax holiday, though we think unlikely, as it would need to be paid for, which would be tough. If anything, the debt deal may add modestly to the fiscal drag we have penciled in for next year." EMPHASIS OURS

Yup. Much the same point that economists such as Krugman, Stiglitz and Reich have been making. We are very much through the looking glass.

Wow. That IS The Best Word Cloud Ever

August 1st, 2011

To be honest, I have found the whole "word cloud" phenomena to somewhat perplexing. Perhaps I am getting old. I do, on occasion, find them amusing and entertaining. It was not until today, however, that I found one that was both hysterical and heart wrenching. Jon Cohen writes over at WaPo:

"Americans give overwhelmingly negative reviews to the fierce budget debate that has transfixed Washington over the past few weeks, and large numbers now think less favorably about the country’s political leaders, according to a new poll by the Washington Post and the Pew Research Center.

Asked for single-word characterizations of the budget negotiations, the top words in the poll — conducted in the days before an apparent deal was struck — were “ridiculous,” “disgusting” and “stupid.” Overall, nearly three-quarters of Americans offered a negative word; just 2 percent had anything nice to say."

Here it is...

Quote Of The Day - Here and Now Edition

August 1st, 2011

"Anyone who characterizes the deal between the President, Democratic, and Republican leaders as a victory for the American people over partisanship understands neither economics nor politics."
-- Robert Reich

Worth 1,000 Words

July 30th, 2011
via

The WSJ Pulls A Fast One

July 29th, 2011

That the Wall Street Journal has for years been just to the right of any other "respectable" newspaper in America has long been known. There has never been a Cato or Heritage pronouncement, no matter how absurd or ultimately proved wrong by the uncooperative nature of reality, which was not at first promoted in their editorial pages as very nearly the latest burning bush. As we head toward what looks like the GOP sabotage of America's good credit, former WSJ writer and recovering radical David Frum noted that they published an all time whopper yesterday.

"The strict demands of the paper’s ideology do not always lie smoothly over the rocky outcroppings of reality. It can take considerable skill to match the two together.

In that regard, this morning’s lead editorial about the debt-ceiling crisis is a true masterpiece.

If you were to write a story about government debt, you’d probably be inclined to write about the two sets of government decisions that produce deficits or surpluses: decisions about expenditure and decisions about revenue. You’d want to do that not only as a matter of fairness, but also as a matter of math.

And that’s why, my friend, you would wash out as a WSJ editorialist. They wrote this editorial without any reference to revenues whatsoever. Boom! Gone! Don’t deny reality. Defy reality."

Click HERE to read further as Frum lays out the shockingly dishonest steps the WSJ employed to lay blame for the debt where it doesn't belong.

A BIG Shift

July 28th, 2011

Robert Greenstein of the CBPP notes a very radical departure in both the Boehner debt bill and the absurd "Cut, Cap and Balance."

"For 26 years, all budget legislation that would trigger across-the-board cuts if Congress fails to meet a fiscal target has exempted the basic low-income (or “means-tested”) entitlement programs from those cuts. The Gramm-Rudman-Hollings laws of 1985 and 1990, the deficit reduction agreement of 1990, and the Balanced Budget Act of 1997 — all bipartisan pieces of legislation — included that exemption. So did last year’s “pay-as-you-go” law, which requires Congress to offset the cost of new tax cuts or increases in entitlement programs so they don’t increase the deficit. Congress has never enacted a law with an across-the-board cut mechanism that subjects core assistance for the poor to these cuts.

But in the last few weeks, House Republicans have advanced two major pieces of legislation that would do just that. Both the “Cut, Cap, and Balance Act,” which the House passed last week, and the new Boehner debt-ceiling proposal drop all of the low-income exemptions that have been part of every previous across-the-board cut mechanism since 1985.

And, in an exercise in political cynicism, both of these bills add an exemption — for payments to Medicare providers – that was not part of the previous laws. This enables the bill’s authors to claim they are protecting Medicare, even as they subject those living below the poverty line to the risk of automatic cuts that would push them even deeper into poverty. (To be sure, these two measures do not protect Medicare — or Social Security — from being cut by Congress to meet the extremely austere budget targets the bills erect; they only protect those programs from being cut automatically if the targets are not adhered to.)"

They Did What?

July 28th, 2011

We couldn't make this up if we tried.

As anyone who has been within a quarter mile of a television or the internet in the last month by now knows, the whole of American representative governance has ground to a halt over raising the debt ceiling. Today was supposed to the big day for Speaker Boehner's bill. It may be dead on arrival in the Senate, but that's only if it ever gets there. Here's what happened via WaPo:

"The House was nearing the end of its debate on the legislation when Republicans suddenly shifted gears. They instead moved to a bill renaming a post office in Peoria, Ill." EMPHASIS OURS

"GOP leaders have been laboring to line up the 216 votes the debt bill would need to pass the House, and they have encountered opposition from some conservatives. There are 240 Republicans in the House."

Rep. Boehner may well be the most incapable Speaker of the House in generations.

Government of S&P, By S&P and For S&P

July 28th, 2011

A number of analysts are finally getting around to asking some very sensible questions regarding the power and influence of Moody’s, Fitch, and Standard & Poor’s in the debt limit boondoggle.


Although we probably should have started this conversation months ago, it's better late than never. Robert Reich draws attention to the fact that the "$4 trillion in savings" figure we've been hearing Republicans insist upon day after day is a target specifically set by S&P, an unelected private firm.

I Really Hate To Agree With Sowell, But...

July 27th, 2011

Although I generally find Thomas Sowell to be a backward thinker, however bright he may be, he has added his voice to the growing chorus which is calling for the elimination of the debt ceiling altogether. Welcome to the party Mr. Sowell.

He writes:

"However the current debt-ceiling crisis turns out, the current economic turmoil in financial markets around the world should cause some serious thoughts about the long run, and about the whole idea of a national-debt ceiling.

Some people may have been shocked when the credit-rating firm Moody’s recently suggested that the debt-ceiling law be repealed, in order to avoid fiscal crises which can throw world financial markets into turmoil that can injure countries around the world.

Anyone who wants to show that Moody’s is wrong should be prepared to show the actual benefits of the debt ceiling, not its goals or hopes. That will not be easy, if possible at all."

In spite of the fact that Mr. sowell goes on to take some plainly partisan shots at his usual targets, such as calling the United Nations "dangerous" and ludicrously blaming the current administration for the debt without mentioning certain inconvenient facts about its predecessor, the core of his argument, that proponents of the debt ceiling should be forced to explain just what the heck it's good for, is spot on.

From its inception as a device meant to appease the isolationists seeking to hamstring President Wilson and to limit the entry of the U.S. into World War One, this parliamentary procedure was specifically intended to cause gridlock. Indeed, as Elvin Lim wrote, the ongoing drama in the beltway has exposed the debt limit as a tool which has allowed our nation to become "the only country in the world that that has the luxury of creating an economic crisis when there isn’t one."

We need to abolish it as soon as is possible. Then, we might get back to business of government.

Umm. It Wasn't A Problem Before, ctd...

July 26th, 2011

Really. It wasn't. Here's an easy to read picture thingy. That's Two Hundred and Seventy Five totally, completely, altogether non-controversial votes to increase the debt limit under the Bush 2 regime.

Stewart on "Armadebton"

July 26th, 2011

Spot on as usual. Which is quite unfortunate on this point.

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Oops...

July 23rd, 2011
by F. Grey Parker

Well. Yesterday sure was an interesting day. First, we were all subjected to the worst speaker of the U.S. House in living memory refusing to take the President's phone calls. Debt limit crisis? "Phooey," said commander booze-tan. Second, we endured the spectacle of Mr. Waterworks holding a damage control press conference. It was a train wreck in which he utterly failed to explain himself.

Reagan On Default

July 22nd, 2011

If you have not yet heard this Reagan speech from 1987, it's eerily familiar. Of course, as President Obama has made the exact same arguments, members of the so-called "Party of Reagan" have called him a "fear-mongering"  "liar". Go figure.

Quote Of The Day - Here and Now Edition

July 20th, 2011

Oh.. we will be following up on contemporary GOP critique of this sort of debt limit "rhetoric..."

"The full consequences of a default – or even the serious prospect of default – by the United States are impossible to predict and awesome to contemplate. Denigration of the full faith and credit of the United States would have substantial effects on the domestic financial markets and the value of the dollar."


-- President Ronald Reagan in a once forgotten 1983 letter to Howard Baker

What's The Worst That Could Happen? ctd...

July 7th, 2011

Dave Weigel observes that congressional reaction to the debt crisis is not exactly inspired:

"You'd never know there was a debt crisis. Congress is in session this week because Republicans didn't want a weeklong holiday recess, and Democrats obliged them. "Our country is going bankrupt,"said Sen. Ron Johnson, R-Wis., last week, making the ask. "We should not be going on holiday."

It was a deal: no holiday. Congress is on emergency watch with weeks to go, maybe, before an analyst at Moody's or S&P gets cut off in traffic, needs to vent, and decides to downgrade the credit rating of the United States. What does Congress look like on emergency watch? Picture the way Congress looks at any other time. Got it? Now: Slow it down."

Yup. The only reason there was no technical "recess," as it turns out, really was to prevent the appointment of a head to the CFPB.

Quote Of The Day - Here and Now Edition

July 6th, 2011

"This country now possesses the strongest credit in the world. The full consequence of a default–or even the serious prospect of default–by the United States are impossible to predict and awesome to contemplate." 
--Ronald Reagan

What's The Worst That Could Happen? ctd...

July 6th, 2011

As the Republicans continue to hold our nation's creditworthiness hostage to their ageneda, an increasing number of observers are advocating the "14th Amendment solution." Among them, Katrina Vanden Heuvel who wrote for WaPo:

"President Obama may find that there is only one course left to avoid a global economic calamity: Invoke Section 4 of the 14th Amendment, which says that “the validity of the public debt of the United States … shall not be questioned.” This constitutional option is one that the president alone may exercise.

What's The Worst That Could Happen? ctd...

July 5th, 2011

Although I generally regard the NY Times' David Brooks to be a hack and an apologist for the Republican Party, there are some signs that reason is creeping into his analyses. He wrote earlier today about the games being played by the far-right in the debt limit debate:

"The members of this movement have no sense of moral decency. A nation makes a sacred pledge to pay the money back when it borrows money. But the members of this movement talk blandly of default and are willing to stain their nation’s honor."

I am in complete agreement with Mr. Brooks on this one.

What's The Worst That Could Happen?

June 29th, 2011

Let's say that debt limit deadline arrives and there has been no "agreement."

TPM reports:
"According to one of the most influential economists in federal policy making, the next four weeks will make the difference between a slow glide toward economic recovery, and a severe tumble into a new recession.

Moody's chief economist, and former McCain economic adviser Mark Zandi 
is forecasting GDP growth of 4 percent by the end of the year and into next. But in response to a question from TPM, he told reporters at a breakfast meeting hosted by the Christian Science Monitor that his forecast would be "blown out of the water," if Congress fails to "reasonably gracefully" raise the national borrowing limit."

Sounds pretty bad. But hey, what does he know? Zandi is only one of the most respected conservative economists in America. His analyses don't mean diddly to RNC Chairman Reince Preibus who had some interesting things to say about a default yesterday morning while talking to Joe Scarborough.

Sabotaging America, Ctd

June 23rd, 2011

A couple of weeks ago, I commented on an article by Robert Parry and made the supposition that the GOP may well be attempting to directly sabotage our country's economy. 

Yesterday, Democratic Senator Chuck Schumer (NY) had the nerve to suggest this publicly. The process continues. Ezra Klein notes that Rep. Eric Cantor's (R-VA) departure from the debt-limit talks today is not just irresponsible, it is also dangerous. Frankly, I think Klein is easy on the man, but his conclusion is clear and correct.

From WaPo:
"...if you had to write a plausible scenario for how America defaults on its debt, or at least seriously spooks the market, this is how it would start. After insisting on using the debt limit as leverage for a budget deal, the Republican leadership finds they can’t actually strike a deficit-reduction deal, but nor can they go back on their promise to vote against any increase in the debt limit that isn’t accompanied by a deficit-reduction deal. What follows is a lot of jockeying and fingerpointing, a short-term increase or two, and eventually, a market panic.

Cantor is putting personal power before country here, and in a very dangerous way. If Boehner actually does manage to cut a decent deal despite Cantor’s effort to throw him under the bus, he may not hold on as leader of his party, but unlike Cantor, he’ll deserve to. For better or worse, this is when we learn whether anyone on the Republican Party’s leadership team is actually prepared to lead."

When we look back years from now, this may be one the most important moments in our history. And one of its most devastating. No foreign enemy has ever put the United States in a position of defaulting on its obligations. The GOP now has.