By Joe Firestone, Ph.D., Managing Director, CEO of the Knowledge Management Consortium International (KMCI), and Director of KMCI’s CKIM Certificate program. He taught political science as the graduate and undergraduate level and blogs regularly at Corrente, Firedoglake and Daily Kos as letsgetitdone. Cross posted from New Economic Perspectives
It now looks like the big media and leaders in both parties are no longer focusing on the Government Shutdown crisis, but are now moving on to the notion that the shutdown is melding with the upcoming probable breaching of the debt limit to create a combined mother of all fiscal crises. Along with this, the media and many politicians, encouraged by the President’s standing “strong, strong, strong,” are now directing attention away from whether ObamaCare will be delayed or compromised, to other types of ransom the Administration might pay in return for both re-opening the Government and also providing an increase of an undetermined amount in the debt limit. Meanwhile there are reports that under increasing Wall Street pressure John Boehner is preparing to negotiate with House Democrats and allow a vote to pass a CR and a clean debt limit increase bill, in return for concessions he can take back to his caucus.
TINA does not apply in this case, and the President’s choices are not limited to just refusing to negotiate or giving in to ransom demands whether focused on Obamacare, the Keystone Pipeline, entitlement cuts,“tax reform frameworks” or any other measures that give “tea party” Republicans “the respect” they think is due them. By continuing to frame things in this way, the media and politicians in both parties are echoing the Administration’s framing of the situation and absolving the President of his share of the blame for the debt limit crisis. They are also preparing the way for a compromise, that will, almost certainly, result in hurtful cuts to Government spending including renewed consideration of “the Great Betrayal,” also known as the Grand Bargain, and probably passage of the chained CPI cuts to Social Security over the objections of a large majority of the American people.
In two previous posts, here and here, I listed the five options the Administration can use to lessen or nullify the impact of Republican intransigence on increasing the debt limit. I’ll now list them again to emphasize that there is no TINA. The President has options to defeat the debt ceiling without doing the “Great Betrayal.”
1. A selective default strategy by the Executive, prioritizing not paying for things that Congress needed, and perhaps not paying debt to the Fed when it falls due and working with the Fed to get the $2.05 Trillion in bonds that it was holding canceled;
2. An exploding option involving selling a 90-day option to the Fed for purchasing some Federal property for $ 2 Trillion. Then when Congress lifts the debt ceiling, the Treasury could buy back the option for one dollar, or the Fed could simply let the option expire;
3. Using the authority of a 1996 law to mint proof platinum coins with arbitrary face values in the trillions of dollars to fill the Treasury General Account (TGA) with enough money to cease issuing debt instruments, and even enough to pay off the existing debt; and
4. Using the authority of the 14th Amendment to keep issuing debt in defiance of the debt ceiling, while declaring that the debt ceiling legislation was unconstitutional because it violated the 14th Amendment in the context of Congressional appropriations passed after the debt ceiling mandating deficit spending.
5. Beowulf has offered yet a fifth option for getting around the debt ceiling by issuing consols. Consols are debt instruments that pay a fixed rate on interest in perpetuity, but never promise principal repayment at a maturity date. The debt ceiling law is written in such a way that what counts against the ceiling is the principal repayment guaranteed by the instrument. Since consols provide no principal repayment, one can have unlimited consol issuance without increasing the debt-subject-to-the-limit.
In a previous post, I analyzed which of these five options, if any, was most likely to be used to cope with the debt limit crisis, and I also made clear and provided reasons why I preferred the platinum coin and consol options to the other three, even though I thought that the platinum coin was far from the most likely option. I also pointed out that Yves Smith at Naked Capitalism used the list of options in this recent post to make the point:
. . the larger point is that this budgetary Battle of the Titans is a phony war. Obama can finesse the Republicans if he needs to. . . .
So hang tight for way too much unnecessary melodrama over the next month. It’s another round of watching the two parties play chicken, with each posturing that it won’t be the one to steer out of the impending crash. The fact is that Obama really wants his Grand Bargain. All of this high drama is necessary for him to pretend to his base that he was forced to do what he’s been trying to do for years: sacrifice old people since he perversely believes that “reforming” Social Security and Medicare will get him brownie points in the presidential legacy ledger. . . .
Yves and I agree on that. The Administration is raising the zombie Grand Bargain, Great Betrayal again. It probably did so at the White House meeting with John Boehner on October 2, 2013. And Boehner promptly went back to his caucus and began to boost that as target of negotiation. The result? The “unnecessary melodrama” is exactly what’s exploding in the media right now as the shutdown crisis morphs into a combined shutdown/debt limit crisis, intended to end with the Grand Bargain, evolves.
In this crisis, the Government shutdown, however much harm it is causing in the short term, is secondary in importance. The reason why is that the pressure to end the shutdown is too great for the Republicans to bear for very long. Remove their power in the debt limit crisis, and they will fold before too many days are up as more and more pressure builds from the the media, the public, the contractors, and Wall Street, and as they have to face the fact that they are destroying their chances to even retain the House, much less win the Senate.
That’s because the shutdown harms their brand and exposes them to opprobrium each day. They can put on costumes, pretend to defend WW II veterans, or propose to just fund programs whose shutdown impacts are hitting the press on any given day, all they want. But that won’t change the fact, that they perpetrated one too many hostage-takings and tried to get a ransom that the President is unwilling to pay, and that a majority of people think that the hostage-taking was illegitimate, and that it is they who are responsible for the shutdown.
So, the longer the shutdown goes on, the greater will be the anger of the public at them and at the tea party. If they let it go much longer, it will finish them politically until the memory of what they did fades from public consciousness.
So, if their power over the debt limit is removed from them, then they will fold on the shutdown before too long. I give them only a few days at the outside if and when the President removes the threat of default from breach of the debt limit out of the equation.
Last night, R. J. Eskow provided us with 8 reasons Democrats should refuse to accept a Grand Bargain. These are:
– 1. “If you reward hostage taking, there will be more of it.”
– 2. “As Napoleon once said, “Never interrupt your enemy when he is making a mistake.”“
– 3. “The Democratic base will go from fired up to fed up.”
– 4. “It could divide Democrats in Congress.“
– 5. “The American people will hate the deal.”
– 6. “A “Grand Bargain” will harm the President and his party politically.”
– 7. “Democrats have already given the GOP too much – and giving them more cuts will hurt the economy.”
– 8. “Social Security is a stand-alone program; it doesn’t belong in deficit talks.”
These reasons are all important, but they’re less than fully compelling if you believe that the risk of default due to the debt ceiling is real and increasingly high, and if you also believe that the country and the President are in a box and TINA applies. But if you believe that the President can use even one of the options I’ve listed, then you have the 9th and most important reason why the Democrats ought to stand firm and never vote for the Grand Bargain or any of its elements.
That reason is that no bargain at all is necessary to defuse the debt limit aspect of the crisis because the President can do that any time he cares to. TINA is BS. No ransom need be paid. There is a choice.
And there is blame for Representatives and Senators who make the wrong choice going against what the public wants. Once the President has taken away their debt limit toy, only the CR/budget portion of the crisis will be left, and as I’ve argued earlier the Republicans will stop the government shutdown in a relatively brief time
So, for anyone who wants to see a resolution of the present crisis on terms that do not involve any further concessions from Democrats who have already given in on a CR continuing the sequester, it’s very important that the blogosphere start debating the options for handling the debt ceiling law once again, as it did in 2011 and during the fiscal cliff/sequester periods, so the President will find it more difficult to plead TINA when he wants make his Grand Bargain. The TINA/kabuki game he and the village media are playing is the enemy of the economy, the safety net, and the public purpose.
To stop it from coming about, the first thing we must do is unmask the news networks, the cable media, and the village progressives, as actively attempting to constrain debate by ignoring the options the President has, apart from a simple “I will not negotiate, or I must cave in stance.” Let us make them come to grips with the alternatives and, in doing so, spread the news that there are a number available, and that whatever unpalatable compromises the President proposes, are his choices and his fault; not necessary expedients he is being forced into because he has no effective weapons to use in countering the Republicans using the debt limit law to take hostages. We must remove any TINA cover, not just for the President, but for the Democrats in the Congress, so that it will be clear that if they support the President in any chained CPI cuts or Grand Bargain, they will pay dearly for it in the 2014 elections.
As of today, the first break in the media’s united front against the idea that the President has no options came from the New York Times where a short piece by Jamie Galbraith entitled “Government Doesn’t Have to Borrow to Spend,” is opening up the debate to options. Jamie tells us:
Could the Treasury skip the rigamarole and pay its bills without bonds? Economically, sure. Why doesn’t it? Well, the Fed has regulations governing “overdrafts” — but apart from these, the answer is plain: to do so would expose the “public debt” as a fiction, and the debt ceiling as a sham.
Under present law, Jack Lew could even pay off public debt held by the Federal Reserve by issuing a high-value, legal-tender coin – so long as the coin happened to be platinum. A coin is not debt, so that simple exchange would retire the Fed’s debt holdings and lower the total public debt below any given ceiling.
That’s a gimmick, sure. But so is the debt ceiling! Legally, the president’s officers have the power to use one gimmick to deflate the other. Why don’t they? The answer is again clear: they have been trapped by the bad-faith aura of this bad-faith law.
Jamie always goes to the heart of the matter with admirably simple language, and puts the coin into the larger context that the United States, fiat sovereign that it is, doesn’t need to borrow to spend, and right now can create “debt free” money by using platinum coins.
Right now, things are going well for the Democrats. The Republicans and the tea party are increasingly the villains of this piece, and the Democrats are largely escaping blame and positioning themselves well for 2014. But, if it is clear that they are voting for a settlement of this crisis that sacrifices part of the safety net, while claiming TINA, when no one any longer believes that TINA is true, then they will pay the price for that vote. So, to the extent we can spread knowledge of these alternatives, we can constrain them from agreeing to any Grand Bargain with the Republicans, and we will have succeeded in blocking it until the next attempt to legislate it.
Yes, there will be another attempt. If a clean CR extends for too short a period, the GB may come back next month, or in December, even if the debt limit threat is also taken off the table. If not then, it will probably not return for most of fiscal 2014; but once the elections are over and there is a lame duck Congress again, then the Grand Bargain will re-appear because many of the defeated and retiring Congresspeople and Senators will then be subject to influence from the austerity forces led by the Peterson network of organizations and the various lobbyists who can offer lucrative post-Congress careers.
Update: 2:50 PM October 4th EST:
Another mainstream outlet has now started mentioning the coin. The Center for American Progress (mouthpiece for the third way and the Administration) (h/t DEC Blogger) offers this by way of an interview of Mark Patterson by Ezra Klein, who felt his “I am terrified” framework slipping a bit today, probably when Jamie Galbraith came out for the coin in the Times.
EK: If you’re this worried and the consequences are this bad, why not do something like declaring the debt ceiling unconstitutional under the 14th amendment or minting the coin?
MP: It’s been my view and the view of pretty much everyone in Treasury and everyone in the administration that if there was a viable legal strategy that could take the threat of default off the table we would eagerly embrace it. It’s not as though people in the administration were or are closed to cool, interesting, viable possibilities. But the things we’ve been presented haven’t withstood that scrutiny.
The coin is a clever, nifty idea but it has problems. The one that gets overlooked the most is it wouldn’t actually make everything normal after it was invoked. It would be subjected to all kinds of challenges and litigation. As a straightforward matter the Federal Reserve wouldn’t give Treasury a trillion dollars for that coin. We looked carefully at it, but for both practical and legal reasons, the legal reason being the law obviously wasn’t meant for anything like this and the practical reason being that the Federal Reserve would need to cooperate and wouldn’t, it wouldn’t work.
The 14th Amendment shares similar problems in which you would invoke a constitutional crisis of sorts. One side would say the president broke the law and should be impeached. That would occupy all the oxygen in Washington. That’s not a reason not to do it if it’s the right thing to do. But if the objective is keeping our status as the safest and best investment in the world you’ve created all kinds of doubts about us. I don’t think proponents have thought enough about what would happen after you did it.
Atrios has already replied to the coin comment by characterizing it as “argie-bargy” and pointing out correctly that the language of the legislation authorizing it is completely clear and “intent” doesn’t matter. However there are a number of other points to be made here. First, WaPo, Ezra, Mark Patterson and CAP are not the most credible sources of criticism for this, since all like to function as Administration mouthpieces and want “entitlement reform,” aka at least chained CPI,” and generally a full-blown Grand Bargain.
All have also previously rejected the coin idea, and when criticized in detail for their positions on these matters refuse to respond with rational arguments, but engage in labeling and name-calling and putting forward claims about the likely consequences supported by neither evidence nor logic, but only the intuitions of the DC village. Sure, there will be legal challenges to the coin, but there’s much analysis from the coin side about why these challenges will fail, and the weight of opinion about the coin seems to be that it would be legal. All this is discussed comprehensively in my well-reviewed e-book, which Klein, Patterson, and the White House have had plenty of time to review.
And certainly while those challenges are going on, the President could be drastically reducing the debt subject to the limit by using coin proceeds to pay back debt, increasing confidence in markets with every significant payoff. Of course, this depends on whether the President mints a High Value Platinum Coin (HVPC), say $60 Trillion in face value, rather than “a small ball” TDC alternative, but that’s his choice, after all.
As for the Fed, it may or may not cooperate with the Executive on crediting the coin; but the law provides that in cases of disagreement in interpretation between the Fed Chair and the Secretary Treasury that the view of the Secretary shall prevail. In other words the Fed can be made to cooperate when it comes to crediting the coin, and it is highly doubtful that if the Fed is between the rock and the hard place of crediting the coin or allowing a default, that it will then choose the latter and risk the financial system collapsing. The Fed, after all, is pretty chicken about financial system crashes, and is likely to embrace its own version of TINA, since, in addition to the rock and the hard place, the Fed’s compliance is unambiguously required in the law.
Patterson’s view is also off-base when it comes to the 14th amendment, because his view about the illegality of appealing to it gives the wrong reason. The right one is that the President is bound by the amendment to not allow a default, and as long as he has options like platinum coins, and consols available, he is obligated to exhaust those before he takes action on the basis that the debt ceiling law is preventing him from fulfilling his obligations. As long as those exist. It is not.
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IMO, obama is not a democrat or a republican. His only alligiance is to himself and it’s a mistake to think he cares, at all, about the party. He cares about obama.
I agree. I don’t think he cares. But he may care about Democrats not voting with him on the GB. So, it’s up to us to try to make sure that they know they will pay a price if they do.
I would have said something like this about Obama but now I don’t have to. Thanks.
Should Democrats for the Grand Bargain be indentified ahead of time and singled out for greatest pressure? I remember reading Durbin signalling that he supports the Grand Bargain. Do any others?
Perhaps it is not enough to tell re-election seeking Democrats that we will not vote for them if they vote for the Grand Bargain? Perhaps we should tell them that we will not vote for them if the Grand Bargain is permitted to pass? Might that cause them to pressure their peers-in-office to actually make sure the Grand Bargain fails?
Obama will savagely reject every alternative to default that you have offered. His sole goal is to use default to extort the Grand Bargain. Would it make sense to try getting certain sympathetic Democratic officeholders to make steady loud speeches/articles/etc. about these alternatives so as to reveal Obama as being firmly opposed to them? Could that shame and humiliate Obama and the Catfood Wing of the Democratic Party into dropping their pursuit of the Grand Bargain?
The Grand Betrayal has very little to do with making a deal with the Republicans.
Obama and his neo-liberal sycophants want to trash social security and entitlements as part of their duty to their owners and as part of their own political philosophy.
The plan is to blame it on those evil Republicans, but Obama has already shown that he doesn’t really care about his own base. His message to the left is FOAD.
Some of the Republicans are willing to take the credit for trashing social security. Others don’t care either way.
But the one thing we can be sure of is is that none of these clowns are on our side.
Mostly true. But it’s not true that this has little to do with “the deal.” Obama needs the deal as a response to supposed TINA for cover. the cover is important because without it, his presidency is over.
Also, the term is “the Great betrayal.” It is a meme coined by Bill Black, already in use in opposition to “the Grand Bargain.” Having a third meme, seems a bit redundant.
Forgive my stupidity, but what is “TINA”?
“There Is No Alternative”. A favorite argument of neoliberals.
The only thing I disagree with you on is your term clowns to describe them. They are bought and paid for criminals.
The two are not mutually exclusive.
You have a point, but frankly I don’t see “how” PBO will succeed in “blaming Republicans.”
Actually, I’m not sure that he is even trying to.
What he has going for him is an incredibly “gullible” base (mostly), who believes all the DNC talking points thrown at them, and generally lacks the ability to think critically, anymore.
Some folks ridicule the Republican base (and I agree that their values and core beliefs are way-off-base), but they say to their Leaders, “jump,” and their Leaders ask, “how high.” ;-)
OTHO, you’ve got unions and some factions of the Democratic Party base, like the SEIU, which are putting out petitions right now in the very midst of GB negotiations–pushing for the repeal of the sequester!
I am inundated on Twitter with Dem organizations literally “asking for a Grand Bargain” (although I imagine that union rank-and-file members don’t realize this).
I’ve had to “unfollow” some organizations (mostly unions) due to the onslaught of “pro-Grand Bargain” petitions, etc.
In the end, I’d say that it’s the Republican Party that could really take lessons from the Democratic Party on how to make its base work against their own self-interests.
It is mind-boggling that they are able to pull off this type of maneuver–time, and time, and time again!
Especially since we all know the definition of “insanity,” LOL!
And “the base” just cheers it on! Since so many of the Democratic Party base are “sheeples,” clearly Democratic Party politicians have no threat of “being primaried.”
No wonder they view their own base with so much disdain, if not contempt. [which is my impression, from their actions]
[Much of the progressive blogging community “excepted,” of course.]
Btw, I noticed this morning that Social Security Works (SSW) also is referring to the Grand Betrayal in its e-mail solicitations. So, you’re not alone in destroying the better meme.
So when do the Kabuki awards come out?
kimsarah;
True Kabuki awards stay ‘in the closet.’ To be genuine, they must be inferred, never explicated.
Obama believes that the Grand Betrayal will solidify his importance in history. It’s probably a result of lack of values and intellectual limitations. We, as in old time Democrats, have very little ammunition to fight for the preservation of our tiny safety net. In other words, if Obama wants to betray us, he will.
Obama’s decline to use The Coin or the 14th indicates that his focus is betrayal.
Yes, his refusal to use the 14th amendment shows his deep respect for the separation of powers.
Or, an alternate explanation is that it shows what he is willing to go to bat for:
http://www.washingtonpost.com/blogs/2chambers/post/kucinich-other-house-members-file-lawsuit-against-obama-on-libya-military-mission/2011/06/15/AGrzd6VH_blog.html
We ought to be looking at why, after the Democratic Party left resurrected itself and galvanized around the Obama candidacy it seemed to have disappeared. All these situations are threatening to, gradually, to disintegrate the social contract and the Union itself. This attempted putsch was a show of force by the right. It has proven that it can push the United States of America, the lone remaining super-power to the brink with relative ease.
This moment of power on their side has been carefully planned by disciplined cadre financed by a minority of the oligarchs. Today a change in political line can be transferred to the faithful (about 30% of the American people) and they will chant their slogans in unison and flood the blogosphere with those chants.
How, in your opinion, can the Democratic Party left or the left in general find strength to counter this movement to not just roll back FDR but TR and, frankly, Lincoln as well?
Unfortunately the horse may be out of the barn for at least the rest of the decade. The time for the Dems and the left in general to have rallied was in 2010, when off-year elections coincided with the census and legislative reapportionment. But the lefties (present company included, to be honest!) were too busy pouting over how ACA fell short of perfection, and guess who wound up slicing and dicing a lot of US House seats after 2010?
You gotta hand it to the wingers. They do have the sort of killer instinct that it takes to win.
Yes we were “pouting” about the extortion racket Obama wasted 2 years on when millions of people were losing their jobs and their homes and he was looting our treasury to bail out the Wall Street Financial Terrorists.
Make no mistake, Obama would have lost in 2012 if the Republicans didn’t run a hundred millionaire from the East Coast who was caught on video dissing the 47%.
Romney was an obvious fall guy (which many here pointed out), whether he knew it or not, tho I’m guessing he did. Funny how the odious O picked up the former Bain CEO recently as his advisor. What an incestuous clan of lords they are.
Obama Appoints Bain & Co Consultant to Top Post
https://www.commondreams.org/headline/2013/09/13-4
Calling Mr. Orwell, Mr. George Orwell!
Don’t get me wrong. The pouting itself was justified considering the outcome of the ACA fight. My complaint is really over the chronic inability of lefties (again, including yers truly) to keep their eye on the ball when it comes to political strategy. It’s probably true that it’s easier for right-wingers than it is for left-wingers to focus on strategy–after all, they’ve got little else going on in those reptile brains of theirs. Still, it’s pretty depressing sometimes to see the Left still getting outgamed decades after it should have been learning their political ABCs (like, um, the census every ten years, reapportionment to follow, etc., etc.)
During the period 2009 – 2010 the Democrats had the following failures.
First, they failed to take the big banks into resolution for insolvency and take control of the financial apparatus that would have allowed credit to small business to keep flowing after the crash.
Second, they allowed outrageous bonuses to be paid to executives in companies that were being bailed out by the public.
Third, they passed a stimulus bill that was only 40% the size it needed to be to get full employment (we don’t have it now nearly 5 years later, and still have 28 million wanting full time jobs at a living wage who can’t get them), and that also emphasized tax cuts rather than high fiscal multiplier Federal and State spending (after State revenue sharing).
Fourth, they passed a credit card reform bill (CCR) that retained high interest rates and have allowed outrageous gross profits for the CC companies and banks, while holding down the consumer spending tat would have been great for the recovery.
Fifth, they failed to pass a 35 page Medicare for All Bill that everyone could understand, and instead, produced the 2300 page horror written by the drug and insurance companies to increase their profits called the PPACA (ACA, Obamacare).
Sixth, they failed to prosecute the banksters and insurance fraudsters.
Seventh, they failed to help home owners, but instead implemented a fig leaf that just allowed the servicers and mortgage companies to collect even more profits before they foreclosed on them.
Eighth, they failed to pass a FINREG bill that solved the derivatives and financial instruments trading problem, leaving the international gambling casino intact, and continuing to expose the world to the risk of another financial implosion.
Ninth, they did nothing about environmental and climate change problems.
Tenth, they did nothing about re-engineering the energy foundations of the United States.
Eleventh, education reform in public schools was put on the shelf and they passed nothing on this.
Twelfth, they fostered unprecedented electronic surveillance of all of us and have expanded the architecture of totalitarian repression in such a way that our democracy is now threatened.
They could have avoided failures in these areas, and prepared the way for successes if the Democratic Senate had organized itself in January 2009 without the filibuster.
They failed to do that. And that procedural failure, that could have been prevented by Harry Reid with pressure from the President-elect (at the time) led to all the other failures I mentioned. It was not the “pout” of the “lefties” that defeated the Ds in 2010, it was their poor performance during the time they had power, that gave the tea party the opportunity to rise and create the conditions that led to the wave election of 2010.
Had the Democrats turned even two of these failures, the stimulus bill, and the health care reform into successes that people loved, there would have been no victory of the Republicans in 2010, no disaster at the State level, no attacks on the rights of women, no attacks on voting rights, no ruinous cuts in education and in all manner of State and local services including education (because the recession would have ended by January of 2010), and, no repeated financial crises since the Summer of 2011 at the Federal level which have risked default and also created periodic and now continuing drags on the economy.
The lesson of 2010, is not one of lefties pouting. It is a lesson of what happens when the supposed party of the people takes care on the interests of the 1% at the expense of the people. The Democrats deserved a sound thrashing in 2010, and from the looks of things now, it doesn’t look they’ve learned anything valuable and that instead of learning their lessons they prefer to scapegoat the lefties the same way they scapegoated Ralph Nader in 2000.
Other people acting independently are not the cause of recent failures of the Democratic Party. the cause is much more fundamental. It is that increasingly since 1977, the Democratic Party no longer behaves like the Democratic Party. It is now a party that believes in messaging, and moral blackmail, but not in actually performing for the benefit of the people who elect it.
And why didn’t the Democrats do any of that?
Because they work for the same criminal elite the Republicans do.
Watch this space” http://www.reinventdemocracy.net/ over the next two weeks.
kooky question time:
have you considered that, even though the goal of your site is to foment “real” change in the real world, in those areas in which it doesn’t/can’t do so immediately, to use it to point out the path that most citizens would or do desire that the current policies are not?
that sounds like making it a cross between an online polling station and an alternative government in exile type of thing, but I wonder if it can be done.
put forward the policy, or allow the policy to cohere through the magical power of the internet (including consultations/cautions of real experts), then put it up for “voting” as a symbolic thing. “this is what the country really desires” vs what we got. granted, that’s done rather piecemeal here and in various other places.
one main problem is that it falls into all of the problems of sampling, especially poll sampling and internet sampling, that already exist.
read the site and the various links more carefully, you’ve misunderstood what it is about. And that is not because of what the site said; it’s because you haven’t read it carefully.
Anyway, watch that space. Things will be happening soon.
Banger I just want to swoop in here and say that I read your comment on defining “the left.” Because I do not have time right now this is not a serious comment, but more of a probe and a marker.
I’m not persuaded the term “the left” is even valid any more (and maybe that’s not a bad thing, given the branding).
For example, the “Democratic left” who still support Obama folded like deck chairs whenever they had to put policy over tribalism. What kind of “left” is that?
Name it and claim it, say I… I see what you are saying about compassion and connection over and against “liberty” (for some (and justice for the highest bidder)). But that 1090 article in Links kinda sets the baseline for successfull propagation and I’m not sure “the left” cuts it. Not throwing the baby of a long and honorable history out with the bathwater, but it’s hard out here for an aging hippie….
Inflection point comin’ right up! And there will be consequences, for Obama’s Presidency and for the rest of us too.
Consider two 19th century US Presidents–both Democrats incidentally–confronted with make-or-break crises: Jackson and the Nullification Crisis in 1831, Pierce with the Kansas-Nebraska bill in 1854. In one case, a President with genuine principles (“the Union, it must and shall be preserved!”) hung tough, won his case and the consequences indeed did preserve the Union for 30 moreyears. In the second case, an empty suit with no principles caved in to ruthless pressure from a minority in Congress and the Union fell apart six years later. We’re still wondering after more than five years whether this President is a Jackson or a Pierce. Maybe he hasn’t figured it out either.
This President is a Pierre Laval for the Overclass.
The only think protecting us from Obama’s betrayal when it comes to social security and medicare is the idiocy of the republicans. Boehner and the tea party have refused to take yes for an answer. So at some level thank you tea party. Thank you for your unreasonable hatred.
Its not necessarily idiocy on the part of the GOP rank-and-file. Republican polling collapsed after the SS privatization push in 2005. Despite the common story about Schaevo exposing the GOP, the Schaevo incident helped stabilize and strengthen Republican support among boomers and seniors. Democratic voters found their notions reinforced. Republicans may not want to touch SS because the people most concerned with it tend to be 50+, Republican voters.
A 30 year old Democrat may not care now because the effect won’t seem immediate which is why Democrats can get away with discussing chained CPI and grand bargains.
Don’t celebrate too soon–XM POTUS Channel has been reporting for a couple of days that Boehner is saying that “his only way out, now, is to strike a Grand Bargain.”
My “guess” is that the past couple of years were “dress rehearsals.”
I am convinced that a Grand Bargain will be passed and implemented this month–to include “tax reform” that will make life very miserable for working and middle class folks. (Dave Camp has been holding hearings for months–of years–and they are reporting that his package is near finished–tax reform committee “chair” Camp, that is.
I’ve repeatedly posted Rep Jan Schakowsky’s OpEd (Reuters) that discusses the punitive tax reform that Bowles-Simpson’s proposal calls for. That’s what Camps’ committee will produce, in legislative form.
I imagine a lot of the GOP hardliners (tea partiers, whoever else) see the sequester as a better outcome than the grand bargain.
So part of me thinks the whole point of the shutdown/debt ceiling negotiation is ultimately to reach an outcome where those “belligerents” are marginalized and become non-players.
It’s also a feature of Obama wanting a clean resolution. He knows the belligerents will never sign up to that. So this is a win/lose proposition – either he wins, or the belligerents win. There’s no win/win in here, until afterwards, when the remaining parties can shuttle through the grand bargain.
I agree that PBO will “win,” if one considers a Grand Bargain to be “a win.”
But in doing so, I would think that 2014 might be a repeat of 2010.
And with the ACA well-entrenched–2016 may very well end up resulting in a “bloodbath” for the Democratic Party.
One thing for sure, it’s “Kabuki Theater” at its finest!
If the left had some kind of vigor at even a fraction of the level the extreme right has then this would be a perfect opportunity to assert power. I was puzzled by this power play and I call it an attempted putsch by the right. I think this is, as Firestone indicates, an attempt to create, at minimum a Grand Betrayal, but I think that the deeper reason for this is to show to other factions within the oligarchy just how powerful the Koch brothers and their comrades are. They can and will push a button and bring the USA to the brink of self-destruction if they choose.
Talking about rational policies here is not the point. People need to see this for what it is and it has nothing to do with Obamacare or spending. There is no debt crisis, and Obamacare preserves oligarchical control of the HC system and re-arranges the deck chair so some parts of the population gain something others lose. Liberals and leftists have some kind of allergy to understanding politics, probably blinded by American Exceptionalism. We have to remember here that the stakes are extremely high. If you control the most powerful country in the world that is pretty heady stuff. This has nothing to do with the “irrational” right. The Koch brothers and their faction are not irrational–everything they do makes a ton of sense if you understand realpolitik Machiavelli and Shakespeare would have understood what is happening here. This crap about Debt ceilings is nothing–the nonsense coming out of right-wing think tanks is mainly pure propaganda it is clear and has been pointed out here and elsewhere that most of the studies and findings of these “scholars” are mainly fraudulent to give right-wing ideology some veneer of scholarship (mind you there was a time when there were legit right-wing scholars and there are some left here and there).
The right has been able to take over the RP why can’t the left have even a small bit of influence? I say it is because most of us aren’t willing to join with our fellows in collective and FOCUSED action so we aren’t even on the political playing field. And by action I don’t mean writing Congress or the WH but asserting political muscle such that we could bring the country to have to bargain with us.
We’ll see, maybe we can stop the Grand Betrayal maybe there’s juice in the old New Deal alliances. Maybe by raising the issue on these fora it will influence affairs. I know the WH monitors this site from time to time.
liberal and leftists have an allergy to politics–
not out of “American Exceptionalism” (ludicrous concept I believe most of them would laugh at_).
but because, as I pointed out before in another mad theory of mine, because it is literally wrestling in the muck, selling slogans, trying to brainwash people.
liberal/leftist desires a humanistic, rational acceptance of grounding principles, from which the only thing remaining is to hash out the specifics of implementation. they want people to be “guided to the truth” or really guide themselves there.
politics is a dirty game. and that itself is the problem. if you’re trying to organize society, engaging in the dirty game might be necessary but the danger is, it might sully you and turn you into the very thing that you despise. the self-centered shill.
Young ‘un, there was a time when leftists didn’t shun hard-nosed politics, AT ALL. There was a lull during the ’70’s when the main battles seemed to have been won, then Reagan with his folksy machismo, and Thatcher with her indomitable-seeming British stiff upper we-survived-the-Blitz lip, came in and sorta’ like, overnight, made leftist ideals seem weak and effeminate. Since then, left-leaning political types have acted just slightly scared and ashamed, ISTM. Wasn’t like that before the Reagan/Thatcher shift, at least in my admittedly fragmented memory.
hA! thanks for the schoolin’. it is always useful.
watch out though. i might be older than you.
older, but no wiser.
I think it started under Carter. That’s when “liberals” started running away from the “liberal” brand. They allowed the right to drag their brand through the mud, and rather than fight for it; they started calling themselves “progressives.”
The mid-70s. Remember “deregulation” started with the airline industry under Carter. Little did we know.
“Using the authority of the 14th Amendment to keep issuing debt in defiance of the debt ceiling, while declaring that the debt ceiling legislation was unconstitutional because it violated the 14th Amendment in the context of Congressional appropriations passed after the debt ceiling mandating deficit spending.”
No “grand bargain” or “great betrayal,” whatever, is going to do the job, because if the Pres. gives in to that sort of blackmail, we’ll be right back there again and again and again.
The platinum coin is a clever idea, no more absurd than the debt ceiling itself, but there are too many problems associated with such a move. It will be seen as a gimmick, it will become a magnet for endless disputes and could get Obama impeached.
But using the 14th Amendment to declare the debt ceiling unconstitutional makes sense, and looks to me like the only way to go. Only it has to be done right. It would be a huge mistake for Obama to use the 14th to justify continual borrowing, because the Republicans would make a huge stink, threatening impeachment, and Treasury Bond interest would soar. What should come first, before any additional borrowing, is a presidential declaration that the debt limit is unconstitutional, followed by a presidential request that the Supreme Court rule on that as soon as possible. Since the court is largely conservative, it will be interesting to see what will happen next. But since the court’s involvement is inevitable in any case, Obama really has no choice.
If the Court rules in his favor, then that’s the end of it. No more annual crises regarding the national debt, no more Tea Party blackmail. If the Court rules against him, we’re no more worse off than before.
It doesn’t matter how its done. The overwhelming majority wouldn’t care. This issue is too dry and not direct enough for people to worry too much about. They will care about their loss of government spending.
People who said the debt was a major issue in 2000 voted for George W. Bush, and then they did it again. “The national debt” is something people say when they don’t want to admit they are a Republican or a Democrats because their parents were.
Holding the line on the size of the stimulus was an insane venture politically because the average voter can’t grasp the difference between $100 billion and 11ty kajillion Disney fun buck because they are both absurd numbers versus what people see in their daily lives. 144,000 was an incomprehensible number to backwards desert dwellers 2000 years ago. The number of stars in the sky was an incomprehensible number to sheepherders 5,000 years ago. Depending on what people with excellent eye sight claim they can make out, the most a person could see is about 4,500 stars from the northern hemisphere if one is being liberal.
Bill Clinton was impeached over a blow job and perjury. People can understand and grasp this. Andrew Johnson was impeached for being a Southerner and taking the blame for various ills of post Civil War society in the eyes of the American people.
Republicans aren’t attacking Obama over his rank thuggery in Libya or handing out weapons to every two-bit terrorist. They are on some bizarre tangent about pulling security to make sure an ambassador was killed. I don’t really understand Republican arguments, but there argument is focused on the ambassador dying which is something people can grasp.
The American electorate does not care about a relatively obscure line in the 14th Amendment. Anyone who utters impeachment and 14th Amendment will never be listened to.
The RP does not care about the issues as issues. Their goal is to destroy the safety net, efforts at regulating powerful monopoly interests, and stymie law-endorcement if it is aimed at high earners. Needless to say, taxes should be born by the bottom 90% primarily. They are succeeding in their efforts and grow more powerful everyday because they have a dedicated cadre of highly skilled professionals and lawyers on their side and their efforts have enabled to organize and discipline a dedicated collection of citizen activists and true believers who will believe anything the RP dictates through it’s propaganda organs and they can turn on a dime so robot-like their voters are. Today the sky is red tomorrow it is yellow by decree of the Central Committee.
Agreed, but there’s no substantive difference between RP and DP. Apparent differences are merely make-up and costumes. They serve the same sponsors, patrons, and investors.
For the old RP yes for the Tea Party, no. The faction in the oligarchy they represent is at odds with the DP and the old RP.
After nearly five years of perfidy, consitutional violations, and serious crimes, it’ s a fundamental error IMO to assume O is either well-intentioned or honest. How many times will you trust Lucy with the football? Obama wants—needs—this crisis to commit his treachery.
If we don’t heed Firestone’s call to action, Obama’s Grand Betrayal is a done deal. I believe it is his single greatest priority to end the last of the New Deal.
Let me make sure I understand this:
– Repudiate federal torture statutes:
Viable legal strategy
– Institutionalize policy in breach of War crimes Act, 18 USC § 2441:
Viable legal strategy
– Commit aggression against Pakistan and Syria in breach of 59 Stat. 1544 Article 6(a):
Viable legal strategy
– Mint big coin:
Not viable legal strategy
“paying off the debt” is one of those non-necessary things. yes, I understand that with gov’t debts owing, we are constantly having to justify why it is “not like a household” and so on. but from those Columbia discussions, it was clear that the debt (or the bonds the debt is held in) is a vital buffer stock for our economy.
http://www.youtube.com/watch?v=soVyyyXrcwo
i would imagine that this reduces price inflation in the investment realm. if some of the people holding dollars (foreign creditors) can be fawned off with bonds, they won’t go running around trying to find a way to preserve their purchasing power, thereby inflating the real estate markets, stock markets, and so on.
so, paying off the debt would be a bad thing, no?
**still a confused peon
sorry, relevant discussion of that issue begins at the 30 minute mark, approximately.
“if some of the people holding dollars (foreign creditors) can be fawned off with bonds, they won’t go running around trying to find a way to preserve their purchasing power, thereby inflating the real estate markets, stock markets, and so on.”
If the Fed Gov simply spends (like it does now) without sterilizing that spending by collecting taxes and issuing bonds, then that’s inflationary and leads to bubbles like you described.
From what I understand, the platinum coin would allow the Fed Gov to avoid having to increase its debt issuance without lowering its spending. Which means the Fed Gov spending is not “sterilized”.
Now one can argue (I do anyways) that this is happening to a degree already. Through QE, the Fed Reserve is already counteracting some of the sterilization that the Fed Gov does through bond issuance. Where the Fed Gov issues bonds to sterilize its spending, the Fed Reserve is counteracting that with QE by buying a good percentage of those bonds and re-injecting currency back into the economy (into the hands of those that don’t need it). So in a way, unsterilized spending by the Fed Gov wouldn’t be that much different. In fact, it’s effectively the same as the Fed Reserve increasing its QE to buy all the bonds that are issued by the Fed Gov.
And the platinum coin idea is tantamount to the last sentence in the previous paragraph. That is, it’s equivalent to the Fed buying all the bonds issued by the Fed Gov. But rather than the Fed Reserve buying bonds from the Fed Gov, the Fed Gov is instead “buying” a platinum coin from the Fed Gov. So the Fed Gov isn’t increasing it’s debt level. Ta dah, debt level is no longer an issue.
The down-side to this is what you’ve identified: it’s non-sterilized spending which leads to inflation in assets. And as mentioned, this is already happening per QE by the Fed Reserve. So in a way this would be QE by the Fed Gov instead (still going to the wrong hands, BTW, as it ends up in the hands of the people who don’t need it). Joe Weisenthal argues that this can be offset by reverse QE by the Fed Reserve. See Business Insider: 3 Huge Myths About The Trillion Dollar Coin Plan To Save The Economy. Recommend his article more generally too; it was very good at tying together a lot of the pieces.
wow! thank you. it clarifies some things for me.
my personal intuition is that our society has, as some have said around here, enough money but very poorly distributed.
we need leeches applied to those portions that are coagulating money* and not using it for anything useful (the top). we need to do stuff that is totally politically unfeasible, considering who “owns” the political class.
we need to reduce the financial sector, speculation in general, and large pools of money seeking more money and not productive investment. we need to, unfortunately, tax and redistribute and/or restructure who gets paid how much to do what, and what gov’t gets paid to administer the services that the entire population needs to do its business (including corporations).
but, because we have an owned group of puppets, we’re looking for the quick & dirty workaround of the coin. i’m onboard for the coin simply because it would put a stop to this constant budgetary nonsense. but that is the exact reason the political class will NEVER entertain it, or things like it, seriously. they want to have their hostage situations and grand bargains and so on. the coin would eliminate that and ask the tough question of why none of them seem interested in governing and aiding the population, rather than helping certain segments loot the rest.
such a quagmire~!
*leaches are still used effectively in therapeutic treatment in Germany as a natural aid to circulation, rather like a targeted warfarin.
i’m onboard for the coin simply because it would put a stop to this constant budgetary nonsense. but that is the exact reason the political class will NEVER entertain it …
Bingo. I’m in complete agreement. The platinum coin undermines one of the greatest fears that is being instilled in the population. Removing that fear dis-empowers the TPTB that are operating our government, which is why it won’t be done.
At best, Obama will raise the debt ceiling by his fiat. That would remove one of the tools that holds the Presidency over a barrel. But still keeps in his arsenal the fear of debt as a way of holding the people over a barrel.
There are lots of good ideas discussed in this post, including seemingly flaky ones like the platinum coin. But Barry, the triangulating and equivocating butt-kisser with a backbone of marshmallow, will never consider any of them, cerainly not in opposition to the plutocrat powers that be, who rule his choices absolutely!
The republic has failed grossly, even though most people don’t yet know it or believe it. It’s time to admit the truth and deal with it, not just the “Grand Bargain” or “Obamacare” or unceasing and senseless warfare, but everything.
The Democrats may just posssibly rally at the point of near extinction, reject Barry and his stumble-bum parade of helpers, but that’s unlikely. Only a new and unstoppable movement (a new Occupy?) will do it. But in any case, in one form or another, “The North will Rise Again”.
Conflating everything I have read today. The Grand Bargain is an anachronism in light of the discussion for sovereign finance. It is ‘Old Narrative’. So I like this turn in the analysis. Galbraith is very cool. And my suspicious mini me is thinking that our great American private finance industry is in so much trouble both here and around the world that it should welcome the coin. Asap for the full 60 trillion. When the TPP financial deregulation fails under its own unethical weight, it’s curtains for American private finance. It should have happened 30 years ago, but better late than never. This could happen any day now. And it’s gonna be one of those things you just don’t mention in polite company. I’m wondering now if this “crisis” (no doubt the one Obama surreptitiously referred to when pushing Summers) hasn’t been moved forward because Summers is out. In the end, how else will American finance survive in a world of very serious-minded sovereign nations?
If the law imposing the debt limit is constitutionally invalid (owing to alleged conflict with the 14th Amendment), then wouldn’t the SCOTUS have to decide that question — that is, can the President, alone, simply ignore any law with impunity for which some plausible “reason” can be cooked up and without testing in the courts?
Obama once told Rev. Jeremiah Wright that Wright’s problem was he had to tell the truth.
See: http://www.truthdig.com/report/print/the_rev_jeremiah_wright_recalls_obamas_fall_from_grace_20110919
Unless Uncle Sam is willing to back a system ultimately offering rock solid defense of the dollar, the coin won’t work. The intrusion on Wall Street’s delicately balanced, super leveraged turf that, presently is anchored by Treasury securities would incite panic, whether irrationally founded or simply manufactured in a virtual act of war.
As this is the case, then, the only credible solution is full bore reorganization of the global financial system, rejecting today’s imperial monetarism and its culture of scarcity increasingly holding sovereign entities hostage to scrambling for crumbs falling from a shrinking pie produced by a collapsing physical economy whose potential for creating tangible wealth has been purposely diminished–technologically downgraded. Erected in its stead need be a Hamiltonian system of credit promoting a culture of abundance and technological advancement, the likes of which the post-WWII Bretton Woods system was intended to effect until coming under attack from London (the new Venice) in the 1960s.
Unless this course is taken, an insoluble crisis is on the agenda, the likes of which I will argue is entirely intended–today’s political theater is made to order–this for the sake of promoting an imperialist agenda, first consolidating control over physical and financial assets into still fewer hands, and foremost venturing to destroy the centuries old system of sovereign nation states at whose apex is the constitutional republic of the United States itself.
If only for the sake of accenting the still ongoing battle between republicanism and oligarchic subversion, on this account alone would I support the weak idea of “the coin.”
One of the worst D Senators re: Great Betrayal is Michael Bennet of Colorado. I have written him repeatedly insisting that he not support any such an attack on SS, etc. In every case I have had the pleasure of a reply parroting at length the party line of the Peterson Institute. Although Bennet is nominally a Democrat, in fact he is the senator from Phillip Anschutz, the richest man in Colorado, a Republican zealot. I think more investigation/publicity about Mr. Bennet’s real constituency/loyalty would be helpful.
Um, it seems the Grand Betrayal is already baked in. Let me explain.
Even without federal gamesmanship the economy is in an extremely fragile state:
Mike Whitney cautiously predicts the U.S. economy is headed for a slump, although he’s quite made the case that it’s headed for an actual collapse.
The sequester, the shutdown, and the impending debt ceiling crisis are all just piling on to an already bad situation. A collapse, or at least a very severe downturn, appears to be getting deliberately engineered. The FIC has engineered such collapses for the last hundred years for fun and profit, and this could be the Big One.
Such a downturn can be expected to motivate Radical Action, which obviously will not be directed at the MIC or the FIC (the Financial Industrial Complex), because they are untouchable. It will be directed at ‘entitlement’ programs and anything else that supports the general population. Think of it as one of the last, if not the last, battle in the class war.
It’s what Republicans want, and Obama, being a Republican by his nature, very much appears to be colluding with Republicans to achieve precisely this result. The debt ceiling crisis will be more than sufficient to tip over the global economy, although it could crap out with just the sequester and the shutdown.
I for one do not believe Obama cares about his ‘legacy’ because he’s already blown it just about every way he can. But I do believe he’s out to make the biggest possible giveaway to TPTB. I could be wrong, but I really doubt it. The debt ceiling crisis will tell.
It could be just about time to kiss the middle class goodbye.
It seems strange that nearly 5 years into Obama’s Presidency, we are still having these conversations about what Obama “could” do. He is doing exactly what he was elected to do, what he is paid to do. The problem is that we did not elect him and we are not paying him. Oh, I know there was a sham election in which we were given the “choice” between who was going to screw us, but such choices are not real, such elections are not real. What could be said of Obama, that his election was illegitimate, could be said of every other officeholder out there.
When we cast the issue of the shutdown in terms of the Constitutional powers of the Executive against those of the House, we are missing the point. The entire structure is illegitimate. No one in this sad farce has any intention of doing right by us in the 99%. What we are witnessing is infighting within our elites over how we are to be screwed. It is not that one side is for us and the other against us. They are both against us, just in different ways. The argument is not over ends but means, how best to loot us.
For this reason the debate over what Obama “could” do is meaningless. It is no more than keeping score on the lies he is telling us. His goal of gutting Social Security and Medicare and furthering kleptocracy is what really counts. It is this which will determine his actions now, just as it has for the last 4 1/2 years. The first thing we need to learn on the way to creating true resistance to the powers that be is to reject these false debates and the terms they are cast in. We need to stop treating those in power as if they were legitimate and acting in good faith. They are not, but they are perfectly willing to trade on those assumptions and use them against us. Every time they get us to treat them as if they were legitimate, in any way, shape, or form, they win a victory over us. The only real answer to this is a complete and implacable rejection of not this one or that one, or this issue or that. We must reject them all and deny any claim they have or might make to legitimacy of any kind.
Agreed. Obama hopes I’m sure that he get the “Reagan Treatment”, i.e. his insidious actions sent down the memory hole and a fake persona plastered on him. But it isn’t essential. Dubya left office in disgrace and is doing quite well for himself, I’m sure.
The bigger issue for me is how Obama maintains this “Teflon coating” for so many. I guess you can ascribe it to liberal guilt and a refusal of blacks to look this guy square in the mug. But it seems more sinister to me than that. You come to think that Banger is right, that the whole media apparatus is subtly controlled. So many people not asking the right questions. So many people forgetting so many things that have happened in the past. So many people who don’t even seem to be able to remember what words mean any more. It’s all rather disturbing, even spooky.
———
You come to think that Banger is right, that the whole media apparatus is subtly controlled.
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This is a good sized chunk of how the .1%’s take-over has been such a smooth success. At some point didn’t the Reagan administration push through some kind of deregulation whereby it was made possible for one person or group or corporation to gain control of whole ?sections of the media, local or national, I forget which, something that wasn’t allowed before that
Gotta agree… Carnegie’s ghost is gallivanting off somewhere so he can’t hear the screams, yet knows the deed is being done… conversely he’s in a 360 degree media center and through sensory osmosis archiving epic gratification… it matters not which the two… the screams are viscerally real.
skippy… the list of names behind the corporate smoke screen are no different than the Tudors… they have assumed the rights of creator and all the privileges that title affords… rightly or wrongly… in its application.
Hugh, I think it’s time to revive this joke:
The Democratic Party is like a horse that refuses take commands from its owner and stubbornly refuses to carry him. The owner does not go out and get a new horse, but picks up the horse and carries it around in the belief that, eventually, the horse will change its mind.
Years later, the horse is thinking, “I’m a genius!”
Latecomer here, please someone tell me what is TINA?
Thanks
TINA: There Is No Alternative [to neo-liberalism], attributed to Maggie Thatcher.
Jesus, so much vitriol about Obama on this thread. He’s “controlled by plutocrats.” He’s got a sea anenome tendril for a spine. He’s a horrible, horrible person!
Hey! Why don’t you pay attention to the real villains, the Republicans. To the real oligarchical puppetmasters, the Koch Bros. and friends, who the New York Times reports conspired to bring on the shutdown and default.
Have you ever heard the phrase “two party system“? There’s nothing about today’s Republicans that we didn’t know in 2000. And the Democrats had their boots on the Republican’s throats in 2009, and gave them a hand up and let them back in the game. And here we are. Both parties own the system, both parties are responsible for the outcomes.
TROLL PROPHYLACTIC No, I didn’t say both parties are “the same.”