Monday Reads

Good Morning!

I thought I’d start this morning reads off with Bill Moyers who is having a good laugh at the expense of billionaires that are donating lots of money to political campaigns.  It seems they really don’t like having their names bandied about and their closets opened.  Pity the Poor Billionaires!!!

Last month, an Obama website cited eight mega-donors to Mitt Romney’s campaign as possessing “less-than-reputable records.” Among them was Frank VanderSloot, a Romney national finance co-chairman who has raised millions for the campaign. He’s a rancher – with 110,448 acres, on which he no doubt roams playing “This Land is Your Land” on his little Stradivarius — and CEO of the billion-dollar company Melaleuca, which Rolling Stone describes as “a ‘multilevel marketing’ firm based in Idaho that sells off-brand cleaning products and nutritional supplements.”

VanderSloot and his wealthy pals went ballistic and cried intimidation. “You go back to the Dark Ages,” VanderSloot said, “when they put these people in the stocks or whatever they did, or publicly humiliated them as a deterrent to everybody else — watch this — watch what we do to the guy who did this.”

Conservatives described the Obama ranking of Romney contributors as an “enemies list,” conjuring images of Nixonian wiretaps and punitive tax audits. But despite protestations to the contrary, these deep-pocketed plutocrats aren’t shelling out the shekels for the love of flag, Mom and apple pie (or tarte tatin, as they call it in the swanky joints).

“Most of the megadonors backing [Romney’s] candidacy are elderly billionaires,” Tim Dickinson writes in Rolling Stone. “Their median age is 66, and their median wealth is $1 billion. Each is looking for a payoff that will benefit his business interests, and they will all profit from Romney’s pledge to eliminate inheritance taxes, extend the Bush tax cuts for the superwealthy — and then slash the top tax rate by another 20 percent.” As at least one of them has said, they view these cash infusions as an “investment,” plain and simple.

Money is rolling into Wisconsin in Tuesday’s recall election. The Hill reports that it’s the most expensive race in Wisconsin history.  The Koch Brothers are knee deep in money trying to keep their union bustin’ boy in office.  We’ll be live blogging this tomorrow night so stay tuned!

Out-of-state sources have funded both sides heavily in the contest CPI said. Barrett has received about 26 percent of his $4 million in donations from sources outside of Wisconsin, while Walker has received two-thirds of his $30.5 million haul from out-of-state. Both campaigns have been aided by strong spending by super-PACs and other outside groups.

Labor unions have spent heavily to defeat Walker. The report says that the nation’s three largest public unions, the National Education Association (NEA), American Federation of State, County and Municipal Employees (AFSCME), and the Service Employees International Union (SEIU),  have directed at least $2 million to anti-Walker efforts.

Walker, for his part, has been aided by conservative businessmen including casino mogul Sheldon Adelson and billionaire David Koch. The Republican Governors Association received a $1 million contribution from Koch in February, according to CPI.

The economy is slowing down.  Oil prices are dropping in response.  The stock market has lost all its value.  Will we see another recession shortly?

The statistics on Friday were daunting. Only 69,000 jobs were created last month, far lower than what’s needed just to keep up with population growth. The job tallies for March and April, shabby to begin with, were revised down, for an average monthly tally of 96,000 over the past three months, versus 252,000 in the prior three months.

The weakness was not only displayed in job growth. Average weekly wages declined in May, to $805, as a measly two-cents-an-hour raise was more than clawed back by a drop to 34.4 hours in the length of the typical workweek.

Similarly, the rise in the number of people looking for work is normally considered a sign of optimism, but, on closer inspection, it appears to be simply the reversal of a drop in job-seekers in April.

Granted, it is better for jobless workers to be actively looking for work than sitting on the sidelines. But without enough jobs to go around, the inevitable result is higher official unemployment. The jobless rate ticked up from 8.1 percent in April to 8.2 percent in May, or 12.7 million people. Of those, 42.8 percent, or 5.4 million people, have been out of work for more than six months, a profound measure of personal suffering and economic decline.

There’s no sign that Washington is prepared to shoulder this responsibility. President Obama’s last big push for job creation, the $450 billion package proposed last fall, would have created an estimated 1.3 million to 1.9 million jobs by providing aid to states for teachers and other vital public employees, investments in infrastructure and tax breaks for new hiring. It was filibustered by Senate Republicans and not brought up for a vote in the Republican-dominated House, with Republican lawmakers claiming that deficit reduction was more important. Since then, they have balked at even smaller administration proposals, like modest investments in clean-energy projects.

Blocking constructive action is bad enough, but it’s not the worst of it. Recently, the House speaker, John Boehner, has ratcheted up economic uncertainty by pledging to force another showdown this year over legislation to raise the debt ceiling. A debt-ceiling debacle would come on top of the expiration at the end of 2012 of the Bush-era tax cuts and the onset of some $1 trillion in automatic spending cuts. If allowed to take effect as planned, those measures would take a huge bite out of growth, further weakening the economy.

Paul Krugman slammed the “anti-bipartisanship” in the Paul Ryan budget and in Romney’s support of obstructionist policies aimed at tanking the economy yesterday on ABC.  Krugman said that the budget Romney supports is a “fraud”.

This morning on “This Week,” New York Times columnist Paul Krugman called Rep. Paul Ryan’s proposed budget plan a “fraud” as Romney campaign senior advisor Eric Fehrnstrom confirmed his candidate’s support for the plan that would trim trillions in federal spending over the next decade.

“The Ryan plan — and I guess this is what counts as a personal attack — but it isn’t.  It’s not an attack on the person; it’s an attack on the plan.  The plan’s a fraud,” said Krugman. “And so to say that — just tell the truth that there is really no plan there, neither from Ryan, nor from Governor Romney, is just the truth.  That’s not — if that’s — if that’s being harsh and partisan, gosh, then I guess the truth is anti-bipartisanship. ”

Krugman, who has been critical of the Ryan, R-Wis., plan in the past, was responding to the Fehrnstrom, who confirmed Romney’s support for the plan after ABC News’ George Will asked Fehrnstrom to clarify his candidate’s stance on the Ryan proposal.

“He’s for the Ryan plan.  He believes it goes in the right direction.  The governor has also put forward a plan to reduce spending by $500 billion by the year 2016,” said Fehrnstrom. “In fact, he’s put details on the table about how exactly he would achieve that.  So to say he doesn’t have a plan to — a plan to restrain government spending is just untrue.”

Krugman defended the president’s budget plan when asked by Fehrnstrom if he preferred it over the Ryan plan.

“I mean, the president — at least it’s — you know, I don’t approve of everything, but there are no gigantic mystery numbers in his stuff.  We do know what he’s talking about.  His numbers are — you know, all economic forecasts are wrong, but his are not — are not insane.  These are — these are just imaginary,” he said.

Molly Ball writes about the mediocre Mitt Romney Governorship of Massachusetts at the Atlantic.   Here’s my favorite quote “He believed that a PowerPoint presentation would solve all our problems.”   Here’s some other tidbits that lead up to that very funny line.

Romney campaigned on a promise to clean up Massachusetts’ notoriously cronyistic state government, painting his opponent, the sitting state treasurer, as a product of a backroom-dealing Beacon Hill culture. But his efforts once he was elected were somewhat halfhearted and largely fruitless.

One example was the state’s judiciary, a notorious hotbed of patronage. Romney’s attempts to reform it didn’t succeed, and instead, he ended up succumbing to the status quo, the Washington Post reports. His attempt to consolidate transportation agencies was shot down by the legislature, as was his push to remove from the state university system William Bulger, brother of mobster “Whitey” Bulger. (Bulger did eventually resign, in part due to Romney’s pressure.)

“A lot of governors come in offering to change the political culture,” said Cunningham. “But he wasn’t here long enough, he didn’t put enough effort into it, and he had a very formidable opponent.”

Perhaps because of his outsider mien, Romney enjoyed notably chilly relationships with legislators and local officials, who found him distant and somewhat disengaged. John Barrett, who was mayor of the city of North Adams during Romney’s governorship, described him Thursday as “a governor who just ignored us, who didn’t want our effort,” saying he never met with mayors or sought their input. “He believed that a PowerPoint presentation would solve all our problems,” Barrett said.

So, the biggest issue on my mind is the looming Debt-Ceiling fight and the horrible Agent Orange.  I pretty much believe that the House Republicans will crash all the markets and then some if they think it makes Obama less likely to be elected.  Here’s Garrett Epps at the American Prospect.  He believes–as do I–that Obama should use the Constitutional Option and tell them all to go to hell regardless.  It will be interesting to see how soon they will heat this up.

The debt limit will apparently become a crisis again sometime after the election. Boehner two weeks ago announced his plan to demand another round of cuts when the current ceiling is reached at the end of the year. (I suspect this manufactured crisis will only happen if Obama is re-elected; if Mitt Romney wins the election, Republicans will suddenly find economic recovery an important value after all.)

Obama should begin now to prepare for the predicted crisis. And if there is any way to climb down from the inane “my attorney Bernie says I can’t” comment, he should find it. I called the U.S. Department of Justice to ask whether the Office of Legal Counsel has issued, or is preparing, a formal opinion on the President’s possible power under Section Four; the DOJ’s spokesman did not return my call.

There’s an interesting analysis at TP on how the last debt ceiling debate hurt the economy.  A repeat under current conditions could be disastrous.

House Republicans last year used the imminent approach of the nation’s credit limit to force Congress into enacting a series of spending cuts. The hostage scenario led to the nation’s first ever credit downgrade, with the credit rating agency Standard & Poor’s repeatedly citing the GOP’s intransigence on revenue as a key justification. Speaker of the House John Boehner (R-OH) has indicated that the GOP is ready to reenact the debt ceiling debacle the next time the nation comes close to its borrowing limit. But as economists Betsey Stevenson and Justin Wolfers write, the economy was significantly setback during the last showdown, which they call “an act of economic sabotage“

Follow the links to the Bloomberg analysis and you’ll see why we’re in worse position to weather that kind of anti-bipartisanship nonsense this year. So, who really killed the confidence fairy last year?

High-frequency data on consumer confidence from the research company Gallup, based on surveys of 500 Americans daily, provide a good picture of the debt-ceiling debate’s impact (see chart). Confidence began falling right around May 11, when Boehner first announced he would not support increasing the debt limit. It went into freefall as the political stalemate worsened through July. Over the entire episode, confidence declined more than it did following the collapse of Lehman Brothers Holdings Inc. in 2008. After July 31, when the deal to break the impasse was announced, consumer confidence stabilized and began a long, slow climb that brought it back to its starting point almost a year later. (Disclosure: We have a consulting relationship with Gallup.)

Businesses were also hurt by uncertainty, which rose to record levels as measured by the number of newspaper articles mentioning the subject. This proved far more damaging than the regulatory uncertainty on which Republican criticisms of Barack Obama’s administration have focused (more on that subject in a Bloomberg View editorial today). Employers held back on hiring, sapping momentum from a recovery that remains far too fragile.

It’s going to be a very long, hot summer.

What’s on your reading and blogging list today?