Tag: Economy

Catfood is made out of peas? Who knew? lambert

This press conference tells us that the austerity crap isn’t some bit of political posturing, it’s a belief. We’re doomed. Atrios

The right wing Republican talking points that were spewed by President Obama at his press conference were so thick that it has left no doubt the president is about to sell out the middle class and poor.

President Obama said Monday that he had “bent over backwards” to forge a compromise with Republicans on a debt limit deal – and that it was time for them to “budge.”

“I am prepared to take on significant heat from my Party to get something done and I expect the other side to be willing to do the same thing,” he said. . . . .

“We have to pull off the Band-aid — to eat our peas,” he said.

I don’t often agree with NYT Columnist Russ Douthat but his analysis of the “madness” cuts to the point:

Barack Obama wants a right-leaning deficit deal.  

The not-so-secret secret is that the White House has given ground on purpose. Just as Republicans want to use the debt ceiling to make the president live with bigger spending cuts than he would otherwise support, Obama’s political team wants to use the leverage provided by those cra-a-a-zy Tea Partiers to make Democrats live with bigger spending cuts than they normally would support. . . .

Why? Because the more conservative-seeming the final deal, the better for the president’s re-election effort. In that environment, Republicans have every incentive to push and keep pushing. Since any deal they cut will be used as an election-year prop in 2012, they need to make sure the president actually earns his budget-cutting bona fides.

The problem is that voters don’t care about the deficit. They care about jobs and the economy. Spending cuts, tax cuts and austerity programs do ot create jobs. Even Ronald Reagan’s budget director, David Stockman, now admits that Reaganomics and the Bush tax cuts are a major cause of the current “debt crisis” and takes Obama and Rep. Paul Ryan to the “woodshed”

“In attacking the Bush tax cuts for the top 2 percent of taxpayers, the president is only incidentally addressing the deficit,” he writes. “Mr. Obama is thus playing the class-war card more aggressively than any Democrat since Franklin D. Roosevelt – surpassing Harry S. Truman or John F. Kennedy when they attacked big business or Lyndon B. Johnson or Jimmy Carter when they posed as champions of the little guy.”

“On the other side,” he continues, “Representative Ryan fails to recognize that we are not in an era of old-time enterprise capitalism in which the gospel of low tax rates and incentives to create wealth might have had relevance.”

Eat your peas, we are doomed.

I think the GOP is smelling success in their goal of making President Obama a one term president. Even bloggers like the Rude Pundit doubt Obama:

At some point, Obama has to squash McConnell and Boehner like bugs (although he probably won’t)

Now that Boehner has once again walked away from the negotiating table, Senate Minority Leader Mitch McConnell made it clear on Fox News Sunday that his top priority is stopping Obama’s re-election:

Even with the country on the brink of default, the Senate’s highest ranking Republican says his “single most important” goal is to make Barack Obama a one-term president.

“The single most important thing we want to achieve is for President Obama to be a one-term president,” Senate Majority Leader Mitch McConnell told National Journal’s Major Garrett in October.

Fox News’ Bret Baier asked McConnell Sunday if that was still his major objective.

“Well, that is true,” McConnell replied. “That’s my single most important political goal, along with every active Republican in the country.”

“But that is in 2012,” he added. “Our biggest goal for this year is get this country straightened out and we can’t get this country straightened out if we don’t do something about spending, about deficit, about debt and get the economy moving again. So our goal is to have a robust vibrant economy to benefit all Americans.”

McConnell told Baier that a “Grand Bargain,” where Republicans agree to tax hikes in exchange for cutting Social Security and Medicare benefits, was likely off the table.

“I think it is. Everything they told me and the Speaker is to get a big package would require big tax increases in the middle of the economic situation that is extraordinarily difficult with 9.2% unemployment. We think it’s a terrible idea. It’s a job-killer.”

Priorities aside, what all these politicians don’t seem to understand is that austerity is the “job killer”, especially with the the job market and wages sinking like a rock. President Obama’s grand plan of $4 trillion in deficit reductions with cuts to vital social safety nets as the carrot and minuscule revenue increases, is even worse. This is all about maintaining the status quo for the wealthiest who have proven since the Bush tax cuts that they will just keep the money and screw the masses.

John Aravosis sums up this debacle quite succinctly:

Someone’s being played.  First the Republicans walked out of the Biden talks.  Now Boehner is refusing the President’s more than generous offer to cut Social Security and Medicare as part of a larger deal absurdly skewed towards GOP goals.  It’s those pesky tax increases, you see.  It’s just not enough that the President caved on a clean debt ceiling, caved on having an additional stimulus instead of spending cuts, caved on postponing spending cuts until the economy is well again, caved on at least making spending cuts equal to tax increases, and caved on keeping cuts to Social Security and Medicare out of this.

Mind you, it’s not entirely clear what the Republicans have even agreed to here in terms of any tax increases.

So the GOP walks, and Obama will just have to sweeten the deal to “save the hostages.”  Did anyone else see this coming?

Someone is being played alright, the American people.

I have no hope for any rational solution that is going to improve the economy and the job situation for Americans. It makes no difference who is in the White House at this point, or in 2012.  Obama will never stand up to McConnell and Boehner simply because he agrees with them. They are playing Russian Roulette with a loaded gun at the American people’s head.

Nobel Prize winning Economist and New York Times columnist Paul Krugman has nailed Barack Obama’s economic polices and his penchant for feeding the right wing economic fallacies, as “the false government-family equivalence, the myth of expansionary austerity, and the confidence fairy” and, as Dr. Krugman points out, Obama did it in two sentences:

Government has to start living within its means, just like families do. We have to cut the spending we can’t afford so we can put the economy on sounder footing, and give our businesses the confidence they need to grow and create jobs.

Dr. Krugman has already debunked both the myths of government-family equivalence and expansionary austerity. Yet the President still thinks that by caving to the right wing Hoover economic policies the economy will get better. This appears to be a signal that he is about to cave to Republicans once again on spending cuts and no new revenue sources that has led will further slow the economy and may spiral the US into a second recession or worse.  

The White House is now saying that Congress must pass a bill by July 22 in order for the government not to default on its debt.

The Obama administration believes congressional leaders must agree to a deficit-reduction deal by July 22 in order to raise the government’s borrowing limit in time to avoid a default in early August, according to Democratic officials with knowledge of the negotiations.

The government needs a week or two to write and pass the necessary legislation and take the steps necessary to avoid missing a payment. “We’re down to the wire,” one official said.

Brain Beutler of Talking Points Memo reports Sen. Charles Schhumer (D-NY), in an telephone interview with reporters, said that while the Constitutional option is worth exploring, he thinks “it needs a little more exploration and study. It’s probably not right to pursue at this point and you wouldn’t want to go ahead and issue the debt and then have the courts reverse it.”

Legal scholars and other Democratic Senators have been taking a very close look at the 14th Amendment clause that forbids Congress from defaulting on US debt.

Republican economist Bruce Bartlett, who believes that the Republicans are playing with “the financial equivalent of nuclear weapons”, argues that Section 4 renders the debt ceiling unconstitutional, and obligates the President to consider the debt ceiling null and void.

If the Congress fails to raise the debt ceiling and the government stops paying its obligations, the first people who should not get paid is Congress.

After receiving a $10 billion of tax payer money in the financial crisis bailout and making a record $2.7 billion profit in the first quarter of 2011, Goldman Sachs will lay off 1,000 American workers and out source their jobs to Singapore.

The jobs in Singapore are likely to be “high-paying, skilled positions in sales and investment banking,” the same types that are likely to be cut in the firm’s domestic operations, according to one person with knowledge of the matter. This person added that the firm has recently briefed people in Washington about the new overseas jobs because it “is afraid of the fallout” as it plans to slash $1 billion in costs over the next year — a move that will mean a significant, though still undetermined number of layoffs across its operations, though people close to the firm expect the biggest hit to come from the US. Goldman also plans a much smaller expansion in its Brazil unit and in India.

Last year, the Republicans in the Senate, aided by Sen Joe Lieberman and four Democrats, blocked a bill that would have ended tax breaks for companies that shift American jobs overseas. Over the last decade these mega corporations have laid off nearly 3 million American while hiring 2.4 million overseas. These jobs are not low tech jobs as these companies claim but but jobs held by highly educated workers who never expected to find themselves among the unemployed.

Jon Walker at Firedoglake says that the negotiations on the debt ceiling keep moving right:

In the beginning, the idea that any political party would actively hold the debt ceiling hostage to reduce the deficit was considered absurd. Mainly because all the top politicians have admitted they don’t want the country to default and that actually forcing a default would have the exact opposite affect of sending Treasury bond rates up, making the deficit problem dramatically worse. Only a year ago, the idea the debt ceiling must be raised was not just the broad centrist position, and it has been the common sense position for decades.

Instead of holding a firm line and pointing out that Republicans were flirting with incoherent madness related to the debt ceiling, Democrats ,lead by President Obama, choose to feed the Republican deficit hysteria by actively refusing to take a stand. This moved the debate radically to the right. It made it acceptable to hold America credit worthiness hostage to demand deficit reductions despite massive unemployment.

John Amato at Crooks and Liars gives a tutorial in Negotiating for Dummies:

Every “cut” is on the table, but not revenue increasers. This is all kabuki and the debt ceiling isn’t the same type of game they played with as shutting down our own government was. But if Democrats use meaningless military cuts to justify massive cuts in education, food safety, health research and criminal justice as some kumbaya moment, then this will be not a deal, but a ritual sacrifice.

Rachel Maddow and Chris Hayes, Washington Editor of The Nation magazine, discussed the lengths to which the Republicans have gone to undermine President Obama, calling it “craven shameless, unprincipled partisan hackery”

At this point, I call it insanity on the part of the President and the Democratic leadership.

Ed Schultz rails against the latest attack on the middles class, New Jersey Governor Chris Christie’s bill ending collective bargaining on health care for state employees and reducing their benefits.

This is an outrageous attack on state employees and unions that will hurt them for years. The bill will increase the costs of contributions to pension funds and limit access to health care at the same time it could increase subscriber costs by several hundred percent.  It removes the right to choose where they go for treatment unless they purchase an even more expensive plan. Most public employees have no collective bargaining rights except for health care, this bill ends that right.

It also freezes retirees cost of living adjustments (COLA) for the next 30 years. These raises have fluctuated and for the last two years have been 0%. Without some raises the elderly in New Jersey may well find themselves impoverished.

While the bill was opposed by many Democrats, it was the Democratic leadership, including Senate President Stephen Sweeney, Assembly Speaker Sheila Oliver and Assemblyman Lou Greenwald, who sold out betrayed the fundamental Democratic values. Any Democrat that voted for this horrendous bill should be primaried by a real Democrat.

Up Date below the fold

Call a Wahmbulance for House Majority Leader Eric Cantor as he quits the debt ceiling talks with Vice President Joe Biden:

House Majority Leader Eric Cantor, Republican of Virginia, said Thursday that he was quitting  the debt ceiling negotiations being led by Vice President Joseph R. Biden Jr. because of an impasse over the role of taxes in any final deal.

“I believe that we have identified trillions in spending cuts, and to date, we have established a blueprint that could institute the fiscal reforms needed to start getting our fiscal house in order,” Mr. Cantor said in a prepared statement.

“That said, each side came into these talks with certain orders, and as it stands the Democrats continue to insist that any deal must include tax increases. There is not support in the House for a tax increase, and I don’t believe now is the time to raise taxes in light of our current economic situation. Regardless of the progress that has been made, the tax issue must be resolved before discussions can continue.”

David Kurtz at Talking Point Memo says this may not be such a big deal:

The read we’re getting is that this could be merely an indication that the emissaries to the talks have gotten as far as they can get and that the remaining heavy lifting is going to have be done by the principals: President Obama and Speaker Boehner.

Meanwhile, Speaker John Boehner doesn’t sound to pleased that he will now have to defend the Republican stand that tax increases are off the table:

“I understand his frustration, I understand why he did what he did, but I think those talks could continue if they’re willing to take the tax hikes off the table,” he said.

One possible interpretation of Cantor’s pullout was that he needed Boehner’s authority to negotiate revenue increases necessary to complete a far-reaching deal with Democrats, but Boehner made repeatedly clear on Thursday that he had not budged at all on the issue.

“Tax hikes are off the table,” he said. “First of all, raising taxes is going to destroy jobs….second, a tax hike cannot pass the US House of Representatives — it’s not just a bad idea, it doesn’t have the votes and it can’t happen. And third, the American people don’t want us to raise taxes. They know we have a spending problem.”

(emphasis mine)

Boehner may be correct on point two but he is so wrong on one and three that is totally laughable and flat out lies that the press refuses to counter. Americans know we have a revenue problem because of the Bush/Obama tax cuts and loop hole in the tax code. Americans overwhelmingly support tax increases on millionaires. I don’t think Boehner is stupid, I think he is a tool of his corporate masters.

My only question now is where the hell is the Democratic leadership to counter this? Why aren’t the Democrats out in front of the cameras pointing out how wrong the Republicans are? The Democrats need to listen to the people, too and take Social Security, Medicare and Medicaid off the table as well.  

The stock market came tumbling this morning on the bad news that started yesterday with Federal Reserve Chairman Ben Bernanke’s bleak economic outlook. With the news that there were higher than expected new unemployment claims, a drop in new housing sales and the announcement from the International Energy Agency that they would release 60 million barrels oil, sent stocks, oil and gold prices in to a downward spiral.

This isn’t necessarily all bad news. Lower the price of oil that has been driven wholly by speculators that have “no skin in the game” has been a major cause of the economic slow down. As the price of fuel drops, the price of transportation and goods fall, people have more money to spend or invest.

Global Oil Reserves Tapped in Effort to Cut Cost at Pump

The United States will lead an international effort to release 60 million barrels of petroleum reserves to world markets, replacing some of the oil production lost because of the conflict in Libya, the International Energy Agency announced in Paris on Thursday.

The action is aimed at reducing energy prices for businesses and consumers, and in early trading futures contracts for West Texas intermediate crude oil were down $4.50 a barrel to around $91.

The United States will release half of the total amount from the Strategic Petroleum Reserve, with the rest of the oil to be provided by other nations among the international agency’s 28 member states. Negotiations for the coordinated response have been going on in secret for weeks, according to a person involved in the talks. Similar unified action was taken in 1991 at the outbreak of the first Persian Gulf War.

Stocks and Oil Fall Sharply

The Dow Jones industrial average fell sharply and energy stocks declined more than 2 percent on Wall Street on Thursday after a report that the United States would release some oil from its Strategic Petroleum Reserve. Crude oil prices also fell.

The International Energy Agency announced in Paris on Thursday that the United States will release half of the 60 million barrels of petroleum reserves to world markets, with other nations releasing the rest, replacing some of the oil production lost due to the conflict in Libya.

What Atrios said:

The people who run the world agree that ordinary people need to suffer so that the banksters don’t lose on their bets.

The people who run the world are awful people.

Shitpile is an understatement.

BERLIN (AP) — German Chancellor Angela Merkel is warning that a full-scale restructuring of Greek debt would have “completely uncontrollable”consequences on the financial markets.

Merkel said Wednesday that imposing a so-called haircut on Greek debt – reducing the amount to be repaid – would not only endanger banks and other creditors who hold Greek bonds, but also institutions that sold insurance policies against a default.

Merkel told a parliamentary committee that those credit default swaps have a higher face value than the debt itself.

But protect those bankers they no matter that they’ve destroyed Greece’s economy by the skin of the average Greeks’ teeth

ATHENS – Prime Minister George Papandreou of Greece won a crucial vote of confidence early Wednesday, with all 155 lawmakers of the Socialist Party expressing their support for his beleaguered government, above the absolute majority of 151 votes required by Greece’s 300-seat Parliament. . . .

He defended the country’s foreign creditors, who have become a lightning rod for popular fury, saying, “They are giving us a helping hand in difficult times.”

But tens of thousands of people gathered outside Parliament, many voicing rage at foreign lenders, whom they see as a kind of occupying power, and at a government they blame for Greece’s financial crisis.

“They destroyed the country,” said Terpsichore Theofili, 23, a history student, as she stood in the crowd in Syntagma Square outside Parliament. “They should pay, not us,” she added.

David Dayen said it,

No, they’re saving their creditors.

In other words, a Greek default event would break the banks and the financial wizards who sold default insurance. This is all about protecting them, not the Greek people. . . .

Mohamed El-Erian of Pimco still thinks Greece will default. And maybe they will. Maybe the Parliament will succumb to the pressure of the street and refuse to institute more pain and suffering. Maybe this latest plan will just kick the can down the road, and default will be an inevitable future event. But Greece should have the power to set the terms here. It’s like the old joke: “If I lend you $100 and you don’t pay it back, you have a problem. If I lend you $1 trillion and you don’t pay it back, I have a problem.” Greece could hold that over their creditors, but so far their political leadership has been cowed.