Silver Lining?

Is there an upside to having a President who is impatient, self-indulgent, intellectually lazy, easily frustrated, not terribly competent, and pathetically in need of love?

He sided with the Democrats on limiting the debt ceiling extension to only three months, and tying it to disaster relief.  Will Republicans in Congress go along?

He punted DACA to Congress, giving it six months to do something.  Will Congress do anything?

 Maybe.

For years now, we've watched the expansion of the imperial presidency.  We've watched as signing statements and executive orders have supplanted legislation while Congressional gridlock took root and metastasized.  Well, Congressional gridlock works when Congress can count on a strong Executive to keep the wheels of government turning.

What happens when the Executive Branch is in disarray, and the President is out-to-lunch?  Will Congress get its act together and reassert its Constitutional powers?

The single most important power Congress has abrogated to the Presidency is the power to make war.  Given that Our President's negotiating skills are somewhat less than advertised, do we dare  hope for enough genuine leadership among the time servers, corporate clients, and party hacks in Congress to avert catastrophe in Korea or the Middle East?  (A good start would be to child-proof that red button!)

Members of Congress, Republicans and Democrats alike, have been either too fearful or too lazy to give us genuine representative government for far too long.  If they can't or won't do their jobs, they must be replaced with individuals who will.  Historically, there always is one group willing to take the reins when a government becomes too dysfunctional — and, sad to say, the most trusted leaders in government right now appear to be the generals.

Amazing Debt Ceiling Resolution?

I suppose we might say "thank you" to John Boehner for calling the vote on a "clean" bill to increase the debt ceiling, but that might be giving him a little too much credit.  Another bout of craziness certainly would not have helped Republicans in the midterm elections, and the Republicans who joined Democrats to give us a clean bill either were in super-safe seats or had announced their retirement at the end of this Congressional session.

In the meanwhile, the crazies can rant and rage against Boehner to whip up their even crazier base, but I don't expect the Speakership will be in danger.  Attention span among the true crazies is not all that long, and they are easily distracted (by Fox News.)

The evil Obama might have been happier with another threatened debt default and, perhaps, even another credit downgrade (by a different ratings agency.)  Am I a bit cynical?

You betcha.

What next?

Assuming both Houses of Congress vote to approve the temporary Republican capitulation and send the bill to the President before midnight, we've squeaked through again.  The interesting part, this time, was that Obama finally drew a "red line" and didn't move it — but I suspect the thanks for a resolution should go to the U.S. Chamber of Commerce, the Business Roundtable, Wall Street lobbying firms, and a bunch of other essentially Republican organizations.

The question now is, "Have they learned anything?"  Keep your fingers crossed.

So called "moderate" Republicans — that is, not the ones Devin Nunes (R-CA) described as "lemmings with suicide vests" — just might get some more corporate support.  Yes, a lot of those "moderates" are afraid of primary challenges from the Tea Party lemmings, but wouldn't it be nice if some of those corporate interests got into those safe, perfectly gerrymandered Republican districts and financed primary challenges against right wing radicals by Republicans a little closer to the center?

Boehner and the bomb throwers

It's Boehner's responsibility, if not necessarily his fault.  He can call for a House vote on the Senate's continuing resolution whenever he gets up the testosterone to face down Ted Cruz and the Crazies (not a heavy metal band) but he's so terribly afraid of losing the Speakership, he won't do it.

And what I want to know is what's the point of being Speaker if you can't lead?

According to sources to the Times, Boehner says he won't let us default on the debt, albeit he will not make any public statements to that effect.  I believe it, though.  I think he cares more about the full faith and credit of the United States (not to mention the economy of the rest of the world) than for his status with the people Harry Reid calls "Tea Party anarchists."

Honestly, I suspect John Boehner just might be some kind of patriot.

The "Train Wreck"

John Boehner really, really, really wants to keep his job as Speaker.  He's not stupid, and I'm sure he doesn't want to shut down the government, but he had to go along with the radical crazies in his caucus for fear of losing his job.  That's why he supported the House bill to defund Obamacare, referring to the ACA as a "train wreck."

The real train wreck will come at the end of the month, when government shuts down.  Unlike the catastrophic Congress Clinton had to deal with back in the nineties, which had enacted a fair number of appropriations bills before digging in its heels, the current Congress had not passed any appropriations bills at all.

Not long after, of course, we come up against the debt ceiling.  Will the crazies carry through on their threat to let the USofA default on its debts?  Are they really that crazy?

I guess all we can do is wait and see.

Beware the "Grand Bargain"

The general public seems to believe that what Bernanke called "the fiscal cliff" (and Krugman called "the austerity bomb") has been averted.  It hasn't, of course.  Sequestration and lifting the debt ceiling were kicked down the road a couple of months, but nothing, really, is settled.

During his first term, Obama seriously sought a "Grand Bargain" on tax increases and spending cuts with John Boehner — but Republicans, possibly convinced by too rich a diet of Fox News, declined, thinking they could take the Presidency and possibly the Senate as well in the 2012 elections.  Well, they were wrong.

The problem now, though, is that Obama still wants a "Grand Bargain," and probably still is willing to make entirely too many concessions on what currently are called "entitlements," but which used to be called "the social safety net."  (Yes, the progressives let the conservatives select the lexicon again.  When Republicans talk about "reforming entitlement programs," what they mean, really, is "shredding the net.")

Well, there are some changes that could be steps in the right direction.  The salary cap for FICA contributions could be lifted — or, better yet, entirely eliminated — to build the Social Security trust fund.  Since that trust fund may be invested only in government bonds, perhaps the Fed could create a new instrument — available only to the trust fund — that actually pays a little interest.  Since the Fed creates money out of thin air, it wouldn't cost taxpayers a cent, so beefing up the trust fund would not have any negative impact on the general economy.

What Medicare needs more than anything is what insurers call a more favorable experience rating — that is, it needs more members paying in who need less health care.  Hence, it makes no sense at all to raise the age of eligibility to 67, since the youngest members use the fewest services.  What should be done is to open up Medicare coverage to much younger participants.  The best way I can see to do that is to allow Medicare to compete against the private companies on the Affordable Care Act exchanges.  Uh huh, that good old public option — but there's no doubt it would cut costs.  The real solution, of course, is single payer for all.  Don't miss Eduardo Porter's column in yesterday's Times!

Needless to say, eliminating corn subsidies and the corn-based ethanol requirement for gasoline would free up a lot of money for food stamps, and raising the minimum wage to a living wage would help increase all kinds of tax revenues while reducing income inequality.  Yes, prices might have to rise, but poorer people tend to spend whatever extra income they receive, boosting sales.  That means more profits for (real and alleged) small businesses, and more employment.

I could go on, but why bother?  None of the above will happen.  After all, as Will Rogers said, "We have the best Congress money can buy."

Punk-ass Pussy President Sucks GOP Cock Again

I am sorry that the most visceral words that signify great cowardice in the English language are either misogynistic or homophobic. I'm in a very visceral frame of mind.

Barack Obama is not an idiot, so I assume he realizes that the Faustian bargain he just struck with Boehner and Co. will make anything resembling economic recovery impossible at any time in the foreseeable future. Thing can, and will, get much worse before they get better.

The only hope I see is that Congress turns down the alleged "compromise," forcing Obama to act like a mensch and use executive power to raise the debt ceiling on his own — but would he do it even then? I don't know.

Immediately after publishing this post, I intend to fax my representative in the House to request that he vote "no," but he's a complete party hack who narrowly held onto his seat in 2010, so I don't expect him to comply with my request. After that, I suppose I'll fax the White House so they understand that they can't count on their left-leaning base after such a complete betrayal. I wouldn't vote for Barack Obama again even if it meant risking the election of, say, Louis Gohmert, who is so stupid his district has to send him to Congress on the "little bus."

I may use some visceral language.

BREAKING NEWS!!!!!!!

According to a teaser from my local NBC station, "The East Side Groper Strikes Again!"

Gee! Somebody was groped, and he/she was not the first! Very upsetting, indeed!

In the meanwhile, Boehner got a bill past the House by adding a totally crazy balanced budget amendment requirement, and the Senate shot it down. The House, in turn, shot down Harry Reid's allegedly "Democratic" bill, making way for a "compromise" somewhere between the right wing and the starboard side of a flat earth.

Apparently, this is okay with Obama, who made it perfectly clear that he is far too cowardly to invoke the 14th Amendment — or even just common sense. (Common sense suggests that once Congress has spent the money, it is obliged to pay the bill — because a default is the equivalent of declaring bankruptcy. Clearly, the United States cannot be bankrupt while so many of its citizens and corporations have so much wealth.)

And, so, I guess the "warring parties" will get something together before 8/2 replaces 9/11 as the low point in American history. Given the most recent GDP figures, though, one hopes that European style austerity can be delayed for a while — say, five or six years. Otherwise, it's really looking like 1937 all over again.

Anyway, if you think getting groped might actually make you feel better than the rest of what's in the news, head over to the East Side. Maybe you'll get lucky.

Now what?

As of this writing, John Boehner still can't gather enough votes in the House to pass a bill to raise the debt ceiling, despite support from all Republican leaders, presumably including Eric Cantor — although I suspect next-in-line-to-be-Speaker Cantor may be less upset than he appears. If there is no breakthrough today, somebody in Washington may have to show some courage.

We all know who that somebody is, and we all know what he'll have to do. Barack Obama will have to go right ahead and break the 1917 debt ceiling law by ordering Treasury to keep selling bonds after the debt ceiling is breached. Presumably he can find some lawyers willing to write some opinions explaining why he's really allowed to do it. As we all know, it's not hard to find lawyers willing to justify anything. Hell, George W. Bush found lawyers to justify torture.

But who would buy those bonds? Well, Ben Bernanke is no idiot, and I think he could persuade the rest of the Fed to go along. Yes, it means "printing" money, and is likely to put even more downward pressure on the dollar, but inflation hasn't been any sort of problem for the past few years. An out-and-out default would do much more harm.

Yes, Obama would certainly be impeached in the House — creating even more political theater — but he wouldn't be convicted in the Senate. As for his electoral chances, they might improve if he finally showed some balls — portraying himself as the strong leader who finally stood up to the incompetents in Congress.

The "Gang of Six" Plan

If you haven't read the actual document released by the "Gang of Six," you can download it here. Don't feel intimidated — it's short and not even remotely technical. As a matter of fact, it says pretty much nothing in terms of suggestions for real legislation.

So why is Our President so enthusiastic? Well, it's, sort of, bipartisan. Three extremely conservative (but not Tea Party) Republicans got together with three Blue Dog Democrats, and came up with roughly four pages of mostly conservative talking points. Needless to say, both the left and the Tea Partiers are extremely upset. "Mostly conservative" is what passes for "moderate" these days.

As for me, I continue to hope that Our President has no strong interest in any of these particular talking points, and is using them just to put pressure on the Tea Partying ideologues in the House. All he wants right now is a goddamned increase in the debt ceiling without being forced to raise it himself, without Congressional approval (as I suggested a couple of weeks ago.)

Bill Clinton, it seems, agrees with me. So far, as best I can tell, nobody's heard from W.

More Debt Ceiling Crap

Have you ever watched a game of chicken? Some of us geezers automatically think of the one in that James Dean movie, Rebel Without a Cause. In the case of the debt ceiling, though, two cars driving side by side towards a cliff really isn't the right metaphor. To me, two cars driving on a collision course down a single lane road with brick walls to each side seemed more apropos. It isn't possible for just one of them to step on the brakes and bail out. Either both chicken out or both wipe out.

Then along came that canny little bastard, Mitch McConnell, with a neat idea for creating an exit ramp for the Republicans — a ramp that would allow the Republicans to duck out of the way while Obama drives the country off a cliff and ensures a Republican victory in 2012. There's just one little problem with the McConnell plan.

What if there's no cliff? The Republicans would have chickened out, the economy wouldn't be significantly crappier (albeit still quite crappy), and Obama probably could go on to win another term. Nobody actually knows what a second Obama term would look like, but I'm not betting on a great flowering of liberalism. I figure it will be the same corporatist crap, just minus the worst of the supply side bullshit.

If both parties still are obeying their corporate overlords, McConnell's plan is likely to be the one that flies. It will take a few days for House Republicans to figure out which of them can get away with voting for it and which of them get to beat their chests and vote "no," but it can pass. (Expect, of course, a very close vote.)

Those of us old enough to remember the James Dean movie cannot help but feel a bit cynical. It's only to be expected.

Regarding what's "on the table"

The June job figures show employment continuing to crash, even as corporate profits increase. Is anybody surprised? The profits are coming mainly from overseas, although "productivity increases" here at home (automation plus increasing worker exploitation) aren't hurting at all.

In his column in yesterday's Times, Paul Krugman pointed out that the president is running very low on economic advisers, and wondered if the political advisers — who, like Obama himself, seem to know very little about economics — might be exerting too much influence. Given the quality of the economic advisers he used to have, I suspect there's not a hell of a lot of difference, but I'm hoping somebody can communicate some sense to him.

First of all, somebody has to pound it into his thick skull that we are not dealing with supply-side problems. It doesn't matter how many tax cuts and tax advantages government tosses at business — they'll just take the money and sit on it, or use it to buy back their own stock or take over other businesses (with concomitant staff "consolidations") or distribute it as dividends to shareholders. None of it will be used to create jobs in the United States as long as Americans can't afford to buy their products.

(The political advisers, of course, will point out that some percentage of "independent" voters have swallowed the supply-side line, and will encourage Obama to "get out ahead" of the Republicans. Obama once said he'd rather be a good one-term president than an ineffective two-term president, but I suspect he was either lying or self-deceiving at the time. I don't have a lot of confidence in Obama — or any of our current political elite — putting the country ahead of their own ambitions.)

If we disregard political ambitions and corporate contributions (har de har har), it makes absolutely no sense to give the corporations "tax amnesty" for bringing overseas profits back to the United States. We tried it back when Bush was president, and all it did was create a great deal of moral hazard, inevitably leading to the current proposal to do it again.

It also makes no sense to cut entitlements, which would serve chiefly to further reduce demand, and make our employment problems even worse. If Obama really has Social Security and Medicare "on the table" in the current talks with the Republican leadership, let's hope he's feeding them a line of bullshit no less stinky than the line they're feeding him about the possibility of increasing tax levies on the plutocrats.

Shit, nobody in either party wants to tax the plutocrats! They are the plutocrats! (Where's the IWW when you need it? We need it now.)

The Debt Ceiling Dispute

This week we get to see whether Our President has finally grown big enough balls to stand up to those big bad Republicans. Yes, I know, they're very scary! Some of them are so stupid they may as well be crazy, and some of them have been publicly committed to supply-side voodoo for so long they are incapable of making rational choices.

Obama's biggest problem is that he's backed down so many times there's no reason for even the sensible Republicans — those who are just ordinary politicians — to believe he won't do so again. That means he has to get out ahead of the game this time, even given the fast approaching "deadline" that's supposed to frighten all of us so much.

Here's my suggestion: begin by announcing that there will be no agreement that does not include tax increases for the rich. He should not fudge the language by talking about "closing loopholes" or "eliminating subsidies" — he should come straight out and say "tax increases." The Republicans will, of course, accuse him of "class warfare," but what the hell? America is ready for a little "class warfare" at the moment, and the tea parties should not have a monopoly on populism while so-called conservatives load greater and greater burdens on the backs of the middle class and the poor.

Obama has taken a good first step by rejecting any temporary, stopgap measure that will do nothing but push the problem closer to the 2012 election. He has a history (think of the Bush tax cut extensions) of being nickled and dimed into major concessions, and he shouldn't allow that to happen again.

After drawing his line in the sand, his next step should be to announce that he will instruct Treasury to continue to sell bonds even after the debt ceiling is reached, based on the idea that when Congress votes for spending without raising sufficient revenues to pay the bills, it must be assumed that Congress is empowering the executive to borrow. By the time the Supreme Court issues an opinion on the Constitutional validity of a debt ceiling, breaching it will be a fait accompli, and the debt ceiling no longer could be held hostage by Republican blackmailers.

It's time for the president to start acting more like a scary black man and less like somebody who got his job through an affirmative action program. The only way to deal with bullies is to stand up to them. Barack Obama seems to be beginning to make that attempt. Let's hope he follows through.

Double Dip?

Bad news all around this past week — jobs, housing, the markets, what-not — but, especially, politics. The Republicans are determined to drive the US economy into a hole it can't climb out of, and the Democrats are going along for the ride.

All but a few corporately connected economists see the budget deficit as a medium- to long-term problem. Do we have to deal with it? Of course — but we don't have to balance the budget next year, the year after, or the year after that. Anyway, the best way to balance a budget is through economic growth, and austerity programs — no matter what certain ideologues have to say about it — never lead to growth.

The whole idea that businesses will fail to invest because they are afraid their taxes will go up is idiotic. Taxes can only be a percentage of profits (after the usual heavily lobbied deductions and exclusions), so if that percentage is something less than 100%, investments that increase profit margins make economic sense. If a company makes an extra billion that is taxed at 50%, that's still an extra half-a-billion.Even if it's a risky investment, if it pays off it amounts to greater profits. If it fails, it's a write-off, and the tax rate doesn't matter — it may even save the company some money on the taxation of its more profitable ventures.

I do not advocate allowing the US to default on its debt, and I think a responsible Congress would have voted to increase the debt ceiling last week with no commitments to deficit reduction. Now is not the time to play dumb political games. As a matter of fact, now is a time to stimulate job growth through greater deficit spending — enough, this time, to make a real difference.

It won't happen, of course, because too many Americans are economic illiterates, and because the Republican commitment to further enriching the rich is the foundation of the current party's existence. Only by shrinking government can further upper-income and corporate tax cuts be made possible.

I am trying to learn more about Gary Johnson, a dark horse candidate for the Republican presidential nomination. I'm starting to think that a libertarian Republican just might be a better choice for 2012 than a corporatist Democrat — and that somebody (possibly with Tea Party endorsement) has to turn the Republican Party away from its own corporatist commitments. With Johnson (or, even, Ron Paul), progressives just might get more than they will out of Obama.

Debt, more debt, and a bit of Afghanistan

I've been remiss. Sorry. Let's try to catch up a little.

So the US reached its current debt ceiling today, and Timmy Boy Geithner was only too happy to dip into the pension funds of federal employees to prolong the suspense. Nobody was surprised, and the yawns resonated across the Potomac. Wall Street, apparently, is not at all worried.

Why isn't Wall Street worried? My guess is that the Street is sure that nothing that happens will be in any way damaging to the Street. Oh, for Christ's sake, that's not a guess — that's just a totally non-creative reading of the way life is, these days. All I can hope for is that Democrats won't give in to "triggers" unless there are tax increase triggers as well as spending cut triggers. Hopefully, they won't have to look to Obama for leadership.
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Dominique Strauss-Kahn is in a New York City jail at the moment. Is it entirely likely that he, as a powerful world leader, has the testosterone, the hubris, and the disdain for lower class African immigrants to be guilty. Quite possibly, if he stopped to think at all, he presumed she was an illegal, and hence wouldn't report the assault.

On the other hand, it's not outside the realm of possibility that he was set up. Nicholas Sarkozy can't be terribly upset — in fact, quite a few champagne corks must have been popping at UMP headquarters when the news broke. A more likely scenario, though, is that certain bankers holding short positions on Greek debt find it in their interest to stop another bailout of Greece. With Strauss-Kahn out of the picture, the inevitable default is likely to come far sooner.

NYPD says it has forensic evidence supporting the alleged assault, which seems a little odd considering it took the form of what Bill Clinton famously called "not sex." The maid, who came from a Francophone country where France continues to exercise a good deal of economic power, must have shown extraordinary presence of mind — especially for a presumably traumatized woman pushing around a cart well stocked with those little bottles of mouthwash. Yes, testosterone, hubris, and disdain offer a more likely explanation, but I'm just saying that's not the only explanation.
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Meanwhile, John Kerry and a few others are suggesting that the recent Osamacide makes a somewhat accelerated exit from Afghanistan more acceptable. Sadly, somewhat accelerated is not likely to mean "next week," but at least Petraeus is keeping his mouth shut for the moment, which is appropriate for the future director of the CIA.

Now, if only Asif Ali Zardari and Ahmad Shuja Pasha can persuade Pakistani Islamists that they really didn't have anything to do with bin Laden's assassination, and also persuade Hamid Karzai he's better of accommodating Pakistan than India, some real progress in getting the US the hell out of Afghanistan might be achieved.

Standard and Poors Downgrades Congress

A couple of days ago, Standard & Poors announced that there is a one in three chance that it will downgrade US debt from its customary AAA rating within the next two years. The bond market barely flickered, indicating that nobody who mattered was terribly concerned. Granted, S&P's reputation for accurate evaluation of risk suffered somewhat in 2008, but the real reason for the collective yawn was that bond traders understood the announcement was a political rather than an economic statement.

(Yes, the stock market took a bit of a dive following the announcement as the amateurs panicked, but it rapidly recovered. One might be curious to know just who was shorting the most volatile stocks just prior to the S&P pronouncement.)

So, what was the political point S&P wanted to make? In the words of the shop teacher from South Park, "Hey, you kids! Quit messing around!"

More than anything else, Wall Street values stability — especially since it has shown itself to be so inept at risk management. While nobody in his or her right mind believes the US ever would default on its debt, S&P probably thinks there might be enough idiots in Congress to create instability by playing politics with the debt ceiling right up until the last minute. If the rest of the world gets to thinking that our government is approaching critical mass for idiocy, US debt markets — private as well as public — could suffer.

A statement similar to S&P's was sent by the bond trader PIMCO earlier this year, when it announced it no longer would be purchasing US debt, thereby implying distrust of government. The real reason PIMCO is getting out of the market for government debt is that is pays such low interest — specifically because it is so very safe an investment.

Look a little deeper, though, and there may be cause for concern. S&P issued virtually identical statements — twice — with regard to UK debt. It is widely believed that those "devaluations" helped elect the Cameron government, and encouraged the current British austerity program.

Would Wall Street prefer a compromise closer to the Ryan proposal than to the Obama proposal for debt reduction? Well, S&P speaks for a lot of very wealthy individuals. What do you think?

Obama on the Debt Ceiling

The president announced a speech for tomorrow in which he is expected to offer his plan for reducing the deficit, in the teeth of Republican demands for more blood from the American working classes as a condition for approving an increase in the debt ceiling. As always, the announcement comes with promises of "bipartisan" appeal, but given that the result of failure to raise the debt ceiling would be economic catastrophe, the Republican threat is hollow.

To date, every time Obama promised to be "bipartisan," he followed up with a Grand Canyon sized cave-in to Republican demands, which in turn was followed by greater cave-ins as he proceeded to "compromise" from his weak starting position. If he thinks this is the only way to win himself a second term — appealing to so-called "centrists" in an attempt to appear "reasonable" — maybe he ought to pay a little more attention to what, in a previous administration, was called the "wimp factor." Americans don't like to be led by a shrinking violet, afraid to offend anybody at all.

The first rule of negotiations is to lower the opponent's expectations by demanding absolutely everything on one's wish list. The Republicans do it every time, Obama never. I'll be very pleased if this time, at least, he follows this most basic rule. I'll also be very surprised.