Why is Romney the Almost-Human?
Posted: April 11, 2012 Filed under: 2012 presidential campaign, U.S. Politics | Tags: bad liar, robot, Romney 12 CommentsEverybody — well, me, and Charles Pierce, and bostonboomer, and well, everybody — sees him as a stiff awkward robot with less charm than a Roomba.

Yes, that’s at least partly because he’s a rich guy who has to mix with the rubes on nothing stronger than caffeine-free Coke. And it’s partly because he’s been lying for votes for so long, it takes more and more time to get the right lies out of storage. A Roomba doesn’t have to do either of those things.
But, really, are those issues unusual for a politician? They all have to campaign among the manyheaded and sanitize their hands every few minutes. They all lie like tombstones, and we know it. So what is it with Romney? Why are the other politicians just doing what politicians do, but Romney gets called a robot?
I’m beginning to think that maybe it’s because he’s so bad at lying. It’s written all over his face that he doesn’t believe any of the drivel himself, that he’s reading his speeches to the proletariat because that’s what you have to do, that he’s going through the motions.
He’s such a bad liar, we can see him doing it. But truth-telling is so far off the table it’s in the Marianas Trench somewhere. That means we have to examine the only alternative. Good liars.
In the RE (Rove Era), elections are about piling on the most stimulating lies. For three and a half years we’ve had someone doing pretty much the diametric opposite of everything he campaigned on, and when he goes out campaigning now … people still believe him when he says the next four years will be different. He’s one of the best liars in all history.
It’s like a choice between being swindled out of your money or your house. Both alternatives are repulsive, but with a bad liar, we might be on our guard and actually get ripped off less. With a sweet-talking bamboozler, in Vastleft’s inimitable words, half the country accepts it while the other half demands even worse.
Crossposted from Acid Test
Monday Reads
Posted: March 19, 2012 Filed under: morning reads | Tags: BIg spending republicans, miami, New Orleans, New York City, Obama birth control cave, police violence, Puerto Rico republican Primaries, Romney 32 Comments
Good Morning!
Lots of things don’t surprise me these days. That would include the news that Clinton and Obama were more fiscally conservative than either of the Bush presidents or Ronald Reagan or Nixon or Ford. For that matter, Carter came in third. Once again, evidence shows that Republican memes are lies. Here’s a list of possible excuses for the Republican binges.
Let me anticipate some of your objections before you make them. (1) Reagan was fighting a war, he jacked up defense spending instead of discretionary spending, and he inherited a recession with inflation that might, well, inflate his numbers. This is all true, but expanding defense was Reagan’s choice, and a dollar spent, on no matter what, is a dollar taxed or borrowed. (2) Bush was fighting a war and battling a recession, too. Yes, but he had neither inflation nor a Great Recession. (3) Don’t play relativity games with me…too much government spending is too much government spending, even if Obama’s predecessors were worse! There is a time for government cuts, but it’s not when you have 9 percent unemployment and your interest rates are below 2%. (4) The language of Obamacare and financial reform are better indicators of big government than federal spending. It’s fair to measure government size by its total involvement in people’s lives, but that deserves a longer post. (5) We should be more concerned about the taxes and spending to come than the spending that has past. But they haven’t happened yet, so they’re not part of the president’s record.
Economix shows us how the recession has decreased the number of people that have health insurance. Some have lost coverage due to job loss. Some have lost insurance because their employers have scaled down benefits.
The share of children and working-age adults who had insurance through an employer fell 10 percentage points during the last recession, according to a study released on Thursday by the Center for Studying Health System Change, a nonpartisan research group in Washington.
From 2007 to 2010, the share of children and working-age adults with employer-sponsored coverage fell to 53.5 percent from 63.6 percent, according to the study.
The major contributor to the decline was the loss of employment during the downturn, with almost a third of the people younger than 65 living in a family where no one was working, according to the study. The study is based on the center’s 2007 and 2010 Health Tracking Household Surveys.
The surge in unemployment, coupled with the steady deterioration of the number of employers offering coverage and the number of workers signing up for insurance, is causing a “steady erosion” in employer-based coverage, said Chapin White, a senior researcher at the center who is an author of the study.
I wrote a post on Saturday on how the Obama administration seems to have back pedaled on its birth control coverage mandate for all but strict religious organizations. It appears that by providing self-insurance, organizations can avoid having private insurers providing the benefit for them. This would mean many schools, universities and hospitals–large employers of women–could avoid the mandate to provide women’s preventative health care.
Taking a conciliatory tone and asking for a wide range of public comment, the Obama administration announced this afternoon new accommodations on a controversial mandate requiring contraceptive coverage in health care plans.
Coming after a month of continued opposition from the U.S. bishops to the mandate, which was first revised in early February to exempt certain religious organizations, today’s announced changes from the Department of Health and Human Services make a number of concessions, including allowing religious organizations that self-insure to be made exempt.
It appears that the Administration has no problem with religious institutions discriminating against women or persons that don’t hold their specific views.
Romney’s won the Puerto Rican primaries. While the delegates are apportioned, Romney’s margin of victory will still give him the entire delegation.
Mitt Romney will win Sunday’s Republican presidential primary in Puerto Rico, CNN projects, based on vote results obtained from local party and election officials.
At 8:35 p.m. ET, with about 23% of total ballots accounted for, the former Massachusetts governor had a substantial lead with more than 25,000 votes — or 83% of the vote.
Rick Santorum was a distant second, at 8% with slightly more than 2,500 votes.
The other two candidates, former House Speaker Newt Gingrich and Texas Rep. Ron Paul, were further behind with 2% and 1% of the vote, respectively.
Speaking at a rally Sunday night in Vernon Hills, Illinois, Romney said that Puerto Rican voters were clear about which of the four candidates “most represent their feelings” — and especially their desire to nominate someone who can bring about a stronger economy and smaller government. He said his party can appeal to Latinos, and win the presidency, with a low-tax, pro-business message.
I’ve been watching this story unfold with absolute horror. This one has the feel of something that will make the wind change. Seventeen year old Trayvon Martin was killed by a neighborhood watch “captain” with a police fantasy and a racist mindset. The more you hear about his killer, the more it will make you wonder about who lives in your neighborhood.
On February 26, 2012, a 17-year-old African-American named Trayvon Martin was shot and killed in Sanford, Florida. The shooter was George Zimmerman, a 28-year-old white man. Zimmerman admits killing Martin, but claims he was acting in self-defense. Three weeks after Martin’s death, no arrests have been made and Zimmerman remains free.
Here is what everyone should know about the case:
1. Zimmerman called the police to report Martin’s “suspicious” behavior, which he described as “just walking around looking about.” Zimmerman was in his car when he saw Martin walking on the street. He called the police and said: “There’s a real suspicious guy. This guy looks like he’s up to no good, on drugs or something. It’s raining and he’s just walking around looking about… These a**holes always get away” [Orlando Sentinel]
2. Zimmerman pursued Martin against the explicit instructions of the police dispatcher:
Dispatcher: “Are you following him?”
Zimmerman: “Yeah”
Dispatcher: “OK, we don’t need you to do that.”[Orlando Sentinel]
3. Prior to the release of the 911 tapes, Zimmerman’s father released a statement claiming “[a]t no time did George follow or confront Mr. Martin.” [Sun Sentinel]
4. Zimmerman was carrying a a 9 millimeter handgun. Martin was carrying a bag of Skittles and a can of iced tea. [ABC News]
5. Martin weighed 140 pounds. Zimmerman weighs 250 pounds. [Orlando Sentinel; WDBO]
6. Martin’s English teacher described him as “as an A and B student who majored in cheerfulness.” [Orlando Sentinel]
7. Martin had no criminal record. [New York Times]
8. Zimmerman “was charged in July 2005 with resisting arrest with violence and battery on an officer. The charges appear to have been dropped.” [Huffington Post]
9. Zimmerman called the police 46 times since Jan. 1, 2011. [Miami Herald]
10. According to neighbors, Zimmerman was “fixated on crime and focused on young, black males.” [Miami Herald]
11. Zimmerman “had been the subject of complaints by neighbors in his gated community for aggressive tactics” [Huffington Post]
12. A police officer “corrected” a key witness. “The officer told the witness, a long-time teacher, it was Zimmerman who cried for help, said the witness. ABC News has spoken to the teacher and she confirmed that the officer corrected her when she said she heard the teenager shout for help.” [ABC News]
13. Three witnesses say they heard a boy cry for help before a shot was fired. “Three witnesses contacted by The Miami Herald say they saw or heard the moments before and after the Miami Gardens teenager’s killing. All three said they heard the last howl for help from a despondent boy.” [Miami Herald]
14. The officer in charge of the crime scene also received criticism in 2010 when he initially failed to arrest a lieutenant’s son who was videotaped attacking a homeless black man. [New York Times]
15. The police did not test Zimmerman for drugs or alcohol. A law enforcement expert told ABC that Zimmerman sounds intoxicated on the 911 tapes. Drug and alcohol testing is “standard procedure in most homicide investigations.” [ABC News]
The police down here in New Orleans are considered to be so out of control that the DOJ may be taking over operations shortly. We also have had several suspicious shootings down here recently.
New Orleans police officials confirmed Thursday that the 20-year-old man who was fatally shot by a plain-clothed narcotics officer during a drug raid at a Gentilly house a day earlier was unarmed. New Orleans police officer Joshua Colclough, 28, fired a single shot Wednesday evening that killed Wendell Allen, 20. Police officials were guarded in their comments about the shooting Thursday, citing the ongoing investigation.
“We have not been able to yet completely understand what exactly occurred,” Police Superintendent Ronal Serpas said Thursday.
The shooting took place inside a red-brick, two-story home at 2651 Prentiss Ave. in Gentilly. Officers were executing a search warrant at the home following a days-old probe of marijuana dealing. Serpas said officers later found drug paraphernalia and 138 grams of marijuana — about four and a half ounces — inside the residence.
It was the second fatal shooting of a suspect by police within a week in the NOPD’s 3rd District, a relatively sleepy swath of residential neighborhoods that stretch from Lakeview through Gentilly. In last week’s incident, in Mid-City, two officers were badly injured in a gunfight before the alleged gunman, 20-year-old Justin Sipp, was killed by police gunfire.
Here’s another horrifying story from NY.
A trans woman says that when she was arrested for a minor subway violation, NYPD officers belittled her, called her names, asked about her genitals — and kept her chained to a fence for 28 hours. Now she’s suing. And it turns out she’s far from alone.
In her lawsuit, Temmie Breslauer says she was arrested on January 12 in a subway station for illegally using her dad’s discount fare card (only seniors and people with disabilities can get these). She says the arresting officers — the suit names one, Officer Shah — laughed at her. When they took her to the station, a desk sergeant asked her “whether she had a penis or a vagina.” Breslauer explained that she was in transition. Then, instead of putting her with female inmates or in her own room, the department allegedly chose this course of action:
[S]he was fingerprinted, seated on a bench, then painfully chained to a fence wherein, for no apparent reason, her arm was lifted over her head and attached to the fence to make it appear that she was raising her hand in the classroom. She sat there in that position for 28 hours.
She also says officers not only refused to call her “she,” they instead referred to her as “He-She”, “Faggot,” and “Lady GaGa,” and asked her “So you like to suck dick? Or what?” Meanwhile, people arrested for the same minor crime (misdemeanor “theft of services”) she was were calmly processed and allowed to leave. Finally, she was able to go before a judge, who gave her two days of community service. She says the whole ordeal aggravated her existing PTSD and left her sleepless and suicidal.
Makes you wonder what ever happened to honest, decent people, doesn’t it?
So, what’s on your reading and blogging list today?
Friday Reads
Posted: February 3, 2012 Filed under: 2012 presidential campaign, morning reads, We are so F'd | Tags: 1Q84, Aomame, Haruki Murakami, Romney, Santorum, Thomas Paine, Willard 70 Comments
Good Morning!
As you may know, one of my pet peeves is how right wing politicians distort historical figures and quotes to their advantage and very few journalists or people bother to spell check them. Mitt Romney is going on using a George Patton quote and attributing it to one of my favorite founders, Thomas Paine. Any one remotely familiar with the 18th century would know that “lead, follow, or get out of the way” couldn’t even be part of the lexicon. But, never let a good opportunity to skew history the wrong direction get in the way of a pol in heat.
Fred Shapiro, editor of the authoritative Yale Book of Quotations published by Yale University Press, told BuzzFeed that “the notion that Thomas Paine said this is extremely ridiculous.”
“The diction and tone of ‘lead, follow, or get out of the way’ are, of course, far too modern to have been said by Thomas Paine,” Shapiro said.
A similar form of the quote — “push, pull, or get out of the way” — can be traced to a proverb dating back to 1909, according to Shapiro, who is the author of a forthcoming book on notable misquotes. And there is a newspaper mention of the quote from 1961, but it’s from the governor of Ohio. According to Paine biographer Craig Nelson, Paine “never said it. George Patton did.” (You can also find the quote attributed to Patton on the Internet).
In response to a request for comment on the Paine misquote, Romney spokeswoman Andrea Saul noted that the candidate had hedged a little bit: “In another era of American crisis, Thomas Paine is reported to have said, ‘Lead, follow, or get out of the way.'”
University of Texas professor and Paine scholar William Scheick called Romney’s misquoting of Paine “another deplorable example of politicians distorting history to advance themselves and their shadowy supporters” and said that Paine “hardly is apt in Romney’s case.”
“For me, that’s the real story here — that Romney and his audience apparently have no clue to what a searing liberal freethinker Paine was,” said Scheick.
Don’t you just love the description “searing liberal freethinker”? I might also add the man was a well-known critic of organized religion. That’s hardly a combination of attributes for a leader that you would think a Republican presidential wannabe would want thrown around these days. I remember reading a biography of Thomas Paine in high school and thinking “wow”. At the end of his days, Thomas Jefferson was one of the few folks that would even speak to him. He was that scandalous. It is pretty well known that he moved from being a deist into the realm of atheism by his end days. His most famous work is Age of Reason but he is also well known as a pamphleteer or the equivalent of a 18th century blogger.
What you may not know is that he was one of the most ardent and earliest supporters of emancipation for women. One of his most famous works is called: An Occasional Letter on the Female Sex and includes many examples of how women have been subjugated to men. Here, Paine channels his inner female to argue for emancipation.
If a woman were to defend the cause of her sex, she might address him in the following manner:
“How great is your injustice? If we have an equal right with you to virtue, why should we not have an equal right to praise? The public esteem ought to wait upon merit. Our duties are different from yours, but they are not therefore less difficult to fulfill, or of less consequence to society: They are the fountains of your felicity, and the sweetness of life. We are wives and mothers. ‘Tis we who form the union and the cordiality of families. ‘Tis we who soften that savage rudeness which considers everything as due to force, and which would involve man with man in eternal war. We cultivate in you that humanity which makes you feel for the misfortunes of others, and our tears forewarn you of your own danger. Nay, you cannot be ignorant that we have need of courage not less than you. More feeble in ourselves, we have perhaps more trials to encounter. Nature assails us with sorrow, law and custom press us with constraint, and sensibility and virtue alarm us with their continual conflict. Sometimes also the name of citizen demands from us the tribute of fortitude. When you offer your blood to the State think that it is ours. In giving it our sons and our husbands we give more than ourselves. You can only die on the field of battle, but we have the misfortune to survive those whom we love most. Alas! while your ambitious vanity is unceasingly laboring to cover the earth with statues, with monuments, and with inscriptions to eternize, if possible, your names, and give yourselves an existence, when this body is no more, why must we be condemned to live and to die unknown? Would that the grave and eternal forgetfulness should be our lot. Be not our tyrants in all: Permit our names to be sometimes pronounced beyond the narrow circle in which we live. Permit friendship, or at least love, to inscribe its emblem on the tomb where our ashes repose; and deny us not that public esteem which, after the esteem of one’s self, is the sweetest reward of well doing.”
As I said, it’s really hard for me to imagine Willard thinking that he is quoting Paine. He obviously knows not what of he speaks in many ways.
Sabrina Rubin Erdely has written an incredible account of the “One Town’s War on Gay Teens” in this month’s Rolling Stone. The town is none other than Anoka, MN who is represented in congress by the dread Pirate Bachmann and her faux therapist, closeted husband Marcus. The personal stories of several teens is detailed and gut-wrenching. So much for Minnesota nice.
Against this supercharged backdrop, the Anoka-Hennepin school district finds itself in the spotlight not only for the sheer number of suicides but because it is accused of having contributed to the death toll by cultivating an extreme anti-gay climate. “LGBTQ students don’t feel safe at school,” says Anoka Middle School for the Arts teacher Jefferson Fietek, using the acronym for Lesbian, Gay, Bisexual, Transgender and Questioning. “They’re made to feel ashamed of who they are. They’re bullied. And there’s no one to stand up for them, because teachers are afraid of being fired.”
The Southern Poverty Law Center and the National Center for Lesbian Rights have filed a lawsuit on behalf of five students, alleging the school district’s policies on gays are not only discriminatory, but also foster an environment of unchecked anti-gay bullying. The Department of Justice has begun a civil rights investigation as well. The Anoka-Hennepin school district declined to comment on any specific incidences but denies any discrimination, maintaining that its broad anti-bullying policy is meant to protect all I students.
Meanwhile, I continue to wonder if any Republican presidential candidate has read that bible they keep thumping. Here’s the latest example of audacious insensitivity from Rick Santorum.
GOP contender Rick Santorum had a heated exchange with a mother and her sick young son Wednesday, arguing that drug companies were entitled to charge whatever the market demanded for life-saving therapies.Santorum, himself the father of a child with a rare genetic disorder, compared buying drugs to buying an iPad, and said demand would determine the cost of medical therapies.
“People have no problem paying $900 for an iPad,” Santorum said, “but paying $900 for a drug they have a problem with — it keeps you alive. Why? Because you’ve been conditioned to think health care is something you can get without having to pay for it.”
The mother said the boy was on the drug Abilify, used to treat schizophrenia, and that, on paper, its costs would exceed $1 million each year.
Santorum said drugs take years to develop and cost millions of dollars to produce, and manufacturers need to turn a profit or they would stop developing new drugs.
“You have that drug, and maybe you’re alive today because people have a profit motive to make that drug,” Santorum said. “There are many people sick today who, 10 years from now, are going to be alive because of some drug invented in the next 10 years. If we say: ‘You drug companies are greedy and bad, you can’t make a return on your money,’ then we will freeze innovation.”
Santorum told a large Tea Party crowd here that he sympathized with the boy’s case, but he also believed in the marketplace.
Then there’s “I don’t care about poor people Willard”. Do these guys even think before they speak? I really like this Pierce description in an article where he rips austerity a new one. We have to be punished for suffering, for not surviving their financial abuses, and for not being patient enough. Hallelujah and trickle it down Big Brother!
The idea of poverty’s being a sin that requires ritual purification before redemption runs pretty deeply in this country. When Jonathan Edwards delivered his great sermon, Sinners In The Hands Of An Angry God, I doubt whether even that unbending piece of Puritan iron realized how many of his fellow citizens would be so willing to be the servants of that god, seeking to punish their fallen brethren. There has always been a strong view in our politics that pain can purify the nation. Especially the pain of other people, less-worthy-people. Sinners.
We are falling like dim children, like the suckers we always are, to the notion of the deserving and undeserving poor, the have-less-and-lesses are being pitted against the have-littles, and the have-nots. That’s what Willard Romney’s been about the last couple of days. He wants to find a way to harness the fear people have of becoming poor to his advantage at the expense of the people who actually are. That is the basis of the entire public career of Paul Ryan, the zombie-eyed granny-starver from Wisconsin, and the whole party has signed the guestbook into his little S&M parlor of a budget.
Speaking of Big Brother References, I just finished an interesting novel about religious cults, domestic violence and alternative realities called 1Q84 by Haruki Murakami. I’m checking the sky for two moons these days. I totally recommend it. It’s literary. It’s unusual. It’s got marvelous character development and descriptions and a plot that is amazing. Here’s the NYT review from October. Aomame makes the girl with the dragon tatoo look like a conformist and weakling. It was a very long read and didn’t always capture me, but it is still worth the time. It starts out with what seems like two completely unconnected characters and events and then weaves all the connections from there on out.
One of the many longueurs in Haruki Murakami’s stupefying new novel, “1Q84,” sends the book’s heroine, a slender assassin named Aomame, into hiding. To sustain her through this period of isolation she is given an apartment, groceries and the entirety of Marcel Proust’s “Remembrance of Things Past.”
For pity’s sake, if you have that kind of spare time, follow her lead. Aomame has the chance to read a book that is long and demanding but well worth the effort. The very thought of Aomame’s situation will pain anyone stuck in the quicksand of “1Q84.” You, sucker, will wade through nearly 1,000 uneventful pages while discovering a Tokyo that has two moons and is controlled by creatures that emerge from the mouth of a dead goat. These creatures are called Little People. They are supposed to be very wise, even though the smartest thing they ever say is “Ho ho.”
You can see the Times reviewer was not enthralled. I was frankly happy to read something not so cookie cutter for a change. So, I guess that’s what’s on my mind these days since I’ve had plenty of bedrest and time on my hands. What’s on your reading and blogging list today?
Friday Reads
Posted: November 11, 2011 Filed under: morning reads | Tags: attack Iran, austerity, child sexual assault, economic growth, Iran nukes, Nouriel Roubini, Penn State, Romney 48 CommentsGood Morning!!
I’ve spent the last few days editing tables, proofreading, and formatting bibliography, cross checking table of contents and lists of tables to make sure page numbers match. It’s the kind of work that makes you want to pull out every last thread of hair on your head. I’m hopefully at the end of the road to chasing down about a dozen signatures for forms too. It’s driving me nuts!! I’m going to be so glad when this stupid dissertation gets published and I don’t have to mess with the thing ever again!
Given that I”m doing this mind numbing frustrating detail work, it’s probably contributing to some things that are making me really mad. I cannot–for one–imagine any one having any reasons to defend a football coach who didn’t report horrible instances of child sexual assault. I don’t understand the riots on campus that occurred the other night. I certainly don’t understand glib tweets defending said coach sent out to millions of fans by celebrities either. How many little boys were assaulted and how many people around them will be hurt as they spend their lives trying to overcome the trauma? How on earth do you defend some who who was covering up and not reporting a series of heinous felonies?
Demonstrators tore down two lampposts, one falling into a crowd. They also threw rocks and fireworks at the police, who responded with pepper spray. The crowd undulated like an accordion, with the students crowding the police and the officers pushing them back.
“We got rowdy, and we got Maced,” said Jeff Heim, 19, rubbing his red, teary eyes. “But make no mistake, the board started this riot by firing our coach. They tarnished a legend.”
An orderly crowd first filled the lawn in front of Old Main when news of Mr. Paterno’s firing came via students’ cellphones. When the crowd took to the downtown streets, its anger and intensity swelled. Students shouted, “We are Penn State.”
Some blew vuvuzelas, others air horns. One young man sounded reveille on a trumpet. Four girls in heels danced on the roof of a parked sport utility vehicle and dented it when they fell after a group of men shook the vehicle. A few, like Justin Muir, 20, a junior studying hotel and restaurant management, threw rolls of toilet paper into the trees.
“It’s not fair,” said Mr. Muir, hurling a white ribbon. “The board is an embarrassment to our school and a disservice to the student population.”
Just before midnight, the police lost control of the crowd. Chanting, “Tip the van,” the students toppled the news vehicle and then brought down a nearby lamppost. When the police opened up with pepper spray, some in the crowd responded by hurling rocks, cans of soda and flares. They also tore down street signs, tipped over trash cans and newspaper vending boxes and shattered car windows.
The irony of all this is that the right wing noise machine has less to say about this violence and mayhem than it ever has about the Occupy Protests. Most disappointing is that Assistant Coach Mike McQueary will not be attending the game because he’s gotten death threats for doing the right thing after witnessing the sodomy of an approximately ten year old boy by then Assistant Coach Sandusky.
Raw Story has an interesting piece up about Romney who seems to have an itchy missile finger trained on Iran. Just what we need; more entanglements in the Middle East.
Accusing President Barack Obama of naivete on Iran, Republican presidential challenger Mitt Romney promised Thursday that if elected president he would “prepare for war” with the Islamic republic.
In a commentary published in the Wall Street Journal, Romney said he would back up US diplomacy “with a very real and very credible military option,” deploying carrier battle groups to the Gulf and boosting military aid to Israel.
“These actions will send an unequivocal signal to Iran that the United States, acting in concert with allies, will never permit Iran to obtain nuclear weapons,” he wrote.
Nouriel Roubini has some interesting choices to lay at the feet of European Community leaders. It’s really worth a read. For some reason leaders here and in the US are obsessed with austerity. They should be obsessed with way promoting economic growth.
First of all, without economic growth, you have a dual problem: a) The socio-political backlash against fiscal austerity and reforms becomes overwhelming as no society can accept year after year of economic contraction to deal with its imbalances; b) more importantly, to attain sustainability, flow deficits (fiscal and current account) and excessive debt stocks (private and public, domestic and foreign) need to be stabilized and reduced, but if output keeps on falling, such deficit and debt ratios keep on rising to unsustainable levels.
Second, restoring growth is also important because, without growth, absolute fiscal deficits become larger rather than smaller (given automatic stabilizers). Third, restoring external competitiveness is key as that loss of competitiveness led—in the first place—to current account deficits and the accumulation of foreign debt and to lower economic growth as the trade balance detracts from GDP growth when it is in a large and growing deficit. So, unless growth and external competitiveness are restored, flow imbalances (fiscal and current account deficits) persist and stabilizing domestic and external deficits becomes “mission impossible.” Finally, note that, unless growth and competitiveness are restored, even dealing with stock problems via debt reduction will not work as flow deficits (fiscal and current account) will continue and, eventually, even reduced debt ratios will rise again if the denominator of the debt ratio (debt to GDP), i.e. GDP, keeps on falling. Growth also matters as credit risk—measured by real interest rates on public, private and external debt, which measures the default risk—will be higher the lower the economic growth rate. So, for any given debt level, a lower GDP growth rate that leads to a higher credit spread makes those debt dynamics more unsustainable (as sustainability depends on the differential between real interest rates and growth rates times the initial debt ratio).
Switching to US problems, Morgan Stanley has its knickers in a knot about potential failure of the super committee. They anticipate more downgrades of US soverign debt.
Now Morgan Stanley is weighing in on this question, as part of a broder note about the impact of the super-committee on the economy.
From MS’ Christine Tan:
S&P reminded market observers in October that the US remains on negative watch due to its unsustainable fiscal outlook, which implies a 1 in 3 chance of further downgrade from its current
AA+ rating. If the Super Committee fails to reach a $1.2trn deficit reduction deal, if such a deal relies more upon accounting changes than real deficit reduction, or if Congressional action lessens the impact of the $1.2trn automatic trigger, we believe this could potentially provide S&P with a pretext to downgrade the US further from AA+ to AA. The initial S&P downgrade of the US’s AAA rating on
August 5, 2011 roiled the markets into severe risk-aversion mode and the GRDI, Morgan Stanley’s proprietary risk appetite indicator fell to an all-time low of -5.13.So it’s important to bear in mind that the consequence of a downgrade would be an economic slowdown, not anything on the cost of borrowing side.
It sure is a crazy mixed-up world. What is on your reading and blogging list today?





Recent Comments