It’s still the Economy Stupid! (version 9.999999999)

Personal Consumption Expenditure Revisions via Calculated Risk Blog. (People are not partying like it's 1999.)

Chatting up the ladies of The View is not going to get the majority of people’s minds off the worsening economy. The recovery is definitely slowing down and there are signs in the latest national product and income reports that are very disturbing to us necromancers of macroeconomics. The persistently high unemployment rate is taking its toll on consumer spending. Since that’s the main driver of the U.S. economy, things are not improving. It looks like on a sideways  slide.

One of the things that I really noticed is what Keynes referred to as the paradox of thrift in action. The personal savings rate for the second quarter was reported as 6.2 percent of disposable income. This is significantly higher than the 4 percent that most of the forecasters had anticipated. Coupled with poor consumer sentiment, this is a bad sign.

Confidence among U.S. consumers fell in July to the lowest level since November, posing a threat to the biggest part of the economy.

The Thomson Reuters/University of Michigan final index of consumer sentiment declined to 67.8 this month from 76 in June. The preliminary measure was 66.5.

Employment growth has been slow to take hold and lower home prices are depressing wealth. The lack of confidence may further restrain consumer spending, which accounts for 70 percent of the economy, and limit the pace of growth.

“Consumers have a lot to be concerned about,” Eric Green, chief market economist at TD Securities Inc. in New York, said before the report. “Private job growth is showing signs of slowing, not accelerating,” he said, and stock prices have declined since peaking in April.

People are not feeling secure enough about their wealth (home values, stock portfolio values, etc.) and their jobs to spend money. Instead, they are either saving their money or paying down debt. Either behavior has a bad result for the economy because it doesn’t translate into immediate spending. Because banks are building liquidity and capital and boosting their incomes via fees and arbitrage of investments, they are not lending. This means consumer savings is not translating into business investment. Plus, what business in their right mind is going to expand their concerns when you don’t see customers coming through the doors?

In fact, one of the most interesting trends we’re seeing right now is that businesses are buying equipment and not hiring workers. What profits they do manage to make is going to upgrade existing capital.

The fact that businesses seem to be investing more in equipment than in hiring may be a reason why households have been reluctant, or perhaps unable, to pick up the pace of their spending.

“There are limits on the degree to which you can substitute capital for labor,” Mr. Ryding said. “But you can understand that businesses don’t have to pay health care on equipment and software, and these get better tax treatment than you get for hiring people. If you can get away with upgrading capital spending and deferring hiring for a while, that makes economic sense, especially in this uncertain policy environment.”

Even the Federal Reserve is worried about the current trends.

On Thursday, James Bullard, president of the Federal Reserve Bank of St. Louis, warned that the Fed’s policies were putting the economy at risk of becoming “enmeshed in a Japanese-style deflationary outcome within the next several years.”

The warning by Mr. Bullard, who is a voting member of the Fed committee that determines interest rates, came days after Ben S. Bernanke, the Fed chairman, said the central bank was prepared to do more to stimulate the economy if needed, though it had no immediate plans to do so. On Friday, the government will release its estimate of gross domestic product for the second quarter of this year.

At the Fed, Mr. Bullard had been associated with the camp that sees inflation, the central bank’s traditional enemy, as a greater threat than deflation brought on by anemic growth. Until now he had not been an advocate for large-scale asset purchases to reinvigorate the economy.

Meanwhile, Congress seems completely out to lunch when it comes to fiscal policy. There’s a concerted effort by the right wing of the Republican party and many DINOS to push a meme that it’s all the fault of selfish poor people. I was appalled to read this particular bit of that in WaPO (h/t to BB). The current line is to push people’s needs to actually cash in on the insurance programs they’ve paid for to help them through bad times (e.g. social security, medicare, unemployment insurance) as ‘entitlements’ or some kind of welfare. This branding of safety net insurance programs is horrifying. My father paid for his social security benefits for over 70 years since its inception. To suggest that he’s adopted a “me first” attitude because he’s cashing in on his benefits it’s beyond morally reprehensible. Indeed, Neel Kashkari –a former Bush Treasury appointee–suggest that we should sacrifice further for the good of U.S. corporations. It’s like the fact they’ve been underpaying us for our increased productivity for decades now wasn’t enough sacrifice.

Cutting entitlement spending requires us to think beyond what is in our own immediate self-interest. But it also runs against our sense of fairness: We have, after all, paid for entitlements for earlier generations. Is it now fair to cut my benefits? No, it isn’t. But if we don’t focus on our collective good, all of us will suffer.

When a Republican like Kashkari starts talking about the ‘collective good’ you best mind your wallets. He touts TARP bailouts while telling us we need to fork over our future social security benefits. (Notice he works for Pimco now, he undoubtedly wants to churn up some investment fees from privatized social security accounts and forced saving.)

If you dig deeper into the numbers, it appears that the only reason we’ve experienced lackluster growth has been due to programs like the home credits for first time buyers, cash for clunkers, and money to states that have been used to save state workers jobs. Basically, government programs have given a short, one time injection into various markets but it’s not stopping their trends. It’s only slowing the momentum.

I’ve mentioned that Louisiana is about ready to go off the ‘budget cliff’ in a year and that all state schools and health facilities face an across the board cut of around 24%. From what I can tell already, most of that will come by nearly halving the work force at nearly all state run institutions. No wonder Republicans want to cut ‘entitlements’. How can you shift so many folks on to unemployment rolls and still save the state budget? Louisiana isn’t even one of the worst states like California. (Although if Bobby Jindal continues to have his way, it will be.) If any thing, states like California should be asking the Federal government to stop subsidizing North Dakota and Nebraska and send them back their federal tax money. Without that money, states like Louisiana would’ve been in the dumps at least two years ago.

I’m not sure why the group that’s in Washington DC doesn’t seem to get the extent of the bad news when it comes to the economy. It’s either purposefully ostrich-like or purposefully callous. Maybe it’s because a lot of them have forgotten what it’s like to live through continually high unemployment and job insecurity. It’s possible that there’s just way too many lawyers there and none of them have actually had experience with running a business or working like a serf for an unappreciative corporation.

Whatever it is, they need to get over themselves really quickly. If these patterns continue, it’s going to be a long slow decade and I for one, will not look kindly on any one that asks me to sacrifice for the good of corporate profits. This is especially when that sacrifice comes to giving back benefits that I’ve paid for since I was 15 years old and got my first job with a paycheck.

31 Days of Action

Check it out. Help end violence against women worldwide.

Women Thrive Worldwide presents the 31 Days of Action—a grassroots campaign intended to push Congress to pass the International Violence Against Women Act (IVAWA). Watch the video. Get inspired. Take action. Visit us at:

Find more videos here:

Information from Amnesty International.

Information from UNIFEM.

Information from the Bill’s Sponsors SEN. JOHN F. KERRY & REP. BILL DELAHUNT & KERRY KENNEDY & LARRY COX via Politico.

IVAWA will support innovative programs that challenge public attitudes and cultural practices that perpetuate and condone violence against women and girls. In settings where women are prevented or discouraged from seeking justice, IVAWA will support training for police and judicial officials on countering violence against women and respecting the rights of victims. It will allow long-term prevention efforts such as increasing women’s economic security, expanding access to jobs and education, and engaging men to change behaviors and attitudes. Societies in which women are able to live and function in relative safety, empowered to realize their aspirations and move their communities forward are healthier, better developed, and more stable. Societies that take measures to deter discrimination and violence against women are better equipped to root out terrorism, less prone to conflict, and therefore more secure.

This isn’t just the right thing to do – it’s in our own interests. Investing in women makes sense because when they are safe and free to earn a living they invest in education and grow economies – making U.S. assistance dollars go farther. And, U.S. security benefits from the elevated status of women. The Joint Chiefs of Staff recently stated that one of the most effective forces for defeating extremism is female education. IVAWA will help make this possible

We come now to bury Supply Side Economics

I’ve been having a major hissy fit about the extraordinary bad policy measures proposed and undertaken by Republicans for sustaining tax cuts and deficits for as long as I can remember. The deal is, however, nobody likes it when you tell them they can’t have a free lunch when Ronnie Raygun repeated it ad infinitum. That is very much how the Republicans have achieved political victory since the Reagan years. Basically, they promise to cut taxes no matter what the circumstances and spend money on every military adventure and toy that comes down the pike and chock it up to preserving American exceptionalism. Ronald Reagan and Dubya Bush are responsible for the deficit today and the people that benefited from their tax cuts–and voted for them–should be asked to clean up the mess.

I was ever so pleased to read this article by FT’s Martin Wolf that recognizes ‘supply-side economics’ for what it is. It has nothing to do with a good economy and has everything to do with good politics. It’s a policy of promising and delivering everything and then screaming about the huge bill when a Democrat is in office. Every 8 years or so they do one huge Dine and Dash on the country. Wolf realizes this and basically calls Dubya’s tax cuts “massive, irresponsible, and unsustainable”. He also rightly calls the Reagan years for what they were. Reagan was a premier example of Keynesian policy. Ronald Reagan spent us out of the recession of the early 1980s. The only thing that was supply side about it was the high supply of bull shit rhetoric that went along with it. Some one needs to correct the message.

Ronald Reagan was the country’s premier Keynesian. Then Bill Clinton got into office and led us to a very long,very good business boom by doing what Keynes said to do during that time. You only deficit spend when the economy sucks. It had improved by the beginning of the 1990s. Bill Clinton was frugal. I can never forget the day that Dubya/Cheney looked at those surpluses they inherited and Cheney said, deficits don’t matter, Reagan showed us that. Then they immediately started two wars and gave away the Treasury to every corporation and rich person in the country. It’s damn ironic now that every Republican and Blue running Dawg thinks deficits matter. This is the time when we need them. We should’ve paid more attention to them like five years ago. But Cheney of no heart has brass balls and a spine. If only we had a Democrat in elected office with spine and balls.

Anyway, here’s Wolf’s nutshell description of supply side economics. It’s a good one.

To understand modern Republican thinking on fiscal policy, we need to go back to perhaps the most politically brilliant (albeit economically unconvincing) idea in the history of fiscal policy: “supply-side economics”. Supply-side economics liberated conservatives from any need to insist on fiscal rectitude and balanced budgets. Supply-side economics said that one could cut taxes and balance budgets, because incentive effects would generate new activity and so higher revenue.

The political genius of this idea is evident. Supply-side economics transformed Republicans from a minority party into a majority party. It allowed them to promise lower taxes, lower deficits and, in effect, unchanged spending. Why should people not like this combination? Who does not like a free lunch?

How did supply-side economics bring these benefits? First, it allowed conservatives to ignore deficits. They could argue that, whatever the impact of the tax cuts in the short run, they would bring the budget back into balance, in the longer run. Second, the theory gave an economic justification – the argument from incentives – for lowering taxes on politically important supporters. Finally, if deficits did not, in fact, disappear, conservatives could fall back on the “starve the beast” theory: deficits would create a fiscal crisis that would force the government to cut spending and even destroy the hated welfare state.

In short, Republicans chose one side of Keynesian economics–the side that uses government spending or tax cuts to spur an economy that should be used only during recessions–and applied it like the apple cider vinegar of economic policy. One spoonful of tax cuts fits all! Decades of data have shown economists that that is the farthest thing from truth, however, the political windbags of the right have managed to continue the charade that every one can have everything and not pay for it as long as we just cut taxes. (That is until a democratic president takes office). It’s like saying 1 + 1 = 4. Problem is that many people still buy that. It’s like thinking there were Dinosaurs in a literal Garden of Eden.

The truth is that tax cuts NEVER pay for themselves. Even one of Dubya’s advisors has said as much.

Indeed, Greg Mankiw, no less, chairman of the Council of Economic Advisers under George W. Bush, has responded to the view that broad-based tax cuts would pay for themselves, as follows: “I did not find such a claim credible, based on the available evidence. I never have, and I still don’t.” Indeed, he has referred to those who believe this as “charlatans and cranks”. Those are his words, not mine, though I agree. They apply, in force, to contemporary Republicans, alas,

Since the fiscal theory of supply-side economics did not work, the tax-cutting eras of Ronald Reagan and George H. Bush and again of George W. Bush saw very substantial rises in ratios of federal debt to gross domestic product. Under Reagan and the first Bush, the ratio of public debt to GDP went from 33 per cent to 64 per cent. It fell to 57 per cent under Bill Clinton. It then rose to 69 per cent under the second George Bush. Equally, tax cuts in the era of George W. Bush, wars and the economic crisis account for almost all the dire fiscal outlook for the next ten years (see the Center on Budget and Policy Priorities).

The Democratic leadership must get out ahead of this misleading set of facts and stories. It doesn’t help that they are also adding to the confusion by dissing the Clinton/Gore economic record. Indeed, if any of them would ever get around to reminding the public how good they had it in the 90s, the message would go far. I also remember the Reagan Years. My first house loan came with an interest rate of %16.7. Both my exhusband and I lost our first jobs out of college because of a bad economy. I lost my job at a huge S&L that went bankrupt. He lost his at the Federal Land Bank because of the bad ag economy. The Reagan period was not morning again in America and the Democrats need to step up the game to remind people of that.

Why is it that the Republicans so clearly and convincingly get people to buy the snake oil and the Democrats can event manage to agree on a coherent message? Of course, it would help if they’d stuff that dead racoon of a hairmet in Senator Ben Nelson’s mouth every time he goes rogue, but it would also help if they mentioned how everything was just fine during the Clinton years.

Here let me remind you. The unemployment rate hit a 30 year low in 1999. It was 4.2% and it was low for all groups including

Find the good trend.

blacks, women and hispanics. (It was 7.3% when he took office). From 1993 to 1999, the economy added 20.4 million jobs. There were also increases in blue collar jobs like construction.

20.4 Million New Jobs Created Under the Clinton-Gore Administration. Since 1993, the economy has added 20.4 million new jobs. That’s the most jobs ever created under a single Administration – and more new jobs than Presidents Reagan and Bush created during their three terms. Under President Clinton, the economy has added an average of 245,000 jobs per month, the highest of any President on record. This compares to 52,000 per month under President Bush and 167,000 per month under President Reagan.

92 Percent — 18.8 Million — of the New Jobs Have Been Created in the Private Sector. Since President Clinton and Vice President Gore took office, the private sector of the economy has added 18.5 million new jobs. That is 92 percent of the 20.4 million new jobs – the highest percentage since Harry S. Truman was President and presiding over the post-World War II demobilization.

We had the fastest and the longest Real Wage growth in two decades. Inflation was the lowest it had been since the 1960s.

Under President Clinton, real wages are up 6.5 percent, after declining 4.3 percent during the Reagan and Bush years. Real wage growth in 1998 reached 2.6 percent — the largest increase since 1972.

Okay, so now, tell me. What policies were highly successful? Which policies lead us to peace and prosperity? Why aren’t we seeing the Democrats today try to reinvigorate the policies of Clinton/Gore instead of putting through legislation that comes from the Heritage Foundation? Why are they even dicking around the Republicans at this juncture?

The Obama apologists wonder why Obama–the greatest things since FDR?–is not getting due credit for all these massively huge bills that his congressional chorus line has passed. Well, it’s the economy stupid! First things should’ve been put first. We got a half assed stimulus bill the same way we now have assed financial reform and half assed health insurance reform. If he’d have put all of his political capital into solving the country’s economic problems (JOBS) first, he’d have had enough to run the gambit on the rest. And I would be willing to bet you we wouldn’t have to wonder why a bunch of half-baked Heritage Foundation plans got implemented under a Democratic presidency and majority.

What is so wrong with so many people that they can’t just point to the Clinton years and say, let’s just do that again? Of all things, why can’t the Democrats take and sell that message seriously?

Swimming in Privilege

Being born into privilege means different things to different people. I have found that there are many dimensions that grant you access to privilege. I was born into privilege in many ways and later, I purposely chose to opt out on some for reasons that I sometimes find hard to share with people. A lot of it has to do with the fact that I don’t like getting privileges that I didn’t earn but that I inherited.

It is sometimes hard for people to understand why I would opt out and join an “out” group. I guess the conversations here and in the media about racism and reverse racism have made me think more about this and I’d like to share my ideas with you. Again, I think privilege is multidimensional and that an “out” group can move further up in the hierarchy of that dimension or that other dimensions can offset or trump (in some instances) being a member of an “out” group in another dimension. I also think the idea of reversing privilege –especially when applied by a member who has spent their life having a life of privilege in many dimensions–is a notion that many people don’t understand.

So, I have these hypotheses and I’m going to bounce them off of you.

The dimensions of privilege in the U.S. are still these characteristics. The most privileged are white, male, christian, straight, upper middle class, young to middle age, and WASP. If you were born into this category, you basically hit the lottery and will very rarely experience barriers and words of discouragement to a life of continual upward mobility. You will access the best jobs, the best education, and probably never find that some one who helps you on your path says one of your dimensions is disturbing. However, if you are a person that has some profile that differs from that, you will experience life differently. You may be resented as a person of privilege, but this is not reverse discrimination. It is an emotion people feel towards you because you have no idea that your path was made easier than many others because of the gene lottery.

You can move in and out of privilege in the various dimensions. For example, as you age, you become a member of an “out” class; especially if you are a woman. I have learned this lesson well as my 40s progressed. You become more invisible. You also can become rich and educated and improve your status in that area, and it will clear many paths for you. If you can mimic the language, the dress, and the values of the upper middle class, you can move from an “out” class to a place of privilege. Again, this is true even if you have other dimensions that put you in the “out” group.

What I see at the moment is that this dimension–the upper middle class–dimension is the most important of them all. It didn’t necessarily impact as many lives as it does today, but it’s always been important. Race, ethnicity, and religion have been trump cards in the past that have completely blocked you. This has changed. In that if you were Jewish, you may have been barred from a country club even if you had all the other dimensions of privilege. Race was a huge problem in the South because racism was institutionalized and pervasive until we started knocking it down during the civil rights era. Ethnicity was a problem at one time for the Irish and Italians who also experience problems because they were Catholic. Sex has always been a trump card but again, laws have improved the situation for women in a similar way that civil rights laws have improved the situation for people of color. Still, there are places where we still get stuck.

The most pervasive “out” classes at the moment are those who are Muslim or are of middle eastern ethnicity. The events of 9/11 pushed these folks to the bottom of the hierarchy of ethnicity and religion. I see this now all the time. People think that specific practices–like genital mutilation or child marriage–are part of the Islam doctrine which is not true at all. They ignore that it happens in Catholic Guatemala and or Hindu parts of India. In fact, it happens right here in the U.S. with certain Mormon sects. And like it our not, we do mutilate the genitals of male babies in this country in the name of Judeo-Christian tradition. Once you become an “out” class, the stereotypes abound and memories of others about you become limited. I think it’s difficult for some people to view themselves as having privileges and to realize, in some cases, that they are privileged because there’s always some one ahead of you in something.

It’s also easier to hide some dimensions of being an “out” class. For example, for many gay people, the closet is a viable option. Some hide in traditional marriages. Education and moving to the upper middle class can hide some ethnic roots. Adopting the speech of the upper middle class, their habits and customs really helps one pass. And I believe that upper middle class black people, while still experiencing racism, will have much more privilege than some poor white people because, again, there are multiple dimensions upon which to experience the lack of privilege and the barriers that come along with it.

I do celebrate that many of these barriers–because of the civil rights and the women’s movement– have been removed by law. This doesn’t mean that we have gone over the edge, however. This is because privilege in all of these dimensions is so institutionalized and pervasive, it’s hard to press the mute button on all of it. This is where I have problems with positions like the one taken by Jim Webb today in the WSJ. There is no “myth” of white privilege. It exists. Just as there is male privilege in this country, straight privilege in this country, Christian privilege in this country, youth privilege in this country, and Western European ethnicity privilege in this country. It’s a lottery of genetics that gives us the original combination of privileges and “out” characteristics we get. Again, some we grow out of, some we grow into and , like me, we can opt out of some. Some cannot be changed.

Webb misses the point when he speaks to these statistics that I quote below. This is because he is focused solely on a single characteristic that grants being “out” or “in” privilege. Again, I suggest that the most pervasive out group today is that of the lower and working class. You see this occurring across many dimensions. Social class appears to be the ultimate trump card from experiencing some of the nastiest of the “isms”. It can dilute aspects of racism or ethnicity for example. Money can buy you a lot of privilege that not many other things cannot The exception maybe fame.

Generations of such deficiencies do not disappear overnight, and they affect the momentum of a culture. In 1974, a National Opinion Research Center (NORC) study of white ethnic groups showed that white Baptists nationwide averaged only 10.7 years of education, a level almost identical to blacks’ average of 10.6 years, and well below that of most other white groups. A recent NORC Social Survey of white adults born after World War II showed that in the years 1980-2000, only 18.4% of white Baptists and 21.8% of Irish Protestants—the principal ethnic group that settled the South—had obtained college degrees, compared to a national average of 30.1%, a Jewish average of 73.3%, and an average among those of Chinese and Indian descent of 61.9%.

Policy makers ignored such disparities within America’s white cultures when, in advancing minority diversity programs, they treated whites as a fungible monolith. Also lost on these policy makers were the differences in economic and educational attainment among nonwhite cultures. Thus nonwhite groups received special consideration in a wide variety of areas including business startups, academic admissions, job promotions and lucrative government contracts.

From this bit of statistics, Webb suggests that “government-directed diversity programs should end”. Well, I suppose if you solely look at the color of folks’ skin, this is what those statistics might tell you. But it ignores the nuances and it ignores the many dimensions that I bring up. Not one racial group is a “fungible monolith”.

We should stop all forms of discrimination. We should recognize that government law and programs successfully accomplish this. These statistics do not say that our job is done. It says that we do not recognize the many dimensions of privilege and the barriers to attainment. We should also recognize that because one person has an insult thrown at them, this does not mean they are suddenly the victim of one of the pervasive ‘isms’. This is especially true if they win the lottery of genes and haven’t experienced the kinds of institutional barriers that can block you day in and day out, year after year, decade after decade. You can’t scream that you are the victim of discrimination–like Mark Williams–after one incident where people judge you on one or some of the dimensions. This also applies to the people screaming that there’s a war on Christmas or Christians when the monopoly on holiday celebrations, monuments, and vacation calenders are set up based on your particular brand of mythology. You can’t attend a school or have a job where the majority of holidays, parties, and decorations aren’t hammered on you by that group year after year. Just asking people to recognize that they aren’t the only act in town isn’t discrimination. It’s asking you to reconsider your monopoly on religious privilege. It’s not persecution for your beliefs.

If you’re a Christian in Saudi Arabia, you can claim discrimination. You’re an out class member in that society. Discrimination isn’t about losing your privilege. It’s about not granting others access to privilege and rights. The same goes with the monopoly on marriage by heterosexuals and the privileges that come with that. Losing your unique privilege isn’t about discrimination. It’s about including others in the benefits of the institution. It’s about wresting a way a monopoly that gives you benefits that others do not get and cannot access.

That is what it’s about to me. Making sure whatever institutions we have in the United States do not provide discriminatory benefits based on being an “in” or “out” class of people. This also includes the right to build a place of worship wherever you choose. This means, that it’s okay for any religious institution to put a dharma center, church, synagogue, temple, or mosque on private land within blocks of ground zero. It’s not about offending the privileged group. It’s about protecting the rights of the ‘out’ group.

I’m not sure if this is what’s missing in some of these discussions that’s been happening recently. But, I’m pretty certain that I can trace a lot of problems back to the fact that privilege is multidimensional and a lot of folks only focus on one dimension at best. It’s difficult to rate which dimension causes the most pain in 2010. This is especially true given your personal family experience and memories. For many southern blacks, race has been the ultimate dimension that blocked progress historically. For many women, it’s been their sex. Up until recently, it was very difficult for women to get degrees or follow professions in anything but the so-called pink collar jobs. Right now, it appears that socio-economic status can trump both sexism and racism through law, but it can not erase history or the experience of the individual. We still have to fight for equality for GLBT and for those who follow religions outside the Christian tradition. It’s gotten better for Jews, but it is not good for those outside the Judeo-Christian tradition. Also, just try telling people you’re an atheist and watch their face.

It’s about time we take the Melting Pot meme seriously. Reversing discrimination isn’t about granting special privileges or benefits to some people. It’s about given them access to the monopoly on privilege that others have had for centuries and it doesn’t have to be a zero sum game.

BP CEO definitely Master of the Artful Dodge

Congress is in the process of proving just how inept they are as BP CEO Tony Hayward managed to spend hours providing insouciant looks and not much else. The shocker of the morning came from entrenched Republican Oil Lackey Congressmen Joe Barton who apologized to Hayward for subjecting such a fine business to a Chicago-style Shake Down. He’s now backed off of the statement but the damage is done to his credibility around the hill. This almost tops Joseph Cao’s call for ritual suicide for BP executives earlier this week. Barton’s apology came after even Republican colleagues started the call to remove him from the energy subcommittee.

After infuriating Democrats and Republicans alike with his public apology to BP and suggesting that a $20 billion escrow fund was a “shakedown” by the White House, Barton is now “retracting” his statement, made at a hearing with BP CEO Tony Hayward.

“I apologize for using the term ‘shakedown’ with regard to yesterday’s actions at the White House in my opening statement this morning, and I retract my apology to BP,” Barton said. “As I told my colleagues yesterday and said again this morning, BP should bear the full financial responsibility for the accident on their lease in the Gulf of Mexico. BP should fully compensate those families and businesses that have been hurt by this accident.”

Showing just how involved Republican leadership was in damage control over Barton’s comments today, the retraction was forwarded to the media by House Minority Leader John Boehner’s office.

Barton evidently likes BP’s deep corporate pockets as evidenced by records of his campaign corporate contributions.

Ordinarily, it’s not that shocking to see a Republican from Texas defend the petroleum industry. But Rep. Joe Barton’s comments to BP CEO Tony Hayward today, in which he described it as a “tragedy” that a “a private corporation can be subjected to what I would characterize as a shakedown”, has obviously touched something of a raw nerve, with Republicans already seeking to distance themselves from the comment while Democrats look for ways to exploit it.

Making matters worse for Barton is the identity of the top contributor to his election campaigns. Since 1989, it has been the company Anadarko Petroleum, from which he’s received $56,500 in PAC donations and another $90,000 in individual contributions.

Congress is intent to prove that BP put safety measures on hold to enhance profits. (Shock! Corporations Maximizing Profits! More Breaking News at 6!) Even CNN has given up live coverage because basically, there’s nothing to see here! BP is under criminal investigation. They actually think Hayward will pony up some evidence?
Lawmakers castigated BP chief executive Tony Hayward at a House hearing Thursday for what they said were cost-cutting measures and other “shortcuts” leading to a disastrous oil spill in the Gulf of Mexico, but Hayward said he was not prepared to make judgments about the cause of the catastrophe until “multiple investigations” are completed.

Well, the hearings continue, but so does the stiff upper lip. Who is winning this argument?

Meanwhile, over at the CNN Polling people, it’s obvious the Oval Office Speech on Tuesday hasn’t improved the President’s ability to lead on this issue.

Fifty-nine percent of people questioned say they disapprove of how the president is dealing with the spill, up eight points from May. Forty-one percent say they approve of how Obama’s handling the crisis, down five points from last month.