Today’s edition is ginormous—playing catch up! You can access all the past editions of The Daily Planet on the green Category bar on the top of each page under the heading PlanetPOV.

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BUDGET

 

 

 

WaPo: Origins of the debt showdown

In mid-January, newly installed as the GOP House majority leader, Virginia’s Eric Cantorrose to the podium inside a spacious hotel ballroom to deliver a message to his troops, including the 87 newcomers who had given the party control of the House.

A vote to increase the nation’s $14.3 trillion debt limit was coming soon, he told the caucus members who had gathered at the Marriott in Baltimore’s Inner Harbor for aclosed-door retreat less than 10 days after taking power. Think of it as a “hidden” opportunity, he implored them, a chance to achieve their goal of reining in the federal government and its spending habits.

“I’m asking you to look at a potential increase in the debt limit as a leverage moment when the White House and President Obama will have to deal with us,” said Cantor, one of several new House leaders who detailed the game plan for the coming months. “Either we stick together and demonstrate that we’re a team that will fight for and stand by our principles, or we will lose that leverage.”

The frantic showdown that followed, bringing the nation to the brink of default, looked like the haphazard escalation of a typical partisan standoff.

It wasn’t.

It was the natural outgrowth of a years-long effort by GOP recruiters to build a new majority and reverse the party’s fortunes. That effort began before the economy collapsed in 2008, before the government bailouts that followed, before the tea party rose in response to push its anti-tax, anti-spending message.

With the backing of the GOP establishment, Cantor and two colleagues banded together as the “Young Guns,” drawing their nickname from a magazine feature anointing them rising stars. They scoured the country for like-minded conservatives who shared their uncompromising commitment to shrinking the federal government. They showered these Young Gun recruits with money and support and exhorted them to maintain a laser-like fiscal focus.

By early 2010, talk of the “debt ceiling” began to creep into the lexicon of some Young Gun candidates, first as a reaction to Congress yet again giving the nation the authority to borrow more money. But in time, it became a shorthand, their synonym for all that was wrong with Washington.

How the shorthand of 2010 grew into the showdown of 2011 is the story of a Republican resurgence that brought immense advantage to the leadership but also created immense expectations among this new breed of lawmaker. Having built a majority on ideology, the GOP leadership found itself struggling to control a rambunctious rank and file determined to live up to the bold rhetoric that had brought it to Washington.

The newcomers took Cantor seriously when he urged them in January to see the debt ceiling as leverage. Democrats called the GOP irresponsible for gambling with the economy and the nation’s flawless credit. Republicans countered that an epic clash over the debt limit was inevitable, given the outcome of the election and widespread anger with runaway government spending.

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Why the (Un)Balanced Budget Amendment is un-American

The People’s View:

[…]If you thought gaining power, Republicans would be satisfied with making the government dysfunctional simply legislatively, you are soooo wrong. No, now that they have some power and more abilities to hold the American people hostage, they want to write destruction of America as we know it into the Constitution of the United States. In an amendment that might as well repeal the pre-amble of the Constitution, the GOP delares that government should now and forever be dysfunctional. They are calling it the “balanced budget amendment.” Only, it’s not simply an amendment to require Congress to balance the budget. No, that would make Congress actually have to work and compromise and stuff, you see. No, this Dysfunctional Government Amendment ensures that Americans are forbidden from entering into social and generational compacts, and that the ones we are in now (Social Security, Medicare, Medicaid, assistance for students, children and the working poor) are eliminated.

Here’s how it starts to break the government:

 SECTION 1. Total outlays for any fiscal year shall not exceed total receipts for that fiscal year, unless two thirds of the duly chosen and sworn Members of each House of Congress shall provide by law for a specific excess of outlays over receipts by a roll call vote.

SECTION 2: Total outlays for any fiscal year shall not exceed 18 percent of the gross domestic product of the United States for the calendar year ending before the beginning of such fiscal year, unless two-thirds of the duly chosen and sworn Members of each House of Congress shall provide by law for a specific amount in excess of such 18 percent by a roll call vote.

Let’s ignore the fact for a moment that in the last couple of decades, federal outlays have always been in the 20-something-percent of GDP range, through Democratic and Republican presidents and Congresses. At least, this means the government can bring in 18% of the GDP in revenue to match the outlay, which hasn’t happened in the recent recession, right? Of course not. What, you didn’t actually expect the so-called “balanced” budget amendment to be balanced, did you? Here’s the looksie on the revenue side:

 Any bill that imposes a new tax or increases the statutory rate of any tax or the aggregate amount of revenue may pass only by a two-thirds majority of the duly chosen and sworn Members of each House of Congress by a roll call vote.

To summarize, spending in any given year cannot be more than 18% of GDP in the previous year, and not only can taxes not be raised, there cannot even be changes to the tax code that closes loopholes for giant corporations and multimillionaires. A supermajority – which will happen, uhh, let’s see, never – is required to close corporate jet tax loopholes, but killing Medicare and Social Security? It only needs a majority vote. Actually, it doesn’t even need a majority vote. Those are basically starved to death.

Oh, by the way, during a declaration of war, Congress can, by a majority vote (or during a military conflict that’s not a declared war, by a 60% vote), waive the spending caps, but not the portion about additional revenue. Isn’t that nice? They are allowing us to fight wars on the credit card – oh how very compassionate of them! Oh and another thing, if you can never raise revenue, and we have presumably fight wars on the credit card, just how does that war debt get paid back? Oh, I see. By taking on more debt. But wait. What’s this?

 The limit on the debt of the United States shall not be increased, unless three-fifths of the duly chosen and sworn Members of each House of Congress shall provide for such an increase by a roll call vote.

So… it’s also next to impossible to raise the debt limit. Hmm. Let’s see: you can’t take in more revenue nor borrow more money in order to pay for war expenses that Congress to authorizes beyond the spending cap. So how do you pay that war debt? You default. Or, you eliminate (or severely cut) Social Security, Medicare, Medicaid, and assistance for homeowners, students, children and the working poor. Not enough? Well, you then need to eliminate drug and food safety, clean water and clean air standards, and of course, disaster protection (that’s right, there is no exceptions for natural calamities or emergencies, only for war). Also, forget about those roads and bridges and investment broadband Internet. Information superhighway? Who needs it? You’re not going to need it where the GOP wants to take you.

And what if you have a war during a recession? Well, you are screwed even more. The limit on spending goes down (due to recessionary decrease in GDP) at the same time the need for services goes up (oh iono, maybe the unemployed need unemployment benefits?) and we borrowed extra money to pay for the war. So even more severe cuts in public, food and environmental safety, and in maintaining or building infrastructure (physical and broadband) and worse slashing – if they manage to even survive – to social safety nets. In other words, the Republican perfect storm.

And that’s the goal. This amendment has nothing whatsoever to do with fiscal discipline, or actually balancing the budget, or ensuring that the United States pays its bills, builds a society worthy of our credo (Out of many, one), or any such thing. This has to do with dismantling the very nature of our country. In a country whose founders explicitly defined the general welfare of the people as one purpose to form this country and its government, one political party now seeks to ensure that the tax welfare state for the super rich and multinational corporation and the military industrial complex are strengthened while the building blocks and founding ideals of this country – the commitment to our social responsibility to each other, to a strong foundation of education for those who are willing to work hard, and public, environmental and consumer safety, and the protection of the most vulnerable – are destroyed right along with our capacity to respond in a natural calamity.

Those who can pay for education will have it; the rest will have to do with crumbs, no matter how hard you are willing to work. Those who can inherit and profit will have money; those who will have lost everything thanks to the irresponsibility of the former group will be left on the street. Those who can pay for medical care will be treated; those who cannot – including children – will be left to die. Those who can pay for their own police and fire protection will have it; those who cannot will be ravaged. The government will be unable to ensure the safety of the food you buy, or the water you drink. Of course, if you can pay a few times more for your food and water (make sure you only drink bottled water), you might still be fine.

Make no mistake: this amendment that the Republicans are trying to force down the throats of Congress and the American people will take us from the goal of a more perfect union to an oligarchic state of the the Have Not’s and the Have More’s; from freedom to wage slaves and wage masters, from a government handicapped by legislative gridlock to a constitutionally enforced swampland.

 

 

BUSINESS

 

 

Bank of America to pay $410 Million in class-action suit over overdraft fees. Debit Card Users may Get a Refund.

 

Red, Delicious, and Rotten

How Apple conquered China and learned to think like the Communist Party.

Foreign Policy:

Apple now has four flagship stores in China — two in Beijing, two in Shanghai — and plans to open an additional store in Shanghai and its first Hong Kong location within a year. There are also hundreds of licensed Apple resellers in major Chinese cities, as well as many more unlicensed venders (including the elaborate fake “Apple Store” in Kunming unmasked two weeks ago by an American blogger). And these stores are packed with customers: As the company’s chief operating officer, Timothy Cook, revealed on a recent earnings call with reporters, “Our four stores in China [are], on average, our highest traffic and our highest revenue stores in the world.” Each attracts as many as 40,000 people daily (to accommodate crowds, Apple’s stores in China are designed to be much larger than in the United States). From 2010 to 2011, revenue in greater China has ballooned 600 percent, totaling $8.8 billion for the first three quarters of fiscal year 2011.

And yet the same company that enjoys such a sterling, virtuous image in the global press and that’s now making buckets of cash in China is precisely the one singled out by China’s fledgling civil society groups for its alleged indifference to labor rights and environmental enforcement, as well as an apparent tendency toward secrecy and obfuscation. In a nutshell, just as Apple has been consolidating its success in China, it has been acting depressingly like the Chinese Communist Party.

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ECONOMY

 

 

 

 

The reason the markets are diving

Ezra Klein:

[…]But the Dow Jones isn’t diving because spending has risen, deficits have grown or stimulus policy has changed. It’s diving because of forces Washington can’t control, and in many cases, doesn’t understand very well. How many members of Congress do you think could give a coherent account of what has happened to oil or steel prices over the last three years? Or what’s happening in the Eurozone? Or to the yuan?

A dramatic gap has opened between the economy as Washington sees it — and wants to intervene in it — and the economy that actually exists. Whatever weak recovery we might have hoped for is being hindered by global commodity prices, consumer deleveraging, fears of flagging demand in emerging markets, earthquakes in Asia, and much more. Globally, it’s been an almost uninterrupted run of crises and bad luck. Meanwhile, Washington just spent two months arguing over whether it would pay its bills or spark an unnecessary financial crisis.

Last week, Congress resolved that question. This week, the markets are tanking. Which suggests that Washington is asking itself the wrong question.

The right question is simple enough to pose: Where will the recovery come from? The problem is that no one has an answer. And as one hopeful hypothesis after another is dashed, the markets are beginning to panic.

It won’t come from the United States. Our recovery has slowed, and updates to the Commerce Department’s growth figures have shown that the hole we’re in is significantly deeper than we realized. Thursday’s news only underscored that conclusion, as the early signs suggest that Friday’s job numbers report will be disappointing.

It won’t come from Europe or Japan. The debt crises in Greece, Spain, Portugal and Italy have quieted any conversation about recovery and raised the question of whether the Eurozone can survive. And Japan is still trying to rebuild after the horrific earthquake and tsunami that ripped across its coastline back in March.

For some time, the hope was that recovery could come from the world’s emerging economies, driven by China. But after years in which the Asian giant managed to defy global economic trends and post one incredible growth number after the other, the Chinese government is admitting that the economy has overheated and they need to begin tapping the brakes. That doesn’t simply suggest the emerging economies won’t drive a global recovery; it also raises a new source of concern: What if the Chinese government fails to engineer a soft landing for its economy?

The impoverished and reckless economic policy conversation in Washington isn’t helping to cope with these trends, but even if we got our act together, the reality is that we have limited influence over what happens in China or in the Eurozone and Japan. And it’s not even clear how much an ideal policy response would do to speed America’s recovery.

As bad as the daily data was two years ago, it was easier to tell a story of recovery. The full scope and stickiness of the financial crisis wasn’t yet visible, and the disappointments of the aftermath hadn’t yet sunk in.

Today there’s more stability, but we seem to have stabilized into an era of high unemployment, low growth and endless risk. Rather than recovering from the crisis, it is almost as if we have settled into it.  And no one quite knows how we’re going to escape.

 

Time to Say It: Double Dip Recession May Be Happening

NYT:

When what may eventually be known as Great Recession I hit the country, there was general political agreement that it was incumbent on the government to fight back by stimulating the economy. It did, and the recession ended.

But Great Recession II, if that is what we are entering, has provoked a completely different response. Now the politicians are squabbling over how much to cut spending. After months of wrangling, they passed a bill aimed at forcing more reductions in spending over the next decade.

If this is the beginning of a new double dip, it will have two significant things in common with the dual recessions of 1980 and 1981-82.

In each case the first recession was caused in large part by a sudden withdrawal of credit from the economy. The recovery came when credit conditions recovered.

And in each case the second recession began at a time when the usual government policies to fight economic weakness were deemed unavailable. Then, the need to fight inflation ruled out an easier monetary policy. Now, the perceived need to reduce government spending rules out a more accommodating fiscal policy.

The American economy fell into what was at first a fairly mild recession at the end of 2007. But the downturn turned into a worldwide plunge after the failure of Lehman Brothers in September 2008 led to the vanishing of credit for nearly all borrowers not deemed super-safe. Banks in the United States and other countries needed bailouts to survive.

The unavailability of credit caused a decline in world trade volumes of a magnitude not seen since the Great Depression, and nearly every economy went into recession.

But it turned out that businesses overreacted. While sales to customers fell, they did not decline as much as production did.

That fact set the stage for an economic rebound that began in mid-2009, with the National Bureau of Economic Research, the arbiter of such things, determining that the recession ended in June of that year. Manufacturers around the world reported rapidly rising orders.

Until recently, most observers believed the American economy was in a slow recovery, albeit one with very disappointing job growth. The official figures on gross domestic product showed the United States economy grew to a record size in the final three months of 2010, having erased the loss of 4.1 percent in G.D.P. from top to bottom.

Then last week the government announced its annual revision to the numbers for the last several years. New government surveys indicated Americans had spent less than previously estimated in 2009 and 2010 on a wide range of things, including food, clothing and computers. Tax returns showed Americans even cut back on gambling. The recession now appears to have been deeper — a top-to-bottom fall of 5.1 percent — and the recovery even less impressive. The economy is still smaller than it was in 2007.

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Wall Street hates the debt deal: The details behind the stock market plunge

TIME:

Leading up to the debt-ceiling deadline, everyone was talking about how the stock market would crater if Washington didn’t reach a deal. In fact, the opposite has happened. Just when it became clear last week that Washington was moving closer to a deal is exactly when Wall Street started to stumble. And now that we have a deal, the falls have been getting worse. Thursday was particularly bad. The Dow Jones industrial average plunged more than 500 point. Overall, the market has fallen 9 out of the last 10 trading days, one of the worst stretches of down days in recent years. […]

Some have said the fact that the debt deal was struck has allowed investors to focus more clearly on the economy, and what they see, now that they’re looking again, is bad news. But it’s more than just that. In the Aug. 15 issue of TIME, columnist Rana Foroohar argues that the debt deal will increase the level of inequality in the U.S. You can read her very good article here. I agree with Foroohar that it is bad news — and perhaps even worse than she makes it out. Inequality not only caused the financial crisis; it could make the recovery much slower. Here’s why:I have written a few pieces about how the debt deal could slow the economy. A cut in spending, be it from consumers or the government, during a recession is sure to cost the economy jobs. Still, the direct drag from the debt deal on the economy is unlikely to be that big, mostly because the $2.1 trillion in cuts over the next decade won’t really kick in for a few years. Thomas Lam, chief economist at Singapore-based financial firm OSK/DMG, calculates that the drag on the economy will lower economic growth by only 0.3 percentage points in each of the next two years, which is something but not disastrous. So why is Wall Street reacting so badly in the wake of the deal?

Because the big impact of the deal may not be the direct drag of a decrease in spending. At times in the debt-deal negotiations, it looked like we might get either an increase in taxes for the wealthiest Americans, an increase in unemployment benefits or both. In the end, we didn’t get any of those things. Nor did we get a reduction in entitlement programs that benefit everyone. Instead, what was cut was largely discretionary funds, a large portion of which go to programs that help the poor.

 

 

Obama wants aid for unemployed vets, officials say; about 1 million out of work

 

 

Retailers report solid sales gains for July

 

THE S &P DOWNGRADE

President Obama’s statement about credit downgrade

 

 

Moody’s: Why the U.S. Is Still AAA

[…]The United States, Moody’s says, has “unmatched access to financing, meaning that the U.S. government can support higher debt levels than other governments.”

Somebody tell Washington. Greece has a debt crisis. The United States had a debt limit crisis. It can, if it wishes, do something to try to avert a new plunge into global recession, which has become a real fear.

Here’s an excerpt:

Characteristics that support the Aaa rating and that formed the basis of our decision to confirm the rating include the following:
1. The unparalleled diversity and size of the U.S. economy and its long record of relatively solid economic growth, based on both demographics and productivity. Even if the short-term economic outlook exhibits some weakness, we believe that the long term remains favorable in relation to many other advanced economies. This provides a solid base for government finance.
2. The global role of the dollar, which underpins continued demand for U.S. dollar assets, including U.S. Treasury obligations. This feature, unique to the U.S., provides unmatched access to financing, meaning that the U.S. government can support higher debt levels than other governments. Thus, while comparisons of government debt ratios form an important part of our rating analysis, the status of the dollar and the U.S. government debt market need to be taken into account when making such comparisons. Over time, the dollar’s role may be eroded, but we see no immediate threat.
3. Relative to other large Aaa-rated governments, the U.S. debt position is somewhat high, but not out of line with the positions of these countries. While the projected trend of U.S. government debt is less favorable without further deficit reduction measures, we believe that eventually such measures will be adopted. The less favorable debt ratio trend now in place is reflected in the negative outlook assigned to the rating.
4. A step in the right direction toward deficit reduction was taken on 2 August with the passage of the Budget Control Act, even if by itself it will not produce all of the deficit reduction measures necessary to reverse the debt trajectory. Although the political process has been considerably more contentious than usual in the past few months, it finally did produce an agreement. We expect further fiscal measures over time, albeit with vigorous debate over the particulars.

 

 

The Downgrade RALLY

Frum:

The bond market has reacted to the S&P downgrade of US debt with a big rally in US Treasuries. As I write, the US government can borrow money for 10 years at about 2.3% and for 2 years at under one quarter of a point. The market wants to buy, buy, buy US debt […]

What the market wants to sell are stocks:  ie, claims on the future earnings of private-sector companies.

In other words, the market is saying: We fear recession and deflation. The Washington consensus is that we need to fight debt and inflation. It’s utterly upside down, utterly perverse.

 

 

S&P just said all it takes to improve US credit rating is to let Bush tax cuts on wealthy expire. Audio here: 

 

 

The People’s View:  Where S&P Got it Right: The Tea Party Paralysis of the US Government 

 

 

They did it anyway: S&P downgrades U.S. credit rating (and stumps for tax hikes)

TheReidReport:

[…]In other words, politics in Washington has become so toxic, so … well… led around by crazy people, S&P doubts that any responsible legislation will emerge to tackle America’s debts any time soon.

What S&P should have said: a government partially governed by the tea party, and held captive to people so mad, they think defaulting on our debt would be a good thing, can’t possibly succeed in legislating sanely. Here it is again, from the opening paragraph of the report:

We lowered our long-term rating on the U.S. because we believe that the prolonged controversy over raising the statutory debt ceiling and the related fiscal policy debate indicate that further near-term progress containing the
growth in public spending, especially on entitlements, or onreaching an agreement on raising revenues is less likely than we previously assumed and will remain a contentious and fitful process. We also believe that the fiscal consolidation plan that Congress and the Administration agreed to this week falls short of the amount that we believe is necessary to stabilize the general government debt burden by the middle of the decade.

Our lowering of the rating was prompted by our view on the rising public debt burden and our perception of greater policymaking uncertainty, consistent with our criteria (see “Sovereign Government Rating Methodology and Assumptions
,” June 30, 2011, especially Paragraphs 36-41). Nevertheless, we view the U.S. federal government’s other economic, external, and monetary credit attributes, which form the basis for the sovereign rating, as broadly unchanged.

Plain enough for you? The two big issues not tackled in the debt ceiling compromise: long-term entitlement reform and revenues — that’s raising taxes to you — are the problem for the S&P.

One more byte:

We have taken the ratings off CreditWatch because the Aug. 2 passage of the Budget Control Act Amendment of 2011 has removed any perceived immediate threat of payment default posed by delays to raising the government’s debt ceiling. In addition, we believe that the act provides sufficient clarity to allow us to evaluate the likely course of U.S. fiscal policy for the next few years.

The political brinksmanship of recent months highlights what we see as America’s governance and policymaking becoming less stable, less effective, and less predictable than what we previously believed. The statutory debt ceiling and the threat of default have become political bargaining chips in the debate over fiscal policy. Despite this year’s wide-ranging debate, in our view, the differences between political parties have proven to be extraordinarily difficult to bridge, and, as we see it, the resulting agreement fell well short of the comprehensive fiscal consolidation program that some proponents had envisaged until quite recently. Republicans and Democrats have only been able to agree to relatively modest savings on discretionary spending while delegating to the Select Committee decisions on more comprehensive measures. It appears that for now, new revenues have dropped down on the menu of policy options. In addition, the plan envisions only minor policy changes on Medicare and little change in other entitlements, the containment of which we and most other independent observers regard as key to long-term fiscal sustainability.

Our opinion is that elected officials remain wary of tackling the
structural issues required to effectively address the rising U.S. public debt burden in a manner consistent with a ‘AAA’ rating and with ‘AAA’ rated sovereign peers (see Sovereign Government Rating Methodology and Assumptions,” June 30, 2011, especially Paragraphs 36-41). In our view, the difficulty in framing a consensus on fiscal policy weakens the government’s ability to manage public finances and diverts attention from the debate over how to achieve more balanced and dynamic economic growth in an era of fiscal stringency and private-sector deleveraging (ibid). A new political consensus might (or might not) emerge after the 2012 elections, but we believe that by then, the government debt burden will likely be higher, the needed medium-term fiscal adjustment potentially greater, and the inflection point on the U.S. population’s demographics and other age-related spending drivers closer at hand (see “Global Aging 2011: In The U.S., Going Gray Will Likely Cost Even More Green, Now,” June 21, 2011).

S&P chose not to take a stand on what the mix of revenues and spending reductions should be, but for a Wall Street-funded, which generally means right wing and anti-tax, agency to discuss revenues at all, is a serious knock on the absurd fiscal straight jacket Republicans have put the country in.

As bad a track record as S&P has, and it is really bad — they were a core part of what nearly brought down the U.S. economy in 2007 — it’s hard to argue with that. Congress simply couldn’t pass a balanced plan that raised revenues and dealt fairly with the explosive growth of Medicare costs because one party is controlled by people who don’t understand economics, history, or just plain logic.

 

Politico: S&P has a powerful lobbying operation – one that’ll likely be used frequently following U.S. credit downgrade

 

 

Standard & Poor’s has been wrong before. But they’re right now.

Ezra Klein:

[…]In Washington, it’s almost trite to say that the political system is broken. It’s been clear for some time that things really are different, that norms and procedures that once kept fractious congresses functioning have eroded with terrifying speed. If anything, S&P is, as usual, noticing the deterioration too late. But that doesn’t mean the deterioration is not real, or that it should be ignored. Too often, the pressure in Washington is from interest groups and activists and political consultants who are, perhaps without meaning to, pushing towards further dysfunction. Those of us in Washington who would like to see the government work have long wondered when the business community and other entities who need a functioning political system would begin exerting a countervailing force. Perhaps it begins now. If not, then this may be the first of many downgrades to come.

 

Kos: S&P is Hardly a Neutral Observe

 

Shoot the People Who Ignored the Message

Before you start screaming at Standard & Poor’s for downgrading U.S. debt for the first time in history, remember this: they warned G.O.P. leaders, very specifically, that U.S. credit ratings were at serious risk of downgrade EVEN IF the debt ceiling was lifted. In fact, S&P warned on July 14, and then reiterated on July 15, that a deal in the $1-2 trillion range (like the one that was enacted) would be insufficient, and kicking the can down the road (as the “Joint Committee” does) would be insufficient, and a deal that doesn’t demonstrate that the G.O.P. is a serious partner in bending the debt curve (i.e., one that doesn’t contain immediate new revenues as a sign of “seriousness”) would be insufficient.

[Update, Aug. 5, 10:33 PT: full text of S&P’s two “downgrade” press releases can be read at this link.]

On July 15, I wrote the following for PoliticusUSA:

The credit-rating agency Standard & Poors has released a statement that says, among other things, that merely raising the debt ceiling is not enough to prevent a downgrade of the United States’ credit rating, triggering market instability and causing the interest rate on U.S. debt to skyrocket.

On July 18, I expanded on S&P’s warnings in a piece for Alternet:

Late Thursday, the credit-rating agency Standard & Poor’s released a statement announcing that merely raising the debt ceiling will not be enough to prevent a downgrade of the United States’ credit rating for the first time in seventy years, potentially causing the interest rate on both government and private debt to skyrocket and destabilizing the entire economy. Remarkably, the statement also prescribed the specific numbers and conditions that would allow the U.S. to avoid such a catastrophe: to ensure a stable credit rating, any deal between Obama and the Republicans must reduce debt by $4 trillion, should include some “mix” of spending cuts and tax increases, and must involve concessions by both sides (a strong hint that the G.O.P. must consider closing tax loopholes, as well as a repudiation of Eric Cantor’s assertion that merely attending negotiations is the only concession the GOP intends to make).

In short, Standard & Poor’s has put G.O.P. lawmakers on notice that if they take the easy way out instead of making the “Grand Bargain” that Obama has advocated for, including tax increases, they may be responsible for disrupting the U.S. economy.

The S&P statement clearly states that merely raising the debt ceiling, or implementing a deficit-reduction package in the $1-2 trillion range, will not be enough to prevent a costly rating downgrade, because it would show that the country is not serious about tackling the deficit….

And on July 19, here on VichyDems, I discussed S&P’s July 15 warning, which neither I nor any MSM reported had noticed immediately:

A Standard & Poor’s report dated July 15, the day after it threatened to downgrade U.S. debt if a debt-bending deal is not reached, underscores what I’ve been writing about: that merely lifting the debt ceiling, or authorizing a so-called “Debt Commission” to propose further spending cuts by the end of the year, is not enough to ensure that U.S. debt is not downgraded to AA status, with enormous “knock-on” effects to the rest of the economy.

 

WhiteHouse: S&P downgrade is why Obama ‘pushed for grand bargain’

The Hill:

The White House reacted to the Standard & Poor’s downgrade of the U.S. credit rating by calling for more bipartisan compromise to “put our nation on a stronger fiscal footing.”

But the administration didn’t miss the chance to say, in essence, “I told you so.”

“Over the past weeks and months the President repeatedly called for substantial deficit reduction through both long-term entitlement changes and revenues through tax reform, with additional measures to spark jobs and strengthen our recovery,” press secretary Jay Carney said in a statement.

“That is why the President pushed for a grand bargain that would include all of these elements and require compromise and cooperation from all sides.”

S&P, the credit rating firm that reduced the nation’s rating from AAA to AA+, said the recent plan to raise the debt limit while reducing the debt “falls short” of its expectations, but also offered broader condemnations of America’s political process.

S&P said it was “pessimistic” about the ability of Congress and the White House to reach a broader plan to rein in the deficit “any time soon.”

The Treasury Department immediately pushed back against the downgrade by S&P, accusing the rater of having major calculation errors that threw the firm’s entire rationale into doubt.

“A judgment flawed by a $2 trillion error speaks for itself,” said a Treasury spokesperson.

 

NYT: How a U.S. Downgrade May Affect Consumers

 

Jared Bernstein: “Austerity” can also lead to a credit downgrade — you know, by tanking the economy

 

Reminder–Boehner: ‘A Lot’ Of Republicans Want To Force Default, Create ‘Enough Chaos’ To Pass Balanced Budget Amendment

 

The $1 Billion Armageddon Trade Placed Against the United States Bond Market

Jack Barnes writes : Someone dropped a bomb on the bond market Thursday – a $1 billion Armageddon trade betting the United States will lose its AAA credit rating.

In one moment, an invisible trader placed a single trade that moved the most liquid debt market in the world.

The massive trade wasn’t placed in bonds themselves; it was placed in the futures market.

The trade was for block trades of 5,370 10-year Treasury futures executed at 124-03 and 3,100 Treasury bond futures executed at 125-01.

The value of the trade was about $850 million dollars. In simple terms, if that was a direct bond buy, no one would be talking about it.

However, with the use of futures, you have to have margin capacity behind the trade. That means with a single push of a button someone was willing to commit more than $1 billion of real capital to this trade with expectations of a 10-to-1 return ratio.

You only do this if you see an edge.

This means someone is confident that the United States is either going to default or is going to lose its AAA rating. That someone is willing to bet the proverbial farm that U.S. interest rates will be going up.

I believe what happened is a debt-ceiling deal was done in Washington and leaked to a major proprietary trader. Everyone knows the debt negotiations in Washington have been an extreme game of brinksmanship between political parties, but now someone knows how that game played out.

This had the hallmarks of one of the largest bond shops in the world knowing something the rest of the market didn’t.

The number of shops or even central banks that can take on this level of market risk is extremely small. Some that come to mind are hedge fund manager John Paulson, Bill Gross’s PIMCO, and the U.S. and Chinese central banks.

Paulson already scored big – about $6 billion big – on a similar trade years ago when he bet against subprime mortgages, the investments that helped bring down Lehman Bros. and many other investors.

Whoever was behind it wanted a trade on ASAP, and didn’t care about the ripples they would cause.

 

 

Lawrence O’Donnell DECIMATES S&P (VIDEO)

 

 

ENERGY

 

HEALTH CARE

 

Kaiser Health News: We explain what the “supercommittee” could mean for cutting health spending.

[…]Here’s a guide to how the panel’s deliberations could influence Medicare and Medicaid.

Q: Aren’t Medicare and Medicaid protected from cuts right now?

A: Yes—and no. The debt deal, which was signed into law by Obama on Aug. 2, makes $917 billion in discretionary spending reductions during the next decade. Neither Medicare nor Medicaid would be touched in those reductions.

However, that changes a bit in the second round of funding cuts called for in the law. Between now and Nov. 23, the super committee is asked to find at least an additional $1.2 trillion in debt reduction over 10 years. The panel can make those recommendations by changing any part of the budget. The committee could recommend cuts in entitlement programs, including Medicare and Medicaid. It could also propose tax increases.

Q. Won’t deep differences between the parties over the structure and future of entitlements and taxes prevent the panel from reaching any agreement?

A. Democrats are sure to insist on tax increases to match any spending cuts, which will anger Republicans, and Republicans will surely want entitlement cuts, which will upset Democrats.

Stan Collender, a partner at Qorvis Communications and former congressional budget staffer, said he gives less than 5 percent chance the committee will come to an agreement that Congress will approve. “In an era of hyper partisanship have you seen any other special committee of elected officials come up with some broad-based deficit reduction package looking at tax increases and spending cuts?” he asks.

If Congress doesn’t agree on a debt plan, the current law has a trigger mechanism that will automatically guarantee the $1.2 trillion savings beginning in 2013 through cuts in defense and other federal spending. Included in these cuts would be is a 2 percent reduction in Medicare payments to hospitals and other providers. Medicaid funding would not be touched by that trigger.

Sen. Pat Roberts, R-Kan., describes the idea of across-the-board cuts as “Armageddon” because of their severity and that half of the cuts would have to come from defense. “You can’t cut defense by 50 percent. You can’t cut Medicare providers, including doctors, more,” Roberts said.

Q: There have been plenty of commissions that have worked on debt reduction, including the Simpson-Bowles panel last fall. What makes this different?

A: The threat of the automatic, across-the-board spending cuts is what gives the debt panel more clout than its predecessors, including a commission established by Obama and co-chaired by former Sen. Alan Simpson, R-Wyo., and former President Bill Clinton’s chief of staff Erskine Bowles. Many lawmakers dislike the idea of surrendering any power over the federal purse, especially when it could mean that spending on a favorite program could be at risk.

The committee will look at many of the same alternatives as the deficit task forces earlier this year formed by Obama and the Bipartisan Policy Center, which was headed by President Clinton’s budget director Alice Rivlin and former Senate Budget Committee chairman Pete Domenici, R-N.M., and a plan formulated by a bipartisan group of senators known as the Gang of Six.

Q. What else will the super committee be looking at?

A. Among some of the alternatives expected to be considered are Medicare premium supports, which would give enrollees vouchers or credit to purchase a private insurance plan rather than having the government directly pay for covered services; converting Medicaid to a block grant program, which would also limit federal funding; or asking higher-income Medicare beneficiaries to pay more for their coverage. Changes in spending for the 2010 health care overhaul may also be considered.

Collender doubts Democrats on the committee would accept major changes to either Medicare or Medicaid.

“I don’t see the trigger as a sort of sword hanging over their head,” he said, noting that Congress can always vote again to reverse the cuts planned under the trigger. He said if the economy continues to falter, he would doubt Congress would allow funding cuts to occur.

But Bob Crittenden, executive director of the liberal Herndon Alliance, said Medicaid is most at risk in the super committee because the group is unlikely to agree on cuts to Medicare or Social Security.

Steve Bell, senior director or the economic policy project at the Bipartisan Policy Center, said he expects the super committee will lead Congress to make some cuts to the deficit but no dramatic restructuring to entitlement programs. That’s because the savings goal is not high enough and the two political parties can’t agree on the main options to reduce spending in Medicare and Medicaid. “You will get out of this what you got out of the last four months—something mushy in the middle that does not address the underlying fiscal crisis,” he said.

Q. Why are Medicare and Medicaid part of the debt discussions?

A. Medicare and Medicaid make up about 23 percent of federal spending and their costs have been growing faster than the overall economy. Spending for both programs is rising as a result of overall cost of health care, but each has its own issues. Medicare costs have climbed partly due to the aging population, which has meant more people are eligible for coverage under the program. Medicaid costs increased with the recent economic downturn, which led to dramatic uptick in enrollment as people lost jobs and private health coverage.

Q. What do doctors and hospitals say about the cuts proposed as part of the automatic trigger?

A. Although the debt ceiling law says that only Medicare providers could face cuts, providers say those reductions could impact their ability to deliver medical care and impact beneficiaries.

“From our view, there’s no separation between these kinds of provider cuts and something that will affect beneficiaries,” said Chip Kahn, president and chief executive officer of the Federation of American Hospitals. “It will affect the way providers operate and at some point this artificial separation between things that affect beneficiaries and provider cuts has got to be identified for what it is – an artificial break. If it affects providers, it affects beneficiaries.”

Rich Umbdenstock, the American Hospital Association president and chief executive, echoed that sentiment. In a statement he said cutting hospitals will mean decreased access for seniors. “That’s why the total Medicare program – including caregivers – should be exempt” from cuts that he said could overload emergency rooms, shut trauma units and reduce patient access to the latest treatments.

Q. How does a “fix” to Medicare’s doctor payments figure into the issues facing the super committee?

At the end of the year, Medicare is scheduled to cut pay to physicians by about 30 percent. That is caused by a budget rule adopted years ago. Since 2003 each time the requirement has come due Congress has averted it. Some analysts argue that the debt reduction efforts and the need to fix the doctor reimbursement formula could collide, especially because of the cost of fixing doctor pay. Pushing the issue off for another year would cost about $25 billion, although doctors have been pressing for a two-year fix at a cost of roughly $50 billion. These fixes would add to the nation’s deficit and complicate the super committee’s work.

Q. This sounds similar to the BRAC (Base Realignment and Closure) commission used by Congress to decide which military bases to close. Will it work the same?

BRAC was an independent nine-member panel appointed by the president that evaluated which bases to close from 1998 to 2005. Once that list was approved by the president, Congress could change it only by voting down the list in its entirety.

Similar to BRAC, the super committee’s recommendations will face an up-or-down congressional vote. Congress will not be able to amend the recommendations. But the super committee’s charge is far broader than BRAC since it will be able to make recommendations on cutting or changing any type of government program. It also will have to grapple with deciding whether to recommend raising taxes.

“This is a heckuva lot bigger than BRAC—the concept is the same—but its purview is the broad range of government and entitlement programs,” said Robert Bixby, executive director of the nonpartisan Concord Coalition, a budget watchdog group. He gives the committee less than a 25 percent chance of coming to an agreement.

 

Health care reform has already saved seniors $460M in prescription drug costs

 

Protecting Medicaid

Steve Benen:

The list of discouraging elements in the debt-ceiling agreement is plenty long, but there are a handful of provisions that help it from being a total disaster. Among them is the fact that the “trigger” cordons off Social Security, Medicaid, and Medicare beneficiaries.

This came as something of a relief, especially given the Republican efforts to gut Medicaid, with drastic consequences for seniors and low-income families.

There are a few good behind-the-scenes accounts published today on how Sunday’s deal came together, but Politico’s report included an interesting tidbit on this.

Progress was made, but the atmosphere was tense as the hours slipped toward the deadline. By Saturday night, discussions over the trigger had bogged down, and a call between McConnell’s staff and senior White House aides turned heated when GOP negotiators demanded that Medicaid be added to the mix of programs that could face cuts.

Gene Sperling, chairman of Obama’s National Economic Council, was in mid-sentence, trying to calmly explain why the White House wouldn’t allow that, when Office of Management and Budget Director Jack Lew interrupted.

“No!” the typically mild-mannered Lew yelled. “The answer is simply no! No, no!”

The White House didn’t draw enough lines in the sand, and in a few instances, didn’t stick to the lines in the sand even after they were drawn.

But at least in this case, the president’s team took a stand in support of Medicaid, and I’m glad. Given the likelihood with which the trigger will be pulled, this decision very likely made a huge difference in the health care needs of millions.

 

 

JUSTICE

 

 

Court allows torture suit against former Secretary of Defense Donald Rumsfeld

A federal appeals court ruled Monday that two Americans who claim they were tortured while in U.S. military custody in Iraq can pursue a lawsuit against former Secretary of Defense Donald Rumsfeld.

The 2-1 ruling from the U.S. Court of Appeals for the Seventh Circuit appears to be the highest-level court success for lawyers seeking to use the courts to impose accountability for what critics view as national security excesses under President George W. Bush. Thursday’s decision came in a lawsuit brought by Donald Vance and Nathan Ertel, employees of a firm that did security work in Iraq. Vance spent three months in military detention and Ertel six weeks in conditions and suffering from abuse they claim amounted to torture.

“United States law provides a civil damages remedy for aliens who are tortured by their own governments. It would be startling and unprecedented to conclude that the United States would not provide such a remedy to its own citizens,” Judge David Hamilton wrote, joined by Terence Evans. “When civilian U.S. citizens leave the United States, they take with them their constitutional rights that  protect them from their own government.”

“Sorting out the appropriate remedies in this complex and perilous arena is Congress’s role, not the courts’,”Judge Daniel Manion wrote in dissent. “I agree with the court that allegations of torture
against a U.S. citizen are a very serious matter. But given the significant pitfalls of judicial entanglement
in military decisionmaking, it must be Congress, not the courts, that extends the remedy and defines
its limits.”

While Rumsfeld was sued personally, he is being represented in the case by the Justice Department. The government also usually pays any damages awarded in such cases.

A Justice Department spokeswoman had no immediate comment on the ruling, but Rumsfeld’s private attorney blasted the appeals court’s ruling.

“Today’s decision by the Seventh Circuit Court of Appeals is a blow to the U.S. military,” attorney David Rivkin said. “According to two judges on the court, the judicial branch is best-suited to decide how to handle detainees captured and held in foreign war zones….Having judges second-guess the decisions made by the armed forces halfway around the world is no way to wage a war. It saps the effectiveness of the military, puts American soldiers at risk, and shackles federal officials who have a constitutional duty to protect America.”

The Seventh Circuit decision (posted here) comes as two other appeals courts, the Ninth Circuit and the Fourth Circuit, face somewhat similar appeals involving an alleged terrorist held in military custody and allegedly tortured in the U.S.: Jose Padilla. A district court in California allowed a suit against former Justice Department lawyer John Yoo to proceed, but a judge in South Carolina rejected a similar suit against Rumsfeld and other officials.

Just last week, a district court in Washington State allowed a suit by another U.S.-citizen civilian who sued Rumsfeld claiming torture by U.S. forces in Iraq. How the full array of cases come out is hard to predict right now, but it seems certain that one or more of them will head to the Supreme Court.

 

L.A. drivers already know this ~ 10 LAPD officers sue, saying department has traffic-ticket quotas

 

 

MEDIA

 

 

Thom Hartmann:Mainstream Media Ignores S&P Attack On Republicans

Have you seen, anywhere, in any media, or even heard reported or repeated on NPR, the following sentence? “We have changed our assumption on this because the majority of Republicans in Congress continue to resist any measure that would raise revenues, a position we believe Congress reinforced by passing the act.”

It’s right there on Page 4 of the official Standard & Poors “Research Update” – the actual report on what they did and why – published on August 5th as the explanation for why they believe Congress – and even the Gang of Twelve – will be unable to actually deal with the US debt crisis.

Perhaps it’s just lazy – the bullet points at the beginning of the report don’t mention the Republicans or taxes, but instead just say, for example (part of one of six quick bullet-points): “[T]he downgrade reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges…”

In order to figure out that one of the reasons why is that “Republicans in the Congress continue to resist any measure that would raise revenues,” a hard-working reporter would have to read to page four of the eight-page report.   It’s just too much effort for most reporters?

Although they do also mention this in the very first sentence of the report: “We lowered our long-term rating on the U.S. because we believe that the prolonged controversy over raising the statutory debt ceiling and the related fiscal policy debate indicate that further near-term progress containing the growth in public spending, especially on entitlements, or on reaching an agreement on raising revenues is less likely than we previously assumed and will remain a contentious and fitful process.” (Italics mine)

Or could it be that many reporters – and virtually all of the television talking heads – are themselves relatively high income-earners who don’t relish the idea of higher taxes?

Or could it be that reporters are afraid that if they report the actual language of the S&P Research Report, then Republicans will punish them by denying them “access” – i.e. refusing to show up on their programs – which is the career and show kiss-of-death for radio and TV programs that rely on big-name politicians to work?

I don’t know the reason, but it’s fascinating to see all the huffing and puffing about the S&P downgrade of America’s debt that all seems to be working so hard to avoid mentioning that critical sentence.

Inquiring minds want to know…

S&P Blames GOP For U.S. Credit Problem, Associated Press, Politico Cover It Up 

San Francisco Chronicle:

[…] Take Jonathan Allen in Politico:

Standard & Poor’s delivered an unambiguous message to investors Friday that has serious implications not only for the nation’s economy but also for President Barack Obama, the tea party and anyone else with skin in the 2012 elections: America’s political system is subprime.

That was how Allen started off his article. In it, there was zero mention of the two very damaging statements S&P used in its press release, and directly aimed at Republicans:

The outlook on the long-term rating is negative. As our downside alternate fiscal scenario illustrates, a higher public debt trajectory than we currently assume could lead us to lower the long-term rating again. On the other hand, as our upside scenario highlights, if the recommendations of the Congressional Joint Select Committee on Deficit Reduction–independently or coupled with other initiatives, such as the lapsing of the 2001 and 2003 tax cuts for high earners (my emphasis)–lead to fiscal consolidation measures beyond the minimum mandated, and we believe they are likely to slow the deterioration of the government’s debt dynamics, the long-term rating could stabilize at ‘AA+’.

…Compared with previous projections, our revised base case scenario now assumes that the 2001 and 2003 tax cuts, due to expire by the end of 2012, remain in place. We have changed our assumption on this because the majority of Republicans in Congress continue to resist any measure that would raise revenues, a position we believe Congress reinforced by passing the act.

Allen’s Politico article had a lot of Republican quotes, not many Democratic quotes, and in all failed to tell the truth of Standard & Poor’s message.

And then there’s the Associated Press’ article by Martin Crutsinger. It fails to include, or mention Standard & Poors’ GOP-directed press release quotes, and wrote:

Another concern was that lawmakers and the administration might fail to make those cuts because Democrats and Republicans are divided over how to implement them. Republicans are refusing to raise taxes in any deficit-cutting deal while Democrats are fighting to protect giant entitlement programs such as Social Security and Medicare.

Which would lead one who didn’t read the S&P press release to think that it was balanced and mentioned “giant entitlement programs such as Social Security and Medicare,” but the press release mentioned Medicare here:

It appears that for now, new revenues have dropped down on the menu of policy options. In addition, the plan envisions only minor policy changes on Medicare and little change in other entitlements, the containment of which we and most other independent observers regard as key to long-term fiscal sustainability.

But Standard and Poors does not attack Democrats the way Republicans are addressed.

It’s purely irresponsible for The Associated Press and Politico to fail to accurately report the contents of the Standard and Poors press release. If The Associated Press and Politico want to damage President Obama, they should just come out and say so. Heck, Senate Majority Leader Mitch McConnell said that his objective was to make President Obama “A one-term President.”

Looks like Senator McConnell and the GOP want to destroy the American Economy. And even then, they still will miss their objective.

Stay tuned.

 

 

Unnamed source at DOJ, FBI talking about News Corp and possible RICO violations

Adweek:

[…] RICO, the Racketeer Influenced and Corrupt Organizations Act, establishes a way to prosecute the leaders of organizations—and strike at the organizations themselves—for crimes company leaders may not have directly committed, but which were otherwise countenanced by the organization. Any two of a series of crimes that can be proven to have occurred within a 10-year period by members of the organization can establish a pattern of racketeering and result in draconian remedies. In 1990, following the indictment of Michael Milken for insider trading, Drexel Burnham Lambert, the firm that employed him, collapsed in the face of a RICO investigation.

Among the areas that the FBI is said to be looking at in its investigation of News Corp. are charges that one of its subsidiaries, News America Marketing, illegally hacked the computer system of a competitor, Floorgraphics, and then, using the information it had gleaned, tried to extort it into selling out to News Corp.; allegations that relationships theNew York Post has maintained with New York City police officers may have involved exchanges of favors and possibly money for information; and accusations that Fox chief Roger Ailes sought to have an executive in the company, the book publisher Judith Regan, lie to investigators about details of her relationship with New York police commissioner Bernie Kerik in order to protect the political interests of Rudy Giuliani, then a presidential prospect.

MORE>>>

 

 

 But seriously, what specific message do you think she’s trying to communicate with that gaze?

 

Murdoch’s sins go way beyond the hacking scandal

 

 

MILITARY

 

 

New ‘reverse boot camp’ to prepare departing troops for civilian life

Stars and Stripes:

Military officials will develop a “reverse boot camp,” with the goal of better preparing servicemembers who are leaving the military for civilian jobs or college classes. The program is part of a host of new initiatives announced by President Barack Obama on Friday to reduce unemployment among veterans.

During a speech at the Washington Navy Yard, Obama lamented that too many veterans have struggled to find work upon returning to civilian life. He told of Army medic Nick Colgin, who saved the life of a French soldier who was shot in the head in Afghanistan. But back home in Wyoming, Coglin had to take classes he could have easily taught just to get a job as a first responder when he got back home.

“That isn’t right and it doesn’t make any sense,” Obama said. “If you can save a life in Afghanistan, you can save a life in an ambulance in Wyoming.”

Obama is proposing tax cuts for companies that hire young veterans and a public challenge to civilian companies to hire 100,000 former servicemembers or their spouses by the end of 2013.

According to Department of Labor statistics, the unemployment rate for post-Sept. 11 veterans in July hit 12.4 percent, well above the national rate of 9.1 percent. A senior White House official called the figures unacceptable, and said that “those veterans who have sacrificed for their country … deserve all the support we can give them.”

Veterans advocates have been critical of the military’s Transition Assistance Program in recent years, saying the effort doesn’t prepare troops enough for challenges they’ll face navigating job interviews, university classrooms and Veterans Affairs facilities.

The new “reverse boot camp” will be an extended transition period for servicemembers leaving the military. Officials said details of the program will be released later this year, based on recommendations from a task force of planners from the Defense Department, the VA, and the White House economic team.

The corporate tax breaks, which will require congressional approval, would give business owners between $2,400 and $9,600 per new employee, based on the veteran’s disability status and how long they’ve been looking for a job.

Administration officials said they expect the package to provide about 25,000 jobs for veterans and cost about $120 million, “but we hope it will cost more, because that will mean more jobs.”

 

 

POLITICS

 

The summer of Obama’s discontent

Robert Schrum:

August has historically been a treacherous month for the president. But Obama can own this month, this year, and next, if he regains the fierce urgency of now.

 

For Barack Obama, August has long been the cruelest month.

In August of 2007, with Hillary Clinton all but universally seen as securely ahead in the race for the Democratic presidential nomination, Obama had to face down grumbling from his supporters that the campaign had to get more aggressive — or it might simply fade away. Obama stood the ground of his strategy, carried Iowa, and was on his way to the nomination.

Two years later, months after the passage of the stimulus bill that prevented a descent into depression, and with Congress apparently ready to pass health care reform in the fall, August of 2009 was the time when town halls convulsed into near riots and the Tea Party moved from the cranky edge of American public life toward dominance in the Republican Party. Obama stayed his course and finally won health reform the following spring, but what was left of the president’s vision of bipartisanship shriveled as the aisle he aspired to reach across became a chasm.

August of 2010 revealed a lack of resonance for Obama in the midterm elections. By then, “the greenshoots of recovery” prematurely heralded by his principal economic advisor were more like a brownfield of intractable unemployment. The president asked Americans if they wanted to go back, and it turns out they did — not to Bush, certainly, but to job security, stable home values, and worthwhile 401(k) plans. Blaming the past failed. And after the political cataclysm of November 2010, Obama — and Vice President Joe Biden — bridged the partisan canyon to negotiate a deal on the Bush tax cuts that also provided a dose of additional stimulus in the form of a payroll tax cut and extended unemployment compensation.

There are two continuing strands in this pattern: The recurrence of political superstorms in the dog days of summer — which happened again this year; and Obama’s staying power in the face of adversity, which sustained his candidacy and then his presidency. But over time, the sheen of hope has been worn away. And nowhere is this more obvious than with his own base. Aggrieved by the loss of a public option in the health care bill, and the lack of a second major stimulus bill, activists were vocally disappointed when Obama agreed to a two-year extension of the Bush tax cuts — no matter what the president extracted from the GOP in return. The Left’s premise is that if he had stood his ground more resolutely, or stomped his foot harder, somehow events would have moved ’round to him.

Now, with the debt ceiling bargain comes the Summer of Obama’s discontent — proclaimed not only by erstwhile supporters, but generally by the purveyors of Washington wisdom. The president must wish that he could abolish August, never more so than this year. There are dark warnings that his own disappointed supporters won’t show up next November — and even silly grumblings about a primary challenge from the Left. Analysis after analysis argues that Obama’s authority is “weakened,” and his presidency “irreversibly neutered,” as the columnist George Will happily hopes. And Jeb Bush, who had been prudently passing on 2012 in favor of the next time around, has just shown an inch of leg in the current race, telling Fox News: “You never say never.”

Well, as Republicans discovered when they called Bill Clinton “irrelevant” in the mid-1990’s, presidents are rarely “irreversibly” anything. This kind of instant analysis is a spasm of the moment, almost always wrong — and especially wrong when it manifests itself as it has here in the swelling chorus of an echo chamber.

MORE>>>

 

 

The Real Norquist– involved in money laundering and more.

The Hill:

Just a few years ago, Norquist was a central figure in the GOP culture of corruption and cronyism that helped Democrats retake control of Congress in 2006.

From his longtime friendship with Karl Rove to leadership of the K Street Project with convicted former House Majority Leader Tom DeLay (R-Texas) to the money-laundering scandal involving convicted Republican lobbyist Jack Abramoff, Norquist has long wielded unchecked power in Washington. Norquist and his Americans for Tax Reform (ATR) are key players in an influential web of GOP donors, operatives and organizations working to implement a Republican agenda and consolidate power benefiting their special-interest friends. ATR funding reportedly comes from right-wing organizations like Olin and Scaife — conservative foundations set up by millionaires and billionaires like the Koch brothers — to support a set of policy goals favorable to their corporations. ATR has also received significant funding from the tobacco, gambling and alcohol industries.

It was Norquist, working with then-Majority Whip DeLay, who launched the scheme known as the K Street Project in 1995. Run out of ATR offices, it controlled access to key government figures and rewarded GOP cronies by pressuring Washington lobbying firms to hire Republican operatives. Those who were loyal and willing to “pay to play” were granted access. As part of this cozy relationship, corporate “friends” were able to participate in the drafting of legislation affecting their industries. (Can you say Dick Cheney energy task force?) The Senate liaison to the project who met regularly with Norquist to review openings and candidates at lobbying firms was none other than former Pennsylvania Senator and current GOP presidential contender Rick Santorum.

During this time, Norquist worked with Abramoff, Ralph Reed and Abramoff’s partner Michael Scanlon in a money-laundering scandal that bilked millions of dollars from Indian tribes. Abramoff and Scanlon grossly overcharged the tribes for work on casino gambling issues, using Norquist’s ATR and the ATR Foundation as a pass-through to support their lobbying effort.  Contributions were made to ATR, which then skimmed a fee off the top before passing the money on to Ralph Reed and other anti-gambling activists.

In one example, the Choctaw Indian tribe in Mississippi paid Americans for Tax Reform $1.1 million in 1999. Norquist passed the money to Reed, who ran the powerful Christian Coalition and a for-profit political consulting company. Reed used the money to run a religious-based anti-gambling campaign with the veiled purpose of preventing a rival tribe from cutting in on the Choctaw casino business.

This allowed Norquist, Reed and Abramoff to disguise the fact that the money used to fund anti-gambling activities was generated through Indian gambling. Abramoff utilized Norquist’s cachet and access, referring to him once in an email as a “hard-won asset.”

Investigations in 2006 by the Senate Indian Affairs and the Senate Finance committees (then chaired by Republican Sens. John McCain, Ariz., and Chuck Grassley, Iowa, respectively) found that Norquist not only used ATR as a cash “conduit” for Abramoff’s clients, but that ATR and four other conservative nonprofit groups “appear to have perpetrated a fraud” on American taxpayers.

Which raises the question: Just what is it that 236 GOP House and 41 GOP senators fear from an operative known to be involved in illegal activity involving taxpayer fraud and influence peddling?

 

 

No, You Don’t Have to Win Political Independents to Get Elected

The Monkey Cage:

Alan Abramowitz:

…no matter how independents vote in the 2012 presidential election, their preferences will not necessarily determine the winner. If the election is close, it is entirely possible that the candidate chosen by most independents will lose the overall popular vote.

Based on the national exit polls, that’s what happened in each of the last three presidential elections that were decided by a margin of less than five points.

In 1976, most independents voted for Gerald Ford but Jimmy Carter won the overall popular vote. In 2000, most independents voted for George W. Bush but Al Gore won the overall popular vote (despite losing the Electoral College). And in 2004 most independents voted for John Kerry but George W. Bush won the overall popular vote.

In a close election, a candidate with an energized and unified party base can sometimes overcome a deficit among independent voters. That doesn’t mean the candidates should ignore independents, but it does mean that unifying and energizing their own party’s base is just as important as appealing to the independents.
This can’t be said often enough.

 

 

President Obama moves to strengthen US response to genocide

DSCC: We’re fighting back against Florida’s new voter suppression law

If Obama is Not Your Boyfriend, Why are you Playing Hard to Get?

The Pragmatic Progressive:

It’s tough being a Progressive these days. Hell, it’s tough being an American these days, but I digress. As Progressives, there is a lot we agree upon – We want fair/progressive taxation. We want multinational corporations to bring jobs back to the US. We want universal healthcare. We want a reliable social safety net. We want equal rights for all. We want clean water and safe food. We want an end to the wars. We want the Bush regime to be tried for their crimes. We want banksters and other corporate masters to be held accountable for their sins…perhaps more importantly, we want their money out of our democracy.

Just to refresh a memory or two, the years between 2000 and 2009 were pretty damn awful. The Presidency was stolen from us…arguably twice. We were attacked. We retaliated against the wrong country. We started another war. We tortured. The word ‘American’ started being seen as a badge of shame, so much so that Americans began claiming they were Canadian. The earth got hotter. Natural disasters were managed by a horse lawyer. Corporatists took over the Supreme Court. Corporate money took over the country in a way never seen before. Jobs left the country in record numbers. The banksters played games with our mortgages, resulting in a whole new breed of homeless people. Wages went down. Benefits went down. The gap between rich and poor put the Grand Canyon to shame. Social Security held on by a thread. Medicare was manipulated to be an extremely costly gift to the insurance companies. Creative accounting made sure that the next administration would have to pick up the tab. This whole debacle was sold to us under the guise that it was God’s will. In short, our country made the final leap to plutocracy mixed with a generous helping of theocracy.

In 2007, the economic facade assembled by the Bush team began to crumble. The artificially inflated housing bubble burst, in a dramatic way. The stock market crashed. Oil prices escalated. The Bush regime was at the end of their term. They saved their bankster friends before leaving, but their parting gift to the American people was a huge collective middle finger. They came into office with two goals, empire building and setting the stage for total privatization by convincing the American people that government was dysfunctional. In those two ways, their regime was a complete success.

By the time election season came along, even die hard Republicans were ashamed of their party. The American people were ready for change. We wanted to hit the country’s ‘reset’ button. Along came a breath of fresh air. Senator Barack Obama was new to most of the country. He was African American (that’s different, right?) He was extremely intelligent. He was a Constitutional attorney and former Editor of the Harvard Law Review. He was handsome. He was young. Unlike Bush, he knew how to form complete thoughts and articulate them. He was charismatic. He was inspiring. He spoke of “change.” He had all the qualifications of a ‘reset button.’

Progressives fell in love. We knocked on doors. We helped get out the vote. We donated money we didn’t have. We attended rallies. We were involved in a way not seen since the 60s. It felt great. It felt empowering. It worked. We helped elect a President.

In the end of 2008 and the beginning of 2009, the economy was on the verge of a depression, but the country was bathed in an aura of optimism. Hope and change were on the horizon.

The aura began to darken early. The mantra of change became suspect when ex-Clintonites began filling the Cabinet. Even before the inauguration, progressives started jumping ship. Since then, there have been a lot of disappointments. The wars have continued. The Bush tax cuts were extended. The public option was taken off the table during the health care debate. More Progressives jumped and as a result, we lost the Senate to a new batch of Tea Party Republicans.

Last week a deal was struck to raise the debt ceiling. Since then, the internet and the media have been filled with threats to sit out 2012, threats to primary the President or even to turn to a third party. Progressives are angry…and rightfully so. The road to Progressive values should not be this bumpy and painful. We voted for ‘change’, where the hell is it?

“Change will not come if we wait for some other person or some other time. We are the ones we’ve been waiting for. We are the change that we seek.”

President Obama made a lot of campaign promises and he’s kept an unprecedented number of them. He has accomplished a pretty amazing amount for a first term President. Unfortunately, his obstacles are higher than even our expectations.

Our electoral system is screwed up. In 2008, it cost more than half a billion dollars to win the Presidency. Since the Citizen’s United decision, giving corporations the unlimited ability to donate to elections, that number will undoubtedly go up exponentially in 2012. As long as a candidate has to bring in that kind of money, corporate ties will be a given.

Seemingly unbeknownst to many, there are three coequal branches of government. Congress owns the checkbook. All legislation must go through them before heading to the President. He’s had a pretty hostile Congress since the beginning. They have made no secret that their only goal is to destroy this Presidency. The filibuster, which was once used only occasionally, has been used to block almost all Democratic legislation and many of the President’s nominees. In other words, they are not letting him staff the agencies that would improve the way government would do business. Despite that, Nancy Pelosi’s House was able to push through many Progressive forms of legislation which were signed into law.

Then 2010 happened. Disillusioned Democrats decided to sit it out and the Tea Party moved in. The House was taken over. Now, we have a Republican House and a non-filibuster proof Senate. It’s amazing anything has gotten done.

Oh, did I forget to mention the Supreme Court. Five of the nine members are pure plutocrats. A few more years of their judicial “restraint” and we might as well throw up our hands and give up on our democratic experiment.

Last month’s debt ceiling debate was politics at its ugliest. Republicans were willing to bankrupt the country to advance their own political goals. In the past, the debt ceiling has been raised with a single line of legislation. It was never tied to the budget in the past, yet Republicans insisted it be tied to draconian cuts to Medicare, Medicaid, Social Security and Unemployment with zero increases in revenue. The President insisted on an unspecified compromise. In the end, we got a compromise. We got the increase to the debt ceiling with cuts, or perhaps revenues to be determined later. If no decision is made, cuts will come from the military and other spending. Social Security is off the table and Medicare can only be touched from the provider side. Overall, it’s not a great deal, but it’s not the end of the world.

Progressives are, to put it lightly, pissed. Bill Maher, who has been a harsh critic of Obama’s since the beginning, chided his audience when they didn’t respond favorably to his rant against the President. “He fucked up,” he said. “He’s your President, not your boyfriend.” In Maher’s defense, he did say he would still support the President, even if just for lack of options.

Still, progressives, if he’s not your boyfriend:

Why do you expect him to change your entire world? We hated the amount of power that George Bush took for the Presidency. Why do we want it out of Obama?

Why are you so emotionally involved? He’s a politician. He’s not a miracle maker. It’s not personal. He has to make deals to get anything done. That’s how Washington works.

Why do you expect him to beat up the other guys? We want a more civil Washington, except when we’re in charge, I guess.

Why do you play hard to get? This one always gets me. There are a lot of Progressives who believe that the best way to get Obama to come around to our way of thinking is to withhold our support. Are you kidding me? Are we in middle school? Playing hard to get might work in adolescent love but it never works in politics. When you started threatening him and proclaiming your vote off limits during the beginning of his Presidency, he did what any mature person would do, he did his job the best way he thought he could. Adults don’t get their way by holding their breath, throwing a temper tantrum and withholding support. That’s how they get ignored.

If you want to affect real change in Washington, you can…we can stay active. Call and write the President. Call and write your Representatives. Get out the vote. Help organize a movement to change campaign finance. Only when we take private money out of campaigns, will we see a truly Progressive President.

The number one promise that Candidate Obama made to us was that we would be the change we were seeking. We are the ones that own the reset button. We have broken our own campaign promise.

I’m sure I’ll be called an “Obama Apologist” or an “Obamabot,” but in my opinion, I am being a realist. I know the obstacles in Washington. I know the alternatives (President Bachmann/Romney/Gingrich/whoever). I know what the Supreme Court will look like under another Republican Presidency. I know that if the Republicans win, there will be no more Social Security, no more Medicare and frankly, no more care. I know that nearly every government service will be privatized. I know that women’s rights/gay rights/immigrant rights/civil rights will be stripped. I know that the wealthy will declare victory in the war on the poor.

In the worst case scenario, another Obama administration will lessen our losses. In the best case scenario, Progressives will join with the President to accomplish real change.

 

The People’s View: Tea Party Hostage-Taking Backfires: Government Borrowing Costs Down, Democrats Poised to Recapture the House

 

 

Cantor: Entitlement promises “frankly, are not going to be kept for many”

 

 

The Two Sweetest Words in the English Language: De-Fault!

David Weigel, Slate:

Andrew Kroll, on the ground covering Wisconsin’s recall elections, grabs video of Tea Partiers cheering when Andrea Shea King tells them that S&P’s perfidy has been dubbed the Tea Party downgrade.

Shea King obviously wants to inspire the opposite reaction in the crowd — hey, you guys, should boo this! — and maybe some of the applause is wry. But it wasn’t all that long ago that the assembled at an Americans for Prosperity summit in Northern Virginia cheered the news that America had lost out on the 2016 Olympics after President Obama had campaigned for them.

[…]

The thing here is that both reactions completely make sense. In both cases, some damage has been done to America’s reputation. In neither case is Barack Obama entirely responsible. In both cases, he’s going to absorb the blame. And because these activists think defeating Barack Obama is necessary to save America, they cheer. The new reaction to the downgrade only differs for the role anti-spending, anti-tax activists had in making it happen. (No bias here. You want to quibble, take it up with S&P, who cited their worries that America would never be able to close the budget gap with new revenue.) But they’re pretty confident that they’re not going to be blamed for it, so they can cheer.

 

 

How weak Democrats enable hard-line Republicans

Ezra Klein:

Ross Douthat argues that the Republican Party’s intransigence on taxes is rendered rational by the Democratic Party’s cowardice on taxes. He’s right:

During the debt ceiling negotiations, I argued that by passing on a grand bargain today, Republicans were risking a bigger defeat on taxes down the road. The response that I got from more than a few conservatives was telling: They simply didn’t believe that the Democrats would ever muster the political will to actually let the Bush tax cuts expire. And if that assumption is correct, then the Republican refusal to bend on taxes makes all the sense in the world. If you don’t think your opposition can actually pull the trigger and fire the bullets in its gun, then why not wait till after the next election to cut a deficit deal? At best, you’ll have a Republican president and a better final package; at worst, the same basic bargain will still be on the table, because the Democrats won’t have the guts to take it off.

This is the reality that liberals need to face: Much of the Republican “intransigence” and “hostage-taking” and “terrorism” that they deplore is a direct consequence of the fact that Republicans assume that Democrats will always, always, cave on taxes. And so long as that assumption keeps getting vindicated by events, there’s no incentive for the G.O.P. to accede to sweeping compromises on deficit reduction. Why would you compromise with a party that won’t actually fight for the revenues required to pay for the programs it claims to want to protect? Why would you sign off on tax increases that your notionally pro-government opposition doesn’t want to sign off on themselves?

The interesting implication of this, which you see clearly in Ross’s post, is that moderate Republicans are being undermined by weak-kneed Democrats. After all, if centrist Republicans can’t credibly argue a hard-line position will lead to much higher taxes, they can’t credibly argue that the Republicans Party needs to compromise.

 

 

Mischaracterizing FDR to Indict Obama

The Monkey Cage:

Part of Drew Westen’s piece suggested that Obama should have followed the example of FDR:

In similar circumstances, Franklin D. Roosevelt offered Americans a promise to use the power of his office to make their lives better and to keep trying until he got it right. Beginning in his first inaugural address, and in the fireside chats that followed, he explained how the crash had happened, and he minced no words about those who had caused it. He promised to do something no president had done before: to use the resources of the United States to put Americans directly to work, building the infrastructure we still rely on today. He swore to keep the people who had caused the crisis out of the halls of power, and he made good on that promise. In a 1936 speech at Madison Square Garden, he thundered, “Never before in all our history have these forces been so united against one candidate as they stand today. They are unanimous in their hate for me — and I welcome their hatred.”

I asked Eric Schickler, a political scientist at UC-Berkeley who has done research (forthcoming) on public opinion, FDR, and the New Deal, to respond:

Drew Westen’s article depicts Franklin Roosevelt as a president who waged fierce, consistent battle against the wealthy, financial interests who had caused the Depression.  FDR was always the friend of the downtrodden, the”forgotten man,” and pushed a simple narrative that the public could understand: he would defend them against abusive, wealthy interests and use government power to bring them jobs and recovery.  This account of FDR is an appealing narrative to many observers today since it seems to put in sharp relief Obama’s shortcomings.  But it obscures far more than it reveals about FDR’s approach to governing.

While FDR’s inaugural did include salvos against the “unscrupulous money changers,” his actual policies in his first term relied heavily on cooperation with the business community.  The NRA —which FDR hailed as the most important recovery measure—essentially allowed businesses to form cartels, under the friendly supervision of the pro-business Hugh Johnson.  Many of the signal liberal accomplishments of the New Deal were not initiated by FDR; in several cases, the president came to reluctantly embrace policies that social movements on the left and liberal advocates in Congress forced onto the agenda.

Indeed, during FDR’s first three years in office, his version of the New Deal faced more serious challenges from populists and insurgents on the left than from Republicans.  Far from the bold, unyielding advocate fighting off conservative resistance, the FDR of the first New Deal was navigating between competing ideological camps, attempting to build a broad, all-class alliance.  Indeed, FDR was always surrounded by teams of advisers with widely divergent views of the government’s role and he kept them—and the public—guessing about which side he was really on.

The most famous—and perhaps telling—example of FDR siding with the conservatives came in 1937 when he agreed that it was time to retrench government spending.  This policy—advocated by Treasury Secretary Morgenthau—helped plunge the country back into a deep recession.  While FDR was able to partly reverse course, he had the benefit of a Congress with overwhelming Democratic majorities.  Even so, it was not until the war mobilization that the level of government spending proved sufficient to pull the U.S. out of the Depression.  Had it not been for the war crisis and mobilization, FDR may well have left office in 1940 with the U.S. still mired in difficult economic circumstances and with the New Deal’s political foundation hardly secure.

In any case, when it came to domestic politics, FDR was playing defense from the late 1930s through the end of his term.  Even with nominal Democratic majorities, conservatives in Congress managed to defund several New Deal agencies that had been crucial to liberal aspirations (e.g. the National Resources Planning Board) and to launch investigations that undermined popular support for labor unions, one of the key pillars of the New Deal coalition.

Looking back, there is no question that FDR was able to accomplish far more in terms of liberal reform than Barack Obama has or will achieve.  But explaining that gap in terms of the individual character of FDR and Obama is far off the mark.  Few presidents moved in as many different directions, with as little concern for ideological consistency as Franklin Roosevelt.  To attribute his success and Obama’s limitations to FDR’s clear and consistent vision may well be appealing to contemporary liberals hungry for a simple narrative that provides a clear target for their disappointments.  But that does not make it a sound historical or political analysis.

 

ALEC News

Rick Perry Pushes ALEC-Backed Education Policies To Turn Texas Universities Into Businesses

 

ALEC Watch: Rep. Mark Pocan’s Special Report From New Orleans

 

 

 

Big Business Woos ALEC Legislators in the Big Easy

 

At Koch’s ALEC Conference: “The many benefits of atmospheric CO2 enrichment”

 

 

POLLS

 

 

Public Policy Polling: A primary challenger to Obama?

If there’s any state where you could imagine there being a serious desire among Democratic voters to replace Barack Obama with someone further to the left next year it would probably be Vermont. Not only is it one of the most liberal states in the country it’s also the home of 2 liberal icons, Bernie Sanders and Howard Dean, who if there was going to be a viable primary challenger seem like plausible candidates. But our polling there finds neither of them would come all that close to Obama, an indicator that the likelihood of Obama facing any serious contest next year is pretty minuscule.

Sanders would pose the more serious challenge to Obama but still trails 52-33. He actually would edge the President 50-38 with voters describing themselves as ‘very liberal’ but would face a 39 point disadvantage with ‘somewhat liberal’ voters at 62-23 and a 32 point deficit with moderates at 57-25.

That the margin between Obama and Sanders is as close as it is probably has more to do with Sanders’ popularity than unhappiness with the President. Obama’s approval rating with Democratic primary voters in the state is 81/11 and his numbers with the far left are even better than that at 86/6. Sanders is even more popular than that though, boasting a 90/7 overall approval rating, including 97/3 with ‘very liberal’ voters. Even with Sanders’ higher approval though most voters who have a favorable view of both him and Obama would still prefer Obama for renomination.

Obama would lead Dean 61-24. He does 45 points better against Dean than Sanders with ‘very liberal’ voters, leading 61-28 while holding similar leads with moderate and somewhat liberal voters. Dean has comparable favorability numbers to Obama- they break down favorably 77/12- but again it’s a case where voters like both Obama and Dean but want Obama to be the Democratic Presidential candidate.

We’ll probably keep hearing about the prospect of a liberal primary challenger to Obama until he accepts the nomination in Charlotte next year but there doesn’t appear to be much of an appetite for it from voters at this point.

Mitt Romney has a solid lead in Vermont, as we’ve found for him in every New England state except Maine. 26% say he’s their top choice to 16% for Michele Bachmann and Sarah Palin, 10% for Rick Perry, 9% for Herman Cain, 7% for Ron Paul, 6% for Newt Gingrich, 3% for Jon Huntsman, and 1% for Tim Pawlenty.

If you take Palin out of the picture Bachmann picks up a large chunk of her support and narrows Romney’s lead to 8 points. He gets 29% to 21% for Bachmann, 11% for Perry, 10% for Cain, 9% for Gingrich, 8% for Paul, 2% for Perry, and 1% for Huntsman.

Bachmann narrowly edges Romney with far right voters, 30-28. But he makes up for that with solid leads among moderates (31-18) and ‘somewhat conservative’ voters (32-19).

 

NEW CNN POLL: Obama disapproval at 54%. But disapproval up only among people who say he’s “not liberal enough“

 

 

NEW POLL: 20% of Americans have a favorable view of the tea party

 

 

 

 

NEW POLL: 62% say creating jobs should be the priority, 29% say cutting spending

 

Another national poll finds that only 15% support liberal position that debt deal cut spending too much

 

 

Independent voters really don’t like the debt ceiling deal

A new USA Today/Gallup poll finds 39% of Americans approve of the debt ceiling agreement that President Obama signed into law this week with 46% opposing it.

Key finding: Only 33% of independent voters approved of the deal, while 50% disapproved.

First Read: “But if you want evidence that conservative opinion leaders (Limbaugh, Red State, DeMint) might have more sway over Republicans and conservatives than liberal opinion leaders (Krugman, Daily Kos, Bernie Sanders) have over Democrats and liberals, check out these numbers. According to the poll, 64% of Republicans and 64% of conservatives opposed the deal. By comparison, 58% of Democrats and 51% of liberals supported it. Bottom line, at least per this poll: More Democrats and liberals sided with Obama. than with the liberal opinion elite.”

 

 

UNIONS

 

 

 

Why Wisconsin’s recall election matters to the rest of America

Tens of millions of dollars are pouring into Wisconsin, where voters will decide Tuesday whether to recall six Republican state senators for their role in the union battles of February and March.

CS Monitor:

Spotlight: The fight for a Republican bastion

[…[ In the state’s 14th Senate district, an Republican stronghold and the historic birthplace of the national party, long-time state Senator Olsen (R) is facing an intense battle with Rep. Fred Clark(D).

Even though Olsen has comfortably held his office for seven years, this recall race “is nothing like we’ve ever seen,” says Mr. Weigand, his spokesman. “The entire country is watching.”

If the recalls fail, “that’s going to embolden legislators across the country with the courage to make tough decisions to balance their books and cut spending,” Weigand says.

On Monday, Mr. Tate released a statement mocking Walker for his low profile during the recall of his fellow Republicans, including Olsen.

“It seems that having finally gotten what he wanted, an election that is all about HIM, Scott Walker has suspended his self-regard in a moment of expediency and has come to the realization that he’s, well, toxic,” Tate wrote.

 

 

WEDGE ISSUES

 

 

 

 

 

 

 

With Rally, Christian Group Asserts Its Presence in ’12 Race

NYT:

TUPELO, Miss. — To its admirers on the religious right, the American Family Association is a stalwart leader in a last-ditch fight to save America’s Christian culture and the values of traditional families. To its liberal critics, it is a shrill, even hateful voice of intolerance, out to censor the arts, declare Muslims unfit for public office and deny equality to gay men and lesbians because they engage in sinful “aberrant sexual behavior.”

Broadcast on its 192 talk-radio stations, streamed over the Internet and e-mailed in “action alerts” to 2.3 million potential voters, the American Family Association’s pronouncements have flowed forth daily from its sleek offices here in the Deep South.

But now it is doing more than preaching to the choir. This summer, the association has thrust itself into presidential politics by paying for and organizing a day of prayer to save “a nation in crisis” that Gov. Rick Perry of Texas is convening this Saturday. Several Republican presidential aspirants, including Michele Bachmann, Newt Gingrich and Tim Pawlenty, have appeared on a radio program on the group’s American Family network.

The rally, at a stadium in Houston, is expected to draw dozens of the country’s most conservative evangelical groups and leaders, and could burnish Mr. Perry’s national profile and his appeal to religious conservatives as he considers entering the 2012 presidential race.

Mr. Perry invited his fellow governors but only one, Sam Brownback of Kansas, also a Republican, accepted the invitation to the explicitly Christian rally, and in recent days even his attendance appeared uncertain, with his staff stressing that if Mr. Brownback went, it would be in a private, not an official, capacity.

Some legal groups have accused Mr. Perry of breaching the separation of church and state by holding the rally, even though the governor’s aides say no tax dollars are being used.

A federal judge in Houston last week dismissed a lawsuit brought by a group of atheistsagainst Mr. Perry’s participation.

“It’s a plea to God to help our country,” Donald E. Wildmon, the family association’s founder and chairman emeritus, said of the rally, which he, like Mr. Perry, calls a nonpolitical appeal to God.

“We’re at a crossroads,” Mr. Wildmon added in an interview in the association’s headquarters here about his decades in the culture wars, which he acknowledges have not always gone his way. “Either we’re going to maintain a society based on Judeo-Christian values, or we’ll have one based on whatever is popular at the moment.”

In speeches and books, Mr. Wildmon has voiced a sense of siege that is widely shared among evangelicals, one he first expressed 34 years ago as sex and violence crept into television.

But the association has sharpened its edge over the years, moving from its well-known crusades for public “decency” to harshly opposing what it calls an anti-Christian “homosexual agenda” — not only same-sex marriage and the acceptance of gay troops in the military, but any suggestion that homosexual “behavior is normal.” The association also campaigns against antibullying programs that teach tolerance and corporations (likeHome Depot, a current target) that support gay pride parades.

Mr. Wildmon warns that if current social trends go unchecked, “homosexuals will become part of an elite class” and “Christians will be second-class citizens at best.”

Mr. Wildmon, 73, has turned over management of the association to his son Tim Wildmon, 48, but the group’s reputation for inflammatory statements rose after the hiring two years ago of Bryan Fischer, a former pastor from Idaho, as the director of “issues analysis” and the host of a daily two-hour afternoon show. Mr. Fischer, 60, silver-haired and a talk-radio natural, has become a public face of the group.

Perhaps most notably, Mr. Fischer trumpets the disputed theory that Adolf Hitler was a homosexual and that the Nazi Party was largely created by “homosexual thugs” — evidence, he says, of the inherent pathologies of homosexuality. Mr. Fischer has also said that no more Muslims should be granted citizenship because their religion says to kill Americans, and that welfare recipients “rut like rabbits” because of what he calls welfare’s perverse incentives.

“I don’t think we are exaggerating the dangers to the country, the culture, the American family,” Mr. Fischer said in an interview. “The stakes are as high as they could be.”

Peter Montgomery, a senior fellow at People for the American Way, a liberal group, says of the American Family Association’s radio network: “Clearly a lot of Republican politicians want to reach the people who are listening to the American Family Association. Many Republican candidates see no shame in lending credibility to the extremism and bigotry on its radio shows.”

A former Methodist pastor, the elder Mr. Wildmon first became nationally known in the late 1970s when he began urging advertisers to shun television shows with sex and violence, with mixed results. As he built a following, Mr. Wildmon, who then called his group the National Federation for Decency, used boycotts and protests to push convenience stores to stop selling Playboy and Penthouse, and he later tormented the National Endowment for the Arts for supporting work he deemed sacrilegious or obscene.

In 1988, the group renamed itself the American Family Association, and it has had a direct if unheralded hand in recent political battles, sending $500,000 to support the down-to-the-wire campaign for Proposition 8, California’s voter-approved ban on same-sex marriage, for example, and sending a crack political organizer to Iowa last fall for the successful drive to unseat judges who had supported same-sex marriage. The group also sponsors “pastor policy briefings” around the country that seek to mobilize evangelical voters.

Though liberal critics call it a hate group, the association and Mr. Wildmon are widely revered in conservative circles. Working in the relative isolation of Tupelo and lacking a magnetic television personality, Mr. Wildmon is not as widely known as other titans of the religious right, like Pat Robertson or James C. Dobson. But last fall Mr. Wildmon was described as “one of the most effective Christian leaders of our time” as he received a lifetime achievement award at the Values Voter Summit, an annual gathering of top religious conservatives.

Mr. Wildmon, who has remained the association’s guiding force, said the group would spend up to $600,000 putting on the Texas rally. The association has an annual budget of $19 million, raised mainly from small donors, and 128 employees.

Looking back, Mr. Wildmon acknowledged a mix of victories and losses — the campaign to stop Home Depot from supporting a gay rights group as part of a “diversity” initiative, for example, has been rebuffed by the company so far. Penthouse may be sold more discreetly, but television is more profane than ever, and same-sex marriage has gained a strong foothold.

Will a day of concentrated prayer, by tens of thousands of believers in Houston and untold numbers more who may participate from afar, turn the tide? “That remains to be seen,” Mr. Wildmon said. “Anyone who wants to pray to Jesus to save our county is welcome.”

“God didn’t call me to be successful,” he added, sounding more resigned than strident. “He called me to be faithful.”

 

 

Texas Rally Renews Debate Over the Boundaries of Perry’s Faith

NYT:

One Sunday in 2005, Mr. Perry signed legislation requiring that women under the age of 18 get parental consent before having an abortion. The signing took place during a ceremony at a Fort Worth school run by an evangelical Christian church.

Five weeks after the Sept. 11 attacks, Mr. Perry bowed his head and said “amen” as a Baptist pastor led a prayer in the name of Jesus Christ. The prayer was noteworthy not for what it said, but for where it was said: at a student assembly in a public middle school in East Texas. Afterward, Mr. Perry said he had no problem ignoring the Supreme Court’s landmark 1962 ruling that barred organized prayer in public schools.

On Saturday in Houston, thousands of people are expected to gather at Reliant Stadium for a Christian-themed prayer service that Mr. Perry created and promoted. Though Mr. Perry has been criticized for spearheading an event that burnishes his conservative Christian credentials as he considers running for president, the prayer rally is only the latest instance — albeit the highest profile one — of the governor of the nation’s second-largest state emphasizing his Christian beliefs and blurring the line between church and state.

“The scale of this event is new, but the essence of this is familiar to anyone who has followed him,” said James Henson, a longtime political observer and the director of the Texas Politics Project at the University of Texas at Austin. “He’s never hesitated to invoke faith in public and for public purposes.”

Few political figures in America have so consistently and so unabashedly intermingled their personal faith and their public persona, peppering speeches with quotations from Scripture, speaking from the pulpit at churches, regularly meeting and strategizing with evangelical Christians and even, in one recent speech, equating public office with the ministry.

He is known for forwarding Christian-themed e-mails to friends and slipping notecards to aides upon which he has scribbled Bible verses. Two months before the primary last year, Mr. Perry spoke during Sunday services at the nondenominational Elevate Life Church in Frisco and walked away with a distinctive gift from the pastor: a long silver sword, given to the governor as a symbol of the word of God.

The Christian focus of his political career and the attention that the rally has drawn have given Mr. Perry a distinct advantage should he try to position himself as a favored candidate among religious conservatives. But the rally and his outspoken Christianity could also provide opponents an opening to cast him as an extremist. Should he enter the race, he would find himself battling Representative Michele Bachmann of Minnesota, who has also stressed her long commitment to conservative Christian values, for the support of that voting bloc — especially in key early contests like the Iowa caucuses and the South Carolina primary, where those voters can be decisive.

Last month, when asked if he intended to mount a White House bid, Mr. Perry told a reporter for The Des Moines Register that he was “getting more and more comfortable every day that this is what I’ve been called to do. This is what America needs.” But to reporters in Austin, Mr. Perry denied there was a purely religious connotation to his remark, saying: “There’s a lot of different ways to be called. My mother may call me for dinner.”

To many political observers and to his critics, it sounded like backpedaling. “You saw the politician and not the man of faith,” Mr. Henson said. […]

Mr. Perry grew up in Paint Creek, a small unincorporated West Texas community where his parents were cotton farmers. As he described it in his 2008 book, “On My Honor: Why the American Values of the Boy Scouts Are Worth Fighting For,” life in Paint Creek “revolved around school, church and — for most boys — the Boy Scouts.” Mr. Perry, who was an Eagle Scout, attended Sunday school at the local Methodist church. At age 12, he went to a Methodist summer camp, where he met the father of Mr. Robb, the Woodlands pastor. Mr. Robb’s father, the Rev. Ed Robb, a camp counselor, taught Mr. Perry how to swim and helped shape his faith. In 2002, Mr. Perry told Texas Monthly that the elder Mr. Robb, that summer, “led me to the Lord.”

Mr. Perry has also described having a kind of spiritual awakening in his late 20s, when he returned to his parents’ farm after flying C-130s in the Air Force, a few years before he began his political career. At a meeting in May to raise money for the prayer rally, he talked about his state of mind at the time.

“At 27 years old, I knew that I’d been called to the ministry,” Mr. Perry said “I’ve just always been really stunned by how big a pulpit I was going to have. I still am. I truly believe with all my heart that God has put me in this place at this time to do His will.”

 

AND IN OTHER NEWS…

 

 

 

 

America’s Dummy Belt

We are a land of many ‘belts’: the Bible Belt, the Rust Belt, the Sun Belt, to name a few.

But watching the near dissolution of our political institutions and our international reputation as a scientific, medical, and cultural leader at the hands of ideologically puritanical and intellectually useless base idiots, the time has come to name another of America’s ‘belts’: theDUMMY BELT.

This belt encompasses a swath of the United States that, were it drop-kicked from the Union, would instantly join the likes of Sierra Leone and Guinea-Bissau among the world’s most primitive societies.  A grotesque mutation joining Iranian theocracy and Central African poverty would emerge, despoiling the planet and setting back global progress a dozen generations merely by existing.

But alas, God has cursed First-World states by saddling them with responsibility for the well-being of barbaric theocrats and tribalists.  And our nation many years ago made the cataclysmic misstep of bestowing on these nether regions multifarious statehoods and representatives.

In an ironic twist, many of the troglodytes who dwell in the Dummy Belt themselves advocate for secession or a Constitutional Convention to stamp our founding document with all manner of bigotry and fundamentalist filth.  But we should welcome these agitations; the next time aDummy-Belt state suggests secession, the rest of us should pounce on the opportunity.  And when Dummy-Belt Baggers propose a Constitutional Convention, we should join in the romp with some proposals of our own.

My identification of a Dummy Belt here should not be taken to disparage all residents thereof; no doubt, progressives in this region often feel like aliens in their own land.  And it might be well for us to consider a paradigm like that portrayed in the movie Escape From New York. […]

To identify the Dummy Belt, I selected four criteria:

• Percentage of voting population that is
  evangelical
• Bachelor’s degrees per capita
• High-school drop-out rates
• Infant mortality

There are doubtless other criteria that could be used, but I selected those that seem to most directly bear on the idiocy and backwardness of a region.  First, I compiled data on thepercentage of the voting population of every state comprised of evangelicals.  There is no better measure of idiocy than mindless religious extremism.  Evangelicals manifest an admixture of 

Finally, I compiled state-by-state statistics on infant mortality.  This statistic is widely used to differentiate between developed and less developed nations.  Those nations with the highest infant-mortality rates are invariably denoted ‘Third-World’ nations.  So this statistic is useful in identifying regions of the United States that most closely mimic the least civilized parts of the world.

The scores are like golf scores: the higher the number, the worse.  I tried to ensure that each measure could be scored relative to a maximum of 100; each category was then weighted equally.  For example, a state with a 50% evangelical voting population scored 50/100.  The national average with regard to adults holding at least a BA degree is 27.7%.  I measured the deviation from that average and multiplied the difference between a state’s average and the national average by 3.6 so that the maximum score would be around 100.  For example, a state with a 17.7% BA rate would have its 10-point differential multiplied by 3.6 to yield 36/100.

With regard to high-school drop-out rates, I simply subtracted from 100 the percentage of the population that had graduated high school.  For example, a state with a 45% graduation rate would have scored 55/100.  Finally, the average infant-mortality rate in the United States is 6.7%.  I multiplied every state’s differential from that number by 15 to yield a maximum of around 100.  So a state with an 8.7% rate would have a 2-point differential, which when multiplied by 15 would yield 30 points.

To take one example, the nation’s dumbest state, Mississippi, has a voting population that is 46% evangelical for 46 points.  Mississippi’s BA rate is 19.4%, which is 8.3 percentage points lower than the national average, which when multiplied by 3.6 yielded 30 points.  Mississippi’s high-school graduation rate is 62%; that 62 was subtracted from 100 to yield 38 points.  Finally, Mississippi’s infant-mortality rate is a staggering 10.6%, which is 3.9 percentage points above the national average, which when multiplied by 15 yielded 59 points.  The total for Mississippi was 173, easily highest among all states.

Here is America’s DUMMY BELT:

If we are to have a Constitutional Convention, I propose that we compile these statistics and score all states as I have here every 10 years after the Census.  I further propose that DARK RED states have all their representation in both Houses of the US Congress disbanded.  I further propose that LIGHTER RED states have both Senators unseated and retain only symbolic non-voting status among their delegations to the House of Representatives.  I further propose that PINK states be limited to one senator apiece and non-voting status in the House of Representatives.  Finally, I propose that no citizen of any DUMMY-BELT state be eligible to ascend the Presidency without scoring 10 out of 10 on THIS TEABAGGER LITERACY QUIZ.

Were this paradigm in effect today, fully 44 of the 60 members of the ‘Tea Party Caucus’ in the House of Representatives would be watching and screaming as the House went about its business; but they wouldn’t be voting.  And such potential disasters as the financial meltdown Baggers tried to provoke with the debt-ceiling debate would no longer be possible.

 

 

 

TAKE ACTION

 

Let’s get our economy back on track. We can do it with the Contract for the American Dream

 

 

Petition SenatorReid: DO NOT appoint Joe Manchin to the Debt Super Committee! 

 

QUOTE OF THE DAY:

“Too often we enjoy the comfort of opinion without the discomfort of thought.” ~ John F. Kennedy