Blog on the Run: Reloaded

Monday, September 30, 2013 7:33 pm

Shutdown primer

James Fallows at The Atlantic explains the only parts that really matter:

  • As a matter of substance, constant-shutdown, permanent-emergency governance is so destructive that no other serious country engages in or could tolerate it. The United States can afford it only because we are — still — so rich, with so much margin for waste and error. Details on this and other items below.*
  • As a matter of politics, this is different from anything we learned about in classrooms or expected until the past few years. We’re used to thinking that the most important disagreements are between the major parties, not within one party; and that disagreements over policies, goals, tactics can be addressed by negotiation or compromise.This time, the fight that matters is within the Republican party, and that fight is over whether compromise itself is legitimate.** Outsiders to this struggle — the president and his administration, Democratic legislators as a group, voters or “opinion leaders” outside the generally safe districts that elected the new House majority — have essentially no leverage over the outcome. I can’t recall any situation like this in my own experience, and the only even-approximate historic parallel (with obvious differences) is the inability of Northern/free-state opinion to affect the debate within the slave-state South from the 1840s onward. Nor is there a conceivable “compromise” the Democrats could offer that would placate the other side.
  • As a matter of journalism, any story that presents the disagreements as a “standoff,” a “showdown,” a “failure of leadership,” a sign of “partisan gridlock,” or any of the other usual terms for political disagreement,represents a failure of journalism*** and an inability to see or describe what is going on. …This isn’t “gridlock.” It is a ferocious struggle within one party, between its traditionalists and its radical factions, with results that unfortunately can harm all the rest of us — and, should there be a debt default, could harm the rest of the world too. …

* The FAA, the FDA, our research organizations, all other public programs from monitoring air quality to modernizing computer systems to staffing the military — they’re all wasting time and money now because of indiscriminate “sequester” cuts and preparations for possible shut-down. For the foreseeable future, the air traffic will keep moving and other functions will go on — just more stupidly and wastefully. We have that much social capital still to burn. …

** The debt-ceiling vote, of course, is not about future spending decisions. It is about whether to cover expenditures the Congress has already authorized. There is no sane reason for subjecting this to a repeated vote. … [And] in case the point is not clear yet: there is no post-Civil War precedent for what the House GOP is doing now. …

*** For examples of coverage that plainly states what is going on, here is a small sampling: Greg SargentDerek ThompsonJohn Gilmour (on why Ronald Reagan believed in compromise), Jonathan RauchBrian BeutlerJonathan ChaitAndrew Sullivan (also here), Ezra Klein and Evan SoltasDan Froomkin.

The failure of mainstream media to report accurately on this subject is perhaps its biggest fail since its coverage of the runup to the Iraq invasion in 2003. And although the number of lives immediately at risk is far lower, the worldwide economic damage that could result is far higher.

As for what actually will happen, I don’t have any insider knowledge. But I do know that the Tea Party wing of the House GOP (egged on by Sen. Ted Cruz of Texas) is full-throttle, turn-it-up-to-11 crazy. The reason the GOP is split is because they think House Speaker John Boehner and his allies aren’t being conservative enough. They have learned nothing from their recent failures, and they think the biggest problem with the government shutdown that resulted from disputes between Democratic President Bill Clinton and Newt Gingrich’s Republicans in Congress was that the Republicans, who finally caved after about three weeks, gave in too soon. So I’m projecting a 95% chance of a government shutdown, an 80% chance that the shutdown will last more than two weeks, and at least a 40% chance that they will force the U.S., for the first time in history, to default on its debt.

They just want to blow government up. They don’t care about collateral damage — the millions, here and abroad, who would be harmed if the full faith and credit of the United States were to be called into question. But the only way for that NOT to happen is for the Crazy Caucus to suddenly start acting less crazy. And there’s nothing in the caucus’s history to suggest the slightest likelihood that that will happen.

Wednesday, November 14, 2012 6:56 pm

OK, if you don’t want to repeat after me, kids, repeat after Kevin Drum: There. Is. No. Fiscal. Cliff.

The former Calpundit and Political Animal econowonk, now with Mother Jones, explains it all for you:

Which part has the worst effect: the spending cuts or the tax increases?

That’s tricky! CBO estimates that the effect per dollar is greater for spending cuts than tax increases: roughly a dollar of GDP for every dollar of spending cuts versus about half a dollar of GDP per dollar of tax increases.

However, the absolute size of the tax increases is much larger than the absolute size of the spending cuts. Overall, CBO estimates that the spending cuts will reduce GDP by about 0.8 percentage points; the end of the payroll tax holiday will reduce GDP about 0.7 percent; and the expiration of the Bush tax cuts will reduce GDP by 1.4 percentage points.

But wait a second. There are two parts to the Bush tax cuts: the middle-class cuts and the cuts for the rich.

Right. And here’s the thing: CBO figures that letting the middle-class tax cuts expire would shrink GDP about 1.3 percentage points.

But that’s almost the entire effect of letting the Bush tax cuts expire.

Right. And everyone agrees we should extend the middle-class tax cuts. So if we did that, but let the tax cuts on the rich expire, it would have virtually no impact on growth.

So that would make a ton of sense. Are we going to do that?

Good question! Republicans are dead set against it, so it’s going to be a big fight.

What about the payroll tax holiday?

Everyone seems willing to let that end, so that’s not really very controversial.

Why is that? It has a pretty big effect.

Beats me. It would make a lot more sense to extend the payroll tax holiday than to extend the Bush tax cuts for the rich, but Republicans are opposed to the tax holiday and Democrats have already caved in on this. Mostly it’s because they’re worried that extending it would set a precedent for keeping payroll taxes lower forever, and that would hurt Social Security’s finances.

Conversely, Republicans care a lot about tax cuts for the rich. At the moment, they claim they’ll kill any deal to avoid the fiscal cliff unless they get to keep them.

Are they serious?

Yep.

There’s more, but that’s the gist. Having just been told by voters not to blow up the economy any more, the GOP is dead set on doing and the Dems are less than fully dead set on stopping them. Sigh.

There is some good news, though. President Obama has been asking the Republicans for $1.6 trillion over 10 years in tax increases ever since the Great Debt Ceiling Joke of 2011. He campaigned for a year on that very proposal. And on Nov. 6, he won by a — what’s that word, again? Oh, yeah, landslide. So, Mitch the Turtle and the Weeping Cheeto can just take that.

Oh, and Kevin also says, for the love of God, stop talking about raising the retirement age.

Saturday, August 18, 2012 12:02 am

American suffering as morality play for our so-called journalists

Sir Charles on the great American sport of granny-starving, as applauded by The Village:

Someday someone is going to do a study on the psychological attitudes of the worthless media elite of our time and their obsession with making life more miserable for large swaths of their fellow Americans. The degree to which Saletan, Dancin’ Dave Gregory, David Brooks, and virtually the entirety of Fred Hiatt’s funny pages (save Eugene Robinson, Harold Meyerson, and E.J. Dionne), get tumescent over granny having to move in with the kids because she can’t afford to live on her own is really like nothing I’ve ever seen. It’s gratuitous cruelty at the hands of people who have far more than they deserve and confuse this status with wisdom

.

Friday, August 12, 2011 8:37 pm

If we HAD high inflation and U.S. debt wasn’t downgraded THEN, why is it being downgraded NOW?

Filed under: Evil,I want my money back. — Lex @ 8:37 pm
Tags: , , ,

In the late 1970s, the U.S. had a big problem with inflation — not as big as, say, Argentina, or post-World War I Germany, but by U.S. standards, huge. Inflation topped 11% in 1979.

Did Standard & Poor’s and the other ratings agencies downgrade the federal government’s debt back then? Why, no, they did not. That debt remained AAA grade, just as it did up until the other day.

But … but … but … the reason Standard & Poor’s downgraded U.S. debt the other day was because they were afraid the national debt was getting out of control and would lead to inflation, right?

Well, that’s what S&P implied, and it’s certainly what the national media and economically illiterate right-wing nutjobs wanted us to think. However, the fact of the matter is that 5-year Treasury notes are currently paying negative real interest rates. It is literally cheaper right now, taking (lack of) inflation into account, for the government to borrow money for five years to do stuff than to pay cash for that same stuff. And that’s the markets’ doing, not the government’s. So, clearly, bond markets do not perceive inflation to be a near-term or medium-term threat.

So why did S&P downgrade U.S. debt? Yves Smith offers a plausible explanation: payback:

The S&P downgrade looks to be politically motivated. The President had several routes by which he could have circumvented the debt ceiling restriction and almost certainly would have used one of them if the debt ceiling talks had dragged on so long that it became difficult to make interest payments out of tax receipts. McGraw Hill, which owns S&P, is headed by Terry McGraw, a prominent figure in the Business Roundtable, which has stated that it wants Social Security privatized. S&P has used its muscle to its advantage in the past, such as a state effort in Georgia in the early 2000s which would have reined in predatory lending and in turn reduced the issuance of private label mortgage backed securities. Rating them was a very profitable business for all the rating agencies. S&P torpedoed that initiative by refusing to rate bonds with Georgia loans in them. That forced Georgia to back down and killed other state efforts underway. Had these laws been in place, it is almost certain the subprime crisis would not have risen to a global-economy-wrecking event.

We now live in an era in which some of our most powerful institutions are perfectly willing to blow up the economy for short-term gain and the opportunity to place bets on the ensuing disaster. The rule of law, if you are big enough and rich enough, has gone by the boards; the umpires, to use Chief Justice John Roberts’s metaphor from his perjured confirmation testimony, have gone beyond calling balls and strikes to taking a side.

That side is not the president’s. The greater problem is that unless you are fabulously wealthy, it is not yours, either.

Tuesday, August 9, 2011 8:11 pm

“How do you have a discussion with someone when language is intentionally denied the purpose of conveying meaning?”

Quote of the Day, language edition, from Roch Smith in the comments at Ed’s place. He’s talking about economics but the phenomenon he describes applies to pretty much all our public discourse of late:

I used to try to argue with people who detached meaning from words, but it’s impossible. There are people for whom a legitimate “argument” involves ignoring the meaning of words or imbuing them with a meaning that they do not have, sometimes to the point of making them even the opposite of what they mean.

How do you have a discussion with someone when language is intentionally denied the purpose of conveying meaning? Some people view the purpose of a “debate” as constructing an impenetrable barricade against the intrusion of a new idea. Language is not for getting an idea from one mind to another, it is for keeping preconception unmolested; as such, it need not have any fidelity to meaning. The purpose of a “discussion” for the meaning-snatchers is to gainsay, block and frustrate — abandoning meaning serves that purpose well. But you can’t engage it except as a futility.

It’s like arguing with gibberish. One might as well be arguing with: “You said, ‘Keynes suffocated oranges for the transport of the orbiting oak spoons,’ but his dog collar chastity is more of an aerobic digestion, not the marbled decorum you wrongly espouse. So there!”

Roch poses the question mostly rhetorically, but its answer has real, and pernicious, real-world consequences — consequences that those in Washington who work with words for a living could, but choose not to, ameliorate. (And I know they know better because I trained some of them.)

Tuesday, December 8, 2009 9:19 pm

Odds and ends for 12/8

No place like home: The military had hoped to increase “dwell time” — time service members spend stateside between overseas deployments — from the current one year for every year overseas to two years. But with the surge in Afghanistan, that probably ain’t gonna happen, and the media, with the exception of the noted military-hater Rachel Maddow, hasn’t said much about it.

Waste of electrons: There’s a thread over at EW.com about whether the relationship in the “Twilight” series between Edward and Bella is abusive. It has stretched to something like 900 comments. Maybe it’s just me, but isn’t the whole notion of “abusive relationships” in the context of fictional vampires a joke? In fact, doesn’t it trivialize a decidedly nontrivial subject? Oh, hell, is there any chance I’ll get those brain cells back?

Throwing tomatoes at Sarah Palin is wrong. One should throw substantive questions at her instead. They’d hurt more.

At least they hired an expert: Jonah Goldberg has gotten a million-dollar advance to write a book, The Tyranny of Cliches.

“I had … an unequaled tolerance for squalor”: A first-person account of living in a van while a grad student at Duke, to avoid student-loan debt.

Excellent idea, way overdue: N.C. Medical Board posts expanded information on 35,000 physicians and PAs, including disciplinary actions and other embarrassing info the public needs.

This isn’t an Internet meme, but it should be: “My God, what a stupid premise.”

But climate science is a fraud!: Andrew Malcolm compares polls that actually ask two different questions.

But they’re “community organizers,” so let’s take their money away: An investigator finds that “in fact, there is no evidence that action, illegal or otherwise, was taken by any ACORN employee on behalf of the videographers” and that videotapes of ACORN employees “appear to have been edited, in some cases substantially, including the insertion of a substitute voiceover for significant portions of Mr. O’Keefe’s and Ms. Giles’s comments, which makes it difficult to determine the questions to which ACORN employees are responding.” Color me shocked.

The real ACORN takeaway: In light of Jon Stewart’s earlier takedown of ACORN, commenter Waynski at Balloon Juice observes: “It’s a sad comment on the state of our media that we’re now looking for journalistic standards in the fake news guy, because he’s the only one who comes close to having any in the first place.”

Meet the new boss: The flawed, conflict-riddled system of rating securities, which contributed so much to our current economic unpleasantness, isn’t going to be changed much. Goody. I’m gonna invest in a mattress in which to put what little remains of my retirement savings.

Tuesday, September 23, 2008 8:25 pm

When your banker calls in the loan

Filed under: Uncategorized — Lex @ 8:25 pm
Tags: , ,

China holds a big chunk of U.S. debt, and I’ve long wondered what might happen if it ever decided to call it in.

Now we may know. From China’s Xinhua news agency:

BEIJING, Sept. 22 (Xinhua) — Chinese President Hu Jintao and his U.S. counterpart George W. Bush discussed bilateral relations and the financial upheavals in the United States in a phone conversation on Monday morning Beijing time….

Bush briefed Hu on the latest development of the U.S. financial market, saying his government was well aware of the scope of the problem, and had taken and would continue to take necessary measures to stabilize the domestic and world financial markets….

[Hu] said China is ready to work with the U.S. side to intensify dialogue, exchanges and cooperation, and properly handle issues concerning mutual interests and of major concern, particularly the Taiwan question, in a bid to push forward the sustained and steady development of the Sino-U.S. constructive and cooperative ties.

Don’t we have a treaty obligation to defend Taiwan from military attack? If so, what does this development mean for that?

(h/t: Just World News)

UPDATE: Uh-oh.

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