Monday Reads
Posted: August 1, 2011 Filed under: morning reads | Tags: Debt Ceiling, famine, Federal Deficit Deal, Somalia, Syria 50 Comments
Good Morning!
President Cave-in and the spineless Democrats in congress have handed Republican hostage takers a big win. This is beyond ridiculous. As I’ve said before, President Push-over draws a line on the etcha sketch then goes shake shake shake!
Anything can happen, but it apppears the GOP is on the verge of pulling off a political victory that may be unprecedented in American history. Republicans may succeed in using the threat of a potential outcome that they themselves acknowledged would lead to national catastrophe as leverage to extract enormous concessions from Democrats, without giving up anything of any significance in return.
Not only that, but Republicans — in perhaps the most remarkable example of political up-is-downism in recent memory — cast their willingness to dangle the threat of national crisis as a brave and heroic effort they’d undertaken on behalf of the national interest. Only the threat of national crisis could force the immediate spending cuts supposedly necessary to prevent a far more epic crisis later.
Under the emerging deal, President Obama can hike the debt limit in two stages — the first in exchange for equivalent cuts; the second after a Congressional committee comes up with second round of yet more cuts, including to entitlements. The talks appear close to resolving the spending cut“trigger” that would force the committee to act — without giving the GOP an incentive to deliberately sabotage its work. The remaining question is how to get it through the House. But a deal seems immiment.
Again and again, Dems drew lines in the sand that they promptly erased as the threat of default grew. A clean debt ceiling hike? Dropped. Cuts to Medicare benefits? They’ll likely be in that committee’s crosshairs. The insistence on revenue hikes? Withdrawn.
This is sure to create a recession. There’s no lack of economists expressing that view point either.
Macroeconomic Advisers, a leading forecaster, said Thursday that a rewritten plan offered by House Speaker John Boehner, R-Ohio, would shave more than a tenth of a percentage point off of growth next year, while the plan being pushed by Senate Majority Leader Harry Reid, D-Nev., would cause an even larger hit on growth in fiscal 2013 — shaving almost half a percentage point.
That view was shared by Thomas Lam, Singapore-based chief economist at OSK-DMG, a joint venture of Malaysian securities firm OSK Holdings Bhd. and Germany’s Deutsche Bank AG.
“Our calculations … suggest that the Senate and House proposals, respectively, could lower economic growth on average by less than 0.5 percentage points, all else equal, over the next five years (from 2012 to 2016),” Lam said in a research note that suggested the Senate Democrat plan would hit the economy harder.
The chief economist for forecaster IHS Global Insight, Nariman Behravesh, warned Friday that “a weak economy will only make the tough decisions on the budget even more difficult and the case for fiscal austerity in the near-term even weaker.”
Some House Republicans backed by tea party groups demand even deeper front-end cuts, perhaps as much as $100 billion, arguing that politicians can’t be trusted to keep their promises further out.
That’d be dangerous, warned Mark Zandi, chief economist for forecaster Moody’s Analytics.
“I think the idea is a very serious policy error,” he said. “This would be the fodder for another recession. The economy may be able to digest $25-30 billion more (in federal spending cuts) … but $100 billion, I don’t think it could digest that.”
Zandi, who’s frequently cited by Republicans and Democrats alike, favors spending cuts “when the economy is off and running,” but he cautions that “to add more fiscal restraint in the latter part of 2011 and 2012 would be a mistake.”
It's a bi-partisan pony!
Obama is choosing to ignore the jobs crisis and expects to win the election on the back of the bi-partisan pony, I guess. I can’t believe the recession that will be inevitable shortly isn’t going to tank a few political careers. Also, wait until every one finds out that the programs that no one wants cut are going to be subjected to possible across the board cuts. My guess is that the super committee will deadlock and those triggers will turn in to a bunch of big regrets for every one. This will only create more havoc on the budget also. It’s really bad policy. Afterall, did we get anything done from the catfood commission or the gang of six? These committees are beginning to remind me of the old soviet style planning commissions and their 5 year plans.
The famine in Somalia is deepening. The Economist has an interesting piece up suggesting ways that the world can respond to the desperate situation there. It also suggests that we missed all the signs that should’ve told us it would happen.
Famine has a technical meaning these days. It is declared when 30% of children are acutely malnourished, 20% of the population is without food, and deaths are running at two per 10,000 adults or four per 10,000 children every day. Parts of Somalia exceed these dreadful thresholds. In three provinces almost a third of people are acutely malnourished, says the UN’s World Food Programme (WFP). FEWS Net conducted surveys across southern Somalia this month and found that malnutrition exceeded 38% in most areas—a catastrophic rate. Famine is likely to spread all over the south in the next few months (see map). About 2.8m people are thought to need immediate life-saving help.
Yet famine was not declared until July, eight months after the first FEWS Net forecast. The UN did not issue its first appeal until then, though it made a small provision for expected problems in November. The response by donors has been patchy. In a sign of its growing global role, Brazil has pledged more to Somalia than Germany and France have combined. Italy offered nothing. Of the $2 billion the UN says the region needs, it has received less than half. The cash available for food in southern Somalia looks likely to run out well before the next rains.
Outsiders’ caution is linked to the role of the Shabab, an Islamist militia which controls much of southern Somalia and is locked in battle with the internationally recognised but feeble government. The Shabab has banned food aid in most of southern Somalia since 2009, branding Western aid agencies anti-Muslim. The WFP, the biggest provider of food aid, has had 14 staff killed there since 2008. Agencies also worry that militias use food aid to rally their troops—some say this happened in Ethiopia and Eritrea in the 1980s—and do not want to pile into southern Somalia to find they have reinvigorated the Shabab.
Syria’s dictator ushered in a violent start to the Ramadan holy days by upping the level of violence used against democracy protestors. This is yet another terrible story.
Rights activists said 80 civilians were killed in Sunday’s tank-backed assault on the central Syrian city where Assad’s father crushed an armed Muslim Brotherhood revolt 29 years ago by razing neighbourhoods and killing many thousands of people.
Security forces had besieged the Sunni Muslim city of 700,000 for nearly a month before Sunday’s crackdown on the eve of Ramadan, a holy month when Muslims fast in daylight hours.
Many flock to mosque prayers at night, occasions which may provide opportunities for protests to multiply across Syria.
The Syrian state news agency said the military entered Hama to purge armed groups that were terrorising citizens, an account dismissed as “nonsense” by a U.S. diplomat in Damascus.
The agency said eight police personnel were killed while “confronting armed terrorist groups” in Hama.
U.S. President Barack Obama said he was appalled by the Syrian government’s “horrifying” violence against its people in Hama and promised to work with others to isolate Assad.
“Syria will be a better place when a democratic transition goes forward,” Obama said in a statement
So, it appears that most of today’s news will be that Wall Street and the global financial markets can take a breather. It also appears to be a sad day for sane fiscal policy and America’s poor and elderly.
What’s on your blogging and reading list today?
peej
Carissa
ecocatwoman
mablue2
peggysue22
quixote
skydancingguestblogger
Mona (aka Wonk the Vote)
Sky Dancing 
Thank you for the news update — especially your focus on economic issues.
Your welcome and hazards of the occupation! This current set of bad fiscal policy actions is giving this economist an ulcer.
Thanks for the link to McCatchy. I now listen a lot to Bloomberg Radio on the internet. This morning Tom Keene had Arther Levitt, former SEC chairman. and he said the Republicans completely won this. The final announcement by Obama was one of a completly whipped man, he did not look happy.
In my view it is time for the progressives to step up or forget the election because they are totaly ineffective in their leadership. One has to admit that the Teaparty was very effective in promoting their message.Rationality did not prevail. Krugman puts a stake in the ground in today’s column
Dean Baker has a relevant view:
The Nonsense Battle Over the Debt Ceiling
http://www.cepr.net/index.php/op-eds-&-columns/op-eds-&-columns/the-nonsense-battle-over-the-debt-ceiling
He contends the debt has been driven by the bad economy (low govt receipts) and until those Receipts comes up, nothing will change. He points out that in the COB 2008 projection, no business down turn was projected. Baker and others have commented that Obama does not understand the economic problems. Could that be why Rhomer, Summers, Goolsby and Orzag resigned. Could it be that they did not want to be part of the folding?
JOBS IS STILL THE PREDOMINANT PROBLEM
Absolutely yes on all accounts.
Bostonboomer found the McClatchy link. She’s developed a nose for economics now, however I definitely thinks she’s a behavioral economics fan!
Thanks for the round up!
This is sure to create a recession
I think it’s been going on for awhile already
Recession is a technical term. The technical and appropriate term is that we have a really shitty recovery.
Jobs….not only are jobs not in the offering…but the services needed to survive in that case are under attack…one by one, they are removing people’s clinging fingers from the cliff edge
Exactly! I guess if we all fall, screaming from the cliff, in a big blob it supposedly won’t hurt as much to hit bottom?
Well — well — the “job” creators must be protected. So say the delusional bastards.
The stupid sods — we can see the damned train wreck coming.
Claire McCaskill, ConservaDem-MO, said on NPR this morning that this is a big win bcz the Reupbs were going to privatize Medicare and this will only, at most end up cutting it by 2%, all to providers. Such a deal!
She also said that Medicaid, food stamps, and other programs for the poor were completely exempt from cuts.
Say wha’?
According to Reid, the Super Congress of 12 Caesars has “no contraints.”
The devil, and many, many devils I imagine, is in the details.
No surprise here, we all knew he would cave in. It’s in his DNA.
But I predict that he has just handed over the 2012 election to the radical Right on a platter. This latest backflip will not fire up the base so this will be another “win win” for any one of those nutjobs currently running from the opposition.
Why? Because the country will seek “leadership” elsewhere even if it means throwing the nation to the wolves in order to get rid of this empty suit who is unable to defend us against this onslaught.
Privatization, deregulation, here we come!
Let there be no more talk of eating peas. We shall all be eating something else for quite a while.
Even cat food is looking expensive on my budget.
Local market here has been having a really good sale in cans of purina cat food. I buy 20 or so cans every time I go in, stockpiling it for my cats. Started to get strange looks from the tellers, kind of pitying and ashamed. Realized they thought I was buying it for me. So I started joking about my cats. Not sure they believe me, but ohh well.
If I could figure out a way, I’d send you our surplus veggies. It’s been a real rough year, but we do have vegetables!
Not one cent of revenue is included in whatever this bill contains. Not once cent to be drawn from the bank accounts of the same people who were instrumental in bringing this nation to its knees. Record profits are being made while seniors are being stripped of security and services at a time in their lives when they are least able to afford them.
Tea Party politics won the day as Obama just produced another “fail” on his report card to the nation.
Unending wars, the loss of the EPA, the underfunding of education, the end to research, is the goal of these fruit loops and there is no end in sight.
While European countries are on the rise to ensure its citizens of a quality of life this nation is on the downside in only a few short years.
When a nation this wealthy refuses to provide for the safety and wll being of its less fortunate citizens then that nation is doomed. And Obama may be that reason for its demise in the long run as he preffered to side with the bad guys against this onslaught of radicalism.
Greed won out in the end with a major sell out of Dems who assisted in this travesty.
http://www.ianwelsh.net/what-the-debt-limit-crisis-should-have-taught-you/#comments
Really like Ian’s unvarnished truth. Guess it fits my perspective and reality from the last 11 years. I never enjoyed being in a deep dark rabbit hole – learned that as a child. It’s about trying to live dealing with “fuzzy” pols. The person who accepts ‘pols is pols, they do what they do’, must think boys is boys, they do what they do when considering rape, like it’s a given. Oh, the parsing! We’ll fix it later……..when the boat has lost it’s bottom, it sinks period and the rats go with it.
i do not understand how people can watch our MSM news, political pundits. If you make life a a game – is it still Life? Their life’s endeavors are based on deceit – they make me shudder.
We are in a depression now. It’s going to get so much worse because that is the course chosen for us by the oligarchy and it’s puppets. United we stand, divided we fall.
Why have we not revolted?
Cheer up! At least John Boehner saved his job as Speaker.
So yes, there was a “win” in here after all.
I was worried there for awhile but all is well!
even crazy allen west knows he won:
robertcostaNRO Robert Costa
Is Boehner in trouble? West: “No he is not.” Says O is in trouble since prez “surrendered”
Wow, great article, thanks for posting it here.
‘Break the rich, or they will finish institutionalizing aristocracy. Period.’ That’s it in a nutshell, isn’t it?
And for the record: Claire McCaskill is as big an asshole now as she was in 2008 when she gushed over Obama because her kids liked him.
This is what happens when “the kids” choose the shiniest object in the box of Cracker Jacks and think they’ve hit gold.
Yes Pat, indeed.
@Pat… Hell yeah!
Excellent comment
They don’t call it jumping on the bandwagon for nothing. Full of Sound and Fury, signifying nothing.
Debt Ceiling Deal All Cuts No Taxes (He got what he wanted, because he is aiming for campaigning as the Tea Party President)
Bottom line, ‘Someone has to Primary this guy!’ NO KIDDING!
Well all have to suffer because poor little Barry’s father abandoned him and his mother married again and had a important job. Boo hoo. But he will continue to punish us as long as he has the power.
He is Bush III on steroids, and has people like Caskill covering for him, as ‘pooooor little Burrack’, he had to do it, when he intended to do it all along.
David Plouffe was on Morning Edition saying there’s no reason the super committee can’t decide to raise taxes. Yeahhhhhh, right.
On a happier note, I heard a good BBC radio documentary on NPR this morning — “On the road with Hillary Clinton.” A BBC correspondent goes along on a whirlwind trip and talks with staff and the Secretary.
http://www.bbc.co.uk/iplayer/episode/p00hrjf6/Assignment_On_the_road_with_Hillary_Clinton/
Thanks for posting something positive! It’s not easy to find upbeat news these days.
Why is any of this a surprise?
This is a guy who backed off from the appointment of Elizabeth Warren because the GOP opposed her.
For pete’s sake, if this one appointment was taken off the table why would anyone expect him to fight for the bigger issues?
I have a link for y’all: Pam Geller Justifies Breivik’s Terror: Youth Camp Had More ‘Middle Eastern or Mixed’ Races Than ‘Pure Norwegian’ | ThinkProgress
I saw Geller’s original post on memorandum…
There is an update on the ThinkProgress site, Geller has deleted the comment about the mixed faces. Go to the link above because there are lots of cached pages to look at.
I know she’s jewish and I also hate the idea of going Godwin … but doesn’t this racial purity thing remind you of some group of somebodies?
Gosh, by her logic, it would be OK to shoot me, being I am ‘mixed’ or as I prefer bi-racial… (as people make assumptions of what I am or could be depending on what fits their comfort zone.) She is up there with the Falun Gong Leader
Li Hongzhi:
I protested them, at a parade and at Martin Luther King function as they were passing out flyers about ‘mixed’ people being wrong or errors or some wacky thing…yes, I made a scene and got them kicked out and onto the side walk where they can freely express their wacky views, but not within the sanction of the event, celebrating Civil Rights and acceptance of everyone. I have been called plenty of names, but when someone suggests you shouldn’t exist…that is beyond personal, they are advocating your elimination!
Greg Sargent: GOP on verge of huge, unprecedented victory
http://www.washingtonpost.com/blogs/plum-line/post/gop-on-verge-of-huge-unprecedented-political-victory/2011/03/03/gIQA3l8WlI_blog.html
Oops, sorry Dak. I just realized this is in your post. I guess I wasn’t awake when I read it the first time.
I’m headed off to lunch with my “monthly girls club” so I will save this link for later as I don’t wish to lose lunch or have an attack of indigestion before I even take a forkful of salad.
The wine should do nicely.
That is up top. First article quoted.
Pat, I am going to get myself all fixed up and head into town too. When you get back read this:
Insurers must cover birth controlwith no copays
http://www.sfgate.com/cgi-bin/article.cgi?file=/n/a/2011/08/01/national/w070652D20.DTL
arghhhhhhhhhhh!!!!!! I have to subsidize religious indoctrination with my tax dollars and they won’t even let private insurance companies cover birth control. WTF?
I’m sure all the Repugs are doing the happy dance and rallying around Mitch McConnell, the hero/dismantler of the day. The present deal will have dire impacts on the states, counties, cities and townships. We’re going to see more unemployment not less as states and municipal governments are forced to thin the herd with less money. More unemployment means less in tax receipts and less consumption. I’m guessing in many local areas real estate and other taxes will be hiked to try to make up for the Federal cuts. And services whether to the poor or education or R&D or medical services, whatever has a ‘common good’ tag will be slashed to the point of paralysis.
Happy Days. This is a death spiral brought to you by the US Congress and the President of the United States. With friends like these, who needs enemies?
So there you have it, the Democrats are praising the CAVE IN and standing behind their man, as he promises to cut/gut Social Security, Medicare and Medicaid. So, much for the bull of change, it is more ‘Yes We Can GUT & CUT!
Mailing Address:
Democratic National Committee
430 S. Capitol St. SE
Washington, DC 20003
Main Phone Number:
(202) 863-8000
For questions about contributions, please call:
(877) 336-7200
It wasn’t a cave-in and he’s not a pushover. He got exactly what he wanted from Day One.
Totally OT, has everyone seen this?
[Latest News – August 1, 2011
Insurers must cover birth control with no copays
WASHINGTON (AP) — Health insurance plans must cover birth control as preventive care for women, with no copays, the Obama administration said Monday in a decision with far-reaching implications for health care as well as social mores.]
http://my.earthlink.net/article/top?guid=20110801/33a6c1f7-c848-47c4-847e-6ee62f8a6447
Let’s just concede that Social Security is an “entitlement” program. That means that all the contributions paid since its inception were actually a euphemistically named income tax on earnings up to $90,000 annually. Now, calculate the true tax rate on every bracket and I’m sure we’ll see that the lowest earners have been paying, by far, the highest tax rate for the greater part of the last century.
The graph that illustrates that deserves to go viral!
Federal judge blocks Kansas law defunding Planned Parenthood http://bit.ly/qA6vzw
A sliver of good news…. thanks Dak.
Companies near record profits amid high unemployment
Most companies haven’t given a wage increase to salaried workers — and most have reduced or cut company provided health insurance to employees. So of course — workers productivity is up but workers aren’t being compensated for this improvement in the bottom line.