11/16/2011 archive

The deadline for the bicameral Super Committee to come up with a deal on deficit reduction is a week away. While many American’s don’t think that the committee will meet the deadline thus triggering large mandated budget cuts to defense and entitlements, we have President Obama warning the committee not to “cheat” by changing the law so that those cuts, particularly to the Defense, would not go into effect should the committee fail. Meanwhile, the committee’s Democratic members are proposing a $2.3 trillion tax-and-cut proposal “that includes $400 billion in Medicare and Medicaid reductions,” but only if Republicans compromise by putting new tax revenues on the table that in the end would only amount to $350 billion in new tax revenue.

The other really unacceptable proposal that the Democrats have put on the table to get the Republicans to agree to a paltry $350 billion in tax revenues, is making the Bush/Obama tax cuts permanent, even though the White House has said that President Obama would veto any bill that made those cuts permanent. Perhaps they are counting on Obama doing his usual last minute capitulation and he would sign the bill.

The Democrats are scrambling to try to make this look like a good deal but it’s not. Letting the Bush/Obama tax cuts expire would solve more of the deficit problem than anything that this committee or Congress has proposed by increasing tax revenues $1 trillion over the next 10 years. To their credit though, the Democrats have rejected the Republican offer that would cut all the tax rates across the board by 20%, lowering the top tax bracket to 27% from 35% assuming the Bush tax cuts would be extended. This would reduce tax revenues by $200 billion in just one year.

This is a muddled mess that is not really a crisis at all and in the long run won’t create any jobs but deepen the economic crisis that has been created by the burst of the housing bubble, job killing foreign trade agreements, unfair tax codes and the lack of banking regulation.

John Aravosis at AMERICAblog nails what has exacerbated much of problem: the Democrats negotiating techniques, or rather, the lack of them. The Republicans negotiate while the Democrats come to the table and offer their bottom line, so there is nowhere to go but to cave to Republican demands:

Note how the Republicans are still skewing their proposals towards large budget cuts and little tax increases, whereas the Democrats are offering 50-50 budget cuts and tax increases. That means that if both parties make concessions as they move to the “middle” – which is highly unlikely, the Dems will cave while the Rs will stay put – the “middle” will be a point at which there are more budget cuts than tax increases. Why? Because the Democrats, as always, are making their final offer – half tax increases, half budget cuts – first, so there’s nowhere to go but down.

This had been the Democratic approach since 2006 when the party gained control of both houses of Congress. It’s no wonder that voters are disgusted with both parties and that the Democrats lost the House in 2010. By gutting our social safety networks to protect the wealthy and appease the Republicans, the Democrats could well lose more in 2012 if they don’t start listening to the demands of the American people.

h/t to DCblogger at Corrente

A lot of people are conflating The Minneapolis Examiner with The National Examiner and claiming that it’s single sourced and a questionable one at that.

Bullshit.

More from Keith-

The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants.

I’m no expert on the bond market but I do know that when a bond interest rates rise, it is more expensive for the holder of those bonds to borrow money. That’s an over simplification as it pertains to the situation that has been developing with the Eurozone that is possibly on the verge of collapse due to the economic instability of Greece and, now, Italy. Of course, it is affecting market around the world. On Tuesday there was a massive sell off of all Eurozone bonds that is threatening the stability of the Eurozone. David Dayen explains:

Under current arrangements, the Eurozone doesn’t even have the money to save Italy. If the core countries start to lose their credit ratings and cannot afford to borrow, we’re really just done here. Spanish debt is also above the level where they would need a bailout, another troublesome sign.

About the only country on somewhat solid footing is Germany, and this has sowed resentment, particularly because of their domineering response to the crisis. Austerity for thee and not for me is bound to create a backlash.

This is all happening because the European Central Bank refuses to honor the “central bank” part of its name. This is dragging down all of Europe. Edward Harrison works through the issues in Italy, which is ground zero here.

   Italy needs to run a primary budget surplus (excluding interest payments) of about 5 percent of GDP, merely to keep its debt ratio constant at present yields. It won’t ever be able to do so.

   Therefore, yields for Italian bonds must come down or Italy is insolvent as it must roll over 300 billion euros of debt in the next year alone.

   Austerity is not going to bring Italian yields back down. First, Italian solvency is now in question and weak hands will sell. Moreover, investors in all sovereign debt now fear that they are unhedged due to the Greek non-default plan worked out in Brussels last month. As Marshall Auerback told me, any money manager with fiduciary responsibility cannot buy Italian debt or any other euro member sovereign debt after this plan.

   Conclusion: Italy will face a liquidity-induced insolvency without central bank intervention. Investors will sell Italian bonds and yields will rise as the liquidity crisis becomes a self-fulfilling spiral: higher yields begetting worsening macro fundamentals leading to higher default risk and therefore even higher yields.

Nobel Prize winning economist, Paul Krugman, mostly agrees with Harrison’s assessment of how the euro will end if the ECB doesn’t step in with a massive bail out and adds his thoughts:

I might place greater emphasis on the immediate channel through which falling sovereign bond prices force bank deleveraging, but we’re picking nits here.

And this is totally right:

   If the ECB writes the check, the economic and market outcomes are vastly different than if they do not. Your personal outlook as an investor, business person or worker will change dramatically for decades to come based upon this one policy choice and how well-prepared for it you are.

Crunch time. If prejudice and false notions of prudence prevail, the world is about to take a major change for the worse.

There are a number of factors here. Without the backing of Germany, the only Eurozone country with money, the ECB doesn’t have enough money to cover Italy’s debt and Germany’s participation hinges on their demand for austerity measures. The the elephant of a question then becomes what happens if the ECB doesn’t write the check? What if the ECB let’s Italy default, what then?

Harrison’s article at naked capitalism on the Italian default scenarios is long but well worth reading for the suggestions for investors on how they can protect themselves in either event.

“Punting the Pundits” is an Open Thread. It is a selection of editorials and opinions from around the news medium and the internet blogs. The intent is to provide a forum for your reactions and opinions, not just to the opinions presented, but to what ever you find important.

Thanks to ek hornbeck, click on the link and you can access all the past “Punting the Pundits”.

Wednesday is Ladies’ Day

Amy Goodman: The Brave New World of Occupy Wall Street

We got word just after 1 a.m. Tuesday that New York City police were raiding the Occupy Wall Street encampment. I raced down with the “Democracy Now!” news team to Zuccotti Park, renamed Liberty Square. Hundreds of riot police had already surrounded the area. As they ripped down the tents, city sanitation workers were throwing the protesters’ belongings into dump trucks. Beyond the barricades, back in the heart of the park, 200 to 300 people locked arms, refusing to cede the space they had occupied for almost two months. They were being handcuffed and arrested, one by one.  [..]

A New York state judge ruled late Tuesday that the eviction will stand, and that protesters cannot return to Zuccotti Park with sleeping bags or tents. After the ruling, a constitutional attorney sent me a text message: “Just remember: the movement is in the streets. Courts are always last resorts.” Or, as Patti Smith famously sings, “People Have the Power.”

Katrina vanden Heuvel; Progressives on the march to take over Congress

Progressives are on the move once more. Wisconsin lit the spark, as workers, students, teachers and farmers occupied the state’s capitol in February and launched recall elections that sobered conservative Republican Gov. Scott Walker and his legislative allies. Occupy Wall Street turned that spark into a conflagration that swept the nation. Last week, in Ohio and Maine and even Mississippi, voters overwhelmingly rejected efforts to trample worker rights, constrict the right to vote and roll back women’s rights.

These electoral victories have led pundits to wonder whether Occupy Wall Street will imitate the Tea Party and stand candidates for office. But Occupy is a protest movement – one that has transformed the landscape of politics, by forcing the country to face the reality of entrenched inequality and power and address what should be done about it. It will take others to fill the space that it has opened.

Occupy Wall Street NYC now has a web site for its General Assembly  with up dates and information. Very informative and user friendly. It has information about events, a bulletin board, groups and minutes of the GA meetings.

In a Special Comment, Keith contextualizes Mayor Bloomberg’s actions against Occupy Wall Street at Zuccotti Park and how they have – unintentionally – vaulted the movement from a local nuisance to a global platform for the disenfranchised.

Keith isn’t the only one who thinks that Bloomberg did the #OWS movement a favor, so do the #OWS leaders

Members of the Occupy Wall Street movement said today on a conference call that the police action to evict protesters from Zuccotti Park will only amplify future efforts, starting on Thursday with a planned day of action that will occur at sites across the country.

“We’re going to get in the streets by the tens of thousands on Thursday,” said a member of the Occupy Wall Street movement, who requested that names not be used. “The energy that has erupted is just being amplified right now … Thursday will be even more militant and defiant than it was planned to be.”

Today, on November 15th, Mayor Bloomberg and the NYPD made a cowardly attempt to stomp out the spirited movement that sparked in Zuccotti Park two months ago, only to find the flame has spread too far and wide to be stifled. Hundreds have been arrested in New York City defending the birthplace of the Occupy movement, but what Bloomberg fails to understand is that the movement extends beyond the perimeters of Zuccotti Park. As the Occupy alert from last night reads, “You can’t evict an idea whose time has come.”

The country has woken up – we will no longer tolerate a political system ruled by the interests of the 1% at the expense of the rest of us.

That’s why on Thursday, November 17th, thousands of Americans in every corner of the country are pushing back against Wall Street corruption and greed in their communities. We will do all we can to assert our rights as the 99% and reclaim the American Dream.

Join the 99% on November 17th as we fight for accountability, justice, and democracy. Gather with your friends, family and neighbors to highlight work that needs doing in your community – whether a crumbling school building, deteriorating bridge, or a foreclosed home – and demand an economy that works for all.

This is a pivotal moment in history. Our actions have won national attention and the world is watching – let’s make our message loud and clear.

Obama: Each city must decide how to handle Occupy Wall Street demonstrations

Sure, with just a little direction from Homeland Security and the FBI. Yes, Barack, the whole world is watching.

The National Lawyers Guild and the American Civil Liberties Union of Massachusetts have filed a suit to protect the Occupy Boston encampment in Dewey Square from the kind of militarized police operation that has been carried out against occupations in New York, Portland, Oregon, and Oakland, California, in recent days. [..]

Tomorrow, the ACLU of Massachusetts and the National Lawyers Guild will be part of a hearing before Judge McIntyre at 10 am in Room 1008 in the Suffolk County Superior Court (3 Pemberton Square, near State House and Boston City Hall). Members of Occupy Boston are encouraging anyone in the regional area to come to the courthouse to show solidarity with the occupation.

I’ve heard legal theories that the city of New York has the right to impose restrictions on the time, place and manner of the exercise of free speech. This will obviously play out in a court of law. I don’t know how anyone can reasonably look at the laws and say that the wholesale shutdown of the press, not only from the ground but from the air, is in any way a legal exercise. [..]

When you hear about police state crackdowns in the developing world, you typically hear that they go to knock out the communications first, so that nobody can bear witness to the ensuing repression. Michael Bloomberg learned this lesson well.

This is your morning Open Thread. Pour your favorite beverage and review the past and comment on the future.

Find the past “On This Day in History” here.

November 16 is the 320th day of the year (321st in leap years) in the Gregorian calendar. There are 45 days remaining until the end of the year.

On this day in 1959, the musical, “The Sound of Music” opened on Broadway.

Did the young Austrian nun named Maria really take to the hills surrounding Salzburg to sing spontaneously of her love of music? Did she comfort herself with thoughts of copper kettles, and did she swoon to her future husband’s song about an alpine flower while the creeping menace of Nazism spread across central Europe? No, the real-life Maria von Trapp did none of those things. She was indeed a former nun, and she did indeed marry Count Georg von Trapp and become stepmother to his large brood of children, but nearly all of the particulars she related in her 1949 book, The Story of the Trapp Family Singers, were ignored by the creators of the Broadway musical her memoir inspired. And while the liberties taken by the show’s writers, Howard Lindsay and Russel Crouse, and by its composer and lyricist, Richard Rodgers and Oscar Hammerstein II, caused some consternation to the real Maria von Trapp and to her stepchildren, according to many later reports, those liberties made The Sound of Music a smash success from the very night of its Broadway opening on this day in 1959.

The Sound of Music opened on Broadway at the Lunt-Fontanne Theatre on November 16, 1959, moved to the Mark Hellinger Theatre on November 6, 1962 and closed on June 15, 1963 after 1,443 performances. The director was Vincent J. Donehue, and the choreographer was Joe Layton. The original cast included Mary Martin (at age 46) as Maria, Theodore Bikel as Captain Georg von Trapp, Patricia Neway as Mother Abbess, Kurt Kasznar as Max Detweiler, Marion Marlowe as Elsa Schraeder, Brian Davies as Rolf and Lauri Peters as Liesl. Soprano June Card was one of the ensemble members in the original production. The show tied for the Tony Award for Best Musical with Fiorello!. Other awards included Martin for Best Actress in a Musical, Neway for Best Featured Actress, Best Scenic Design (Oliver Smith) and Best Musical Direction (Frederick Dvonch). Bikel and Kaznar were nominated for acting awards, and Donehue was nominated for his direction. The entire children’s cast was nominated for Best Featured Actress category as a single nominee, even though two children were boys.

The Sound of Music was the final musical written by Rodgers and Hammerstein; Hammerstein died of cancer nine months after the Broadway premiere.

Rebecca Luker leads the 1998 Broadway revival cast in a performance of ‘Climb Every Mountain,’ ‘Do Re Mi’ and ‘The Sound of Music’ at the Tony Awards.

As suspected and alluded to by Oakland Mayor Jean Quan in an interview with the BBC, the Department of Homeland Security and the FBI coordinated with mayors throughout the country on tactics to out Occupy Wall Street protesters from city parks. The heavy handed tactics has lead to police abuse, destruction of private property, illegal searches, injuries and arrests.

The official, who spoke on background to me late Monday evening, said that while local police agencies had received tactical and planning advice from national agencies, the ultimate decision on how each jurisdiction handles the Occupy protests ultimately rests with local law enforcement.

According to this official, in several recent conference calls and briefings, local police agencies were advised to seek a legal reason to evict residents of tent cities, focusing on zoning laws and existing curfew rules. Agencies were also advised to demonstrate a massive show of police force, including large numbers in riot gear. In particular, the FBI reportedly advised on press relations, with one presentation suggesting that any moves to evict protesters be coordinated for a time when the press was the least likely to be present.

(emphasis mine)

The raid on NYC’s Zuccotti Park happened just one day after the last raid on Oakland’s #OWS protest that precipitated the resignations of Mayor Quan’s legal advisor and friend, Dan Seigel and Deputy Mayor Sharon Cornu.

On her blog, Rachel Maddow makes the point that these raids, especially the police violence, only steels the protests resolve to continue:

{..} Greg Sargent argues that Occupy Wall Street accomplished something important today, despite the eviction. Ezra Klein asks whether or not Mayor Bloomberg, Brookfield and the NYPD have actually done the movement a favor. And my friends Allison Kilkenny and Amanda Marcotte both criticize the justification used not only for the city to clear the park, but to infringe upon First Amendment Rights.

Glenn Greenwald argues that the only laws being broken are by Mayor Bloomberg:

To justify his raid, Mayor Bloomberg said: “We must never be afraid to insist on compliance with our laws.” Leaving aside the fact that torturers, illegal eavesdroppers, wagers of aggressive war, Wall Streets defrauders, and mortgage thieves are some of his best friends who thrive and profit rather than sit in a jail cell, this is the same Mayor Bloomberg who, now beyond all dispute, is knowingly and deliberately breaking the law by violating a Court Order of which he is well aware. He’d be arrested for that if he weren’t a billionaire Mayor (and indeed, having seen that bevvy of political and financial elites break the law in the most egregious ways with total impunity over the last decade, why would Bloomberg be afraid of simply ignoring the law?).