downgraded

Paul Krugman: OK, so Standard and Poors has gone ahead with the threatened downgrade. It’s a strange situation.

On one hand, there is a case to be made that the madness of the right has made America a fundamentally unsound nation. And yes, it is the madness of the right: if not for the extremism of anti-tax Republicans, we would have no trouble reaching an agreement that would ensure long-run solvency.

On the other hand, it’s hard to think of anyone less qualified to pass judgment on America than the rating agencies. The people who rated subprime-backed securities are now declaring that they are the judges of fiscal policy? Really?

Just to make it perfect, it turns out that S&P got the math wrong by $2 trillion, and after much discussion conceded the point – then went ahead with the downgrade.

More than that, everything I’ve heard about S&P’s demands suggests that it’s talking nonsense about the US fiscal situation. The agency has suggested that the downgrade depended on the size of agreed deficit reduction over the next decade, with $4 trillion apparently the magic number. Yet US solvency depends hardly at all on what happens in the near or even medium term: an extra trillion in debt adds only a fraction of a percent of GDP to future interest costs, so a couple of trillion more or less barely signifies in the long term. What matters is the longer-term prospect, which in turn mainly depends on health care costs.

So what was S&P even talking about? Presumably they had some theory that restraint now is an indicator of the future – but there’s no good reason to believe that theory, and for sure S&P has no authority to make that kind of vague political judgment.

In short, S&P is just making stuff up – and after the mortgage debacle, they really don’t have that right.

So this is an outrage – not because America is A-OK, but because these people are in no position to pass judgment.

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I ignore Krugman’s political views, he’s fast becoming the left’s Bachmann (clueless and marginally bonkers), but when he concentrates on an area he actually knows something about (economics) he can, occasionally, be interesting. I’ve read him before going on about Standard and Poors so I reckoned he wouldn’t be impressed with the downgrade news. He’s, eh, not!

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UPI: …. another government official said the White House had told S&P the company’s thinking was “based on flawed math and assumptions.” And S&P acknowledged “its numbers are wrong.”

An administration official told NBC News after the credit rating was lowered, “It’s amateur hour at S&P.”

The official said the administration showed S&P where its computation errors occurred.

Rep. Barney Frank, the ranking member on the House Financial Services Committee, said on MSNBC the decision was “just a political judgment by a group of incompetents.”

“This is the rating agency that took money from people who were selling junk bonds and told other people to buy it,” Frank said, accusing S&P of overvaluing private debt while consistently undervaluing public debt. They are as responsible for the financial crisis as anybody else. There is zero chance of (the United States) defaulting,” Frank said.

‘who is washington’s most effective politician?’

Andrew Sullivan: …. Who Is Washington’s Most Effective Politician? I think Obama is easily the winner and currently stupidly under-rated – and drowned out by all the noise in the conservative-media-industrial-complex.

Here are the political accomplishments: defeating the most heavily favored party machine in decades (the Clintons) while actually bringing his biggest rival into his cabinet, where she has performed extraordinarily well; helping to cement the GOP’s broad identity as extremists opposed to compromise; entrenching black and Hispanic loyalty to his party; retaining solid favorables and not-too-shabby approval ratings during the worst recession since the 1930s. 44 percent of the country still (rightly) blame Bush for this mess, only 15 percent blame Obama.

On policy: ending the US torture regime; prevention of a second Great Depression; enacting universal healthcare; taking the first serious steps toward reining in healthcare costs; two new female Supreme Court Justices; ending the gay ban in the military; ending the Iraq war; justifying his Afghan Surge by killing bin Laden and now disentangling with face saved; firming up alliances with India, Indonesia and Japan as counter-weights to China; bailing out the banks and auto companies without massive losses (and surging GM profits); advancing (slowly) balanced debt reduction without drastic cuts during the recession; and financial re-regulation.

…. When I read commentaries expounding on the notion that this man is completely out of his depth, I just have to scratch my head. Given his inheritance, this has been the most substantive first term since Ronald Reagan’s. And given Obama’s long-game mentality, that is setting us up for a hell of a second one.

Full post here

:-)

We See You

Thank you desertflower 😉

‘obama might just be the leader you wanted him to be’

Conceptual Guerilla (Daily Kos): …. If you’re a Democrat, there is a lot to like about Alan Grayson. I have never heard anyone complain that Congressman Grayson was “centrist”, or that he was an “appeaser” of Republicans, or that he practiced any of that “triangulation” stuff. Alan Grayson was an unapologetic liberal Democrat, who fought for his beliefs and principles. Alan Grayson can fairly be called a poster boy for the kind of progressive leadership many Kossacks hoped Obama would display.

Which brings me to the bad news about Alan Grayson.

Alan Grayson lost.

Did his unabashed liberal priniciples inspire respect among voters who may not have agreed with everything he said? No.

Did his clear embodiment of progressive leadership cause Democrats in his district to turn out and vote? No.

… Democrats in Orlando stayed home … just like they did everywhere else.

….The people who make policy are the people who win elections, not the people who lose them. Alan Grayson was there to fight for healthcare reform, because he won in 2008. Alan Grayson was not there to do diddly squat in the debt ceiling fight, because he got beat … His voters stayed home….

…This is the world Barack Obama operates in.

1. There aren’t enough of progressives to win an election. You’re not a majority. Not only that, there are twice as many self-identified conservatives, and “independents” skew more conservative.

2. There are plenty of you who are very good at complaining about all that nifty progressive stuff we all wish Obama would pull out of his ass. I have observed President Obama enough to be confident in this belief: If he could pull single payer out of his ass, he would. He can’t.

…. Here’s the reality. The stimulus passed in February ’09 wasn’t enough. It was all Obama could get out of the likes of Joe Lieberman, Max Baucus, and Ben Nelson. Those were our guys. Same with healthcare reform … which Obama got passed where every other Democratic President failed going all the way back to Harry Truman.

Some of you people don’t understand how hard it is to get ANYTHING done in Washington. Ever.

… Let me suggest to you that Obama is very cannily, very amiably, very reasonably helping the Republican Party to self-destruct. You may not see it, but Obama might just be the leader you wanted him to be…..

Full post here

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Thanks so much to 57andFemale for this link – as she said, “this is one of the best smackdowns of the PL and description of Obama’s horrible plight I’ve ever read”.

You know how reluctant I usually am to link to DK, it truly has become a miserable PL cesspit, which makes the efforts of people like Conceptual Guerilla to counter the vitriol there all the more admirable. Thanks again 57andFemale.

wisconsin

Wisconsin Democrats

Thanks Theo67

‘spouting policy vitriol from the comfy confines of an office at princeton’

Ben Heineman (The Atlantic): Many liberals are furious with President Obama over the policies in the debt ceiling deal. But, as usual, their critique – Paul Krugman’s is one example – ignores, or is naïve about, the hard realities of divided congressional politics.

When a “yes” vote was required to extend the ceiling, how should the president have negotiated with a Republican House which had been transformed by the 2010 election and which had a sizable number of ideologically driven republican members who wanted to say “no”? That is the key question.

… We are witnessing for the umpteenth time liberal criticism that ignores the diversity in our political system and the dispersion of power in our constitutional system. From time immemorial, Democratic presidents are harshly criticized by liberals for deviating from their “one true faith,” without much regard for politics. Invariably, they say, if the president had taken a principled public position, he would have mobilized the “base” and countered the forces of darkness (i.e.those with whom they don’t agree), but they don’t offer a cogent political analysis. As in this case. To repeat, how should Obama have negotiated with a transformed House of Representatives when he needed their assent?

…. many liberals don’t want to discuss the politics of this negotiation where one House of the Congress has a large majority and blocking power. Far easier, as always, to hurl ideological imprecations down upon the president (how about Nancy Pelosi and Harry Reid folks?)…

To be sure, those on the Democratic side can have a spirited debate about the policies and the politics of Obama presidency, which came into office facing terrible conditions caused by the worst decade of public and private leadership in years…

But, one thing is for sure. Spouting policy vitriol from the comfy confines of an office at Princeton is not going to solve problems in a deeply divided country with strongly held views across the political spectrum. In our system, policy only become important when joined with the power of politics. And that power, ultimately, is in elections.

Liberals should be working every congressional and senatorial race, starting yesterday. Grassroots politics against conservatives, not Olympian op-eds against President Obama, is the best answer for liberal critics of the debt-ceiling deal.

Full article here

putting veterans back to work

President Obama is greeted by Joint Chiefs Chairman Adm. Mike Mullen, at the Washington Navy Yard, Aug. 5

AP: President Barack Obama is asking Congress to approve new initiatives to help some of America’s 1 million unemployed military veterans find work, including tax credits for companies that hire out-of-work vets.

… The main features of Obama’s proposal, according to administration officials, are two tax credits for companies that hire unemployed veterans:

— A “Returning Heroes” tax credit for 2012-2013. Companies that hire unemployed veterans would receive a $2,400 tax credit. That tax credit would increase to $4,800 if the veteran has been unemployed for six months or more.

— A two-year extension of the “Wounded Warriors” tax credit, which gives companies that hire veterans with service-related disabilities a $4,800 credit. If the veteran has been unemployed for six months of more, the tax credit increases to $9,600.

The tax credits would require congressional approval. Administration officials said the White House would start working with lawmakers on the proposal after Congress returns from its recess in September.

… During his remarks Friday, Obama also will challenge private companies to hire or train 100,000 veterans by the end of 2013. He is expected to name some companies that already have committed to taking part in that effort.

The president also will announce a joint initiative between the Defense and Veterans Affairs departments to come up with a “reverse boot camp” program that would help train service members for the civilian workforce as they wind down their time in the military.

More info here

9.1

Bloomberg: Employers added more jobs than forecast in July, the jobless rate fell and wages climbed, easing concern the U.S. economy is grinding to a halt.

Payrolls rose by 117,000 workers after a 46,000 increase in June that was more than originally estimated, Labor Department data showed today in Washington. The median estimate in a Bloomberg News survey called for a July gain of 85,000. The jobless rate dropped to 9.1 percent as more Americans left the labor force, while average hourly earnings climbed 0.4 percent.

Marketwatch: The U.S. economy added 117,000 jobs in July and an even larger 154,000 in the private sector while the unemployment rate fell to 9.1% from 9.2%, partly because 193,000 people dropped out of the labor force, according to the latest government data.

Job gains in May and June were also revised up by a combined 56,000 .. Economists surveyed by MarketWatch had projected a 75,000 increase in jobs in July, with the unemployment rate holding steady at 9.2%.

‘manufactured crisis’

Thanks Michele

‘staying power in the face of adversity’

Robert Shrum: … 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.

…. The progressive choir does have a point that is substantive, persuasive, economically right – and beside the point … Paul Krugman argues that what’s needed in the near-term is more spending, not more cuts, with a long-term deficit reduction plan tied to the pace of recovery. Those that press this idea – or who believe the president could have achieved a public option, an extension of tax cuts for the middle class but not the wealthy, or a debt ceiling bargain that raised taxes – have yet to describe a practical path that could have gotten him there.

…. the notion of ignoring Congress on the debt ceiling and invoking the 14th Amendment could have served as a useful pressure point or as a last resort in extremis. Actually doing it would have set off a constitutional and probably a financial crisis. It might have offered psychic satisfaction, but exactly how would it have advanced progressive purposes?

…. It is fantasy politics to assume the president could have overcome generations of fantasy economics – and it’s all but certain that no matter what he said, there never would have been enough votes for a second stimulus package in a filibustering Senate where an all-powerful Republican minority was and is dead set against any Obama plan to revive growth and jobs…

…. Democrats in general, as distinct from disappointed activists, may not know all the details, but they seem to sense this. Obama’s approval among liberals is high – and among Democrats it stands at 77 percent – even at the most fraught passage of his presidency. So much for the chimera of a primary challenge. From whom? Dennis Kucinich – who no longer has a congressional district in Ohio?

Just because the Tea Party is crazy doesn’t mean progressives should let them make us crazy …. Time and again, most recently during the manufactured debt crisis, the president has already proved that he’s the reasonable person in the room. Now he has to prove that he’s the passionate person in the room … He has to put an edge on his message, as FDR and Harry Truman did…

… The criticism of Barack Obama in the last campaign was that he was all speech and no substance. As president, he’s been mostly substance, much of it historic, and rarely the speechmaker of 2008. But in the fierce urgency of this now, it is time for speech again, for a clarion call. Let’s hope we begin to hear it in the sounds of August.

Full article here