The War Between Wall Street and Wingnuttia

A chance for conservatives to gut the safety net. That is in addition to turning America into a Pottersville run by the plutocracy.

Anyone familiar with the Reagan and both Bush administrations knows that while they pushed a cultural agenda to some degree they were largely corporatist Republicans. I think it was a columnists over at Slate who first called Bush the CEO president. So it has always been my belief that when looking at any power struggles between the Republican base( the Palinites, the Bachmann fans, Herman Cain, Malkin/Hot Air, the tea nuts, the xenophobes) and the Republican power brokers (Bill Kristol, the Kochs, the Coors family, Richard Mellon Scaife, the Free Enterprise Institute, the Chamber of Commerce) my money was always on the power brokers. The let’s get back to the gold standard, let’s ban abortion even in cases of rape, lets completely privatize education, let’s not fiddle with Social Security but do away with such programs completely are some of the ways the culture warriors took a back seat to what the corporatists wanted or thought was reasonable. Jonathan Chait’s observations along with public quotes from the base make me think the power might be shifting in the direction of the base. Bond Market Underestimating Nut Factor

The widespread assumption in the bond market that the debt ceiling showdown will, somehow, some way, end well strikes me as a classic underestimation of risk. We quietly assume that something terrible and pointless won’t happen because it’s never happened before, even if the potential causes of disaster are blindingly obvious. Jonathan Allen and Jake Sherman have a good story about the craziness of the Republican caucus. How crazy are these people? So crazy that the current House plan — to tie a debt ceiling hike to a Constitutional amendment to balance the budget every year and impose a California-style supermajority to increase taxes — is running into GOP dissent from the right:

Even some rock-ribbed conservatives believe it doesn’t go far enough: Rep. Steve King (R-Iowa) told POLITICO Monday night that he was leaning “no.”

How crazy are they? So crazy they’re using the metaphors of a crazy man:

The senior House GOP aide said “the only reason” McConnell’s plan isn’t dead on arrival in the House is “because there are so few outs” to avoid a default.

“They’re in punt formation. If they’re in punt formation, we’re going to blitz,” said Chaffetz, a former college football kicker.

Add that House senior aid and Steve Loves Terrorists King(R-Iowa) to the list of conservatives who are hoping for Great Recession 2.0. Boehner(R-OH) seems to want the big bargain – $4 trillion in cuts – yet Cantor and the tea baggers smell the blood in the water. They have never been this close to ending the social safety net and are not likely to get this close again. Everyday more baby boomers retire. That means every day, regardless of politics many people become dependent on the safety net they have been paying into to survive. Millions more Americans would be plunged into unemployment and poverty should tea bagger dreams come true. A few years ago we had 12 too big to fail financial institutions. Now we have about seven. In order to keep Citibank or Goldman Sachs afloat would take another bail out should a default occur. The combination of hardships to the average American and those financial entities might serve some good, clouds and silver linings and all. American might finally learn its lesson about the moral corruption and fanaticism that fuels conservatism. Conservative pundits are already paddling as fast as they can to shift blame for reaching this point. A trend likely to continue. The dinosaurs of Wingnuttia makes it easy to track where they stand and the source of their future embarrassment, Andrew Breitbart’s Big Government Downplays Concern Over Default Despite Warnings From Experts

A post on Andrew Breitbart’s Big Government website downplayed concerns that the federal government could default if the debt ceiling is not raised by August 2, claiming that “the whole ‘crisis’ is as phony as a $3 Federal Reserve note.” However, experts agree that if the U.S. were to default as a result of not raising the debt ceiling, it could have significant negative effects on the economy.

[   ]…Zandi: “In A Post-Default World, Financial Markets Would Unravel And The U.S. And Global Economy Would Enter Another Severe Recession.” In a July 15 Washington Post op-ed, Moody’s economist Mark Zandi stated: “The Obama administration and Congress must raise the federal debt ceiling by Aug. 2. That’s all there is to it.” Zandi warned that failure to do so could create “another severe recession” in “U.S. and global econom[ies].”

[  ]…Meanwhile, Jim Millstein, the former restructuring officer at Treasury, who helped reorganize AIG, outlined how disastrous the consequences of default would likely be. Speaking on CNBC on Tuesday, he said that a Treasury default would affect investors of all sorts, and he criticized those who downplay the consequences.

“This would make the Lehman Brothers bankruptcy look like a walk in a park on a sunny day,” he told CNBC’s David Faber. “They’re really playing with fire.”

 

I don’t always agree with Dean Baker, but he is a pretty bright guy. This time he might be underestimating the nihilistic infatuation the conservative base has with crashing the economy again, Wall Street will not let Republicans pull the debt ceiling trigger

( speaking about default) With US government debt no longer the rock-solid pillar of the world financial system, banks would instantly lose much of their capital. They would not only have to write-down the value of government debt, but also all the assets backed by the government, like mortgage-backed securities issued by Fannie Mae and Freddie Mac.

This would almost certainly push the major banks into insolvency. JP Morgan, Citigroup, Goldman Sachs and the rest would suddenly be back in the welfare line. And any rescue would almost certainly not restore them to their former strength and profitability like the last one did. If the government defaulted on its debt, Wall Street would take a shellacking and it would never again be the centre of world finance.

This is why we knew all along that the Republicans in Congress were not serious about their threats over allowing the government to default. While these people might be happy to kick poor people in the face, to take hard-earned wages and benefits away from working people, and to shove retirees out onto the street, the Republican congressional leadership is not about to cross Wall Street. After all, who pays for the campaigns?

In a tug of war between the tea nut base and Wall Street who will win. That is the part of the equation in play. Of course President Obama is a player in all of this, but he has offered Wall Street what they wanted, a solid deal to bring down the deficit. He has in fact been Wall Street’s man, navigating to what used to be the old Right-wing fiscal boundaries. It is not Obama’s call at this point. Lots of columns posted on this site in the last couple of days trying to portray Obama as the obstacle to a deal. That is silly fantasy projection at best. The only thing holding up the biggest and most rabid far Right deficit reduction deal in U.S. history is the tension between the tea bag hostage holders and Republican leadership. Baker also points out something so glaringly obvious it might be, other than a progressive blog, the first time the plain fact has appeared in any kind of major media ( OK Krugman excepted),

Of course this is silly, but the whole debate over the debt ceiling was silly. If congress wants to cut spending then the way to do that is to send the president smaller spending bills. They can do that any day of the week.

President Obama signaled that he was more than willing to move further Right after the mid-terms. he told Republicans to come up with their dream budget – they voted for the Ryan budget which raised the deficit far more than either the Biden $2 trillion plan or the Obama $4 trillion dollar super deal. So far the Cantors in Congress are in charge. They have voted to increase the deficit and yet rejected a true deficit reduction package – partly because they would like to kill the safety net, but partly because they really would like to blow-up the economy. From the ashes will fly a conservative Phoenix that will get us back to the imagined perfection we would have had as a country before statists like Lincoln and FDR started with their fancy social engineering.

Freak of the day – Wynn CEO Goes On Epic Anti-Obama Rant On Company Conference Call

 

And I’m saying it bluntly, that this administration is the greatest wet blanket to business, and progress and job creation in my lifetime. And I can prove it and I could spend the next 3 hours giving you examples of all of us in this market place that are frightened to death about all the new regulations, our healthcare costs escalate, regulations coming from left and right. A President that seems, that keeps using that word redistribution. Well, my customers and the companies that provide the vitality for the hospitality and restaurant industry, in the United States of America, they are frightened of this administration.And it makes you slow down and not invest your money. Everybody complains about how much money is on the side in America.

Just one of those crazed fact free rants that people with too much free time and unearned income have. If President Obama has made things so bad for Wynn’s business than why is he enjoying such enormous profits. And why was he recently bragging about how well Wynn was doing in a recent speech, Wynn Resorts (WYNN) Q2 2011 Earnings Call July 18, 2011

Stephen Wynn

Well, usually, we always say the same thing, the numbers speak for themselves. We had a great first quarter, the best in our history. And we went through it — we were just around $400 million in the first quarter. We are $447 million this time, and that quarter was about 59% better than a year ago. And in fact, for the 6 months, we’re 62% better than a year ago. We are all, in this organization, heartened by the results.

On January 3, — excuse me, on July 3, I got a phone call. I was in a different city from my colleague, Marc Schorr, and he told me that on the third day of July, we equaled in Las Vegas, our cash flow, our profits of the entire year of 2010. That was a very supercharged thing to hear, but we did $271 million last year and we hit $271 million on the third of July. So for the balance of the year, everything from here on in, in Las Vegas is improvement. And we benefited from a very favorable whole percentage.

Wynn Resorts Chairman and CEO Steve Wynn

 

Wynn Resorts Chairman and CEO Steve Wynn, second from left, stands with Wynn International Marketing President Linda Chen at the grand opening of Encore at Wynn Macau in April 2010. Wynn ranked at No. 2 on the 2010 list of highest-paid executives with $14.6 million while Chen, the first woman to break the top 10, ranked at No. 5 with $13.47 million.

And Wynn must have a soft spot for communists since the Chinese let him open up a $675 million dollar resort in China in 2008.

Wynn seems to be one of those super wealthy snobs who lives in a bubble. Income and the value produced by labor is being redistributed the way it has been for the past thirty years, upwards to lazy sleaze bags like him.

This is what Republican class warfare and supply-side economics looks like

 

 

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