October 2013 archive

The business community is worried that they no longer have any influence over the Republican Party and place the blame for this current crisis squarely on the Tea Party faction of the House.

As the government shutdown grinds toward a potential debt default, some of the country’s most influential business executives have come to a conclusion all but unthinkable a few years ago: Their voices are carrying little weight with the House majority that their millions of dollars in campaign contributions helped build and sustain.

Their frustration has grown so intense in recent days that several trade association officials warned in interviews on Wednesday that they were considering helping wage primary campaigns against Republican lawmakers who had worked to engineer the political standoff in Washington.

Such an effort would thrust Washington’s traditionally cautious and pragmatic business lobby into open warfare with the Tea Party faction, which has grown in influence since the 2010 election and won a series of skirmishes with the Republican establishment in the last two years. [..]

In the two previous battles over the debt limit, many chief executives were reluctant to take sides, banding together in groups like Fix the Debt, which spent millions of dollars on a campaign urging Democrats and Republicans to work toward a “grand bargain” on the budget. But with shutdown a reality, and the clock ticking toward default, some of those same executives now place the blame squarely on conservative Republicans in the House.

The handful of Tea Party extremists, who believe that it’s OK to crash the world’s economy for their ideology, are out of control and unreasonable, not that they ever weren’t. But now the creators of this American version of Al Qaeda are scared. Yeah, they are scared. When you have the Koch brothers writing letters (pdf) to the US Senate insisting that the company was not involved in any ploy to shut down the government in efforts to defund Obamacare and Heritage Action, an arm of the Koch bothers’ Heritage Foundation, telling the House to raise the debt ceiling, you know they’re rattled.

Michael Needham, CEO of the powerful group Heritage Action, said that he opposed conditioning a crucial vote to increase the government’s borrowing authority on the group’s main goal: defunding Obamacare.

Under questioning at a breakfast with reporters, hosted by the Christian Science Monitor, Needham, a product of the Stanford Business School, conceded that failure to raise the debt ceiling would indeed disrupt the global economy. [..]

That could give Obama and House Speaker John Boehner (R-Ohio) at least a smidgen of room to maneuver if and when they decide to strike an overall deal: the White House could get a “clean” debt ceiling vote (though of short duration) and the GOP could get a concession or two on the continuing resolution to fund the government’s annual spending.

Taking the cue, the reluctant leader of the pack, House Speaker John Boehner (R-OH, House Majority Leader Eric Cantor (R-VA))and other members of the GOP leadership are meeting this afternoon at the White House to discuss a short term solution to raise the debt ceiling but not ending the government shutdown

Republican House leaders Thursday offered the president and Senate far less than they want in the ongoing financial standoff, presenting a six-week hike of the debt limit, but no deal to reopen the shuttered federal government.While the plan would grant six more weeks before the nation faces the chance of a default, it is contingent on the president agreeing to give up one of his key stances — that he will not sit down and negotiate until the government is reopened and the House stops using the $16.7 trillion debt limit as a lever to extract concessions. The limit is expected to be reached Oct. 17.

Nope, says the White House:

“The President has made clear that he will not pay a ransom for Congress doing its job and paying our bills,” an administration official said in a statement.

“It is better for economic certainty for Congress to take the threat of default off the table for as long as possible, which is why we support the Senate Democrats’ efforts to raise the debt limit for a year with no extraneous political strings attached,” the official continued, adding that Obama still want a straight up-or-down vote on a measure that the Senate passed to reopen government.

“Once Republicans in Congress act to remove the threat of default and end this harmful government shutdown, the President will be willing to negotiate on a broader budget agreement to create jobs, grow the economy, and put our fiscal house in order,” the official said. “While we are willing to look at any proposal Congress puts forward to end these manufactured crises, we will not allow a faction of the Republicans in the House to hold the economy hostage to its extraneous and extreme political demands. Congress needs to pass a clean debt limit increase and a funding bill to reopen the government.”

This doesn’t sound very promising. Boehner’s problem is that unless he violates the Hastert Rule and goes the House Minority Leader Nancy Pelosi (D-CA) and the Democrats for help, there is no way he can get a clean debt ceiling bill to the House floor. Boehner is betting the faith and credit of the US on Obama agreeing to his terms. The president is betting that Boehner will be forced to cave, abandon the Hastert Rule, and put a clean debt ceiling bill up for a vote.

Reid and Obama are also unsure whether Boehner can actually push his proposal through the House in the first place. They aren’t convinced hard-line conservatives and tea party aligned House Republicans won’t balk, forcing Boehner to turn to House Democrats for support. But any Democratic support would be tied to reopening the government.

Here’s the House GOP plan, and the thinking behind it: Republicans would vote to lift the debt ceiling until Nov. 22 – just before the Thanksgiving recess – while prohibiting the Treasury Department from using extraordinary measures to lift the borrowing limit. The legislation will also set up a negotiation over the borrowing cap and government funding. At this time, there are no spending cuts attached to the legislation. There is also no vote scheduled.

The game of chicken continues leaving not just the average American at great risk but putting the business community at loggerheads on who to fund to represent them in the long run. This game will have consequences. Question is for whom? And how dire?  

“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 thea Pundits”.

Follow us on Twitter @StarsHollowGzt

Joseph E. Stiglitz: Five Years in Economic Limbo

When the US investment bank Lehman Brothers collapsed in 2008, triggering the worst global financial crisis since the Great Depression, a broad consensus about what caused the crisis seemed to emerge. A bloated and dysfunctional financial system had misallocated capital and, rather than managing risk, had actually created it. Financial deregulation – together with easy money – had contributed to excessive risk-taking. Monetary policy would be relatively ineffective in reviving the economy, even if still-easier money might prevent the financial system’s total collapse. Thus, greater reliance on fiscal policy – increased government spending – would be necessary.

Five years later, while some are congratulating themselves on avoiding another depression, no one in Europe or the United States can claim that prosperity has returned. The European Union is just emerging from a double-dip (and in some countries a triple-dip) recession, and some member states are in depression. In many EU countries, GDP remains lower, or insignificantly above, pre-recession levels. Almost 27 million Europeans are unemployed.

Janet Tavakoli: President Obama Might Ask Who Benefits From U.S. Debt Default

Bloomberg News’ Yalman Onaran wrote an article on Monday about the disaster that would unfold if we don’t raise the debt ceiling and the U.S. has a technical default by missing an interest payment on U.S. Treasuries. James Kochan’s quote summed up my feelings: “Well, holy cripes!” It has never happened in modern history and would be a disaster greater than the September 2008 financial crisis.

China and Japan combined own $2.4 trillion in U.S. Treasuries, and they are understandably upset with the U.S. about the possibility of a technical default.

Most of the financial press has focused on how awful a technical default would be, and who is upset. But our leaders might ask a different question. Who are the reprobates that are cheering for the possibility of a technical default on the U.S.? Who stands to gain? Who might be happy to set off this financial bomb?

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.

October 10 is the 283rd day of the year (284th in leap years) in the Gregorian calendar. There are 82 days remaining until the end of the year.

On October 10, 1935, George Gershwin’s opera Porgy and Bess premieres on Broadway.

Porgy and Bess is an opera, first performed in 1935, with music by George Gershwin, libretto by DuBose Heyward, and lyrics by Ira Gershwin and DuBose Heyward. It was based on DuBose Heyward’s novel Porgy and the play of the same name which he co-wrote with his wife Dorothy Heyward. All three works deal with African American life in the fictitious Catfish Row (based on the real-life Rainbow Row) in Charleston, South Carolina, in the early 1920s.

Originally conceived by Gershwin as an “American folk opera”, Porgy and Bess premiered in New York in the fall of 1935 and featured an entire cast of classically trained African-American singers-a daring and visionary artistic choice at the time. Gershwin chose African American Eva Jessye as the choral director for the opera. Incorporating a wealth of blues and jazz idioms into the classical art form of opera, Gershwin considered it his finest work.

The work was not widely accepted in the United States as a legitimate opera until 1976, when the Houston Grand Opera production of Gershwin’s complete score established it as an artistic triumph. Nine years later the Metropolitan Opera gave their first performance of the work. This production was also broadcast as part of the ongoing Saturday afternoon live Metropolitan Opera radio broadcasts. The work is now considered part of the standard operatic repertoire and is regularly performed internationally. Despite this success, the opera has been controversial; some critics from the outset have considered it a racist portrayal of African Americans.

“Summertime” is by far the best-known piece from the work, and countless interpretations of this and other individual numbers have also been recorded and performed. The second best-known number is “It Ain’t Necessarily So“. The opera is admired for Gershwin’s innovative synthesis of European orchestral techniques with American jazz and folk music idioms.

Porgy and Bess tells the story of Porgy, a disabled black beggar living in the slums of Charleston, South Carolina. It deals with his attempts to rescue Bess from the clutches of Crown, her violent and possessive lover, and Sportin’ Life, the drug dealer. Where the earlier novel and stage-play differ, the opera generally follows the stage-play.

The Porgy and Bess original cast recording was included by the National Recording Preservation Board in the Library of Congress, National Recording Registry in 2003. The board selects songs on an annual basis that are “culturally, historically, or aesthetically significant.”

On July 14, 1993, the United States Postal Service recognized the opera’s cultural significance by issuing a commemorative 29-cent postage stamp, and in 2001 Porgy and Bess was proclaimed the official opera of the State of South Carolina.

Disclaimer: This forum rules as do the moderators. You know who I am talking about.

And here we are again! It started in 2010. The Bush tax cuts were about to expire. There was leverage to negotiate a debt ceiling raise or to just let them expire. How do I know there was leverage? I know Republicans like tax cuts for the rich, and there was a deal for the purpose of extending them with Republican votes. It passed with those Republican votes, which led to this whole thing because there was no debt ceiling raise included.

Maybe others are unaware of this? I don’t know. It doesn’t matter though; the uninformed shouldn’t dictate fantasy as reality in a reality based community. This is the actual reality and why we are worried about a global financial calamity with regard to a possible political default on the public debt, which is a choice and otherwise impossible for a sovereign currency issuer.

Obama on the Debt Limit – December 2010

Q Mr. President, thank you. How do these negotiations affect negotiations or talks with Republicans about raising the debt limit? Because it would seem that they have a significant amount of leverage over the White House now, going in. Was there ever any attempt by the White House to include raising the debt limit as a part of this package?

THE PRESIDENT: When you say it would seem they’ll have a significant amount of leverage over the White House, what do you mean?

Q Just in the sense that they’ll say essentially we’re not going to raise the – we’re not going to agree to it unless the White House is able to or willing to agree to significant spending cuts across the board that probably go deeper and further than what you’re willing to do. I mean, what leverage would you have –

THE PRESIDENT: Look, here’s my expectation – and I’ll take John Boehner at his word – that nobody, Democrat or Republican, is willing to see the full faith and credit of the United States government collapse, that that would not be a good thing to happen. And so I think that there will be significant discussions about the debt limit vote. That’s something that nobody ever likes to vote on. But once John Boehner is sworn in as Speaker, then he’s going to have responsibilities to govern. You can’t just stand on the sidelines and be a bomb thrower.

You know, we on the left knew what this would lead to. You don’t trust John Boehner with the full faith in credit of the United States unless one is completely clueless or an economic nihilist. The resulting signs we are starting to see of a financial panic in response to the prospects of a default on top of the ongoing depression, the jobs crisis, the continuing climate and ecological crisis all converging into one huge Epochal crisis, point to a special kind of disdain for the public that all our elected leaders have for us.  I mean, we have enough problems without adding to them through a self induced global financial then economic crisis caused by the President’s pursuit of a deficit terrorist grand bargain whether through incompetence or outright corruption.  

So this is going to be tight, Just like last year’s Cards run.  To be fair I’m going to post my ‘Bad Beard’ Phineas and Ferb video.

Either the Pirates or the Cards start golfing tonight, on Monday St. Louis eeked out a win to send it back to Busch Stadium on a 2 RBI Dinger.  That’s the price you pay for leadoff walks.

Adam Wainwright (19 – 9, 2.94 ERA R) will be going against Gerrit Cole (10 – 7, 3.22 R) for all the marbles (I’ll explain that metaphor someday) and we shall see.

“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 thea Pundits”.

Wednesday is Ladies’ Day.

Follow us on Twitter @StarsHollowGzt

Katrina vanden Heuvel: Mitch McConnell’s moneyocracy

For a man who has spent his entire career preaching the gospel of lower taxes, it’s astounding how much Mitch McConnell wants your money.

Sen. McConnell’s zeal is impressive, but not surprising. He’s about to enter the most difficult election of his career – and he’s going to need every last penny. [..]

Today, the Supreme Court hears McCutcheon v. FEC, in which Shaun McCutcheon, a GOP activist and businessman from Alabama, is seeking to overturn the Federal Election Commission’s limit on biennial campaign contributions to federal candidates. But even that’s not good enough for McConnell – he wants the court to throw out campaign contribution limits entirely, and his lawyers have been given time during oral arguments to present this view.

Rebecca Solnit: The Age of Inhuman Scale: On the ‘Bigness’ of Climate Change

Late last week, in the lobby of a particularly unglamorous downtown San Francisco building, a group of passionate but polite activists met with a bureaucrat who stepped forward to hear what they had to say about the fate of the Earth. The activists wanted to save the world.  The particular part of it that might be under their control involved getting the San Francisco Retirement board to divest its half a billion dollars in fossil fuel holdings, one piece of the international divestment movement that arose a year ago.

Sometimes the fate of the Earth boils down to getting one person with modest powers to budge.

The bureaucrat had a hundred reasons why changing course was, well, too much of a change. This public official wanted to operate under ordinary-times rules and the idea that climate change has thrust us into extraordinary times (and that divesting didn’t necessarily entail financial loss or even financial risk) was apparently too much to accept.

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.

October 9 is the 282nd day of the year (283rd in leap years) in the Gregorian calendar. There are 83 days remaining until the end of the year.

On this day in 1967, socialist revolutionary and guerilla leader Che Guevara, age 39, is killed by the Bolivian army. The U.S.-military-backed Bolivian forces captured Guevara on October 8 while battling his band of guerillas in Bolivia and assassinated him the following day. His hands were cut off as proof of death and his body was buried in an unmarked grave. In 1997, Guevara’s remains were found and sent back to Cuba, where they were reburied in a ceremony attended by President Fidel Castro and thousands of Cubans.

Ernesto “Che” Guevara (June 14, 1928 – October 9, 1967), commonly known as El Che or simply Che, was an Argentine Marxist revolutionary, physician, author, intellectual, guerrilla leader, diplomat, military theorist, and major figure of the Cuban Revolution. Since his death, his stylized visage has become a ubiquitous countercultural symbol and global insignia within popular culture.

As a medical student, Guevara traveled throughout Latin America and was transformed by the endemic poverty he witnessed. His experiences and observations during these trips led him to conclude that the region’s ingrained economic inequalities were an intrinsic result of capitalism, monopolism, neocolonialism, and imperialism, with the only remedy being world revolution. This belief prompted his involvement in Guatemala’s social reforms under President Jacobo Arbenz, whose eventual CIA-assisted overthrow solidified Guevara’s radical ideology. Later, while living in Mexico City, he met Raul and Fidel Castro, joined their 26th of July Movement, and travelled to Cuba aboard the yacht, Granma, with the intention of overthrowing U.S.-backed Cuban dictator Fulgencio Batista. Guevara soon rose to prominence among the insurgents, was promoted to second-in-command, and played a pivotal role in the successful two year guerrilla campaign that deposed the Batista regime.

Following the Cuban Revolution, Guevara performed a number of key roles in the new government. These included instituting agrarian reform as minister of industries, serving as both national bank president and instructional director for Cuba’s armed forces, reviewing the appeals and firing squads for those convicted as war criminals during the revolutionary tribunals, and traversing the globe as a diplomat on behalf of Cuban socialism. Such positions allowed him to play a central role in training the militia forces who repelled the Bay of Pigs Invasion and bringing to Cuba the Soviet nuclear-armed ballistic missiles which precipitated the 1962 Cuban Missile Crisis. Additionally, he was a prolific writer and diarist, composing a seminal manual on guerrilla warfare, along with a best-selling memoir about his youthful motorcycle journey across South America. Guevara left Cuba in 1965 to foment revolution abroad, first unsuccessfully in Congo-Kinshasa and later in Bolivia, where he was captured by CIA-assisted Bolivian forces and executed.

Guevara remains both a revered and reviled historical figure, polarized in the collective imagination in a multitude of biographies, memoirs, essays, documentaries, songs, and films. Time magazine named him one of the 100 most influential people of the 20th century, while an Alberto Korda photograph of him entitled “Guerrillero Heroico”, was declared “the most famous photograph in the world.”

((Note- In addition to a transcript, this link auto-plays)

Government Close Down – Another Grand Betrayal in the Works?

The Real News

October 7, 2013

William K. Black-

(T)he Koch brothers don’t care about the Republican Party. They don’t care about the United States of America. And they are incredibly wealthy. They are pure ideologues, in very large part.

What they do care about is making sure there’s no effective regulation, no effective environmental laws, no effective prosecutions of elite businesses. And they believe that this kind of power, which after all has taken offline, for example, a number of the regulatory agencies–and, you know, the EPA has lost all kinds of folks and such–they, the Koch brothers, love all of this. And what they mostly love is that they have demonstrated that they can take over one of the two major parties in the United States of America and use it for what is obviously an improper means, right, that we will extort you to get rid of legislation that was validly passed by both houses of Congress and signed by the president of the United States. And this is, from their purpose, a demonstration of raw power that is supposed to make people fear them in the future. That’s what the Koch brothers get out of it.

James Clapper Thinks That NSA Employees Will Sell Out Our Nation After A Few Days Without A Paycheck

by Tim Cushing, Tech Dirt

Tue, Oct 8th 2013 7:45am

According to James Clapper, nearly 70% of the intelligence workforce has been furloughed. The recently-passed Pay Our Military Act should put most of those civilian contractors back to work, but early last week, Clapper was very, very concerned about the damaging effects a layoff could have.

…

Clapper expounded on how exactly a shutdown would harm national security. It’s not so much that the massive servers might be powered down temporarily or that it might not be able to write checks to telcos and tech companies for backdoor rentals. No, the real problem is that a single missed paycheck is all that stands between any NSA contractor and complete subversion by foreign agencies.

…

According to Clapper, our national security is reliant on uninterrupted payments to a mercenary group of extortionate contractors. A few missed paychecks is a risk this country simply can’t take, not if we’re going to stay ahead of the terrorists.

This sort of statement from Clapper has to do wonders for troop morale. “Hey, guys! The boss says we’re all just opportunistic jerks with no loyalty and the willingness to sell out an entire nation if Uncle Sam doesn’t keep topping off the bank account.”

This paints a very different picture of the average intelligence analyst than the comparatively glowing portrait former NSA director Michael Hayden whipped up for a CNN interviewer while dodging the "ability" question.

…

According to Clapper, the American population values a continued paycheck more than it values loyalty and would gladly sell out its employer (and nation) rather than consider other options like short-term unemployment, job hunting or cutting expenses. If that’s how Clapper views the civilians the NSA employees, the biggest surprise is that, so far, only Snowden has skipped town with a few hard drives’ worth of documents.

Hayden, on the other hand, seems to feel NSA analysts are just Americans with bigger, faster computers and a frighteningly in-depth search engine. They’re people just like us, who would never, ever consider exceeding their “authorization,” no matter what amazing “abilities” the system provides.

NSA Center for Spy Data Suffers Electrical Failures

By Chris Strohm, Bloomberg News

Oct 8, 2013 12:00 AM ET

A $1.2 billion data center being built in Utah for the National Security Agency to house U.S. intelligence secrets has been plagued by electrical failures, according to an agency official.

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The causes of the center’s problems, which include 10 electrical meltdowns in the past 13 months, have destroyed hundreds of thousands of dollars worth of machinery and delayed the its opening by a year, according to the Wall Street Journal.

Giant NSA Data Center Won’t Stop Blowing Up

By Adam Martin, New York Magazine

10/8/13 at 12:29 AM

The N.S.A.’s enormous new data storage center in Bluffdale, Utah, will eventually blow up (in the cell phone sense of the phrase) with quantities of data thought to be thousands of times larger than the printed collection of the Library of Congress. But first, its builders must figure out how to stop the machines inside from literally blowing up in electrical surges. … “One project official described the electrical troubles-so-called arc fault failures-as ‘a flash of lightning inside a 2-foot box.’ These failures create fiery explosions, melt metal and cause circuits to fail, the official said.” Each arc failure, the most recent of which happened Sept. 25, has caused up to $100,000 in damage, according to The Journal. And the site’s builders and managers can’t agree on exactly what’s causing them or how to fix it.

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(A) statement from the joint venture of construction contractors said “the causes of those problems have been determined and a permanent fix is being implemented.” But a report by an investigative “Tiger Team” in the Army Corps of Engineers said the fix was inadequate. “We did not find any indication that the proposed equipment modification measures will be effective in preventing future incidents.” It said the causes of eight of the meltdowns hadn’t been determined.

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So far, the Tiger Team is unconvinced the contractors know how to fix this, writing that the problems “are not yet sufficiently understood to ensure that [the NSA] can expect to avoid these incidents in the future.” When it’s finally up and running, the data storage center is expected to be bigger than anything operated even by Google (though its exact size is classified). Until then, it’s more like a zettabyte-sized headache.