Monday, July 11, 2011

Reaping the whirlwind: GOP nosedives US economy ... by gimleteye

This weekend, in response to Tea Party insurgents backing GOP members of Congress, House majority leader John Boehner withdrew from White House negotiations for a $4 trillion plan promoted by President Obama and advisors that would have addressed entitlement costs, like social security and Medicaire, but also required raising taxes on the richest Americans. Congress will reach some agreement before August 2nd to continue funding the obligations of the US government. It would be insanity to invite the doomsday scenario that would trigger a default of US obligations and the Blackest Friday in world financial markets.

Still, this game of chicken is rattling the confidence of those who buy US treasuries and, by supporting our debt, fund our standard of living. China, for example, has embraced its own Faustian bargain with US debt for decades; to build its own economy while accepting that dollar denominated holdings are worth less and less. But to the Chinese, the US is like the uncle who used to be rich but now is merely entertaining.

The dismal politics that engulf the United States can be read as the consequence of abject partisanship, tied to an uninformed, poorly educated public that allowed itself to be organized around the no-so-latent fear and anxiety connected to long lasting economic hardships. This is the Long Emergency. It is ironic at a time in our nation's history where we most needed dialogue and debate, we had exhausted the base; even Republican leaders from farming states should be able to understand the metaphor.

"They that sow the wind, shall reap the whirlwind", the proverb goes. So it is going, today, with the GOP that has turned any conversation around raising revenues into the equivalent of mercury pollution or radioactivity. But the GOP is determined to weaken EPA rules regulating toxics and pollution under the assumption that we can't afford to clean up the mess we've made. The party of the rich will keep an iron grip on its prerogatives no matter the outcome for America. It is a form of hopelessness whose consequences they can easily escape. Not so, for the rest of America.


Anonymous said...

While the GOP deservedly should get skewered, the party on the other side of the aisle has been just as bad.

Some interesting facts...

Some good analysis....

Anonymous said...

The Democrats have not passed a budget in the Senate. One would at least hope that we could adopt a spending plan but no, the easier strategy is to create an election issue.

Mr. Obama's spending in office makes Reagan's and Bush II's look like minor variances. Trillion dollar annual deficits are now the norm - totally unsustainable and repugnant.

As a Republican, I am stll angry about President Bush's failure to veto the spending presented to him. I think that's why many of my compadres are opposing any new taxes on anyone because new tax revenues are not used to balance accounts.

Obama's cynical attempts to avoid his culpability for the depth of this recession reinforces EoM's point: the general public has no idea what is going on in Washington. Thr truth is that our President is concerned only with his short term political interests; the future be damned.

Gimleteye said...

Perhaps then my Republican friends agree with me that the Wall Street banksters should have been sent packing, if not to jail, then at least to severely reduced pay packages from 2008 onwards; say, the equivalent of high school teachers? I too fault Obama for not pinning blame for the economic catastrophe he inherited, instead of relying on the same talent from Goldman Sachs, whose top executives made billions on all sides of the economic bet while ordinary 401K and pensioners (some Republican, too!) got stiffed by markets now dominated by high frequency computer trading. Royally. But what would you have had, Obama do in January 2008 in regards to the fiscal stimulus, up to QE2? There are some even to the left of me who would have let the whole system collapse. But we kept those Bush tax cuts in place, didn't we? And we masked the depth of this Long Emergency. Who does that benefit, now?

Anonymous said...

You raise an interesting question regarding what should Obama have done. First, he should have taken a close look at what Bush did with regard to bailing out the banks. I think he could have used a "Resolution Trust Corp" model, rather than perpetuate the Bush administration's bailouts.

Second, he could have avoided the politically tempting stimulus program. We all know where that money went - primarily to local governments to give them a temporary reprieve from cutting their budgets.

Last, he could have let the market work, which is the opposite of what he wants to do intellectually. (Bush also failed to let the markets work, though his rationale is interesting and is discussed in his book.) The fact is that the losers in the Bush-Obama rescue of the housing market bailed out foreign bondholders for the most part.

You mentioned that you were reading Reckless Disregard. After reading that book, you must agree that we have to return to a time when the government stops trying to rig markets to benefit small numbers of hangers on and fundraisers, no?

Anonymous said...

As a former Republican (I switched to independent the day GW got on a plane to sign a bill during the Schiavo thing and have never voted GOP since)....

I agree with every thing you posted... However I believe the selling out of our country to the banksters is equally distributed on both sides of the aisle. Obama who I voted for has only capitulated to the same fraudsters. He's let the Wall St scammers continue to operate as they have for 40+ years. The Health reform bill is exactly what the special interests wanted. Another war, and on and on. Basically
Meet the new boss, same as the old boss.

And the sad reality is that next year because of the Truman Show our national politics is like, he will be the only electable candidate and the sell out will continue.

David said...

This is how the Dems play ball:

When TARP (a bill written by Democrats that not a single Republican voted for)was passed, it contained a provision to extend the depreciation allowed on corporate jets from five to seven years. Written by Dems...passed by Dems...not one Republican vote. 100% Dems.

Now the president and his shills are citing Republicans as being more concerned with protecting this extension than they are in protecting seniors.

Just sayin!

Anonymous said...

We needed to reinstate Sarbanes Oxley. We need to give states back authority of regulating mortgage industries and create, at best, regional banks.

Then we need to move on to realize that when we defund R and D, invest off shore instead of on and foolishly think that we can keep on with Asia the way we have, there are larger issues than personal share-holder wealth that you have to look at eventually. You are going to hit a wall eventually. It is not working, and I keep asking - where is our seat at the global table. Don't give me this crap about winners and losers and jobs being replaced. 150,000/month need to be created to keep up with our growing population. We need workers HERE to support social programs. There is no amount of tax reform or health care reform that will make up for $.12/hour.

China's economy will be larger than ours in five years. If we are OK with that, then OK. But, hey, I think it sucks.

Anonymous said...

David, don't be a dope. Plenty of Republicans voted for TARP:

TARP isn't actually legislation, it's a program that was enacted by Public Law 110-343, or H.R. 1424.

In the House, H.R. 1424 passed with the following breakdown of votes:
Democratic 172 Yea; 63 Nay
Republican 91 Yea; 108 Nay
Total - 263 Yea; 171 Nay

In the Senate, H.R. 1424 passed with the following breakdown of votes:
Democratic 41 Yea; 10 Nay
Republican 33 Yea; 15 Nay
Total - 74 Yea; 25 Nay (Sen. Kennedy was in the hospital and did not vote.

Once this measure was passed, the TARP funds were allocated no matter how anyone voted on the stimulus package (which isn't the same piece of legislation), so I'm not sure where everyone seems to be coming up with "no republicans voted for it" unless they just don't understand what you asked. Personally, I thought it was clear, but whatever.

Oh, then signed by W Bush