Politics, Government & Public Policy: August 2011 Archives
Jeremy Walker writes about why he thinks America is in deep trouble.
Last week I was thinking about all of the hype surrounding the debt-ceiling when it occurred to me that I haven't check the status of the Federal Reserve's Monetary Base lately. What follows is a lengthy post where I try to recapture all of my thoughts on this and various topics that I have written about over the course of the past few years.
Obama "paralyzed politically", refuses to lead.
Later, the White House press corps pressed spokesman Jay Carney on whether Obama would be unveiling a deficit reduction plan "in a form of being scorable by the Congressional Budget Office." When Carney demurred, Politico's Glenn Thrush asked: "You said he will be contributing to the process, talking about the super committee, but he won't be leading it. He is the leader of the free world. Why isn't he leading this process?" Carney responded: "Glenn. Look, this President, his leadership on these issues is quite established."Quite established to whom? After Obama's statement, the markets fell another 210 points. Obama is unwilling to call Congress back from its August recess and push for a larger stimulus agenda because he fears alienating already skeptical independents. But he can't bargain constructively on deficit reduction with Republicans because liberals will abandon him if he pushes for real entitlement reform. As a result, Obama is paralyzed politically. All he can do is watch the market, and his reelection chances, drop.
Obama is a non-entity, and it seems like he isn't even trying.
President Obama: Please resign. It's obvious you don't really want to be president anymore, and we're pretty sick of you as well.
Update: Obama is so out of his depth.
Socrates taught that wisdom begins in the recognition of how little we know. Mr. Obama is perpetually intent on telling us how much he knows. Aristotle wrote that the type of intelligence most needed in politics is prudence, which in turn requires experience. Mr. Obama came to office with no experience. Plutarch warned that flattery "makes itself an obstacle and pestilence to great houses and great affairs." Today's White House, more so than any in memory, is stuffed with flatterers.Much is made of the president's rhetorical gifts. This is the sort of thing that can be credited only by people who think that a command of English syntax is a mark of great intellectual distinction. Can anyone recall a memorable phrase from one of Mr. Obama's big speeches that didn't amount to cliché? As for the small speeches, such as the one we were kept waiting 50 minutes for yesterday, we get Triple-A bromides about America remaining a "Triple-A country." Which, when it comes to long-term sovereign debt, is precisely what we no longer are under Mr. Obama.
Then there is Mr. Obama as political tactician. He makes predictions that prove false. He makes promises he cannot honor. He raises expectations he cannot meet. He reneges on commitments made in private. He surrenders positions staked in public. He is absent from issues in which he has a duty to be involved. He is overbearing when he ought to be absent. At the height of the financial panic of 1907, Teddy Roosevelt, who had done much to bring the panic about by inveighing against big business, at least had the good sense to stick to his bear hunt and let J.P. Morgan sort things out. Not so this president, who puts a new twist on an old put-down: Every time he opens his mouth, he subtracts from the sum total of financial capital.
Our credit downgrade is pretty humiliating. The next 15 months will be spent affixing blame to "someone else". So, let's get started! I happen to think that "Cut, Cap, and Balance" was the only debt option on the table that could have prevented a downgrade.
Throughout the debate over the debt ceiling, the media did all of us a great disservice. They reported as though the Republicans were threatening to ruin America's credit unless they got their way.Closer to the truth: If only conservatives like Sen. Jim DeMint, R-S.C., had gotten their way -- i.e., huge spending cuts -- perhaps we wouldn't have just been downgraded by S&P. DeMint predicted ahead of time that none of the debt deals on the table except for "Cut, Cap and Balance" would prevent a downgrade. He has been vindicated.
The bond-rating houses kept saying all along that they weren't worried about the debt ceiling not being increased. Rather, they were worried about the long-term prospects of the U.S. government paying back $15-plus trillion, which is where our national debt (both publicly held and obligated to trust funds) will be shortly.
From Standard & Poor's downgrade announcement we see that they don't care how we reduce the deficit:
Standard & Poor's takes no position on the mix of spending and revenue measures that Congress and the Administration might conclude is appropriate for putting the U.S.'s finances on a sustainable footing.
However, President Obama never presented a plan for reducing the deficit at all, with spending cuts, new taxes, or anything. All he did was give speeches. The only actual written plan that could have prevented the downgrade was the "Cut, Cap, and Balance Act".
Glenn Reynolds' readers report "TAX CHEAT!" Tim Geithner stamped bills are showing up in the wild!
UPDATE: A reader emails:After your post some time ago about the "Tax Cheat" stamp, I had been carefully reviewing the bills I receive to see how many had Geithner's signature. They recently started popping up regularly. And lo and behold, yesterday, when I went to get a cheese steak (I'm in the Philadelphia suburbs), I got a "Tax Cheat"-stamped bill as change. Loved it.Best regards
(don't use my name, I don't want to get audited or anything like that.)Well, the guy behind the stamp already did. Doesn't seem to have stopped him, though. And this is the first sighting of a stamped bill "in the wild" that I've heard of.
ANOTHER UPDATE: A reader emails:
I work at a Trader Joe's in St. Louis. I wasn't actively looking for the Tax Cheat bills, but while giving change last week I noticed that one of the singles I pulled out of my drawer had something on it. I looked again, and it was stamped. The next bill had "Cheater" written over the signature in red pen.The best part about the experience is, upon my pointing it out, the customer said they were keeping both bills for themselves and wouldn't spend them.
Hmm. I wonder how widespread this phenomenon is.
It's not too late to order "TAX CHEAT!" stamps now! I hope Geithner never leaves... it's like my own personal stimulus program.
Krauthammer is right: an unresolved ideological battle doesn't mean that Washington is "broken".
We're in the midst of a great four-year national debate on the size and reach of government, the future of the welfare state, indeed, the nature of the social contract between citizen and state. The distinctive visions of the two parties -- social-democratic vs. limited-government -- have underlain every debate on every issue since Barack Obama's inauguration: the stimulus, the auto bailouts, health-care reform, financial regulation, deficit spending. Everything. The debt ceiling is but the latest focus of this fundamental divide.The sausage-making may be unsightly, but the problem is not that Washington is broken, that ridiculous ubiquitous cliche. The problem is that these two visions are in competition, and the definitive popular verdict has not yet been rendered.
Our Constitution was designed so that these sorts of ideological battles would unfold slowly and be played out over the course of several election cycles. This is a feature, not a bug.
The Budget Control Act is a very small step in the right direction.
$2 trillion of spending cuts is big for Congress but small relative to our underlying fiscal problems. If this bill becomes law and if the fall Joint Committee process is successful, the remaining spending problem will be more than an order of magnitude larger than this accomplishment. If you think this summer has been painful or dread the battle of this fall, you ain't seen nothin' yet. Wait until Congress wrestles with the big stuff.
So far, small steps have been working pretty well for conservatives:
Three times in the past year Congressional Republicans have played brinksmanship with the President and come out ahead: the December 2010 tax rate fight, the Spring 2011 CR fight, and now the Summer 2011 debt limit fight. They have a game plan that has delivered multiple incremental wins so far, and a playing field that favors them for the Fall 2011 Joint Committee fight. In a balanced Washington they have successfully leveraged a debt limit increase to cut spending and not raise taxes.For these reasons I am fairly optimistic this bill provides an opportunity for another incremental win this fall. If I'm right, it also establishes a pattern for when the debt limit expires in 2013.
This pattern is important. In the past, the debt limit has been increased 70+ times with no strings attached. Now, the precedent has been set that debt limit increases should be matched dollar-for-dollar with spending cuts. That's a powerful precedent.
