I don’t usually bother to comment at news sites. When I have I try to be reasonable and fact based. If I feel like venting I can always do that here. A couple of stories were so factless at The Hill over the last year I was moved twice to post a comment. Their stories generally have a Right-of-center slant. Their commenters run so far Right and are so angry your facts are going to get lost in the verbal jousting anyway. Both my comments were never posted so going unread became a moot point. So my surprise at this somewhat fair story about Democrats, the Super Committee and the budget talks – Democrats gain upper hand in deficit-reduction negotiations
Reid’s threat is yet another signal that Democrats are preparing for a supercommittee flop, and are largely comfortable with the cuts that would be triggered if there is no bipartisan agreement.
As Republican leaders vow that failure is “not an option,” Reid is growing increasingly pessimistic and already looking ahead to the consequences of missing next week’s Nov. 23 deadline.
That dynamic has Democrats saying they have the upper hand in the negotiations, with some liberals privately rooting for sequestration cuts to be triggered. Unless Republicans cave on tax increases, there is little reason for Democrats to strike a deal because sequestration does not call for structural reforms to Medicare, Medicaid or Social Security.
Automatic cuts to Medicare would be capped at 2 percent and limited to insurance companies and healthcare providers while Social Security and Medicaid would be exempt.
The Defense Department is slated for $500 billion in cuts if the Joint Select Committee on Deficit Reduction does not produce an agreement with at least $1.2 trillion in spending reductions.
Unless The Hill is completely wrong – a possibility – Ezra Klein might be a head of himself – The Democrats’ peculiar negotiating strategy. If as Ezra claims Republicans think they can push negotiations to the last-minute and come out with a better deal, Reid seems determined that will not happen. The automatic cuts – not perfect by any means – would be a huge defeat for the hostage takers on the Right. Just looking at the polls most Americans are concerned about jobs than the deficit. They’re more concerned about major cuts to Social Security, medicare and Medicaid than they are a few billion to defense. If conservatives want to push their agenda in defiance of the polls look for historic losses in the House for those newly elected tea smokers.
Wait, I thought this was all Barney Frank’s fault?
Newt Gingrich made between $1.6 million and $1.8 million in consulting fees from two contracts with mortgage company Freddie Mac, according to two people familiar with the arrangement.
The total amount is significantly larger than the $300,000 payment from Freddie Mac that Gingrich was asked about during a Republican presidential debate on Nov. 9 sponsored by CNBC, and more than was disclosed in the middle of congressional investigations into the housing industry collapse.
Here is the thing about not caring much about reality: If you are going to create a false narrative about the causes of an event, you must be aware of details, data and facts even if you don’t want to believe in them.
Gingrich, Bachmann, Perry, Cain and the rest are all on broad the working poor people, government, brown people and liberals caused the Great Recession train of delusions. Of course they are. They can’t admit that letting Wall Street act like gambling addicts on acid caused the loss of $17 trillion dollars of the nation’s wealth. In ConservoLala Land the private sector are angels incapable of wrong doing. This attitude also happens to be the same as people who belong to cults. Everything they worship must be perfect because to admit fallibility even once means a lot of the economic scripture they worship is a load of leprechaun toe-jam. Barry Ritholtz who wrote the excerpt from that blog post also wrote an article in the WaPo that everyone should print out and give to your wing-nut friends and relatives – What caused the financial crisis? The Big Lie goes viral.
Wall Street has its own version: Its Big Lie is that banks and investment houses are merely victims of the crash. You see, the entire boom and bust was caused by misguided government policies. It was not irresponsible lending or derivative or excess leverage or misguided compensation packages, but rather long-standing housing policies that were at fault.
Indeed, the arguments these folks make fail to withstand even casual scrutiny. But that has not stopped people who should know better from repeating them.
The Big Lie made a surprise appearance Tuesday when New York Mayor Michael Bloomberg, responding to a question about Occupy Wall Street, stunned observers by exonerating Wall Street: “It was not the banks that created the mortgage crisis. It was, plain and simple, Congress who forced everybody to go and give mortgages to people who were on the cusp.”
What made his comments so stunning is that he built Bloomberg Data Services on the notion that data are what matter most to investors. The terminals are found on nearly 400,000 trading desks around the world, at a cost of $1,500 a month. (Do the math — that’s over half a billion dollars a month.) Perhaps the fact that Wall Street was the source of his vast wealth biased him. But the key principle of the business that made the mayor a billionaire is that fund managers, economists, researchers and traders should ignore the squishy narrative and, instead, focus on facts. Yet he ignored his own principles to repeat statements he should have known were false.
Why are people trying to rewrite the history of the crisis? Some are simply trying to save face. Interest groups who advocate for deregulation of the finance sector would prefer that deregulation not receive any blame for the crisis.
Some stand to profit from the status quo: Banks present a systemic risk to the economy, and reducing that risk by lowering their leverage and increasing capital requirements also lowers profitability. Others are hired guns, doing the bidding of bosses on Wall Street.
They all suffer cognitive dissonance — the intellectual crisis that occurs when a failed belief system or philosophy is confronted with proof of its implausibility.
And what about those facts? To be clear, no single issue was the cause. Our economy is a complex and intricate system. What caused the crisis? Look:
*Fed Chair Alan Greenspan dropped rates to 1 percent — levels not seen for half a century — and kept them there for an unprecedentedly long period. This caused a spiral in anything priced in dollars (i.e., oil, gold) or credit (i.e., housing) or liquidity driven (i.e., stocks).
*Low rates meant asset managers could no longer get decent yields from municipal bonds or Treasurys. Instead, they turned to high-yield mortgage-backed securities. Nearly all of them failed to do adequate due diligence before buying them, did not understand these instruments or the risk involved. They violated one of the most important rules of investing: Know what you own.
*Fund managers made this error because they relied on the credit ratings agencies — Moody’s, S&P and Fitch. They had placed an AAA rating on these junk securities, claiming they were as safe as U.S. Treasurys.
• Derivatives had become a uniquely unregulated financial instrument. They are exempt from all oversight, counter-party disclosure, exchange listing requirements, state insurance supervision and, most important, reserve requirements. This allowed AIG to write $3 trillion in derivatives while reserving precisely zero dollars against future claims.
• The Securities and Exchange Commission changed the leverage rules for just five Wall Street banks in 2004. The “Bear Stearns exemption” replaced the 1977 net capitalization rule’s 12-to-1 leverage limit. In its place, it allowed unlimited leverage for Goldman Sachs, Morgan Stanley, Merrill Lynch, Lehman Brothers and Bear Stearns. These banks ramped leverage to 20-, 30-, even 40-to-1. Extreme leverage leaves very little room for error. ( all emphasis mine).
Does anyone even remember what the tea baggers were so upset about. Part of their beef was health care reform. But in the beginning the biggest complaint had been how reckless Wall Street had been and they shouldn’t have to pay for it. Of course once they were elected to office they did everything they could to be a golden shield for Wall Street. Now they are indistinguishable from the same old crones of far Right conservatism, even claiming that reforms to protect consumers and investors, and maybe prevent another Great Recession are bricks on the road to communism. No wonder they hate the OWS movement. OWS seems to have a lot more courage and deeper convictions even if some of their methods ain’t so great.
Since Newt appears to be gaining traction on Herman Cain’s decline he is getting a little more scrutiny. Newt Gingrich: His baggage has baggage. Ethics charges? Three marriages? Shutting down government? Orphanages for welfare kids?
For instance, he’s the only House speaker in American history to be disciplined by Congress for ethics violations. In 1998, he paid a $300,000 fine after he was found to have been misusing his tax-exempt foundations for political gain.
OK, those have to be the two worst things, dumping his wife who had cancer for his mistress, and congressional ethics sanctions, right?
Whenever I watch political drams on TV or at the movies, as cynical as I might be at times I always have reservations about the petty acts of revenge perpetrated by the characters. In real life Newt’s revenge for President Clinton not letting him sit up front on Air Force One should be what I use as a barometer for what passes the petty vindictive test in drama. Herman Cain doesn’t eat “sissy” pizza. The GOP candidate measures a man in terms of sausage and pepperoni — and with lame, emasculating words
“The more toppings a man has on his pizza, I believe the more manly he is,” he explained. “Because the more manly man is not afraid of abundance. A manly man don’t want it piled high with vegetables! ” …. Cain then explained that a real man would dismiss any pizza contaminated with vegetables as “a sissy pizza.” Because Herman Cain’s penis isn’t having it!
Admit it, if you heard someone on a TV drama say that you’d groan, wondering where Hollywood is getting its script writers. The only reason I include this Hermantor meltdown of sausage laced lunacy is because it is these verbal hair balls are the most likely cause of Herman’s decline in the polls, not the real possibility he committed multiple sexual assaults.
Not word for word but I agree with Matthew Yglesias’s general sentiment – Getting Kicked Out Of Zuccotti Park Is Probably Good For Occupy Wall Street. Bill Moyer makes a good point – PBS host Moyers says government failing Americans
Q: The people behind the Occupy Wall Street protests and the tea party seem to present a similar message, even though they are quite different on a social and personal level. The tea party folks have had some political impact, while the Wall Street protesters have not yet. Do you see their movement ever gaining more traction?
A: I know a lot of tea partiers. I was out listening to them and talking to them. They had a half-truth. Why do I want to put more of my taxes into a government that was serving special interests? They understood that. The other side says we have to have a safety net. The two sides can’t get together. The populist movement (of the tea party) was taken over and co-opted by corporate interests. It’s hard to retain fiery indignation and independence when that happens. I don’t think Occupy Wall Street will have the influence they want unless they do what the tea party did and take over the nominating process. Unless they do, they will never have the satisfaction that they want and that the civil rights movement, say, had back in the 1950s and ’60s. These people are not going to have long-ranging effect unless they have a party to act on their interests. They need to become a political movement instead of a grievance committee.
OWS has thus far declined to identify with a political party. Put aside that small fraction who are anarchists, libertarian crack-pots, the far left and general malcontents – and you have the vast majority of OWS who seem to be progressives. They and conservatives hardly seem like a good match – Karl Rove and his right-wing millionaire posse Crossroads are using OWS to attack Democrats. There is a progressive caucus in the House. Trying to get progressives elected and expanding their power in the House would be the next logical and practical step. Robert Reich notes the irony of using a nationwide militarization of the police to shut-down democracy in action – Occupiers Occupied: The Hijacking of the First Amendment
A funny thing happened to the First Amendment on its way to the public forum. According to the Supreme Court, money is now speech and corporations are now people. But when real people without money assemble to express their dissatisfaction with the political consequences of this, they’re treated as public nuisances and evicted.
To pile on the irony the police are shutting down the best voice in America that represents them.
Bill Moyers keynote at Public Citizen’s 40th Anniversary Gala. Kind of long, but worth a listen to, at 77 years old, a veteran of the long war for social and economic justice. The quote used in the post title is from the video.