TM Connect


Use "My TM" for log in & register.

Taylor Marsh has been writing on line since 1996, with the archives provided here a representation of that work.

Archive | economy RSS feed for this section

AT&T/T-Mobile Withdraws Merger Application

Kimberly Warner-Cohen is a New York City-based novelist and economic activist.

The FCC, who approved the highly controversial Comcast/ NBC merger (and came under fire when one of their commissioners took a job with Comcast four months after the deal went through), worked with the Justice Department to file suit in August blocking the merger of the second and fourth largest telecom carriers in the country, which would create an effective monopoly. According to the LA Times, the DOJ announced:

The deal…would displace Verizon Wireless as the largest wireless carrier in the U.S., leading to higher prices, lower-quality services, a smaller pool of choices and fewer pioneering technologies for millions of Americans. Consumers in rural areas or with lower incomes would be especially hard-hit, Deputy Atty. Gen. James M. Cole said in a statement.

Part of the debate came down to AT&T’s claim that the merger would create 55-96,000 jobs and promised to bring back the 5,000 call center jobs they had shipped overseas. However, critics:

[P]oint out that AT&T’s claim that the deal will add up to 96,000 jobs is misleading because the EPI report actually estimates it will create between 55,000 and 96,000 “job-years,” which refer to a job held for a single year. That means that up to 96,000 people could be employed for one year.If the $8 billion in investment is spread over seven years, it would create around 13,700 jobs that last seven years, but may then disappear.. And the study says AT&T has eliminated thousands of jobs during previous mergers, so there’s no reason to expect the company to behave differently this time.

This past Thursday, AT&T and T-Mobile’s parent company, Deutsche Telekom, temporarily halted their merger application on Wednesday  while they handle the Department of Justice matter. However, that may not matter, as:

The announcements came after FCC Chairman Julius Genachowski on Tuesday came out in opposition to AT&T’s proposed $39-billion purchase of T-Mobile, moving to refer the deal to an administrative law judge for a hearing that could sink its approval…Gigi B. Sohn, president of advocacy group Public Knowledge, which opposes the deal, said the companies withdrew their FCC application to avoid disclosing just how bad the deal would be for consumers.

And, in the a sign that this deal has all but died:

[AT&T] will take a $4 billion accounting charge this quarter to cover part of the break-up fee it will owe, if its bid to acquire T-Mobile fails to gain regulatory approval.

I’m curious to see if there will be any eleventh hour saves and how, if at all, this will affect the Google antitrust investigation.

 

 

Read full story · Comments { 3 }

Wealth Distribution Worse Than We Thought

Kimberly Warner-Cohen is a New York City-based novelist and economic activist.

It’s not news that there’s been a deepening wealth inequality in the United States. Since1979

[For] the top 1% of the population, average inflation-adjusted household income grew by 275%…the poorest fifth of the population saw their incomes rise by just 18% in a little less than 30 years, according to the study, which was based on IRS and Census data.

The current poverty guideline in the United States for a family of four is only $22,350. Since 2007,, real median household income dropped 6.4%, based on a study administered by the Census Bureau. It also found:

The official poverty rate in 2010 was 15.1 percent—up from 14.3 percent in 2009. This was the third consecutive annual increase in the poverty rate. Since 2007, the poverty rate has increased by 2.6 percentage points, from 12.5 percent to 15.1 percent.

This, too, unfortunately, isn’t new information. However, a study put out by Wider Opportunities for Women, shows just how large of a swath of the American public lives in economic insecurity. A staggering 45% of the country lives above the poverty line, but does not have enough to make ends meet when it comes to basic necessities like shelter, food and transportation.

One in four full-time working-age adults has annual earnings below his or her family’s economic security requirements…Twenty percent of white workers, 29% percent of black workers and 43% of Hispanic workers live in two-full-time worker households with earnings below the economic security line

Statistics are especially hard on single women:

More than 60% of single women live in economic insecurity…In 2009, women’s median earnings were just 70% of men’s median earnings—$27,836 versus $39,186.4 In 2009, women who worked full time earned median wages that were only 80% of their male counterparts’ wages…Eighty-two percent of single mother households live below the BEST Indexes for their family types.

These findings need to be a wake up call to Congress to reinvest in our country before this situation spins even more out of control, instead of waging yet another conflict overseas.

Read full story · Comments { 3 }

Legislation Against Congressional Insider Trading Regains Traction

Kimberly Warner-Cohen is a New York City-based novelist and economic activist.

60 Minutes last Sunday aired a bombshell piece about members of Congress being allowed to  buy and sell stocks while using information the public is not privy to (only two out of 975 federal agencies have this privilege). For us, that’s considered insider trading and highly illegal. For those on the Hill, those laws don’t apply. Peter Schweizer, a fellow at the Hoover Institute and author of an upcoming book about “soft” corruption in Washington, explains:

 The fact is, if you sit on a healthcare committee and you know that Medicare, for example, is– is considering not reimbursing for a certain drug that’s market moving information. And if you can trade stock on– off of that information and do so legally, that’s a great profit making opportunity…We know that during the health care debate people were trading health care stocks. We know that during the financial crisis of 2008 they were getting out of the market before the rest of America really knew what was going on.

He also explains that Congress, despite their strong lobbying ties, do not technically have corporate interests and so have no restrictions on stock trading. In shaping the laws, they gave themselves a nice loophole. Just before the public healthcare option was taken off the table, Boehner bought a significant amount of health insurance stock. In 2008, Congressman Bachus, now chairman of the House Financial Services Committee, was short selling, betting that the economy would tank.

While this unethical legality was never hidden from the public, it wasn’t well-publicized, either and this story caused quite a stir. So much so, that the Stop Trading on Congressional Knowledge (STOCK) Act, a bill brought forward in 2006 but pretty much ignored, has been reinvigorated:

The number of lawmakers backing the House bill rose from nine to 65 in the four days after the report. Two similar measures were introduced for the first time in the Senate this week.

That there even needs to be legislation preventing Congress from committing acts generally found to be illegal seems obvious and it isn’t too much to demand that this act pass.

Read full story · Comments { 7 }

Not Good News for Vets Yesterday

TM NOTE: Welcome to Kimberly, who will be writing exclusively on economic issues for TM.com, every Saturday afternoon. She’s fluent in business and technical writing, which is a tremendous voice to add. Please say hello to Kimberly.

Behind the flag waving, cute slogans and parades yesterday for our veterans, there was some very troubling news for the men and women who have served in the armed forces. The most alarming came from a study done by The 100000 Homes Campaign:

27% of Iraq/Afghanistan veterans reported traumatic brain injury, compared to 19% of other veterans.. 21.3% of homeless veterans reported an age over 60, compared to 9.4% of homeless non-veterans… As a group, veterans were 11 percentage points more likely to suffer from at least one condition linked to increased risk of death among the homeless population, which means the men and women who risked their lives defending America may be far more likely to die on its streets.

As the economy slips even further, young veterans are suffering from a disproportionate unemployment rate. According to Businessweek:

The youngest of veterans, aged 18 to 24, had a 30.4 percent jobless rate in October, way up from 18.4 percent a year earlier. Non-veterans of the same age improved, to 15.3 percent from 16.9 percent. For some groups, the numbers can look a good deal worse: for black veterans aged 18-24, the unemployment rate is a striking 48 percent.

We are setting our society for a whole new generation of homeless vets; men and women who signed up (oftentimes these days to get out of economic straits), fought in the name of our freedom and now come back to the same, if not worse, financial situation than the one they left.

Romney, with his perfect timing yesterday, suggested private vouchers to replace VA benefits:

“Sometimes you wonder if there would be some way to introduce private sector competition, somebody else who could come in and say each solder has ‘X’ thousand dollars attributed to them and then they can choose where they want to go in the government system or the private system with the money that follows them. Like what happens with schools in Florida where people have a voucher that goes with him.”

The VFW has come out strongly against this, and I’m sure that other groups will follow suit. The one thing veterans know they can rely on is VA medical care, so necessary in light of the above homeless statistics, and privatizing the system would only ruin it.

Some good news is that House Democrats are investigating possible fraud associated with veterans’ mortgages:

“Over the last 10 years, more than 1.2 million of the refinanced loans have been made to veterans and their families, and as many as 90 percent may have been affected by the alleged fraud, according to attorneys for the plaintiffs.”

We are the only industrialized country that treats their returning soldiers this way. If the Pentagon would shift some of that contracting money towards the troops and their well-being, they would finally get some of the support they need. We can do better than this.

Read full story · Comments { 6 }

The Sunday Early Bird News Round-Up *updated*

Good morning and welcome to Sunday.

On this day in history, August 14, 1935, President Franklin D. Roosevelt signed the Social Security Act into law. And right now, he is turning over in his grave.






Some links for you to peruse:

~UPDATE: Tim Pawlenty just quit the Presidential race.

~Ok, Bachmann wins the Iowa popularity contest.

~Labor unions are growing increasingly angry at President Obama and with good reason. In what some are saying is a slap in the face to the labor unions, the Democratic convention will be held in a right to work state, North Carolina. Twelve labor unions will sit out the convention and while Obama may assume that at the end of the day he will get their support, he may be underestimating the electoral impact of having some of the Democrats’ most ardent supporters refusing to take to the streets, go door to door and generate enthusiasm for a democratic victory in 2012. In addition, the unions are none too happy with the three free trade bills (South Korea, Panama, Colombia) that Obama will sign, as they are net job-killers and provide more tax havens for wealthy corporations.

~Mitt Romney’s recent “gaffe” about corporations being “people” actually wasn’t a gaffe. Under Supreme Court jurisprudence, corporations are people, with some (not all) constitutional rights. Of course, the decisions that anointed corporations with”personhood” was the result of years of out-of-control conservative judicial activism by the SCOTUS and which culminated in the Citizen’s United case. All that said, it does say a lot about Romney’s view of the role of corporations in public life, the economy and politics.

~The administration has claimed that drone strikes in Pakistan have not resulted in civilian casualties, but this report says otherwise. Many civilians have been killed, including 168 children.

~A new political era in Israel? The tent protests are truly incredible to behold. I only wish here in the U.S. we would wake up and feel inspired to do the same thing rather than simply feeling resigned.

~Run Elizabeth, Run.

~David Meyer asks (and answers) “why aren’t Americans protesting?” like their compatriots in other parts of the world.

~Sarah Palin just can’t stand to not be the center of attention.

~Gay rights in Nepal.

~A gay man at the Iowa State Fair asked Tim Pawlenty if he considered him a second class citizen b/c he was gay. Good for him. These candidates with hateful policies and rhetoric need to be confronted.

~The Pentagon is playing with fire. But luckily for them, the MSM isn’t interested.

~President Obama isn’t even pretending to be interested in the grass roots donation drive that helped him achieve victory in 2008. He’s going for the big bucks. We all understand how this works- he had big donors last time around too- but he’s “I’m for the little guy” message has largely been jettisoned due to total lack of credibility.

~I’m sorry, but Rick Perry is a joke. I’m sure he’ll excite a lot of the far right Evangelical base but when you proclaim that Social Security and Medicare are unconstitutional and then can’t have an articulate discussion about it other than to throw out bumper sticker sound bites, then you aren’t serious. Also with Rick Perry, he is even more opposed to gay rights than his fellow right wing GOP candidates.

~Speaking of right wing GOP candidates, next up…Rick Santorum. Have you noticed that when it comes to foreign policy (ie. anything other than talk about the economy/taxes and social wedge issues like gay rights and abortion), the Tea Party types get a glazed look and start speaking total nonsense? Rick Santorum has an interesting view of the history of Iran vis-a-vis the U.S.

~Speaking of Iran and Santorum, while he unabashedly is opposed to any type of rights for LGBT folks in the U.S., he supports gay rights for….Iranians!

~DC lobbying firms represent the human-rights abusing Bahraini government for a rather large fee. Is there anyone they won’t represent?

~Who is and isn’t deemed a “terrorist organization” and who does and doesn’t provide material support for said terrorist groups is largely political. Take the Mujahedeen Khalq (MEK or Warriors of God) for example, now that Iran is in our cross-hairs, a group with American blood on its hands is the darling of Washington DC officials because the group opposes Ahmadinejad. It’s sort of like the pre-Iraq War all over again when the Iraqi diaspora community (think Ahmed Chalabi) won the hearts and minds of neoconservatives (and others) because they were virulently opposed to Saddam Hussein. The problem was, much of the information they passed on to the government was false and they had absolutely no base of support in Iraq. Similarly, the MEK has no support amongst the Iranian Green Movement and it operates in a cult-like, undemocratic manner that should make Washington nervous. The NYT published an excellent opinion piece yesterday that is worth a read if you aren’t familiar with the controversy surrounding MEK.

~So, do you agree with this WaPo commentator that Obama should cancel his Martha’s Vineyard vacation?

~In case you missed it, Jeffrey Goldberg interviewed Israeli opposition leader (Kadima) Tzipi Livni, who said that Obama needs to continue to put some pressure on Israel.

~Tom Friedman is overpaid if he keeps writing stuff like this.

~At least one U.S. official seems to understand Afghanistan’s tribal culture.

~A school in Missouri has recently banned one of my favorite books, Slaughterhouse Five, by Kurt Vonnegut. Just for fun, here is a list of the top 100 banned books (2000-2009) from the American Library Association. Here are the top ten:

1. Harry Potter (series), by J.K. Rowling
2. Alice series, by Phyllis Reynolds Naylor
3. The Chocolate War, by Robert Cormier
4. And Tango Makes Three, by Justin Richardson/Peter Parnell
5. Of Mice and Men, by John Steinbeck
6. I Know Why the Caged Bird Sings, by Maya Angelou
7. Scary Stories (series), by Alvin Schwartz
8. His Dark Materials (series), by Philip Pullman
9. ttyl; ttfn; l8r g8r (series), by Myracle, Lauren
10. The Perks of Being a Wallflower, by Stephen Chbosky

~The latest blow to the health care reform bill is a reminder of what happens when President Obama (and Congress) settle for sketchy compromises like the individual mandate over a public option, which likely wouldn’t be struck down. The next Appellate court to rule on health reform is the notoriously conservative Fourth Circuit. You can be sure of one thing, this is going to the Supreme Court.

~A stage collapse prior to a concert in Indiana ends in tragedy.

~Lets just keep ignoring our crumbling infrastructure because I’m sure it will all just fix itself.

~Are they kidding? Michele Bachmann’s people had insisted in advance of the debate that she be able to leave at each commercial break to “touch up” her makeup?

~Former counter-terrorism official Richard Clarke gave an interview for a local PBS station where he accused the top echelon of the CIA of a cover up with respect to two of the 9/11 hijackers. The response from the mainstream media (other than PBS)? Something between a collective yawn and an attempt to downplay the charges leveled by Clarke.

You made it to the end. I’ll leave you with some Free-running/building-jumping that you definitely shouldn’t try at home:

Read full story · Comments { 15 }

Bachmann Takes Ames

Bachmann gets her night in Iowa.

It doesn’t matter that some testosterone dripping, wind weary macho maned man thinks he’s more important than anyone else. Yeah, lovely message. Can’t wait to have that guy in the White House and on the TV every day. Didn’t we just do that?

So, this is Bachmann’s night.

…and somewhere on a cell phone Sarah Palin continues to plot, not how, but when and where, she can play kingmaker to Perry.

I’m already thinking Romney-Perry 2012. Getting there would be deliciously combustible.

Here’s to Michele. The perfect example of Republican conservatism today. …and she could never in a million years win the general election.

But good for her. There’s got to be a first in here somewhere.

Read full story · Comments { 10 }

What Happens if Ron Paul Wins the Ames Straw Poll?

Mitt Romney will breathe a sigh of relief, though Politico thinks he’s got to reach the McCain bar.

Michele Bachmann better come in second.

Tim Pawlenty is toast unless he comes in second, and Newt keeps trying to pay off his debt.

As for Rick Perry, he continues to act like Iowa doesn’t matter, while Mike Huckabee takes pot shots at him.

If Mitt was daring, the second Rick Perry announces he should hit him from the left on being against Social Security and Medicare. No general election candidate could survive such a ridiculous proposition as Perry is suggesting, challenging the social safety net on constitutional grounds.

Speaking to Chuck Todd today, vaunted Iowa reporter David Yepsen said that if Paul wins the Ames straw poll it hurts the credibility of Iowa and diminishes it’s political power.

As far as I’m concerned that’s something that should have happened a long time ago. They’ve already got a reputation of people winning the straw poll who can’t go the distance; see Pat Robertson. But there’s still a lot of talk about Paul’s organization this time around, so don’t be surprised if it happens.

Yepsen also had a warning for Obama: liberals are demoralized, not just in New York, but in Iowa, so he better get busy. Trouble is there really is no way for Obama to energize liberals at this point, unless he pulls a juicy jobs initiative out of Sherrod Brown’s hat.

Read full story · Comments { 3 }

11th Circuit Appeals Court: Individual Mandate Unconstitutional

The 2-1 ruling marks the first time a judge appointed by a Democrat has voted to strike down the mandate. Judge Frank Hull, who was nominated by former President Bill Clinton, joined Chief Judge Joel Dubina, who was appointed by George H.W. Bush, to strike down the mandate.Politico

More from Reuters:

An appeals court ruled Friday that President Barack Obama’s healthcare law requiring Americans to buy healthcare insurance or face a penalty was unconstitutional, a blow to the White House.

The Appeals Court for the 11th Circuit, based in Atlanta, found that Congress exceeded its authority by requiring Americans to buy coverage, but also ruled that the rest of the wide-ranging law could remain in effect.

The legality of the so-called individual mandate, a cornerstone of the 2010 healthcare law, is widely expected to be decided by the Supreme Court. The Obama administration has defended the provision as constitutional.

The case stems from a challenge by 26 U.S. states which had argued the individual mandate, set to go into effect in 2014, was unconstitutional because Congress could not force Americans to buy health insurance or face the prospect of a penalty.

Read full story · Comments { 10 }

Romney Gets Into it in Iowa

“If you don’t like my answer, you can go vote for someone else,” he said. “If you want someone who will raise taxes, you can vote for Barack Obama.” – Romney gets in heated exchange with hecklers at Iowa State Fair

The exchange came on the same day as what’s being billed as a big Republican debate before the ridiculously overrated Ames straw poll. Now that Romney’s being defined as a “fragile” or “tentative” frontrunner, he’s going to have to take his campaign out of coast.

As he did so he ran headlong into a tree of the activist variety. They’re the Citizens for Community Improvement and they made Romney’s day a lot more complicated than he wanted it to be.

Democrats are rightly jumping all over Romney’s “corporations are people, my friend” line, which illustrates why the establishment hasn’t backed him yet. It’s not just tone deaf but an offensive thing to say with 10+ double-digit real unemployment. Anyone thinking sticking up for corporations in the current atmosphere is a winner is hopeless.

For any Democrat or progressive, what Romney said is red meat. It’s also fodder for the Obama campaign if Romney’s the nominee, but he isn’t yet.

However, if you’re a Republican who hasn’t quite warmed to Romney, I’m not so sure this clip is bad for slick Mitt.

It’s the first relaxed, un-weird and unscripted moment that comes with a pretty good punch line for Republican primary voters. He doesn’t come off as afraid to mix it up and commits himself strongly, even if he’s wrong about, well, just about every policy issue, unless you include his move to raise taxes as governor of Massachusetts to lure S&P to raise his state’s credit rating.

However, all of this is a great set up for Gov. Rick Perry’s entrance.

Still, Romney actually showed some life and real humanness today amidst it all, moments that have been very few for him.

I’m starting to think that what was missing from Romney’s campaign was a little healthy competition.

Rick Perry getting in the race may be the best thing that ever happened to Mitt Romney, because he clearly can’t be as nonchalant with Perry poised to enter. But all the hoopla with Perry is reminiscent of what Fred Thompson engendered before he jumped in and landed on his face. Perry’s not Thompson, but he’s also not Chris Christie, who fits the times much better.

Though why anyone would think Perry has a better chance of beating Obama than Romney is beyond me, though the “cowboy” thing in the era of Obama could seduce the neocons.

For Republicans outside the Perryverse, his approach to foreign policy and national security appear to be a natural extension of his personality: aggressive, unapologetic, and instinctive… all of the traits Republicans see as lacking in the Obama’s foreign policy.

“He’s a cowboy,” said Michael Goldfarb, former senior staffer on John McCain’s presidential campaign. “You have to assume he’d shoot first and ask questions later — which would be nice after four years of a leading from behind, too little too late foreign policy.”

Yee-haw.

Read full story · Comments { 2 }

Romney Raised Taxes to Get S&P to React

(…and other disingenuous moves by Republicans meant to fake out the people)

As Republican presidential hopefuls descended on Iowa for their second major debate on Thursday in Ames, the return of Mr. Romney came at a turning point in his candidacy. His wait-and-see approach toward campaigning in Iowa has been complicated by the expected candidacy of Gov. Rick Perry of Texas, whose strategy includes waging a full effort in the caucuses early next year that open the nominating battles ahead. – With Return to Iowa, Romney Heeds Call of G.O.P. Strategists

We’re headed into some busy Republican 2012 days of action, with Iowa the focus and no one wants to be left out, because even though the White House is preparing to run against Romney, anything can still happen.

What you’ve got to understand about Republicans as they make their case is how they lie to the working class, and have been doing so for decades, in order to convince people to vote against their interests, while utilizing Democratic ideas themselves when it suits them. Sam Stein reveals Michele Bachmann’s hypocrisy on this score today.

A Freedom of Information Act request filed by The Huffington Post with three separate federal agencies reveals that on at least 16 separate occasions, Bachmann petitioned the federal government for direct financial help or aid. A large chunk of those requests were for funds set aside through President Obama’s stimulus program, which Bachmann once labeled “fantasy economics.” Bachmann made two more of those requests to the Environmental Protection Agency, an institution that she has suggested she would eliminate if she were in the White House. Taken as a whole, the letters underscore what Bachmann’s critics describe as a glaring distance between her campaign oratory and her actual conduct as a lawmaker.

But Bachmann’s just a sideshow, though she looks a lot better than Sarah Palin these days, who is once again yanking the chain of her adoring fans. Ames may be overblown in importance, but Sarah isn’t going to let the circus pass her by (after all she needs her Fox contract).

Ronald Reagan could relate to what Mitt Romney did as governor of Massachusetts to impress S&P. Of course, like Romney, Reagan would have a lot of trouble winning the Republican nomination today, too. From Politico:

“When I was governor, S&P rewarded Massachusetts with a credit rating upgrade for our sound fiscal management and the underlying strength of our economy,” Romney boasted. “That didn’t happen by accident. The president’s failure to put the nation’s fiscal and economic house in order has caused a massive loss of confidence that resulted in an embarrassing downgrade.”

But Romney’s case to S&P is a far cry from the anti-tax absolutism of the Republican Party he hopes to lead. Indeed, it bears a far closer resemblance to the right-of-center grand compromise rejected by House Republicans this year — dismissed because it would include new taxes and end tax breaks President Barack Obama described as “loopholes” — or the more modest compromise that passed, than to the Cut, Cap, and Balance plan Romney “applauded.”

The presentation to the ratings agency reveals that Romney’s administration made the case to Standard & Poor’s that his state was creditworthy because of both spending cuts — the current preferred GOP method — and new revenues, including fees he imposed and tax “loopholes” he closed. The presentation also prominently cited a controversial set of tax increases in the summer of 2002, which Romney, then a candidate, had opposed.

This is sound fiscal policy compared to what we’re hearing from all other Republicans. The Tea Party hates Romney already, so this isn’t going to make them feel any cozier toward him.

What’s at the bottom of Romney and Bachmann’s hypocrisy is shared by most of their colleagues, though they won’t admit it, because they’ve tied themselves to a false premise and for whatever stupidity they’re going to allow everyone else to pay for it.

It’s why if Pres. Obama and the White House has any game left they’d take Steve Benen’s advice, which has also mentioned by Chris Matthews.

Here’s the pitch: have the White House take the several hundred letters GOP lawmakers have sent to the executive branch since 2009, asking for public investments, and let President Obama announce he’ll gladly fund all of the Republicans’ requests that have not yet been filled.

This is perfect for Pres. Obama: he gets to give Republicans money for jobs programs that make them look good, with the threat of exposing them if they don’t ascent to creating jobs. It would also make the progressive case the best way possible and manifest what’s needed a lot more than anything else right now: economic growth through jobs.

There is no more important act needed today.

There are innumerable ways for Democrats and progressives to beat Republicans up on their risky economic schemes, but Benen’s is the best I’ve heard so far. However, it takes action to actually do something, not just give meaningless speeches.

Read full story · Comments { 4 }

It’s Official, We’re Screwed

As McConnell and Boehner make their picks for the Super Congress, Pres. Obama must survey the land he helped create, while Democrats swallow hard that they’ve lost any chance to change the economic narrative and aid the working class.

The President is not a progressive – he is not what Americans still call a “liberal.” He is a willful player in an epic drama of faux-politics, an operative for the money power, whose job is to neutralize the left with fear and distraction and then to pivot rightward and deliver a conservative result. What Barack Obama got from the debt deal was exactly what his sponsors have wanted: a long-term lock-in of domestic spending cuts, and a path toward severe cuts in the core New Deal and Great Society insurance programs – Social Security, Medicare and Medicaid. And, of course, no tax increases at all. [...] Unlike say Lyndon B. Johnson or Jimmy Carter, when his term ends he won’t be able simply to go home. He’ll need a big house in a gated suburb, with high walls and rich friends. And a good income, too, from book deals and lecture fees. He may be thinking about that now. The good news is: it won’t save him. For if and when he ventures out, for the rest of his life, the eyes of all those, whose hopes he once raised will follow him. The old, the poor, the jobless, the homeless: their eyes will follow him wherever he goes.James K. Galbraith (via Gaius Publius at Americablog)

From Huffington Post:

On the Senate side, Sens. Jon Kyl (R-Ariz.), Pat Toomey (R-Pa.) and Rob Portman (R-Ohio) will serve on the commission, Senate Minority Leader Mitch McConnell announced. Reps. Dave Camp (R-Mich.), Fred Upton (R-Mich.) and Jeb Hensarling (R-Texas) will represent House Republicans, said Speaker John Boehner.

All six Republicans have signed a pledge to Grover Norquist’s Americans for Tax Reform that they will not vote to raise taxes.

They will join Democratic Sens. John Kerry (D-Mass.), Patty Murray (D-Wash.) and Max Baucus (D-Mont.), whom Reid appointed to the commission on Tuesday. House Minority Leader Nancy Pelosi (D-Calif.) has not yet made her appointments.

As for movement progressives, they have a choice and they need to decide what’s more important, Barack Obama or the middle class Democrats are supposed to represent but don’t anymore.

Read full story · Comments { 21 }

Republicans Plummet in Popularity After Debt Ceiling Debacle

This isn’t easy to do: have a lower approval than Republicans during Pres. Bill Clinton’s impeachment.

So, the Tea Party, who gained in 2010, through Obama and Democrats caving on the Bush tax cut extensions last December, but also through the White House’s cut-cut-cut 2011 austerity budget, then the debt ceiling negotiations, have finally brought the Republican Party down where they deserve.

Both parties have earned the dubious distinction of turning off voters, but for Democrats only 58% think they should be thrown out of Congress, while it’s 64% for Republicans.

A new CNN poll sends a strong message to the Tea Party and Republicans, saying their priorities are not America’s:

According to the poll, 63 percent say the super committee should call for increased taxes on higher-income Americans and businesses, with 36 percent disagreeing. And by a 57 to 40 percent margin they say the committee’s deficit reduction proposal should include major cuts in domestic spending.

But cuts in defense spending get a mixed review: Forty-seven percent would like the committee to include major cuts in military spending, with 53 percent saying no to such cuts.

Nearly two-thirds say no to major changes to Social Security and Medicare. And nearly nine in ten don’t want any increase in taxes on middle class and lower income Americans.

We’ve known the people don’t support cuts in the social safety net for a while, but Pres. Obama won’t stand on that line.

So, this would be great news for Obama and the Democrats, showing them the way, but unfortunately the President bought into austerity a long time ago and won’t make the Democratic economic case. That means for 2012 we’ll have two candidates making the case for cuts, while Social Security, Medicare and Medicaid has no champion in either big two party, though we’ll hear plenty of hot air on “reforming” the social safety net, which won’t result in any good news for the working class.

Read full story · Comments { 5 }

Wisconsin News: Democrats Win 2 out of 6

**UPDATED**

To update, The Fix has the whole story today. It wasn’t enough to take back the Senate, but it’s a beginning that could mean something very big by the time 2012 rolls around. I’ve got one thing to say about that: Run, Russ, Run.

Consider this an open thread. Good coverage from Ed Schultz, with Keith Olbermann and John Nichols good too.

Turnout sounds epic.

Results from the A.P.; also from Journal Sentinel (h/t David Nir).

Read full story · Comments { 11 }

That 1979 Feeling

Ten years into our involvement in the war in Afghanistan, in the mountains southwest of Kabul in the Tangi Valley, an elite group of Army Rangers were pinned down in a fight, when they called in their “Immediate Reaction Force,” according to reporting by Danger Room. It would be another elite U.S. fighting force, Navy SEALS, who would respond, but would end up blown out of the sky. It’s not Desert One, this mission having an even more desperately reckless cast to it. What was worth risking our finest elite force, around 7% of the total according to some experts, in a country that continues to revert back to it’s origin of a tribal nation?

“The Taliban knew which route the helicopter would take,” one unnamed Afghan official tells AFP. “That’s the only route, so they took position[s] on the either side of the valley on mountains and as the helicopter approached, they attacked it with rockets and other modern weapons.” “It was a trap that was set by a Taliban commander,” the official added. – Did a New Taliban Weapon Kill a Chopper Full of Navy SEALs?

The Taliban Haqqani network, operating in the extremely dangerous Wardak province, includes the most brutal fighting insurgents in Afghanistan, so any mission against them is high risk. U.S. Navy SEALS, as well as their Afghan counterparts, a translator and a working dow, came in via a U.S. Army A Special Operations MH-47G Chinook helicopter, seen as the best among these fighting machines but incredibly slow, bulky and vulnerable when navigating in between steep terrain. There are no defenses to deploy when a Chinook is within range of an RPG, though there are speculations that a newer weapon was involved. It was the worst single day loss of life since entering Afghanistan in 2001, with reports saying many of the Navy SEAL Team 6 who took down Osama bin Laden perished this day.

As the latest and worst news from Afghanistan continued to sink in, late yesterday, Pres. Obama addressed the S&P downgrade as the stock market plummeted, finishing with words about the horrific carnage that happened over the weekend. With words coming out of his mouth invoking his belief in America, the President’s grim facial features belied the pep talk that was weirdly surreal. It turned into the Twilight Zone when he got to the end, invoking the spirit of the fallen heroes while using the word “succeed” in the same sentence as Afghanistan.

“Their loss is a stark reminder of the risks that our men and women in uniform take every single day on behalf of their country,” Obama said from the White House. “I know that our troops will continue the hard work of transitioning to a stronger Afghan government and ensuring that Afghanistan is not a safe haven for terrorists. We will press on and succeed,” the US president said. – US will succeed in Afghanistan: Obama

Last year in October, I wrote a piece entitled Getting that 1979 Feeling Again. Today this feeling is palpable.

Every time Pres. Obama comes out to speak now there is a vacuousness to his purpose that goes well beyond what words can hide. It’s like he doesn’t even believe himself anymore, as he babbles on without presenting a single plan. The least he could have done was call Congress back to Washington.

The crisis of economic confidence…

The out of touch talk about “We will press on and succeed” in Afghanistan…

It’s clear individual Democrats in Congress better take up the charge on jobs and growth, because Pres. Obama is acting politically paralyzed.

The good news for Obama is that his poll numbers remain decent amidst his floundering. Everything else, however, is reminiscent of the run-up to 1979 when America seemed incapable of acting like a great nation amidst economic, energy and foreign policy crises that were overwhelming the current occupant of the White House.

America ended up handing the country to Ronald Reagan, who ballooned the deficit, raised taxes over and over, and deserved impeachment after Iran-Contra, but got away with it because it was a different time and an assassination attempt had bonded Pres. Reagan to the people.

There is an out of control, out of touch, out of sync feeling Pres. Obama reveals every time he takes to the podium. He’s been incapable of leading the events playing out during his presidency, instead just reacting to them. Obama needs to change this perception and he has until Thanksgiving to do it.

Read full story · Comments { 18 }

Market Rout Continues – Dow Down Over 600 Points, Closes Below 11,000

The Dow Jones Industrial Average fell over 600 points Monday after a one-two punch: the first-ever Standard & Poor’s downgrade of U.S. debt, then the downgrading of govenment-backed mortgage debt. The Dow’s one-day drop of more than 600 points was its biggest point loss in a single day since December, 1 2008. The Nasdaq dropped 174.72 points, 6.9 percent for the day. – Dow Ends Day Down Over 600 Points, Closes Below 11,000

Obama had this to say today: “The U.S. will always be a triple-A country despite what rating agencies say…”

Mitt Romney also chimed in with a whole lot of nothing, but he did say something that will strike home to many people right now: “.. I’m afraid the president is just out of his depth when it comes to understanding how the private economy works.”

Slick Mitt’s a vulture capitalist of the second rate order, but Pres. Obama has tripped over the presidency and has damaged himself a great deal by creating a catastrophic situation that played into the hands of his adversaries.

Read full story · Comments { 14 }

Axelrod Scores: It was a ‘Tea Party Downgrade’

Former White House adviser David Axelrod on Sunday pinned responsibility for the recent U.S. economic downgrade on the Tea Party movement, arguing that the group’s political “brinksmanship” during debt ceiling negotiations “brought us to the brink of a default” — and that, subsequently, “this is essentially a Tea Party downgrade.” – CBS News

Absolutely. The Tea Party beat the White House on the debt ceiling, even though the Tea Party won’t claim it, so they’ll have to take the downgrade review, too.

Bob Schieffer got the White House bull’s eye talking point, which hits an easy mark, I know, but at this point it’s still welcome. It has the virtue of being true and something everyone can recognize because we all saw this play out.

It goes along with something else that’s manifested.

The Tea Party has overplayed their hand.

Greg Sargent pointed to something on Friday that works as a foundation to this after going through Friday’s New York Times internal polling numbers.

Tea Party i.d. has cratered.

Just 18% say yes they’re a supporter; 73% say no. All through the spectacle that masqueraded as debate and negotiations, their intransigence was on display. Never mind that their ideological zealotry comes with a fiscal policy that will only makes things worse.

You get held accountable for what you do in Congress, especially if you can’t compromise on what’s actually needed to fix our problem economy. Ideological fortitude is certainly principled up to a point, but legislators are sent to govern and Obama and the Democrats served up a lot (wrongly, in my estimation).

There’s no doubt Pres. Obama blew the set up and the negotiations, while refusing to wield the power he could have used to stop the deal, but there’s nothing to be done about that now.

So, if the White House can make the “Tea Party downgrade” stick it has the potential of being a 90s Newt Gingrich moment for the Tea Party, which actually is quite plausible. Heaven knows Democrats are eager to hear the line, which is a natural applause getter.

Unfortunately, this could help Mitt Romney a lot more than Pres. Obama, given his capitulation to Republican economics on the debt ceiling deal.

Read full story · Comments { 27 }

The Sunday Early Bird News Round-Up

Good morning and welcome to Sunday!

Quote of the Day:

“No risk of that, no risk.”

– Treasury Secretary Timothy Geithner during an interview in April, discussing the risk of the U.S. debt being downgraded.

Some links to go with your morning coffee/tea:

~China, our banker, is angry at the U.S. about the downgrade. I guess more administration-China ass kissing diplomacy is in order.

~The Super Duper Debt Committee will just cause more problems than it solves, for obvious reasons.

~The biggest US single-episode loss of life in the Afghanistan War took place Friday as insurgents shot down a Chinook helicopter carrying 38 members of US special forces and 7 Afghan soldiers. More here.

~Also on Afghanistan- The International Crisis Group has issued a report which concludes that despite dumping billions of dollars into nation-building in Afghanistan, the U.S. and its allies have failed to stabilize the country. I think the billions of dollars they are talking about does not include the money spent on the actual war effort there-in other words, just the military and civil rebuilding and stabilization efforts.

~In today’s WaPo there is an article about the origins of the debt showdown and how Eric Cantor took advantage of the House’s new Tea Party recruits to turn the debt ceiling debate into a standoff over the role of government.

~The Wikipedia conference is currently taking place in Israel and the Wikipedia founder talked about how the community tries very hard to keep Wiki entries as neutral as possible. That’s not easy in an era where as soon as there is a political controversy, groups run to the site to get their version of the story out.

~Up to 12 million people’s lives are under direct threat in the Horn of Africa as drought, famine and war take their toll. Much of the world looked away when the predictions of an extreme famine were first put forth. However, the terror group al-Shabab claims there is no famine taking place in Somalia but of course, that could be because the group is preventing humanitarian aid from reaching the men, women and children who are currently starving to death and as a result, they bear direct responsibility.

~A Navy vet and former defense contractor in Iraq explains why he is suing Donald Rumsfeld over the Bush administration’s torture policy- but here’s the thing- in a crazy twist, he was tortured by Americans in Iraq.

~In much of the media’s coverage about the S&P downgrade, there seems to be a tendency to ignore the impact of the refusal to add ANY revenue-generating provisions in the debt deal. There was plenty of blame to spread around to both parties, but there are some interesting tidbits in the S&P statement about revenues. It would seem that the GOP is giddy about the downgrade because throwing a Molotov Cocktail into our already depressed economy was always the GOP plan leading up to 2012.

~While the S&P is certainly correct that Washington is completely dysfunctional and getting them to do anything constructive for the good of the nation is a bit like trying to herd cats, there is no denying the politics of what is taking place. Firedoglake has a good summary of some of the things that may have actually been behind S&P’s decision to downgrade the US credit rating.

~So, how is Saudi Arabia doing on the human rights front? Really, really well. [/sarcasm]

~Despite a lot of people giving Obama props about being willing to put defense cuts on the table, the truth of the matter is that the Obama administration shows no interest in curbing out-of-control defense spending as evidenced by his new Secretary of Defense, Leon Panetta, publicly complaining all last week about how disastrous defense cuts would be. Once again, fear trumps reason. Interestingly, when asked, Leon Panetta can’t seem to articulate any reason why any proposed cuts would be so dangerous to our nation’s security:

~Over 300,000 people took to the streets in Israel this weekend to protest the high cost of living. Good for them. We need to do that here in the U.S.

~The Obama administration will likely squander yet another opportunity to take a serious stand on environmental issues. The Alberta tar sands pipeline is currently being reviewed by the State Dept. and the review itself has been mired in controversy from the start. The pipeline’s chief lobbyist is a former Hillary Clinton deputy campaign director and Secretary Clinton made the none-too-subtle remark long before the review process even started, that she was “inclined to support” it. That made environmentalists and even many Congressional Democrats hopping mad. Of course, the buck doesn’t stop there and environmentalists and congressional democrats are urging the administration to not approve the project. Good luck with that, the fix is in.

~Speaking of the environment, some say that the current Congress is the most anti-Environment since about the 1950′s. Impressive.

~All eyes are on Wisconsin which is in the midst of the largest number of recall elections in U.S. history. Huge amounts of cash have been flooding in to the state via special interest groups from both the left and the right. Some see Wisconsin as a dry run of sorts for what may happen in 2012, ie. did the Tea Party types go too far?

~Gov. Rick Perry’s prayer rally certainly won’t endear him to moderates or independents but I have a feeling that’s ok with Rick Perry.

~Things are still not well in Sudan/Southern Sudan. There is still a long, long way to go.

~The repressive, human rights-abusing Communist Chinese government continues to throw fuel on the fire of religious freedom with respect to Buddhists in Tibet. Even if Americans know very little about this right now, it is a very big issue and could lead to bloodshed when the current Dalai Lama dies. And when that happens, Washington will be forced to take notice but by then it will be too late.

~The death toll in Syria continues to rise as government forces continue the siege on Hama. As Assad’s forces continue to slaughter his own people, the Syrian foreign minister comes out and makes the ludicrous statement that the Assad government will allow free legislative elections by the end of 2011. Yeah, and unicorns are real.

~Both Palestinian and Israeli security forces are frustrated with the politicians in Ramallah, Jerusalem and Washington DC. This is something I have heard over and over again. The Israeli and Palestinian security forces have been training and had unprecedented security cooperation over the past 8+ years, with impressive results, while the politicians piss away every opportunity for a reasonable solution to the conflict.

~Sean Hannity thinks it’s wrong to require insurers to cover birth control but guess what he thinks they should cover…Viagra. Indeed.

~Fox News is out of control with race-baiting.

~Politico continues with its status quo hackery and prints an op-ed from GOP Representative Duncan Hunter, who fear-mongers about cutting defense spending. Ok, no problem there because people can write opinion pieces from various points of view. The problem is that a) he makes patently false claims about the role of defense spending in our current debt crisis and b) Politico knew, or should have known, that Hunter has a conflict of interest when it comes to defense spending given most of his top campaign contributions come from defense contractors. If Politico readers knew that, they might be a little bit more discerning when it comes to taking Hunter’s claims at face value.

~Demonstrations turned violent in Tottenham, England, as people marched to the police station to protest the shooting of a 29-year old man Mark Duggan by police last week. Racial tensions have historically been high in the Tottenham region and as of last night, the situation was still not under control.

~Some in Israel are concerned about a bill that is poised to pass the Knesset and which seeks to provide guidance to the courts such that they would be expected to privilege maintaining “the state as the Jewish nation state in ruling in situations in which the Jewish character of the state clashes with its democratic character.” Israeli journalist Noam Sheizaf and other critics of the pending legislation have argued that proponents of the bill seem to be saying that maintaining a Jewish state and upholding democracy are at odds. It’s an interesting debate.

~Donald Trump really embodies the corporate greed and entitled attitude that seems to have infected this nation. His most recent stunt is to vow to do everything in his power to prevent the building of an offshore wind farm in Scotland because it will obstruct the beautiful view from the golf course he is currently in the process of building.

~Whatever you do, don’t read Thomas Friedman’s silly editorial about the financial crisis in today’s NYT, it’s five minutes of your life that you’ll never get back which is why I read it for you. It’s loaded with dumb analogies and really obvious points like “[r]egarding growth, we surely need a much smarter long-term fiscal plan than the one that just came out of Washington.”

The End.

Read full story · Comments { 12 }

A Friendly Rebuttal to David Sirota (from the ultimate outsider – a former Clintonite)

David Sirota has taken up the multi-dimensional chess argument for Obama, though in a different way than his loyalists and fan boys. David begins by excusing the results we’ve had so far as simply being that he isn’t a liberal. Well, that’s an understatement, but then he says Obama is a “bizarro FDR.” Sirota is as smart as they come, but he’s not the only one screwing up the Obama story. Here’s one snippet of his piece:

They usually stipulate that the president genuinely wants to enact the progressive agenda he campaigned on, but they gently reprimand him for failing to muster the necessary personal mettle to achieve that goal. In this mythology, he is “President Pushover,” as the New York Times columnist Paul Krugman recently labeled him.

This story line is a logical fallacy. Most agree that today’s imperial presidency almost singularly determines the course of national politics. Additionally, most agree that Obama is a brilliant, Harvard-trained lawyer who understands how to wield political power.

Considering this, and further considering Obama’s early congressional majorities, it is silly to insist that the national political events during Obama’s term represent a lack of presidential strength or will. And it’s more than just silly — it’s a narcissistic form of wishful thinking coming primarily from liberals who desperately want to believe “their” president is with them.

Hip boots, please.

Mr. Obama has no driving dream as a foundation, but is simply a formidable political performer that has the gift of oratory, which has become the facade behind which he stands. He can deliver the words, but has never cared about the deeds required to make those words manifest. He is a political actor, nothing more, which is why compromise is his tool, because he has no ideas of his own for which he’s willing to risk failure to pursue. It’s always about him, never you.

None of this, however, detracts from the fact “that Obama is a brilliant, Harvard-trained lawyer who understands how to wield political power.” But power for the sake of it, without purpose, is ultimately corrupting, corrosive and eventually calamitous.

What Sirota and the progressive cool kids are trying so hard to elucidate is that Obama is doing what he is because he wants to, getting the results he wants. So far, so good, but today Sirota takes it to a place that doesn’t sustain itself.

What he and others miss by a marathon is why this is occurring, though Sirota does get this right too: The president has the political muscle to enact a progressive agenda, but he doesn’t want to. Absolutely correct, as I’ve written for a long time, but not for the reasons he writes.

It’s in the polling, which is what guides the Obama White House and reelection team and is the only thing driving this president and it begins with Pres. Obama and his team knowing that Democrats will be on board no matter how mad you get about how horrific his capitulations and compromises are to the Right.

The reason he’s going to the Right is because they’ve got the momentum and he actually is too weak to make the counter argument, because he doesn’t want the fight as much as he wants the compromise, but also because he simply doesn’t care that much to wage the battle. Progressives like David Sirota have forgotten Obama’s revulsion to the battles of the 60s and the 90s; he wasn’t kidding.

Barack Obama will do anything to avert an ideological confrontation, but with the Tea Party caucus he’s been thrown the mother of all curves. Even during the Gingrich era Republicans weren’t willing to burn Washington down over the debt, deficit or budget. The reason he served up Medicare and entitlement “reform” is because Obama thought Republicans would jump at it. As conservatives said repeatedly, pre Tea Party they would. Pres. Obama and the White House never in a million years believed they’d stiff him on it, which is why he didn’t want the details leaked, because the White House isn’t stupid and knew the Left would go berserk. But when the Tea Party did what happened? He compromised again and again to get an outcome that would stop the madness, instead of something that would rectify the problem.

Barack Obama has never waged a fight for anything other than himself, which is what his presidential campaign was about. Now he’s trying to bring every voter he can to his side for his reelection, with Democrats and progressives assured, so he’ll do anything to make that happen, relying on polling to tell him what the public thinks, what they want to hear and what he should say to reach them.

The outcome truly doesn’t matter to him as long as most of the American people side with him in the end to give him a second term. Polls are his compass, not some passion for his Republicanism, which he chose because the mood of the country long ago started swinging Tea Party and Obama has no intention of taking them on, because he might alienate voters whom he’ll need, and Democrats no longer stand for anything, so they’ll just follow the leader.

It’s this Democratic weakness that set up Barack Obama in the first place, the genesis in the Clinton era, though Clinton’s compromises were mixed with a man who relished the battle and had lines he would not cross. When you take out that fighting for people character component the result is the Obama presidency, which has no Democratic compass at all.

The problem with compromising with political extortionists is that once they find out you detest an ideological battle and are willing to give them anything they want as long as they go away and things quiet down is that it’s a never ending saga.

Once again to Obama being candid back in 2007, something most people ignored, but I still believe was a seminal moment for understanding him:

“I think that I have the capacity to get people to recognize themselves in each other. I think that I have the ability to make people get beyond some of the divisions that plague our society and to focus on common sense and reason and that’s been in short supply over the last several years. I’m not an ideologue, never have been. Even during my younger days when I was tempted by, you know, sort of more radical or left wing politics, there was a part of me that always was a little bit conservative in that sense; that believes that you make progress by sitting down listening to people, recognizing everybody’s concerns, seeing other people’s points of views and then making decisions.” – Barack Obama (on ABC’s “This Week”) – May 2007

Pres. Obama is using F.D.R. as his Democratic template and his negotiating base. Everything progressives and the Professional Left bellyaches about is simply noise, because he has no intention of taking on Republicans to make the fight. Obama cedes control to Congress time and again, because he doesn’t want to be cloaked in their ideological mist. The White House always blame liberals for not making the case for Obama, because as they see it, you’re not going anywhere and he’s not changing, so shut up and get with the program. Obama’s got to make peace with a Tea Party nation, so he doesn’t need your crap.

That he has no ideological compass or foundation from which to make an argument for anything F.D.R.-ish should go without saying by now, so any notion he’s a “bizarro FDR” is absurd. He assumes people know that F.D.R. is the base from which he navigates, because he’s goddam Democrat.

The rest is about forging any compromise he can get and he isn’t about to take on the Tea Party and the Right, because he doesn’t believe in ideological fights, which he truly thinks is fruitless, as it upsets people and alienates them from him.

If it won’t help Barack Obama, he’s just not going to do it. Democrats should be grateful, because after all, he’s their leader and he’s, duh, #winning.

The problem that Pres. Obama and his advisers have created now, however, is that when you compromise with extortionists who are also wrong on the facts of the current economic disaster unfolding in America, as Europe’s financial volcano comes close to erupting further, and you have no ideological compass of your own on these matters, the purposeless floundering and dangerous compromises can boomerang.

Sure, you may be left standing, but the carnage piled around you will be catastrophically historic.

Read full story · Comments { 34 }

ABC News: The Deserved Downgrade Cometh

**UPDATED**

From Jake Tapper:

A government official tells ABC News that the federal government is expecting and preparing for bond rating agency Standard & Poor’s to downgrade the rating of US debt from its current AAA value.

Pres. Obama makes more history, just not the kind he’d hoped. Quite an accomplishment for sure and one Republicans, but especially Mitt Romney, will run with all the way to 2012.

UPDATED 3 (8.6.11): Read Yves Smith. Here’s just one part that drives home my last line above:

That’s what Rep. Randy Neugebauer, chairman of the House Financial Services Subcommittee said on April 29, when he requested documents from the administration: Treasury officials “may have exerted too much pressure on S&P.” The Republicans were already laying the tracks for S&P’s defense in April.

Here are a few more dots to connect the timeline:

April 18: Mitt Romney: “The Obama presidency was downgraded today.”
April 20: Mitt Romney: “Standard & Poor’s, one of the rating agencies, just downgraded their view of the future for America…If you will, they downgraded the Obama presidency.”
July 15: WSJ — “The Obama downgrade.”

They’ve been cooking this one for a while.

[...] So even if S&P fails to land a body blow in the markets, its ploy has garnered press that seems certain to taint the Administration, and thus confirms the power of its reckless conduct. Thus the cost is not likely to show up in bond yields, but in something far more fundamental: in yet more destruction of the foundations of our society for short-term, selfish ends.

UPDATE 2: S&P proves they’re craven. From the Wall Street Journal:

Around 1:30 p.m., S&P officials notified the Treasury Department that they planned to downgrade U.S. debt and presented the government with their findings. Treasury officials noticed a $2 trillion error in S&P’s math that delayed an announcement for several hours. S&P officials decided to move ahead, and after 8 p.m. they made their downgrade official.

UPDATE: From S&P, but the nonsense coming from Republicans smells as bad as the downgrade, because they’re hardly pure in the debt ceiling debacle.

The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the Administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government’s medium-term debt dynamics.
More broadly, the downgrade reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges to a degree more than we envisioned when we assigned a negative outlook to the rating on April 18, 2011.
[...] The outlook on the long-term rating is negative. We could lower the long-term rating to ‘AA’ within the next two years if we see that less reduction in spending than agreed to, higher interest rates, or new fiscal pressures during the period result in a higher general government debt trajectory than we currently assume in our base case.

Read full story · Comments { 9 }

So Much for Optimism

Paul Krugman tells the story, but here are the bloody facts:

At the close, the Standard & Poor’s 500-stock index was down 60.27 points, or 4.78 percent, to 1,200.07. The Dow Jones industrial average was off 512.76 points, or 4.31 percent, to 11,383.68, and the Nasdaq was down 136.68, or 5.08 percent, to 2,556.39.

It was the biggest percentage drop since February 2009.

Aren’t you glad Pres. Obama and Congress avoided default?

Mr. Krugman might have a point. Maybe someone should do something?

Read full story · Comments { 16 }