Tuesday Reads

Posted: May 16, 2023 | Author: | Filed under: Crime, Domestic terrorism, Economy, Global Financial Crisis | Tags: , , , , , | 12 Comments
HENRI MATISSE -Les Pensées de Pascal,1924

HENRI MATISSE -Les Pensées de Pascal,1924

Good Morning!!

I’m still trying to recover from Dakinikat’s post yesterday. She seems convinced that the Supreme Court will agree with the 5th Circuit that the way the Consumer Finance Protection bureau is financed is unconstitutional and their decision will lead to the downfall of the Federal Reserve, Social Security, Medicare, and other off-the-books programs. I’m not convinced it will happen, but I’m still extremely depressed by Dakinikat’s arguments.

But for today, I’m trying to set all that aside and just worry about what’s happening (or not happening) with the debt ceiling. Here’s the latest on that emergency.

This is an opinion piece by The Washington Post’s Katherine Rampell, who is very knowledgeable about economic issues: After breaking itself, Congress tries to break the rest of government, too.

The GOP House’s debt-limit-and-spending-cuts bill does a lot of things to sabotage the basic functions of government. It decimates spending on safety-net programs. It creates more red tape to block Americans from accessing services they’re legally eligible for. And it makes it harder for government to fund itself in the first place.

But perhaps the most destructive, least noticed part of the bill is a provision that would force virtually all federal regulatory machinery to grind to a halt.

Tucked into Republicans’ debt-limit-ransom bill is some legislative language that has been kicking around Capitol Hill for a while, known as the Reins Act. If enacted, the law would prevent “major” agency regulations — somewhere around 80 to 100 per year — from going into effect unless Congress first approves each and every one.

To be clear, under current law, Congress already has the ability to rescind regulations it dislikes. This new bill would essentially change the default, so that no major regulation could take effect before Congress gives its blessing.

This change might sound reasonable. After all, tons of American problems have been dumped at the feet of executive-branch agencies (guns, immigration, health costs, etc.). It would be great if federal lawmakers got more involved in trying to solve literally any of them.

But if you think about how Congress actually functions (or rather, doesn’t), you’ll realize this is not an earnest attempt to get lawmakers to roll up their sleeves and conquer the Big Issues. It’s about throwing sand in the gears of the executive branch, so that no one can solve any issue. Ever.

Ernest Ange Duez

By Ernest Ange Duez

Rampell explains why the system is set up the way it is.

There are two main reasons Congress currently delegates certain regulatory issues to executive-branch agencies such as the Food and Drug Administration or the Securities and Exchange Commission.

First, some policy questions aretechnically challenging. What amount of arsenic in the air is “safe”? What should bethe technical standards for mammography equipment? How should the Volcker Rule be implemented in practice? As talented and hard-working as congressional staff are, they might not have the time or expertise to make informed decisions about such minutiae. Agency scientists or other subject-matter experts are tapped to weigh evidence, solicit input from the public, hold hearings, etc., to execute the objectives Congress has enacted.

The second reason is political.

There are plenty of policy questions that Congress has technical capacity to resolve but might prefer not to. Maybe lawmakers can’t come to an agreement within their caucus. Maybe they know that whatever they choose to do will be unpopular.

So: They punt, and make it some other government functionary’s problem.

For example, Congress has been unable to pass significant immigration reform in more than three decades, leaving the executive branch to address migration-related problems in sometimes legally tenuous ways (see: the legal limbo ofso-called dreamers, or former president Donald Trump’s unfunded border wall). Congress has all but abdicated many of its basic responsibilities to other branches of government, such as passing a budget, setting tariffs or deciding on abortion rights.

Or, you know, making sure the federal government doesn’t default on its debt. Apparently even some Republicans are now rooting for President Biden to direct Treasury to mint a new $1 trillion platinum coin to pay off government expenses or adopt some other deus-ex-machination.

Read more at the WaPo.

Biden and McCarthy are meeting again today. From The New York Times: Biden and McCarthy Set for More Talks as Debt Limit Deadline Nears.

The 3 p.m. meeting comes a day after Treasury Secretary Janet L. Yellen reiterated that the United States could run out of money to pay its bills by June 1 if Congress does not raise or suspend the debt limit.

Jean Metzinger (French, 1883–1956), Tea Time, woman with a spoon

Jean Metzinger (French, 1883–1956), Tea Time, woman with a spoon

Republicans have said they want to slash federal spending before lifting the debt ceiling. The president has maintained that raising the limit is a responsibility of Congress and should be done without conditions to avoid an economic disaster, even as he has said he is open to separate negotiations over spending.

Over the weekend, the White House projected cautious optimism regarding a potential agreement, but on Monday, Speaker Kevin McCarthy expressed doubts.

“I don’t think we’re in a good place,” Mr. McCarthy said. “I know we’re not.”

Some potential areas of compromise have emerged in recent days, however. Mr. McCarthy said on Monday that he wanted to negotiate some of the key provisions of the bill to raise the debt limit that House Republicans passed last month. Those include spending caps, permitting changes for domestic energy projects, work requirements for safety net programs like food stamps and clawing back unspent money allocated for pandemic relief programs. “All of that I felt would be very positive,” he said.

Most of the people on food stamps are children, so this would go along with the new Republican push to get rid of child labor laws.

In addition to Mr. McCarthy, Senator Mitch McConnell, Republican of Kentucky and the minority leader; Senator Chuck Schumer, Democrat of New York and the majority leader; and Representative Hakeem Jeffries of New York, the Democratic leader, will join Mr. Biden at the White House.

The government hit the $31.4 trillion debt limit on Jan. 19, and the Treasury Department has been using accounting maneuvers to keep paying its bills. Mr. Biden is also scheduled to leave for Japan on Wednesday to attend the Group of 7 meeting, heightening the sense of urgency to make progress on the debt limit….

“We welcome a bipartisan debate about our nation’s fiscal future,” Mr. Schumer said on Monday. “But we’ve made it plain to our Republican colleagues that default is not an option. Its consequences are too damaging, too severe. It must be taken off the table.”

Ms. Yellen will warn on Tuesday that the standoff over the debt limit is already having an impact on financial markets and is increasing the burden of debt on American taxpayers. Investors, she will note, have become wary of holding onto government debt that matures in early June — when the government could start running out of cash.

“We are already seeing the impacts of brinkmanship,” Ms. Yellen will say at the Independent Community Bankers of America summit, according to excerpts from her prepared remarks.

The Washington Post: Liberals grow fearful Biden may reward GOP for weaponizing debt ceiling.

The White House’s liberal allies are increasingly worried that negotiations with House Republicans over the budget risk rewarding the GOP for threatening the U.S. economy with default, even as Biden administration aides insist the talks have nothing to do with the looming debt ceiling deadline.

tea-time-jacques-jourdan

Tea Time, by Jacques Jourdan

Since last week, Biden aides have been in talks with staffers representing leaders in Congress about a deal to fund the federal government next year that would also raise the nation’s debt ceiling, which must be lifted by as soon as June 1 to avoid potential economic catastrophe. President Biden will host House Speaker Kevin McCarthy (R-Calif.) and other top congressional leaders again on Tuesday for more discussions.

The fresh talks follow months in which Biden and his top aides insisted that the White House would not entertain making any trade-offs to raise the debt limit, saying that would set a dangerous precedent that encourages GOP brinkmanship. And yet, to some critics, the administration appears to be doing exactly that — following unrelenting pressure from the business community and even some moderate Democratic voices to enter bipartisan talks after the House passed a spending and debt limit bill last month.

Publicly, Biden administration officials are adamant that they are working with House Republicans on a deal to fund the federal government in the next fiscal year — not to raise the debt ceiling. Privately, however, even some Biden aides recognize that the negotiations appear to be in part about the debt limit. Behind the scenes, negotiators are clear that any deal on the budget must resolve the debt ceiling deadline, as well. Democratic negotiators also acknowledge that they will have to agree to more spending cuts if they want to secure a longer extension of the debt ceiling — an implicit recognition that lawmakers are bartering over the full faith and credit of the U.S. government, an approach Biden has repeatedly disavowed.

“The issue here is principle: If you accept the idea that you can, in essence, be held to blackmail with the debt ceiling, it will be done again and again. Not to be crass, but it’s essentially negotiating with terrorists who have taken hostages,” said Dean Baker, a liberal economist at the Center for Economic Policy and Research, a left-leaning think tank. “More and more people in progressive circles are becoming concerned with it.”

Of course most of the mainstream media is reporting on all this as if it’s a typical negotiation over a political dispute, and failing to point out that Congressed raised the debt limit with no fuss when Trump was in the White House.

Jonathan Chait at New York Magazine: The Media Is Normalizing Debt-Ceiling Extortion. No, this isn’t how Congress always does it. It’s different and dangerous.

Ten years ago, when Barack Obama faced down an attempt by House Republicans to extract concessions in return for lifting the debt ceiling, he explained that he saw this tactic as inimical to functioning self-government. “If we continue to set a precedent in which a president … is in a situation in which each time the United States is called upon to pay its bills, the other party can simply sit there and say, ‘Well, we’re not going to … pay the bills unless you give us … what we want,’ that changes the constitutional structure of this government entirely,” he explained….

But as the new Republican-led House seeks to renew the effort to use the debt ceiling as a hostage, a revisionist interpretation has taken hold: This isn’t a new or dangerous tactic, it’s just how Congress operates.

At the Tea Table” (Konstantin Korovin, 1888)

At the Tea Table” (Konstantin Korovin, 1888)

“The House Republicans’ insistence on negotiations and compromise is not hostage taking. It is the ordinary stuff of politics,” claims law professor Michael McConnell. “A standalone clean debt ceiling is dead on arrival … In modern times, the debt ceiling is raised with negotiations,” asserts Punchbowl’s Jake Sherman.

Thursday Reads: A Mixed Bag of Stories

Posted: November 14, 2013 | Author: | Filed under: Affordable Care Act (ACA), Barack Obama, Crime, Criminal Justice System, Global Financial Crisis, Health care reform, Media, Medicaid, morning reads, The Media SUCKS, U.S. Economy, U.S. Politics | Tags: , , , , , , , , , , | 48 Comments

matisse_woman_reading

Good Morning!!

Dakinikat has arrived safely in Seattle, where she’ll be visiting with her father, her sister, and her elder daughter Jean. I’m going to fill in for her tomorrow morning, but she’ll be back to her regular blogging schedule soon.

I have no idea what’s happening in the news, because I spent last night watching two PBS shows on the JFK assassination. I’ve still been plowing through JFK books too. But RalphB posted a very interesting link last night that I want to highlight. From Jonathan Cohn, via Bob Cesca, Jonathan Cohn explains How to Interpret Obamacare’s Low Enrollment Numbers for October.

According to HHS calculations, 846,852 people have used the site to complete applications. That means they have created accounts and submitted information to see whether they are eligible for federal programs or tax credits. Those applications include people applying for households with multiple members. In total, it represents 1,509,883 people. The federal government has processed applications for the vast majority of them—98 percent, or 1,477,853 people. Of those, about a third have actually selected a health plan or been deemed eligible for a program like Medicaid. That’s 502,466.

How does that half million break down? About four out of five (396,261) are in Medicaid. The rest (106,185) of them have picked private insurance plans. These numbers include both those who enrolled through the website that the federal government is maintaining (healthcare.gov) and those who enrolled through sites that states like California, Kentucky, and Connecticut are running on their own. The majority (three-fourths) of the people getting private insurance have done so through state sites. Just a quarter, or 26,794, have enrolled through the federal site.

But because the media narrative is that the the Obamacare rollout is “failed,” “botched,” and “worse than expected,” all we’re hearing is the 106,185 figure–as if getting people covered by Medicaid doesn’t count. Tell that to the previously uninsured families who will now be able to take their sick kids to a doctor! By the way, in the first month of the Massachusetts health care exchanges, only 123 people signed up. As Bob Cesca puts it,

because there’s an “Obamacare is a Failed Policy” script that must be serviced, the lowest number of the batch has to be quoted. That’s why you’ve been reading about 106,000 rather than 1.5 million.

Have I told you lately how much I think the corporate media sucks?

secret service badge

At a time when many Americans are remembering the JFK assassination and the lax security that contributed to his death, we’re learning about another scandal in the Secret Service. From The Washington Post: Two Secret Service agents cut from Obama’s detail after alleged misconduct.

A call from the Hay-Adams hotel this past spring reporting that a Secret Service agent was trying to force his way into a woman’s room set in motion an internal investigation that has sent tremors through an agency still trying to restore its elite reputation.

The incident came a year after the agency was roiled by a prostitution scandal in Cartagena, Colombia, prompting vows from senior officials to curb a male-dominated culture of hard partying and other excesses….

The disruption at the Hay-Adams in May involved Ignacio Zamora Jr., a senior supervisor who oversaw about two dozen agents in the Secret Service’s most elite assignment — the president’s security detail. Zamora was allegedly discovered attempting to reenter a woman’s room after accidentally leaving behind a bullet from his service weapon. The incident has not been previously reported.

In a follow-up investigation, agency officials also found that Zamora and another supervisor, Timothy Barraclough, had sent sexually suggestive e-mails to a female subordinate, according to those with knowledge of the case. Officials have removed Zamora from his position and moved Barraclough off the detail to a separate part of the division, people familiar with the case said.

The misconduct wasn’t reported to the inspector general until the end of October after the WaPo had started investigating the incident, but

According to the Secret Service’s internal findings, Zamora was off duty when he met a woman at the hotel’s Off the Record bar and later joined her in her room.

The review found that Zamora had removed ammunition from the chamber of his government-issued handgun during his stay in the room and then left behind a single bullet. He returned to the room when he realized his mistake. The guest refused to let him back in. Zamora identified himself to hotel security as a Secret Service agent.

The report apparently didn’t explain why Zamora took a bullet out of this gun or why the woman refused to let him back into her room. We’ll all have to draw our own conclusions.

Janet Yellen

Janet Yellen

Janet Yellen, Obama’s nominee to head the Federal Reserve, will be appearing before the Senate Banking Committee today for her confirmation hearing.

US News and World Report lists “three things to expect” from the hearing: 1.) Republicans talking about inflation, 2) “measured reassurances” to nervous Republicans about nonexisitant inflation from Yellen, and 3) “a jumpy stock market.”

USA Today offers “five things to watch for”: 1) “can she handle a national stage,” 2) “Will she sound like Greenspan or Bernanke?” 3) “How will Yellen reconcile the Fed’s dual mandate to boost employment while keeping inflation low with her own economic philosophy?” 4) “Will she drop clues on tapering?” 5) “How will she handle questions about “too big to fail” banks?”

If Yellen were a man, would USA Today be asking if she can “handle a national stage?” As for question 2, she’ll sound like Bernanke obviously. Read USA today’s speculations at the link.

On the stock question, markets are responding favorably so far. From the WSJ: U.S. Stock Futures Inch Higher.

U.S. stock futures held steady near record levels, as dovish comments from Federal Reserve chairwoman nominee Janet Yellen helped offset disappointing results from some blue-chip companies.

European markets rose as sluggish euro-zone growth figures suggested accommodative monetary policies would remain in place for some time….

Investors will be keenly focused on Ms. Yellen’s confirmation hearing before the Senate banking committee, starting at 10 a.m. In her planned opening statement, released late Wednesday, Ms. Yellen said that because unemployment is still too high, and inflation is running below target levels, the Fed is using its monetary-policy tools, even unconventional ones like asset purchases, to promote a more robust recovery.

“I believe that supporting the recovery today is the surest path to returning to a more normal approach to monetary policy,” Ms. Yellen said.

Investors will be listening to the question-and-answer period for any clues on when she might expect to start winding down, or tapering, the $85-billion-a-month bond purchase program.

From Bloomberg Businessweek: Yellen Says U.S. Performing ‘Far Short’ of Potential.

“A strong recovery will ultimately enable the Fed to reduce its monetary accommodation and reliance on unconventional policy tools such as asset purchases,” Yellen said in testimony prepared for her nomination hearing before the Senate Banking Committee today in Washington. “Supporting the recovery today is the surest path to returning to a more normal approach to monetary policy.”

Yellen, the Fed’s vice chairman, voiced her commitment to using bond purchases known as quantitative easing to boost growth and lower unemployment that remains above 7 percent more than four years after the economy began to recover from the deepest recession since the Great Depression.

“Her approach is, ‘Let’s do more QE now to get the job done faster,’ ” said Laura Rosner, a U.S. economist at BNP Paribas SA in New York and a former researcher at the New York Fed. “Yellen is repeating her commitment to getting the job done.”

In three pages of prepared remarks for the 10 a.m. hearing, released yesterday, Yellen, 67, said unemployment is “still too high, reflecting a labor market and economy performing far short of their potential,” and that inflation is expected to remain below the Fed’s 2 percent goal. She also highlighted areas where the economy has improved, saying housing “seems to have turned a corner” and the auto industry has made an “impressive comeback.”

bodies

The situation in the Philippines is still desperate, according to the NYT: Traumatized City in the Philippines Begins to Bury Its Dead.

TACLOBAN, the Philippines — Pausing occasionally to dodge driving rains by hiding under loose scraps of plywood, a group of firefighters lowered unidentified bodies into a mass grave here Thursday, six days after the city was largely destroyed in Typhoon Haiyan.

For days, the bodies had sat in public. First they were uncovered on roadsides; then they were placed in body bags. After that, they were collected, and nearly 200 were stored at the biggest site, a government office. In the nearby City Hall, the center of local government relief efforts, the stench from the bodies could be powerful when the wind blew off the harbor….

The official death toll for Tacloban City rose to 2,000 on Thursday, but that covers only bodies that have been collected or visually confirmed by authorized officials. The visually confirmed bodies are those readily visible from roadsides, as relief crews have yet to start digging through towering piles of debris, much of it studded with nails.

There are also 3,000 injured, by the official tally, and 194 people for whom the paperwork has been completed for them to be declared missing.

Toronto Mayor Rob Ford

Toronto Mayor Rob Ford

Up in Canada, Toronto Mayor Rob Ford is still refusing to step down:

It’s clear now, amid more damning allegations and public embarrassment, that Toronto Mayor Rob Ford has no intentions of relinquishing his post.

City council must decide how to continue operating after Wednesday’sdramatic pleas from councillors for the mayor to seek treatment for alleged substance abuse.

He faces yet another challenging day at City Hall on Thursday following the release of more police documents alleging disturbing details about the mayor’s erratic behaviour.

Ford, however, has repeatedly refused to step aside, even after admitting last week that he had smoked crack cocaine about a year ago possibly while drunk..

“I can’t change the past,” he said in council Wednesday. “All I can do is move on and that’s what I’m doing.”

It’s like a family intervention played out in public; but the target of the intervention is in control of a large city. “He continues to be the chief magistrate of the city; he continues to have signing powers,” says city councilman  Anthony Perruzza.

Ryan Ferguson

Ryan Ferguson

I’ll end with some feel-good news. I’ve been following the Ryan Ferguson story for a few years now. Ferguson is a young Missouri man who has been in prison for 10 years for a murder he didn’t commit. Yesterday he was finally freed. If you aren’t familiar with the case, here is some background from CBS News and a timeline of the case from KDSK.com.

From The New York Daily News:

Ferguson — who was serving 40 years for the 2001 murder and robbery of Kent Heitholt, an editor for the Columbia Daily Tribune — said he was still dealing with the shock of walking out of the clink.

“When I finally realized it was actually over, it was incredible relief because I was afraid,” he told the news station. “I wasn’t sure what was going to happen next. They don’t really tell you a whole lot. It was a sensation like no other, and seeing my family right there and hugging them, and knowing that we were going to go home together — it was amazing.”

A state appeals court vacated Ferguson’s conviction after the panel found he did not receive a fair trial.

The panel found that prosecutors withheld evidence from defense attorneys and managed to get a conviction from two witnesses who later recanted their testimony.

Ferguson was arrested after his friend, Chuck Erickson, told cops in 2003 that the pair attacked Heitholt during a night of drinking. A night janitor, Jerry Trump, also said during the trial that he saw the two teens near the parking lot where the editor was killed.

Erickson later admitted that he lied about what happened the night Heitholt was killed and Trump told a courtroom years later that he was coached by prosecutors before he testified. Trump could face perjury charges.

So…. those are my picks for today. What stories are you following? Please post your links in the comment thread and have a great day.

Tuesday Reads: Hostage Situation

Posted: October 8, 2013 | Author: | Filed under: 2012 elections, Affordable Care Act (ACA), Barack Obama, Democratic Politics, Federal Budget, Federal Government Shutdown, Global Financial Crisis, morning reads, Psychopaths in charge, Real Life Horror, Republican politics, U.S. Economy, U.S. Politics | Tags: , , , , , | 50 Comments

WP-Hostage2

Good Morning!!

I hardly know where to begin this morning. The insanity that has gripped the nation’s capital is so extreme that some kind of intervention may be necessary.

Is it possible for the UN or the IMF to step in and explain to Tea Party Republicans why the full faith and credit of the United States government cannot be held hostage in an effort to overturn the results of two elections? Or perhaps they could explain to House Speaker John Boehner that his frantic efforts to hold onto his speakership could end with voters replacing him with a Democratic Speaker in 2014?

As depicted in the cartoon above, the Republican majority in the House is being held hostage by around 30-40 delusional Tea Party wingnuts and their putative leader–John Boehner has no clue how to deal with the hostage crisis. It’s a mystery to me why anyone would even want that job, but to Boehner the job is apparently more important than the nation’s–and the world’s–economic well-being. Holding onto his job is apparently so important to him that he is willing to look like a complete fool rather than stand up to a bunch of crazy people in his own party.

Meanwhile, the media pundits are getting a little more restless–realizing that we really could reach the debt limit on October 17 without the House voting on a “clean” continuing resolution or an increase in the government’s ability to borrow to pay its bills.

Normally, I wouldn’t link to the National Review, but yesterday they published a piece by Washington editor Robert Costa, who probably has a pretty good idea what insane caucus in the House is up to. Costa writes:

Speaker John Boehner may be trying to finalize a plan to raise the debt limit, but House conservatives are already skeptical of his efforts. In interviews, several of them tell me they’re unlikely to support any deal that may emerge.

Costa goes on to quote a few of the wackiest of the wackos (emphasis added):

“They may try to throw the kitchen sink at the debt limit, but I don’t think our conference will be amenable for settling for a collection of things after we’ve fought so hard,” says Representative Scott Garrett (R., N.J.). “If it doesn’t have a full delay or defund of Obamacare, I know I and many others will not be able to support whatever the leadership proposes. If it’s just a repeal of the medical-device tax, or chained CPI, that won’t be enough.”

Representative Paul Broun (R., Ga.) agrees, and says Boehner risks an internal rebellion if he decides to broker a compromise. “America is going to be destroyed by Obamacare, so whatever deal is put together must at least reschedule the implementation of Obamacare,” he says. “This law is going to destroy America and everything in America, and we need to stop it.”

“Stay the course, don’t give in on it, that’s what the people in my district are saying,” says Representative Ted Yoho (R., Fla.). “We did a town hall the other day, and 74 percent of people said, ‘don’t raise the debt ceiling.’”

This despite the fact that polls show their ideas are poison to the American public. These people are truly insane, and they believe they’re winning. Nothing will stop them except throwing them out of their jobs. Here are some other reactions to Costa’s piece.

David Atkins of Hallabaloo: Nothing less than Fort Sumter will do.

If you think this is insane–and it is–keep in mind that it’s only going to get worse from here.

Until Republicans are removed from control of all branches of government, the brinksmanship is going to get worse, and the demands are going to become more severe. The lunatics are running the asylum now, the revanchist movement is in full swing, and the Lost Cause is the name of the game.

Not even sequestration-level spending plus cutting Medicare and Social Security will do for these people–and that’s after losing an election. Try to picture where the Republican party was 30 years ago. Then 20 years ago. Then 10 years. Then today. Now picture 10 years from now. Anyone who thinks there’s going to be a retreat from the precipice is deluding themselves. If they lose in 2014, it will be because they didn’t hold firm against Obamacare. If they lose to Hillary in 2016, it will be because they didn’t shout loud enough about Benghazi.

If we don’t stop them somehow, the Tea Party crazies will try to refight the Civil War.

Josh Barro at Business Insider: Republicans Do Crazy Things Because They Have Crazy Beliefs. Barro responds to Georgia Rep Paul Broun’s claim that “America is going to be destroyed by Obamacare….This law is going to destroy America and everything in America, and we need to stop it.”

It’s one thing to oppose Obamacare. It’s quite another to believe it will “destroy America and everything in America.” As Manhattan Institute Senior Fellow Avik Roy, a strong opponent of Obamacare, wrote last month:

The idea that we had a free-market health-care system before Obamacare, and a socialized one after, is completely and utterly incorrect. In 2010, before the passage of Obamacare, U.S.-government entities spent more per capita on health care than all but three other countries in the world. Obamacare adds to that spending by around 10 to 15 percent. Not good, to be sure, but not the whole kit and caboodle either.

The changes from Obamacare, good and bad, are marginal. It will not fundamentally change America….

But if you already believe something crazy — that Obamacare will destroy America — then it’s not additionally crazy to favor drastic, dangerous action to stop it.

Sarah Jones at Politicus USA: From Hostage Takers to Buffoons, House Republican Ineptitude Heads for Default.

Even a short term debt ceiling agreement is up in the air now. Not the actual debt ceiling limit, but a short term agreement. We can’t even do that now, if Robert Costa’s readings are accurate.

Costa tweeted, “One of my best House R sources thinks Boehner may, just may, be able to get votes for short-term DL ext, but even that is up in air” [….]

If you’re wondering how Republicans can be so out of it when the polls keep instructing them otherwise (as if the ONLY issue here is their own political survival, forget the people or this country), perhaps this level of utter cluelessness will be informative. When asked if the Republicans have their next move mapped out and if Boehner has any legislation drawn up regarding the debt ceiling, “Negatory,” Representative Pete Sessions replies. You see, it’s all about “messaging”. “We’re going to keep with our great, positive attitude and tell the president, ‘you’ve got to sit down and negotiate.’”

So, their great positive attitude involves tanking the economy and shutting down the government because they lost an election. Huh. Also: Only in Republican world is holding a gun to the country’s head before being willing to “talk” an act of good faith.

Republicans don’t understand this president very well at all, but then, we tend to project our own values onto others so this is understandable. They never should have threatened the country. They could have threatened anything but the American people and the democratic process, and this President wouldn’t have felt compelled to take a stand.

Boehner Onion

It’s really getting to be a cliche to point out that reports of Republican behavior are for real and not from The Onion. But seriously, it’s hard to believe The Onion can keep finding ways to exaggerate these people’s insanity. Apparently there was “outrage” after this 2011 Onion story; but does it actually seem crazy two years later to claim that what the Republicans are trying to do is going to hurt–even kill–some children?

A few more comments on the hostage situation from various pundits:

Washington Post Editorial Board: The House GOP has nothing to show for its government shutdown.

WHAT HAVE House Republicans managed to accomplish in a week of government shutdown?

Damage the livelihood of millions of Americans? Check. Government secretaries, food-truck operators, cleaners who work in motels near national parks: They’re all hurting.

Waste billions of taxpayer dollars? Check. It costs a lot to shut agencies, Web sites and parks, and it will cost a lot to reopen them. Meanwhile, the House has voted to pay the salaries, eventually, of hundreds of thousands of employees whom it has ordered not to work. That’s an odd way to manage an enterprise.

Interfere with key government operations? Check. The National Transportation Safety Boardcan’t investigate an accident last weekend on Metro’s Red Line that claimed the life of a worker. That could make future accidents more likely. On the other side of the world, U.S. allies from Tokyo to Singapore are wondering whether they can rely on a nation whose president has to go AWOL from a key summit meeting in their region.

Rattle the markets, slow an economy in recovery, interrupt potentially lifesaving research at the National Institutes of Health? Check, check and check.

Derail the hated Obamacare? Ch . . . — oh, no, wait a minute.

Because it’s not really about “Obamacare.” It’s about making government itself completely dysfunctional. I keep thinking about Dakinikat’s post yesterday and the pieces she quoted by Jonathan Chait and The Economist. Have we really reached the point where the gridlock in DC is so bad that our form of government is in danger of collapse? And what can we do about it? In order to change our system of divided government, we would need to call a Constitutional Convention. Even if we could get to that point in this atmosphere, the final result could be a lot worse than what we have now. I really believe the only way to save our form of government is to somehow throw all the Tea Party Republicans out of it. Is that possible?

Alex Altman at Time: Boehner Holds Weaker Cards In High-Stakes Political Poker

President Barack Obama says he will not pay House Republicans a ransom in exchange for re-opening the government or raising the debt ceiling. House Speaker John Boehner insists he doesn’t have the votes to do either without any White House concessions.

Both men are bluffing. And while Obama’s play is a risky one, Boehner’s bluff is worse: it just doesn’t look very credible.

In a Sunday interview with ABC News, Boehner said the U.S. faced the specter of its first ever federal default if Obama didn’t cave to GOP demands. “There are not the votes in the House,” Boehner declared, to pass a so-called “clean” bill to reopen the government. “The votes are not in the House to pass a clean debt limit,” he added. “And the president is risking default by not having a conversation with us.”


These kinds of threats have worked for Boehner before,

But this is now a less credible threat. A few days before Boehner went on TV to talk tough about the threat of default, he was reportedly confiding to fellow Republicans that he would never allow it. Failure to hike the debt limit would unleash a chain of economic calamities, if not the first ever federal default. Boehner doesn’t want that to be his political epitaph.

To be sure, there are plenty of House Republicans who are willing, if not eager, to hold the line. But if the votes aren’t there for clean bills, that’s only because Boehner hasn’t allowed them to come forward. As Speaker, he and his leadership team control the floor. A clean bill to reopen the government, and a companion measure to lift the debt limit, would draw unanimous or near-unanimous support from the chamber’s 200 Democrats; all but five are on record supporting such a vote. Nearly two-dozen Republicans are also publicly on board. Some say the number is far higher. If Boehner let a clean funding bill hit the House floor, “it would probably get 300 votes,” New York Representative Peter King, a Republican who has been critical of the party’s shutdown strategy, told TIME last week.

Jamelle Bouie at The Daily Beast: Five Boehner Quotes—From One Interview—That Explain Everything.

To watch John Boehner speak Sunday—in a segment with ABC’s George Stephanopoulos—was to watch him issue talking points from another dimension, where legislative hostage-taking is routine and the American public is eager to threaten the full faith and credit of the United States. The interview was rife with dishonesty, but there were five statements—in particular—that stood out for their recklessness and/or brazen disregard for the truth.

I won’t excerpt any more from this one. You need to go read the whole thing–it’s not long.

In my opinion, it’s an open question whether the insanity of the Tea Party can be beaten. Certainly, our democratic Republic cannot survive much more of this. The best solution would be for the Democrats to really hold their ground this time and for President Obama to invoke the 14th Amendment and abolish the debt ceiling unilaterally. But do the Democrats and Obama have the guts to do it? We’ll just have to wait and see.

Now it’s your turn. What stories are grabbing your attention today? Please post your links on any topic in the comment thread.

Cyprus Parliament Unanimously Rejects Bailout Plan

Posted: March 19, 2013 | Author: | Filed under: Global Financial Crisis | Tags: , , | 13 Comments

Cyprus bailout Cypriots

Well, they did it. Matthew Boesler at Business Insider:

The Cypriot parliament has voted against the controversial bank bailout deal hatched with the EU over the weekend, reports Bloomberg.

36 voted no.

19 abstained from voting.

No one voted in favor of it.

The vote was held in a show of hands.

The big part of the bailout plan that has everyone up in arms: a controversial decision to apply haircuts to depositors, which essentially amounts to an expropriation of a certain percentage of money from everyone’s bank account.
That includes insured depositors – those with up to 100,000 euros in the bank – whose funds, up to now, were widely considered sacrosanct.

Now what? Your guess is as good as mine.

I imagine Russia is likely to play a role in this situation going forward, so I found some reactions to the bailout proposal from Vladimir Putin at The Brisbane Times. He wasn’t happy with the deal, which would have removed around 10% of the value of accounts held by many Russians.

Russia’s President Vladimir Putin called the proposed levy ”unfair, unprofessional and dangerous”, and his finance minister suggested Moscow could withdraw a €2.3 billion loan made to Cyprus in 2011. The bank levy was partly intended by Brussels and Berlin to prevent European Union taxpayers spending billions propping up the ill-gotten gains of Russia’s super-rich in Cypriot accounts.

Russian deposits in Cyprus, which offers attractive interest rates and asks few questions, are estimated at €20 billion, meaning Russian corporate and individual investors could lose up to €2 billion in one fell swoop.

Russia’s Finance Minister Anton Siluanov said: ”We had an agreement with colleagues from the eurozone that we’d co-ordinate our actions. So, we will consider the issue of restructuring of the loan taking into account our participation in the co-ordinated actions with the European Union to help Cyprus.”

Other Russian officials tried to allay fears by publicly announcing that whatever happens in Cyprus, the Russian financial system will remain stable.

Merkel stole

I guess Angela Merkel is going to have to come up with another plan or else dream up some better threats.

Obviously this is a fast-moving story, but I’ll include links to the very latest headlines below and then post updates in the comments.

Financial Times: Stocks fall as Cyprus uncertainty mounts

Miamai Herald: Give Cyprus more time, Greece tells EU

Bloomberg: S&P 500 Falls for Third Day as Euro Weakens on Cyprus

Bloomberg: German Stocks Decline Before Cyprus Votes on Bank Levy

Guardian UK: Crisis deepens as Cyprus MPs reject savings tax

Creating Fiscal Strife

Posted: November 29, 2012 | Author: | Filed under: Catfood Commission, Economy, Federal Budget, Federal Budget and Budget deficit, George W. Bush, Global Financial Crisis, House of Representatives, Medicare, Politics as Usual, Republican politics, Republican Tax Fetishists, Super Committee, The Bonus Class, the GOP, U.S. Economy, U.S. Politics | Tags: | 15 Comments

One of the things that drives me crazy as an economist and a citizen looking at this so-called “fiscal cliff” is that our fiscal strife has been created by the people least likely to suffer from its resolution.  Congress gave the Bush administration authority to start a series of unfunded, reckless wars that have lasted well over a decade.  Congress passed the Bush administration’s reckless tax cuts and generous loopholes that have benefited the few at the cost of the many. The Bush administration’s and Congress’ lack of oversight and deregulation of the financial services’ industry created a low-risk, gambling casino with the national investment and savings accounts and the debt markets.  This led to a huge recession.  These are the roots of our fiscal problems.  But, the discussions around cleaning up messes in the District mostly surround Social Security which has nothing to do with the national debt and deficit and items that have become more necessary to average Americans since Congress and the Bush Administration broke the country with its bad policies.

Here’s some of the latest examples.   Closing loopholes and unnecessary deductions for certain constituents is a good idea.  However, which of these things are on the chopping block?  Inkling its way up the priority list is the major middle and working class deduction and source of household wealth:  the mortgage interest deduction.  I have no problem with eliminating second mortgages, mortgages on boats, and mortgages on second properties.  These benefit very few people and really serve little policy purpose.  Capping the deduction–with an annual COLA adjustment to the median price and below-based mortgages is also fine.  However, what are we likely to see?

As the Obama administration and lawmakers on Capitol Hill scramble to defuse automatic spending cuts and tax increases set to take effect Jan. 1, a herd of sacred cows — from Social Security and Medicare to deductions for charitable giving and mortgage interest — are in danger of losing their untouchable status.

Members of both parties have largely steered clear of detailed proposals so far. But plans put forth in the past year by President Obama and Mitt Romney to place limits on annual total tax deductions are likely to crimp the mortgage-interest deduction for certain taxpayers. Top congressional Republicans also have expressed openness to limiting total tax deductions as part of an overall budget deal. In addition, the presidentially appointed Simpson-Bowles fiscal commission suggested scaling back the mortgage-interest deduction as part of its own set of tax-related proposals.

Current law allows homeowners to deduct the interest paid on mortgage balances up to $1 million, including on second homes, as well as on $100,000 worth of home-equity loans. The deduction overwhelmingly benefits wealthier families, partly because they tend to have larger mortgages and pay more interest, and partly because most low- and middle-income Americans do not itemize deductions on their tax returns. It also tends to favor homeowners on the East and West Coasts, as well as those in large cities such as Chicago, where average home prices are higher.

Edward Kleinbard, a tax expert and law professor at the University of Southern California, said the mortgage-interest deduction represents the kind of government “extravagance” that the country no longer can justify, given its fiscal troubles.

“We simply cannot afford wasteful government subsidy programs anymore, and this is one of the most important examples of that,” Kleinbard said. “It’s very much a subsidy to those Americans who need it least.”

Mitch McConnell continues to service Grover Norquist and the Club for Growth. He’s back on his high horse for no tax increases for the wealthy. Ending tax cuts for the wealthy endlessly shown to have no ill-impact on the economy. There is also no real benefit to extending them.

Senate Republican Leader Mitch McConnell (Ky.) slammed the door Thursday morning on Democratic demands to raise tax rates on families earning more than $250,000 per year.

“We’re insisting on keeping tax rates where they are, first and foremost, to protect jobs and because we don’t think government needs the money in the first place,” McConnell said on the Senate floor.

“The problem, as I’ve said, is that Washington spends too much. But if more revenue is the price that Democrats want to exact, then we should at least agree to do it in a way that doesn’t cost jobs and disincentivize rates, as we all know raising rates would do,” he said.

McConnell’s comments came a day after Speaker John Boehner (R-Ohio) shot down a proposal by a senior GOP lawmaker, Oklahoma Rep. Tom Cole, to agree to extend tax rates only for families earning below $250,000 and resume the battle against higher tax rates on the wealthy next year.

Boehner said President Obama and Democrats should focus on finding ways to cut spending and reform entitlement programs.

The fate of the Bush-era tax rates — which will expire for all income levels in January — has dominated the debate over the slew of tax increases and spending cuts that are set to begin next year.

McConnell scolded the president Thursday for sticking fast to his campaign pledge to seek higher taxes on the rich, and made clear that raising tax rates on anyone is unacceptable.

The debate over Medicare is likely to be equally absurd.  Medicare needs some reworking.  Most of its problems comes from the pharmacy benefit which currently allows Big Pharma to price gouge participants and the taxpayers. But, you wouldn’t know that from the conversation.  Republicans are playing games with Amercan’s health.  They appear to be clinging to the Ryan’s voucher plan which would be disastrous for the majority of retired seniors.

The austerity crisis talks have hit a peculiar impasse. The problem isn’t, as most analysts expected, taxes, where Republicans seem increasingly resigned to new revenue. It’s Medicare. And the particular Medicare problem isn’t that Democrats are refusing the GOP’s proposed Medicare cuts. It’s that Republicans are refusing to name their Medicare cuts.

Politico quotes a “top Democratic official” who paints the picture simply: “Rob Nabors [the White House negotiator], has been saying: ‘This is what we want on revenues on the down payment. What’s your guys’ ask on the entitlement side?’ And they keep looking back at us and saying: ‘We want you to come up with that and pitch us.’ That’s not going to happen.”

That’s partly politics. If nothing else, Republicans are respectful of Medicare’s political potency. Recall that a core Republican message in both the 2010 and 2012 elections was that Democrats, through Obamacare, were cutting Medicare too much. Republicans, already concerned about their brand, don’t want to rebrand themselves as the party of Medicare cuts.

But it’s partly policy, too. The fact is that short of converting the program to a premium support system — a non-starter after they lost the 2012 election — Republicans simply don’t know what they want to do on Medicare.

Scour the various outlets for Democratic policy ideas and you’ll find plenty of proposed Medicare cuts. President Obama’s 2013 budget, for instance, includes hundreds of billions in Medicare cuts (see pages 33-37), and caps the program’s long-term growth at GDP+0.5 percent. More recently, the Center for American Progress released a 46-page proposal for cutting Medicare by almost $400 billion.

Republicans, meanwhile, have focused their energy on a long-term effort to convert Medicare to a premium-support model. Paul Ryan’s 2013 budget kept the Affordable Care Act’s Medicare cuts for the next 10 years and proposed to convert the program to a premium-support model in the future. Mitt Romney’s platform proposed reversing Obamacare’s Medicare cuts and offered a vague framework for converting the program to a premium-support model in the future.

If you dig deep into the Republican think tank world, you can find a few proposals that focus on the near-term.

The current fiscal ‘cliff’ framework appears to place a lot of burden on those least able to take it as well as those least responsible for creating the problems.

Cut through the fog, and here’s what to expect: Taxes will go up just shy of $1.2 trillion — the middle ground of what President Barack Obama wants and what Republicans say they could stomach. Entitlement programs, mainly Medicare, will be cut by no less than $400 billion — and perhaps a lot more, to get Republicans to swallow those tax hikes. There will be at least $1.2 trillion in spending cuts and “war savings.” And any final deal will come not by a group effort but in a private deal between two men: Obama and House Speaker John Boehner (R-Ohio). The two men had a 30-minute phone conversation Wednesday night  — but the private lines of communications remain very much open.

No doubt, there will be lots of huffing and puffing before any deal can be had. And, no doubt, Obama and Congress could easily botch any or all three of the white-knuckle moments soon to hit this town: the automatic spending cuts and expiration of the Bush tax cuts, both of which kick in at the end of this year, and the federal debt limit that hits early next.

Go to the Politico story for a concept of what’s at stake and at issue.

Obama appears to be ready to take the case to the people while Boehner is beginning to whine like a toddler who can’t get his playmates to share their toys.  His tea party tots appear ready to wreck the economy and have learned nothing from the last election.

Speaker John Boehner (R-Ohio) said Thursday there had been “no substantive progress” in fiscal-cliff negotiations in the two weeks since congressional leaders met with President Obama.

Boehner, addressing reporters after a meeting with Treasury Secretary Tim Geithner in the Capitol, called on the White House to “get serious” about the talks and warned of a “real danger” that Jan. 1 would come without a deal if President Obama did not offer up specific spending cuts he would be willing to accept.

“Despite claims that the president supports a balanced approach, the Democrats have yet to get serious about real spending cuts,” Boehner said. “Secondly, no substantive progress has been made in the talks between the White House and the House in the last two weeks.

“Listen, this is not a game,” he added. “Jobs are on the line. The American economy is on the line, and this is a moment for adult leadership.”

The Speaker criticized the president for holding “campaign-style rallies” instead of engaging in serious talks.

It appears that the Cat Food Commission findings are still what’s considered to be the basic framework for discussion by Democrats from what I can find. It’s difficult to understand the motives of a party that will continue to let the country suffer in service to its special interest masters, its most radical base, and its inability to embrace any kind of data, reality, or political truth.  It’s obvious we need to let the Bush Tax cuts expire for everything but the first $250,000 of income.  This includes preferential treatment of dividends.  It’s also clear we need to let Medicare negotiate its drug costs.  These two things alone should be no brainers.  Then, there’s the cut that should come from the military from the peace dividend and use of nontraditional technologies.  However, I think some of the hooplah over Benghazi is to argue for more and not less military spending.  This makes no sense what-so-ever unless Republicans are still planning on launching ground wars some where like Iran.  We also need to stop subsidizing profitable industries like Oil and anything based in exporting value overseas.  We need to get tougher on the financial service industry too.  Why Washington DC cannot deal with simple truths is beyond me.  However, be prepared for the first negotiations to deal with your earned benefits and the few deductions that you probably use on your returns.  The Republicans want to make the majority of us pay for 8 years of disastrous policy. It remains to be seen if Democrats and the President will actually negotiate from strength for a change.  Elections should have meaning.
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