[T]he Genesis 8:22 that I use in there is that ‘as long as the earth remains there will be seed time and harvest, cold and heat, winter and summer, day and night.’ My point is, God’s still up there. The arrogance of people to think that we, human beings, would be able to change what He is doing in the climate is to me outrageous.

Senator James Inhofe (R-Okla.), who will be chairing the Senate’s Environment and Public Works Committee. Thankfully we can all rest assured that the Adults are in charge of the GOP. There might be one or two show votes, but then they’re going to buckle down and get to the hard work of governing by consensus. Certainly that’s what the Commentariat is telling me. So it must be true. Cannot wait for my pony.

Every year we get a slightly different version of the same old [Paul Ryan budget proposal], and every year we have to waste entire man-years of analysis in order to make the same exact points about it. And the biggest point is that his budget would force enormous, swinging cuts in virtually every domestic program, especially those for the poor. If this bothers Ryan, he’s had plenty of time to revise his budget roadmap to address it.

But he hasn’t. He knows perfectly well that his budget concentrates its cuts on the poorest Americans. It’s been pointed out hundreds of times, after all. If he found that troublesome he’d change it. Since he hasn’t, the only reasonable conclusion is that this is exactly what he intends. Let’s stop pretending otherwise.

Kevin Drum and I are in agreement. Stop making excuses for Ryan. Stop calling him “serious” or “wonky.” He’s neither. He simply puts an unachievable yet comfortingly numerical face on the GOP broader policy goal. Namely, reduce taxes on rich to as close to zero as can be achieved in a single go-round. Then make a show of balancing this huge deficit driver by a) failing to name any substantive tax reforms and but also specify that you’re going to be relying on extensive, substantive tax reform –and– b) cutting all programs for the poor to the bone or entirely. Can’t have a safety “hammock” after all.
When this still fails to balance the budget, you are free to go after Medicare, which was the plan all along. While there, may as well functionally end Social Security; even though it’s not a deficit driver, you’ve got huge constituencies and the MSM convinced that it is so why the Hell not? Then you call it a day and can efficiently sand the gears against putting any of it back in place even if you find your party in the legislative minority for decades. Huzzah for democracy.

Source: Mother Jones

in the 1960s, [there was certainty] that Americans would never consent to give up their big-government perks. And yet, somehow, alongside the ordinary tacking of American political preference between Democrats and Republicans, conservatism continues to thrive. That’s because power begets power: Democrats can be counted on to compromise with conservative nuttiness, and the media can be counted on to normalize it. And it’s because there will always be millions of Americans who are terrified of social progress and of dispossession from whatever slight purchase on psychological security they’ve been able to maintain in a frightening world. And because there will always be powerful economic actors for whom exploiting such fear, uncertainty and doubt pays (and pays, and pays).

Conservatism is not getting crazier, and it’s not going away, either. It’s just getting more powerful. That’s a fact that a reality-based liberal just has to accept – and, from it, draw strength for the fight.

Rick Perlstein, bringing the old optimism, and but also exactly right.

Finally, it is not clear why it views the fact that the [proposed EU financial transaction] tax will make it more difficult to construct trading algorithms as an unintended consequence. These algorithms may provide large profits to the people who develop them, but the benefits to the economy and society are likely to be near zero. If a transactions tax discourages skilled mathematicians and computer programmers from developing complex formulas for financial arbitrage and instead has them work in a productive area of the economy, then the tax will have been a great success.

Dean Baker nails it. The very existence of this sort of trading apparatus, which benefits only the company deploying it, relies entirely on what should be privileged knowledge (e.g. foreknowledge of trade patterns about to happen that can only be extracted and acted upon through either initiating the trade itself or privileged placement of what amounts to a compute cluster on a particular routing switch (or both)), and is the sort of thing used by Goldman et al. to, you know, screw their own customers by trading against their interests and/or simply profiting off what amounts to insider information, is as anti-market, anti-competitive, and the very essence of what all our anti-collusion, anti-insider trading, anti-trust, and anti-monopoly laws are intended to control. And these types of transactions do nothing for the broader economy beyond radically enriching a handful of folks who can only spend so much. And we’re a country with a giant aggregate demand problem. So there’s that.
But may the Flying Spaghetti Monster help anyone who tries to regulate this practice in any way, much less apply a nominal cost to such actions. This, along with rampant and abusive naked shorting, is the true scandal of Wall Street. (By the by: naked shorting is already illegal, but is basically never even investigated, much less litigated. In light of recent events, this should be the basis of a scandal…but that would require a functioning media. Look over there! A missing white woman!)
And, so far as I can tell, exactly zero is being done about any of it. And nothing will be done until after the next financial collapse. And it will only happen then if the collapse is sufficiently devastating that the entire structure of Wall Street finance is utterly laid waste (thus ending their political influence in the aftermath). Sounds like a time.

Source: cepr.net

It is hard to come up with words that are strong enough to describe what an appalling display of misguided ego, inept negotiating postures, bad policy thinking, and utter disregard for the public interest are on display in [the debt ceiling] fiasco. But as a friend of mine likes to say, “Things always look darkest before they go completely black.”

Yves Smith, bringing the optimism.

In the same way that Wall Street hoovering up a third of all corporate profits is the new normal. Or that 9% unemployment is the new normal. Or that obstruction, rather than legislation, is the new normal for Congress. Or that massive spending cuts during a recession is the new normal. Or that conducting three overseas wars at the same time is the new normal.

The new normal kind of sucks, doesn’t it?

Kevin Drum reflects on the “new normal.”
I think this phenomenon, more than anything explains why we’re going to default. Maybe not this time, but sooner than later. And even then, in the economic ruins that follow, there’s only a passing chance that the important lesson, the moral of the story will sink in.
More likely it’ll be blamed on ACORN, the EPA, and dread socialist fifth columnists and so forth. But I just don’t see how the boil gets lanced without the paroxysm. And, even then, the end result may be that the boil is simply inflamed further.

Making it Up

Across several posts, Dean Baker lays into the dread Liberal Media for just plain making it up when it comes to pushing their preferred, center-right “cut deficits now” agenda.

On the Washington Post:

“The national debt will exceed the size of the entire U.S. economy by 2021 — and balloon to nearly 200 percent of GDP within 25 years — without dramatic cuts to federal health and retirement programs or steep tax increases, congressional budget analysts said Wednesday.”

Actually, this is not what the projections showed. The CBO projections showed that if Congress simply followed current law, letting the Bush tax cuts expire, not fixing the alternative minimum tax, and most importantly, allowing the spending caps in the Affordable Care Act (ACA) to remain in place, then the debt to GDP ratio will soon stabilize and head downwards.

On the New York Times:

“The national debt is on pace to equal the annual size of the economy within a decade, levels that could provoke a European-style crisis unless policymakers take action on the federal deficit, according to a report by the Congressional Budget Office.”

This is not true. The CBO report did not warn of “a European-style crisis.” The reason it did not is that a European style crisis does not make sense in the context of the United States. The United States can never be like Greece or Ireland for the simply reason that we print out own currency.

In the event that we actually ran up against serious constraints in credit markets the United States would have the option to have the Fed buy up its debt. Greece and Ireland do not have this option. This could create a risk of inflation, but there is not the risk of insolvency that euro zone governments face.

On NPR:

In the top of the hour news segment on Morning Edition, NPR told listeners that the Congressional Budget Office warned that the national debt will soon equal the annual size of the economy and this could lead to a European-style crisis [see: New York Times above].

This is critically important stuff. Deep cuts right now will strangle the economy and deeply hurt Obama’s chance at reelection to boot. This, coupled with the knowledge that as conditions improve, the ability (in the form of public desire) to make huge cuts to the social safety net will diminish precipitously is precisely why the GOP is for deep cuts now. They know that doing nothing and simply letting the Bush tax cuts expire will do more for improved deficits than almost any of the “plans” on the table. The CBO has said so again and again. These “plans” are not and never will be about the deficit. They are about pushing a preferred social agenda. Period. We just can’t get anyone in the media to break free from their “view from nowhere, compromise must always be the preferable, serious person postion” lens for long enough to get them to even report the simple facts of the case at hand.

tl;dr: We’re doomed. There will be a default. Maybe not this time, but soon. Once you’ve set up the terms of debate such that they always include wrangling over lifting the debt ceiling and treating it essentially as a hostage situation, then you’ve created a system that, sooner or later, someone will push too far for their own purely political purposes. And when that happens it will be the end of America as we’ve known it. And I suspect that will be happening pretty damned soon.

Making it Up

Ideal Framework

Ygleisas dares to dream about the “ideal negotiating framework” for the debt ceiling:

White House demands clean debt ceiling increase, House majority demands big spending cuts, Senate majority demands partial repeal of Bush tax cuts, and we all compromise on just doing the damn debt increase.

That would be nice. But it would also require non-feckless Democrats in the Senate. Which, so far as I can tell, do not exist.

But, since the plutocrats and banksters seem to realize they’ve got skin in this game, maybe we can just cut some insanely rich people’s taxes, raise the debt ceiling, start a fourth war (I’m thinking Spain is due), and call it a day.

Welcome the Responsibility

E.J. Dionne posits that the coming “Ryancare” enforced destruction of Medicare will either be Obama’s defining moment or the final end of progressive government in America:

Americans are about to learn how much is at stake in our larger budget fight, how radical the new conservatives in Washington are, and the extent to which some politicians would transfer even more resources from the have-nots and have-a-littles to the have-a-lots.

And you wonder: Will President Obama welcome the responsibility of engaging the country in this big argument, or will he shrink from it? Will his political advisers remain robotically obsessed with poll results about the 2012 election, or will they embrace Obama’s historic obligation — and opportunity — to win the most important struggle over the role of government since the New Deal?

And that’s exactly what this is. If you “privatize” Medicare, you are in effect creating a real live death panel for those individuals who cannot afford to pay the difference between the arbitrarily low payments (pegged to the dollar circa 2010) that will be made in the name of “cost containment.” Scare quotes there because such a move is categorically not cost containment; it is payment containment, or total government outlay containment, if you will. Costs will still rise, whether that rise is at the rate of inflation or at some other rate doesn’t really matter: the payments are locked, now and forever, to roughly today’s value. It is therefore only that fraction of individuals that are capable of paying the difference between real cost and subsidized value that will be “contained.” This number of individuals will, of course, be diminished day by day, year after year after year, as the subsidy represents lower and lower actual healthcare buying power. This is how Ryancare “works.” Hope you’ve been rather aggressive and uniformly successful with your by then privatized “Social Security” 401(k). Because you’re going to need it. Cat food doesn’t buy itself, after all. Otherwise, kindly go die in the streets.

In a decade or two, yes, even the very wealthy will begin to feel that pinch and there might be some movement to address the issue. But, by then, assuming all goes to Ryan’s master plan, tax revenue will have ratcheted to such historic lows (the other part of this “plan” is to limit next year’s spending to a fractional percent of the previous year’s, regardless of inflation and actual vs. projected economic output or overall economic conditions) that the federal government will have drowned itself in a teacup and will be laughably incapable and plainly impotent relative to doing anything about it. Problem solved! Think of how free we’ll all feel on that wonderful day!

And but so: do I think Obama will rise to this particular challenge? No I do not. Nothing coming out of the administration leads me to believe he or his advisers have any interest whatever in fighting for the future of Medicare, much less Social Security (which, having its own funding source, is utterly secure for decades to come: so Serious People all know that we must act now to destroy it because otherwise it won’t be there! This makes sense to our Beltway Punditocracy.). The administration and, by and large, The Body Democrat will remain in their defensive crouch, trying not to “screw up” 2012 with a lot of progressive mumbo-jumbo, because, as any Serious Person can tell you, those dozens of Tea Partiers that showed up in DC the other day are the ones that run the country, now and forever, without any regard to election results, polling data, or the stated wishes of the American People at large. Those 100k that showed up in the tundra of Wisconsin? Just out of town Union thugs. No reason to pay attention to them at all. They’ll only win in 2012 if ACORN steals the election for them.

Welcome the Responsibility

PAMtastic poll data

Apropos of this post:

The [NBC/WSJ] survey — which was conducted Feb. 24-28 of 1,000 adults (200 reached by cell phone), and which has an overall margin of error of plus-minus 3.1 percentage points — also listed 26 different ways to reduce the federal budget deficit.

The most popular: placing a surtax on federal income taxes for those who make more than $1 million per year (81 percent said that was acceptable), eliminating spending on earmarks (78 percent), eliminating funding for weapons systems the Defense Department says aren’t necessary (76 percent) and eliminating tax credits for the oil and gas industries (74 percent).

The least popular: cutting funding for Medicaid, the federal government health-care program for the poor (32 percent said that was acceptable); cutting funding for Medicare, the federal government health-care program for seniors (23 percent); cutting funding for K-12 education (22 percent); and cutting funding for Social Security (22 percent).

So, the approach I laid out for the Democrats is not only popular, it’s the most popular. Well, that and people just have no fucking idea about earmarks and their relative proportion of the federal budget. Add that to the striking unpopularity of the GOP’s putative positions and you have a multifaceted issue about which you can be sure that The Democrat will make not one peep, will grudgingly accept the whatever the GOP’s demands are, and will be roundly slaughtered by voter fury about come 2012 but interpret said slaughter as implicit approval of the GOP message and most definitely not anything to do with The Democrat’s utter fecklessness. Optimism!