Sunday, August 7. 2011
Some scattered links I squirreled away during the previous week
(with most of the S&P downgrade shunted off to a separate post):
Steve Benen: Mitch McConnell, Hostage Taker: Starts with a quote from
McConnell (R-KY, Senate Republican Leader) bragging about his role in the
debt limit caper: "I think some of our members may have thought the default
issue was a hostage you might take a chance at shooting. Most of us didn't
think that. What we did learn is this -- it's a hostage that's worth
ransoming." Benen unpacks:
And third, note that McConnell was quite candid in his choice of words.
It's not just Democrats talking about Republicans taking "hostages" and
demanding "ransoms"; here's the leading Senate Republican using the exact
same language. In other words, Mitch McConnell admitted, out loud and on
the record, that his party took the full faith and credit of the United
States hostage, demanded a ransom, and they fully intend to do it again.
Given all of this, it's rather bizarre for Republicans to complain
about being equated with terrorists. As Dave Weigel noted yesterday, "If
you don't want your opponent to label you a hostage-taker, here's an idea:
Don't take hostages."
I'll just add that we've had a set of ideas endemic in popular culture
that excuse McConnell's behavior, even his terminology. In particular,
the notion that the end justifies the means. One can cite many historical
examples, even way before the annihilation of Hiroshima, and many more
since, highlights including the 1953 coup in Iran, the "destroy the
village to save it" war in Vietnam, the whole Iran-Contra fiasco, the
killing of Osama bin Laden. Still, those aren't the things that stick
in popular memory. For that you need something like Vince Lombardi's
"winning is the only thing." You need the long line of movies where we
depend on more and more degraded and unscrupulous characters to do our
bidding -- one can view The Dirty Dozen as a redemption tale,
but actually it just cracked the door open. So now McConnell's brag
touts his romance with criminality. And while some people may feign
to find that shocking, they really haven't been paying close attention.
The truth is all that and more.
Steve Benen: Causing Calculated Contraction:
Starts with a quote from Alex Castellanos ("a prominent Republican media
consultant") on why "we can't borrow forever," and therfore why we can't
borrow at all.
When it comes to economic policy, Castellanos' case is wrong in just
about every conceivable way. Indeed, his concerns reflect a reality
that bears no resemblance to our own, since the United States is able
to borrow money cheaply and easily, and should do just that to help
create more demand in the domestic economy. For that matter, the
Greece comparisons are gibberish. [ . . . ]
I tend to think this is dangerously absurd, but putting that aside,
Castellanos and I fully agree on the underlying point: the Republicans'
economic agenda intends to make matters worse, on purpose, right now.
With a weak economy and high unemployment, conservatives believe
economic "contraction" is a worthwhile, short-term goal.
Americans who endorse this Republican approach are arguing, in effect,
that policymakers should deliberately undermine economic growth and job
creation, in the hopes that conditions will eventually improve after the
right's agenda has worked its magic.
Even if you don't understand the economics (and clearly lots of
people don't), one way you can tell the Republican line is bogus is
to ask yourself: when has anyone purporting to represent American
business in the last 30-40 years ever put long-term considerations
ahead of short-term profits?
Steve Benen: A Timeline of Events:
Starts with Ronald Reagan running for president and promising a balanced
budget, then adding $2 trillion debt during his two terms:
- 2000: George W. Bush runs for president, promising to maintain
a balanced budget.
- 2001: CBO shows the United States is on track to pay off the
entirety of its national debt within a decade.
- 2001 - 2009: With support from congressional Republicans,
Bush runs enormous deficits, adds nearly $5 trillion to the debt.
- 2002: Dick Cheney declares, "Deficits don't matter."
Congressional Republicans agree, approving tax cuts, two wars, and
Medicare expansion without even trying to pay for them.
- 2009: Barack Obama inherits $1.3 trillion deficit from Bush;
Republicans immediately condemn Obama's fiscal irresponsibility.
- 2009: Congressional Democrats unveil several domestic policy
initiatives -- including health care reform, cap and trade, DREAM Act --
which would lower the deficit. GOP opposes all of them, while continuing
to push for deficit reduction.
- September 2010: In Obama's first fiscal year, the deficit
shrinks by $122 billion. Republicans again condemn Obama's fiscal
- October 2010: S&P endorses the nation's AAA rating with
a stable outlook, saying the United States looks to be in solid fiscal
shape for the foreseeable future.
- November 2010: Republicans win a U.S. House majority, citing
the need for fiscal responsibility.
- December 2010: Congressional Republicans demand extension of
Bush tax cuts, relying entirely on deficit financing. GOP continues to
accuse Obama of fiscal irresponsibility.
- March 2011: Congressional Republicans declare intention to
hold full faith and credit of the United States hostage -- a move
without precedent in American history -- until massive debt-reduction
plan is approved.
- July 2011: Obama offers Republicans a $4 trillion debt-reduction
deal. GOP refuses, pushes debt-ceiling standoff until the last possible
day, rattling international markets.
- August 2011: S&P downgrades U.S. debt, citing GOP refusal
to consider new revenues. Republicans rejoice and blame Obama for fiscal
There have been several instances since the mid 1990s in which I
genuinely believed Republican politics couldn't possibly get more
blisteringly ridiculous. I was wrong; they just keep getting worse.
Benen expands on this in a later post,
The Worst Thing the GOP Has Ever Done?:
Where would the GOP's hostage fiasco rank on the list of modern Republican
The list, alas, isn't brief. We could go through Hoover's failures of
the late 1920s, or perhaps Joe McCarthy's crusade in the 1950s. Nixon's
crimes in the early 1970s are legendary, as are the many Reagan-era
scandals -- Iran-Contra, criminal fiasco at H.U.D., the Savings &
Loan debacle -- of the 1980s.
The more contemporary offenses are no doubt fresher in everyone's
minds: the Gingrich/Dole government shutdowns, the Clinton impeachment
debacle, the Bush v. Gore scandal, the politicization of the Justice
Department, the Plame scandal, the fiscal recklessness, the financial
industry negligence that contributed to the 2008 crash, etc.
And while I'm open to suggestion on this, I still think there's
something unique about the Republicans holding the full faith and
credit of the United States hostage, threatening to impose a catastrophe
on all of us, on purpose, to achieve a specific (and unnecessary) policy
goal. What's more, note that no elected GOP officials -- literally, not
one -- ever stood up during this process to say, "Wait, this is wrong.
We shouldn't do this." They all just went along.
Andrew Leonard: The Next Horrible Budget Showdown:
Actually, there's a whole menu of options for recapitupating the last
few months of Republican extortion, and Leonard left out the FAA, which
is already ongoing. The gas tax is a particularly juicy one: after all,
who needs roads? Go read the piece if you want to know.
And remember, September's skirmishes are only a prelude to 2012's
showdown on defense and Medicare spending, with the added fun of an
ongoing presidential campaign to make sure everyone's rhetorical
muscles are in the finest possible fettle.
Remember George Orwell's line from "1984"? Oceania has always
been at war with Eastasia? Senate Minority Leader Mitch McConnell
has already promised that there will never be a clean debt ceiling
hike again; the new status quo is that everything that can be treated
as an opportunity for extortion must be treated as an opportunity
It's the forever budget war.
Andrew Leonard: Market Meltdown Deja Vu:
Written before the end of Thursday's stock market crash (cites the
drop as 271 points at 1 PM; the final drop was 512):
And all of this is happening after a month in which Congress and
the White House occupied themselves by hammering out a deficit
reduction plan for which the best-case scenario is that,
in the short-term, it will only slow U.S. economic growth down
a little bit.
The worst-case scenario? We're looking right at it. For very
good reasons, the global investor community has concluded that
the United States is either unwilling or powerless (or both) to
take any aggressive steps to counteract a growing economic slump.
Remember the fearsome bond vigilantes? Right now they are
gibbering in fear in the basement, stocking up on bottled water.
[ . . . ]
But there's actually a big difference between now and three years
ago. Three years ago, governments around the world took strong
action to counteract financial panic and the slide toward a new
Great Depression. We can and will debate the merits, design and
implementation of those actions -- TARP and the Obama stimulus,
the reliance on tax cuts at the expense of direct infrastructure
spending, etc. -- but at the time, there was a majority consensus
that government should attempt to do something.
But now the game has changed. There will be no new fiscal
stimulus. The European Union may be scrambling to figure out how
to bail out its constituent members, but it is difficult to imagine
the U.S. assisting in any major effort to stabilize markets,
outside of another effort by the Fed to inject even more liquidity
into the system. The critics who argued that the best solution to
the crisis of 2008 was to let beleaguered financial institutions
crash and burn may get their chance this time around. After the
Budget Control Act of 2011, the U.S. government has essentially
handcuffed itself to a chair.
At day's end, Leonard followed up with:
The Roots of Thursday's Market Meltdown:
The failure of the U.S. political system to properly address a
slowing economy is surely an important underlying factor propelling
Thursday's sell-off. But let's not underestimate the extent to which
Europe's ongoing sovereign debt crisis is responsible for the fear
and panic spreading like wildfire throughout investor circles. Maybe
it's just as simple as this: The resolution of the debt ceiling
ridiculousness cleared space for the world to focus on what's going
on in Europe. And now that we're paying attention, we really, really,
don't like what we see. The parallels to the credit crunch of 2008
get stronger every day. Capitalism, having been denied the opportunity
for utter self-immolation three years ago, is eating itself alive,
again. [ . . . ]
The same goes for Italy, the world's seventh largest economy. The
big scary news this week is that "contagion" has spread from the little
guy to the big. Bond investors are now questioning whether Italy and
Spain can pay off their government debt. Rumors that Italy may be forced
down the Greek path are flying through the markets. As a consequence,
the yields that investors will accept for buying new Greek or Italian
debt are rising sharply, which further raises government borrowing costs
and makes Italy and Spain's fiscal situation that much more disastrous.
To complicate matters even more, the biggest holders of government debt
in Europe are big Europeans banks, who are watching their own balance
sheets deteriorate by the day.
The self-fulfilling and self-perpetuating aspects of this dynamic are
obvious. Bond traders get nervous about government finances, and start
pushing markets in directions that make government finances degrade
further. And so on. When government leaders point this out, pledging
their "sound economic fundamentals," their self-serving avowals just
act as another message telling traders to sell!
Alex Pareene: Pamela Geller and Robert Spencer Fundraise on Norway Attack:
As a writer, it sure sucks when someone murders a bunch of people based
on your ideas. (I mean, I assume that sucks. Weirdly, it's never happened
to me.) So you can understand why right-wing anti-Islam bloggers are all
being kind of defensive, these days.
Anders Breivik, the anti-Islam terrorist who killed 77 people in
Norway on July 22, read a lot of American anti-Islam bloggers, many of
whom he cited in his lengthy manifesto. Breivik's favorites included
Robert Spencer, a self-proclaimed expert on Islam whose "Jihad Watch"
blog was quoted and cited in Breivik's manifesto, and Spencer's ally
and collaborator Pam Geller, whose "Atlas Shrugs" was similarly
recommended by the killer. [ . . . ]
They are now actually fundraising on the fact that they helped
inspire a massacre. Or more accurately, they're begging for money to
protect them from the imaginary witch hunt that they claim the liberals
will mount. (Is this part of the witch hunt? I am always confused about
whether I'm witch-hunting or not, when I call people horrid hateful
bigots.) Spencer also signed Geller's fundraising blog, and if you
donate more than $500 to Atlas Shrugs, ThinkProgress reports, they
will send you a signed copy of Geller's book, Stop the Islamization
of America: A Practical Guide to the Resistance.
Alex Pareene: The Baffling Paranoia of Rich Guys Who Resent Obama:
Interview with Ken Langone, co-founder of Home Depot, former head of
the New York Stock Exchange, and all-around rich guy:
Ken Langone wants higher taxes on rich people. He wants the debt ceiling
raised. And he wants his taxes raised. And he wants tax loopholes closed.
And he wants government investment in education and job training. In other
words, he is, in the current political environment, basically a liberal
socialist Democrat? He is more or less aligned with Paul Krugman here.
Obama wants all of these things, too!
Except Langone has a big problem with the politician who shares all
of his major economic policy goals: That politician is also mean to rich
people. [ . . . ]
OK, so . . . this is just pure cultural baggage with
no relation to observable reality. Langone is upset that the president
is not sufficiently "respectful" to John Boehner, he's outraged that
the president appeared in shirt-sleeves in the Oval Office, and he's
upset about a two-year-old reference to "fat cats." Langone wants his
taxes raised and tax loopholes closed, but he's upset that the president
briefly campaigned on . . . closing a private jet tax
So, there is an extensive fact-check of the Reagan jacket thing,
but it doesn't need a fact-checking, it needs psychoanalysis.
Yes, Americans are all ideologically confused. Voters like liberal
policies but vote for divided government. Thomas Friedman dreams of
a technocratic center-left third party without realizing he's dreaming
of the Democratic Party. But Langone crying about the president's lack
of respect and then wishing for Chris Christie to run isn't just
ideological confusion, it's the pathology of the ultra-wealthy under
Guys like Langone should be thankful there aren't mobs with pitchforks
out there, but instead of recognizing that Obama's their best friend in
the country, they're dreaming that there are mobs, and that this awful
populist president is leading them. Imaginary president Black Huey Long
haunts them. People like Jamie Dimon and Lloyd Blankfein, who should
probably be in jail, are convinced the president who pissed away a
significant chunk of his popularity by giving Wall Street all the money
it needed to get back on its feet after crippling the world economy is
a socialist bent on their destruction.
By the way, we saw Horrible Bosses yesterday. It has a
slight warped universe effect, with job holders even more terrified
of losing their jobs than in the present economy, but there have
been many cases in US history where workers were as utterly owned
by their bosses as the three protagonists here -- even if we skip
over chattel slavery, although that's a pretty big one (and still
seems to be much admired in parts of the country, as Michael Lind
keeps pointing out). Some funny stuff; some ineptly stupid. My
takeaway: we need more unions. Even if the sales exec and the
floor manager weren't represented, the company's experience of
having to deal with unions would curb such excesses and give
workers options other than snuffing their bosses -- which in
some ways would even proven to be win-win for the bosses, don't
I'm also reminded of the evils of nepotism, and why I think
estate taxes should approach confiscatory levels approaching
the top. I had a similar experience long ago, when I worked in
a printing company run successfully by a sensitive, thoughtful
founder (like Donald Sutherland here), who wound up leaving
the company to his idiot son (not nearly as vicious as Colin
Farrell here, but nearly as self-centered and equally dim),
who drove the business into the ground (a few years after I
bailed out, so I don't know the gory details). Since then I've
had plenty of opportunities to observe nepotism, especially
in the Bush family, and it's pretty rare when it works out.
Of course, I wouldn't have such businesses confiscated by
the government, either to be run or to be auctioned off. I'd
like to see a system which transfers ownership to the employees
who worked for and built up the business. You could give the
business a moderate evaluation, give the employees stock with
liens based on the evaluation (to be paid off when the stock
was sold, or written off if the stock is sold at a loss), and
let the business go on its merry way. And if the employees
decide to keep the founder's son, well, maybe he's OK, or at
least he'll be better behaved.