Friday Reads

Good Morning!!!

Washington continues to be puzzled about why the economy is so bad. I watched Ben Bernanke’s presser and nothing he said sounded the least  bit surprising to me.  The Fed’s basically ending it’s QE program.  It’s keeping the discount rate low.  It also has lowered its economic outlook and believes that unemployment will stay higher than previously thought and the economy will slow down.  In answering some questions, Bernanke mentioned that austerity budgets in the states was one of the reasons the economy is doing poorly.  He also mentioned things that will likely be short-lived like supply line problems resulting from Japan’s catastrophes and bad weather.  In short, monetary policy has reached its ability to do something.  It’s up to our politicians.  May all the wisdom beings help us!

On national television today, the Federal Reserve chairman painted a picture of a recovery that, two years after it began, remains “frustratingly slow” and too weak to make a meaningful dent in joblessness anytime soon. Even if the current slowdown proves temporary, as the Fed expects, its forecast pace of growth won’t bring unemployment back down below 7 percent until after 2013.

Much more troubling is the country’s lack of a backup plan if things get worse. The economy’s weakness leaves it vulnerable to shocks of the kind that Europe’s festering sovereign-debt crisis could easily deliver. But neither the Federal Reserve nor the U.S. government is in a good position to provide more life support should it become necessary.

Having already spent some $2.3 trillion on two bond-buying programs aimed at lowering interest rates and boosting growth, Bernanke recognizes that the costs of a third round of so-called quantitative easing may outweigh the benefits.

The above Bloomberg op-ed calls for more stimulus because that’s what stops this.  We know that from a lot of data, experience, and theory.  Too bad we’d rather have the equivalents of high school graduates remove our national appendix and argue our death penalty case before the Supreme Court.  None of these folks appear to have one clue let alone the knowledge to get things done.

Meanwhile, the Republicans have left the budget talks because returning taxes to responsible levels is too politically unpalatable for them.  They’d rather rely on tanking the economy and blaming it on Obama.  The Senate Republicans are hoping that John Boehner will take the bullet for them.  We’re all going to need lessons on surviving our politicians destroying our economy.  In that sense, we could be Greece who was brought low by Wall Street Bankers who convinced them they really could fund a grandiose project like The Olympics and everything else.  We’ve spent about 10 years adding grandiose wars and feeding our Wall Street Bankers.  Of course, the people that will suffer from this will not be those bankers, or defense contractors or the politicians who are bringing us low.

Intra-caucus dynamics on the GOP side seem to be dooming the debt limit talks. Eric Cantor’s preference is for John Boehner to sign a deal he can grumble about, so that when the GOP loses seats in 2012 he can challenge Boehner for the leadership. Boehner, meanwhile, doesn’t want to sign a deal that Cantor won’t sign. Consequently, we can’t get a deal.

This, then, returns us to the subject of tactical modalities available if the country runs up to the debt ceiling. The key issue at this point becomes the fact that hitting the debt ceiling doesn’t force an automatic default or a government shutdown. Revenue continues to come in to the federal government. There’s simply a gap between how much comes in and how much the government is supposed to spend. The first step to sound policy in this case is to make sure we keep paying interest on the debt. Thus default and immediate catastrophe is avoided. Second, what you want to do is minimize the impact on government activities. That means that in the first instance you want to try to stiff people to whom the government owes money but who will probably keep working even if you don’t pay them. Take defense contractors, for example. If Robert Gates tells a bullet-making company that he can’t pay the Pentagon’s bills this month because Eric Cantor is being obstinate, but please keep sending bullets anyway, the bullet-makers aren’t going to leave our troops bullet-less. We just need to tell them to keep sending the invoices coming, and promise that all bills will be paid once Cantor relents. Hospitals, doctors, and other Medicare providers are the other low-hanging fruit here. Patients will continue to be treated, doctors will keep filing paperwork, and Kathleen Sebelius will keep reassuring people that they’ll be paid when the congressional gridlock is resolved.

Over time, of course, these tactics tend to run into limits. We may need to start paying people less than their full Social Security checks, mailing a partial benefit plus a note explaining that back benefits will be paid once congress lifts the debt ceiling.

Meanwhile, President Obama pulls a present vote while addressing a GLBT fundraiser for him last night in New York City.  He pulled the traditional republican cop-out position.  Leave the issue to the states.  Guess that means Rick Warren will be doing more prayer appearances for him this election cycle.

OBAMA: Part of the reason that DOMA doesn’t make sense is that traditionally marriage has been decided by the states and right now, I understand there is a little debate going on here in New York about whether to join five other states and DC in allowing civil marriage for gay couples. And I want to say that under the leadership of Governor Cuomo, with the support of Democrats and Republicans, New York is doing exactly what democracies are supposed to to do. There is a debate, there is a deliberation about what it means here in New York to treat people fairly in the eyes of the law and that is — look, that’s the power of our democratic system.

No, we won’t but maybe the states will.

Appearing at a “Gala with the Gay Community” fundraiser in Manhattan Thursday, President Obama said he believes “gay couples deserve the same legal rights as any other couple in this country.” But he stopped short of backing same-sex marriage, even as attendees yelled out for him to do so.

Mr. Obama, who was greeted with a standing ovation by the roughly 600 attendees — who paid between $1,250 and $35,800 to attend — said he always believed discrimination was wrong, joking that “I had no choice. I was born that way.” After a beat, amid laughter from the crowd, he added, “in Hawaii.” He went on to say that discrimination based on sexual orientation or gender identity “runs counter to who we are as a people.”

I guess discrimination is okay if you hide behind religion. Oh, wait, isn’t that what the confederates said about slavery. Let’s see, I seem to remember reading arguments about state rights and that it’s okay to own other people’s because it’s right there in the bible.

The TSA is finally listening to some of the complaints about it’s aggressive pat-down procedures and at least changing the rules for children.  It will no longer trigger automatic pat-downs for any one under the age of 12.

“As part of our ongoing effort to get smarter about security, Administrator Pistole has made a policy decision to give security officers more options for resolving screening anomalies with young children and we are working to operationalize his decision in airports,” TSA spokesman Nicholas Kimball said in a written statement. “This decision will ultimately reduce – though not eliminate – pat downs of children.”

Already widely criticized for the controversial airport security technique, the TSA has come under increased fire after reports surfaced that its officers patted down a 6-year-old girl and an 8-month-old.

There’s an interesting scandal brewing in New York that may take down Mayor Bloomberg.  You can watch more about this at Democracy Now.

Prosecutors have unsealed indictments against the company TechnoDyne and its founders in the CityTime payroll scandal in New York City, which was first exposed by Democracy Now!’s co-host Juan Gonzalez in his column for the New York Daily News. TechnoDyne executives face charges of paying millions in kickbacks to get CityTime work, and money laundering. Meanwhile, the founders of the company, Reddy Allen and his wife Padma, are now fugitives after fleeing to India. Prosecutors described CityTime as “one of the largest and most brazen frauds ever committed against the city.” Following the indictments, Gonzalez says the question remains whether top officials in the administration of New York City Mayor Michael Bloomberg will also be charged.

Kansas may wind up being the first state where women cannot access abortion services.  Kansas is trying to shut down its three abortion clinics. It’s doing this by imposing immediate changes to the clinic’s physical plant.

Back in April, the state legislature passed a law directing the Kansas Department of Health and Environment to author new facility standards for abortion clinics, which the staunchly anti-abortion GOP governor, Sam Brownback, signed into law on May 16. The law also requires the health department to issue new licenses each year, and it grants additional authority to health department inspectors to conduct unannounced inspections, and to fine or shut down clinics.

The department wasted no time in drafting the new rules, issuing the final version on June 17 and informing clinics that they would have to comply with the rules by July 1, as the Associated Press reported Wednesday. Peter Brownlie, president of Planned Parenthood of Kansas and Mid-Missouri, told the AP that inspectors were expected at their clinic in Overland Park, Kansas, on Wednesday. There are only three clinics left in the state: Planned Parenthood’s, a clinic in Overland Park, and the Aid for Women clinic in Kansas City.

The new requirements require facilities to add extra bathrooms, drastically expand waiting and recovery areas, and even add larger janitor’s closets, as one clinic employee told me—changes that clinics will have a heck of a time pulling off by the deadline. Under the new rule, clinics must also aquire state certification to admit patients, a process that takes 90 to 120 days, the staffer explained. Which makes it impossible for clinics to comply. And clinics that don’t comply with the rules will face fines or possible closure.

It’s increasingly clear that the U.S. is becoming a hostile place for nearly any one that doesn’t want to comply with the narrow definitions of what’s right to a handful of Republican activists.  What’s worse is that Democrats act powerless to stop them and the Judiciary appears to be completely dysfunctional at the moment.  We’re losing more rights day by day.  There seems to be a play book and none of us are included.

What’s on your reading and blogging list this morning?