What: "Exigology", Saturday Morning Breakfast Cereal
When: December 14, 2011
Exigology (noun): A statement whose converse is its own explanation.
Exigology (noun): A statement whose converse is its own explanation.
So, just like in 1940, we stand alone, and hopefully at every bus stop, you'll hear the plucky British saying: "Blooming Krauts, who do they think they are telling us our bankers aren't allowed to rob us blind? That's the right of every Englishman, to have his country robbed blind by bankers. Now Frau Merkel wants to make them only rob me nine-tenths blind until they get themselves straight. Well, we fought off the Luftwaffe, so we'll see off this lot an' all."
And banks aren't neutral observers, they're banks If you resent someone stating the obvious, you're probably more intelligent than the general public, which apparently doesn't recognize the obvious. the people who caused the mess. It's like someone who's wet themselves in a public building insisting they choose which mop the librarian fetches to clear up the puddle.
.... Why, you may ask, would media companies that are deeply enmeshed in the capitalist system and run by rich families and Wall Street investors be so devoted to replacing American free enterprise with Kenyan anti-colonial socialism? And how, you may also wonder, could they be so prescient, so forward thinking that they could plot the rise of a Kenyan baby to the White House, yet not notice until it was too late that Craig's List and Google were stealing all their business?
When Democrats compete to challenge an incumbent Republican president, liberals tend to regard seemingly hopeless candidacies, such as the Rev. Al Sharpton's 2004 run, or even the respectable but wildly unsuccessful effort by former Sen. Caron Moseley Braun, as issue advocacy campaigns.
With the GOP field this year so presently disorganized, it is hard to figure who falls where. In some cases, such as former Sen. Rick Santorum, it is easy enough to figure; he is playing to and for the social conservatives—clearly, barring some apocalyptic collapse of the American political structure, Santorum cannot win. One might suggest the same of Minnesota Rep. Michele Bachmann, if she declares as expected.
Some consider Minnesota Governor Tim Pawlenty the foremost "serious" candidate, with the adjective taken to mean someone who actually can compete in the general election.
Which leaves a tier of candidates like Sarah Palin and Newt Gingrich, who bring leagues of devoted fans and followers to the contest, and certainly have a penchant for headlines—thus posturing them as significant players in the early rounds—who cannot win the general election.
One could easily suggest that these will be relegated to the advocacy tier, but American politics is also so chaotic that Palin or former House Speaker Newt Gingrich could seriously unsettle a candidate like Pawlenty as the Republican Party moves toward its convention in Tampa at the end of August, 2012.
"Tragically," the editorial said, "the more entrenched the jobs shortage becomes, the more paralyzed Congress becomes, with Republicans committed to doing nothing in the hopes that the faltering economy will cost President Obama his job in 2012."
The point was made in passing, but it's nevertheless striking. As far as the editorial board of the nation's most important newspaper is concerned, it's simply accepted as fact that congressional Republicans want to hold back the economy, on purpose, to undermine the Obama presidency.
This comes less than a week after a poll in Florida found that 49% of voters statewide believe congressional Republicans “are intentionally hindering efforts to boost the economy so that President Barack Obama will not be reelected.” The WaPo/ABC poll is, as best as I can tell, the first national poll to consider the same issue.
To be sure, the wording of this new poll isn’t ideal, and is far less direct than the poll conducted in Florida. But the takeaway is still pretty clear: half the country is inclined to believe GOP officials are killing efforts to boost the economy for purely political reasons.
Voters’ understanding of the political process is severely limited, and many Americans likely fail to appreciate the role Congress must play in policymaking. There are no doubt plenty of voters thinking, “Sure, Republicans are sabotaging the economy, but why can’t Obama just go around them?” unaware of the fact that, on a grand scale, this isn’t an option.
"Presumably, under the Cain plan, disasters would be turned off." (Amanda Terkel)
By 1800, the compulsion to do battle over bogus issues had kicked in and, since then, many a campaign has been built on manufactured fear. Campaign 2012 is no different.
Watching the Republicans' serial presidential debates, one would think the most fearsome problems confronting Americans are high taxes that are killing economic activity, onerous regulations that keep businessmen from creating jobs, illegal immigration, gay marriage and a president who is too weak to confront Islamic terrorists and dictators.
Well, if you say something often enough and loud enough, people may begin to think it's important, but, outside the realm of boilerplate conservative applause lines, there are far more worrisome threats facing the country.
At 11:20am on Monday morning, Cain told Fox News, "If the restaurant did a settlement, I wasn't even aware of it." That is essentially the same thing he told the National Press Club not two hours later when he said, "I am unaware of any settlement. I hope it wasn't for much, because I didn't do anything" indicating that he not only had no knowledge of any agreements but that he also had no knowledge of the amount of any agreements if they actually existed.
By 6pm that evening, Cain's story was beginning to change. This time he told PBS, "I was aware that an agreement was reached."
Before calling it a night, Cain appeared on Fox News again at 10pm to completely contradict himself saying, "We ended up settling for what would have been a termination settlement, quite frankly … Maybe three months' salary or something like that."
In less than twelve hours, Cain went from being clueless about the whole affair — pardon the pun — to knowing quite a bit more than he'd let on about.
Don't for a second assume that Cain and his team first heard about these accusations when they read them in Politico — they had been contacted several times over the course of nearly two weeks in advance of the publication of the story by reporters requesting comment in writing and in person.
Since the story broke, a third woman has come forward, telling the Associated Press that she had received "a private invitation to [Cain's] corporate apartment" and that the future presidential candidate had made "sexually suggestive remarks or gestures" towards her.
Few people know exactly what happened between Cain and his female employees and only one person has been free to discuss the story openly: Herman Cain.
Since Cain has proven himself unreliable, perhaps the National Restaurant Association should free these women from their confidentiality agreements so they can tell their side of the story.
Then, and only then, can this blame game end.
The one thing we've learned for sure is that Herman Cain's staff has no idea what Herman Cain has been up to. Really, by now they're probably so numb, you could come up to them and say: "Is it true your candidate was once a pirate?" and they'd just promise to look into it.
The even bigger, more fundamental argument between the two sides, however, is whether or not the government has any role at all in moving the country out of the recession.
One side says the American Recovery and Reinvestment Act of 2009—the stimulus bill—was a complete failure.
Yet, as I have pointed out in previous columns, in the quarter the ARRA passed, the Dow Jones average started to climb and has never looked back. The precipitous decline in jobs—a loss of over 700,000 a month when the bill was passed—was turned around. Although the numbers have never been high enough, we have seen positive job growth. GDP, which was falling, also moved into positive ground.
The truth is that the ARRA helped, but the economy is still in trouble because we were in even worse shape back in early 2009 than we thought at the time. The size of the stimulus—the largest that could pass Congress—was simply not ambitious enough.
My question for those who believe otherwise is this: If there is no government action, why will the economy recover? Because of the private sector?
Put this together with two other facts:
Unemployment in America remains sky-high. 14 million Americans are out of work and 25 million are looking for full-time jobs.
The nation's infrastructure is crumbling. Our roads, bridges, water and sewer systems, subways, gas pipelines, ports, airports, and school buildings are desperately in need of repair. Deferred maintenance is taking a huge toll.
Now connect the dots. Anyone with half a brain will see this is the ideal time to borrow money from the rest of the world to put Americans to work rebuilding the nation's infrastructure.
Problem is, too many in Washington have less than half a brain.
In theory, Democrats should be nervous about Texas Gov. Rick Perry's decision to enter the presidential race. In practice, though, it's Republicans who have zoomed up the anxiety ladder into freak-out mode.
To clarify, not all Republicans are reaching for the Xanax, just those who believe the party has to appeal to centrist independents if it hopes to defeat President Obama next year. Also, those who believe that calling Social Security "an illegal Ponzi scheme" and suggesting that Medicare is unconstitutional might not be the best way to win the votes of senior citizens.
Beginning in 2006 we interviewed a representative sample of 3,000 Americans as part of our continuing research into national political attitudes, and we returned to interview many of the same people again this summer. As a result, we can look at what people told us, long before there was a Tea Party, to predict who would become a Tea Party supporter five years later. We can also account for multiple influences simultaneously — isolating the impact of one factor while holding others constant.
Our analysis casts doubt on the Tea Party's "origin story." Early on, Tea Partiers were often described as nonpartisan political neophytes. Actually, the Tea Party's supporters today were highly partisan Republicans long before the Tea Party was born, and were more likely than others to have contacted government officials. In fact, past Republican affiliation is the single strongest predictor of Tea Party support today.
What's more, contrary to some accounts, the Tea Party is not a creature of the Great Recession. Many Americans have suffered in the last four years, but they are no more likely than anyone else to support the Tea Party. And while the public image of the Tea Party focuses on a desire to shrink government, concern over big government is hardly the only or even the most important predictor of Tea Party support among voters.
So what do Tea Partiers have in common? They are overwhelmingly white, but even compared to other white Republicans, they had a low regard for immigrants and blacks long before Barack Obama was president, and they still do.
More important, they were disproportionately social conservatives in 2006 — opposing abortion, for example — and still are today. Next to being a Republican, the strongest predictor of being a Tea Party supporter today was a desire, back in 2006, to see religion play a prominent role in politics. And Tea Partiers continue to hold these views: they seek "deeply religious" elected officials, approve of religious leaders' engaging in politics and want religion brought into political debates. The Tea Party's generals may say their overriding concern is a smaller government, but not their rank and file, who are more concerned about putting God in government.
This inclination among the Tea Party faithful to mix religion and politics explains their support for Representative Michele Bachmann of Minnesota and Gov. Rick Perry of Texas. Their appeal to Tea Partiers lies less in what they say about the budget or taxes, and more in their overt use of religious language and imagery, including Mrs. Bachmann's lengthy prayers at campaign stops and Mr. Perry's prayer rally in Houston.
Yet it is precisely this infusion of religion into politics that most Americans increasingly oppose. While over the last five years Americans have become slightly more conservative economically, they have swung even further in opposition to mingling religion and politics. It thus makes sense that the Tea Party ranks alongside the Christian Right in unpopularity.
There's the call to evict families if one of their kids has been arrested, because once they're all homeless they'll be much less likely to steal things, won't they. On one phone-in a caller yelled, "These parents don't pay any attention to their own kids." So the presenter asked what age the caller's son was and he said, "Either seven or eight, I think."
Rick Perry is the perfect man for this moment. Executive experience, a fine head of hair, a handsome jaw line, a Bible under his arm, a flag on his lapel, a take-no-prisoners campaign machine and a political philosophy that would comfort Jefferson Davis—how can today's Republican Party not fall in line behind this man from Texas?
Something very disturbing happened: Michele Bachmann was supposed to show up about five o'clock and speak for twenty minutes as all the candidates have done. She showed up at about five-thirty and spoke for about three minutes, and then on the way out ... reporters started asking her some questions. And I asked her very respectful questions about her performance last night, where does she think she's going to end up in the straw poll.
Two of her staff members—two blond women ... started elbowing me and pushing me through the crowd. And her husband, Marcus, did the same thing. He even pushed me—elbowed me—into a golf cart, where I hit my head and caused people to start spilling stuff.
One of our political reporters, Shannon Travis, has been covering her campaign and says he's never seen anything like this before. Clearly, his was an embarrassing display on their part. I don't know why all of this happened, but, it was embarrassing and unfitting.
There has been various circumstantial evidence that the public's dissatisfaction with the performance of Congress, particularly during the debt ceiling debate, could threaten the Republican majority in the House of Representatives. Disapproval ratings for the Congress are at record highs, as are disapproval ratings for the Republican Party. Other polls show record numbers of Americans saying that their representative should not be re-elected, that most members of Congress should not be re-elected, or both.
What we haven't had, however, are polls comparing Democrats against Republicans in a direct way. That's why the poll that Gallup published Friday ought to concern Republicans. It shows a 7-point Democratic advantage on the generic Congressional ballot — meaning simply that more Americans told Gallup they plan to vote for a Democrat for Congress next year. Although the generic ballot is a crude measure, it is probably the best macro-level indicator of the direction that the House is headed in.
Last year, Republicans won the popular vote for the U.S. House — essentially what the generic ballot is trying to measure — by 7 percentage points. So a poll showing Democrats 7 points ahead instead is a pretty significant swing.
But does it mean that Democrats are now favorites to take over the Congress next year?
No, not exactly. Instead, it points toward control of the House being more or less a toss-up. There are three structural issues that Democrats will have to contend with that take a little bit of the sheen off this poll ....
Revenue increases may be part of the solution, but even then, at some imbalanced ratio of spending cuts — such as three or four dollars of spending cuts to one dollar of tax hikes — the thesis assumes that markets and economic growth require what in essence is a fiscally contractionary step, reminiscent of International Monetary Fund policies in emerging markets during past decades. We must, the consensus goes, become like Argentina, Brazil and Mexico from the 1980s: Tighten the budget via spending cuts, reduce the deficit and voilá — economic growth will blossom.
But while our debt crisis is real and promises to grow to Frankenstein proportions in future years, debt is not the disease — it is a symptom. Lack of aggregate demand or, to put it simply, insufficient consumption and investment is the disease. Debt has been simply an abused sovereign and private market antidote to sustain it. We and our global market competitors are and have been experiencing a lack of aggregate demand for several decades. It is now only visibly coming to a head, as the magic elixir of leverage is drained and exhausted. This potentially fatal disease of capitalism is a result of several long-term secular phenomena:
(1) Aging demographics, where boomers everywhere spend less, in contrast to their youth, as they approach retirement; babies, houses and second cars shift to the scrapbook of memories as opposed to future spending power.
(2) Globalization, where 2 billion new competitive workers from Asia and elsewhere take jobs and paychecks from complacent and ill-trained 40-somethings in developed markets.
(3) Technological innovation, where machines and robots displace human labor, resulting in corporate profits but declining wages.
Being the elusive character that he was, and after hiding out with his terrorist buddies in Pakistan and Afghanistan, American soldiers finally locate the terrorist leader Osama Bin Laden. Many people had helped secure his safety for nearly 10 years.
Dubbed code name Neptune Spear, the operation lasted 88 minutes, included some 23 Navy SEALs and a dog named "Cairo", no one wanted detainees. Once athe American military confirmed and identified Bin Laden, President Barack H. Obama had previously issued a kill order to SEAL Team Six to shoot him. In Bin Laden's house in Afghanistan, Osama used his wives and children as shields as he tried to get away from the American Military. But the coward Bin Laden could not escape. He was killed hiding behind the dress tail of a young woman. On May 1, 2011, Bin Laden was shot dead, and the American Military wrapped him in a white blanket and buried him at sea by throwing his body overboard. Throwing his body into the sea showed him more respect than he showed to the people who died on 9/11.
Children, the truth is, these terrorist acts were done by freedom-hating radical Islamic Muslim extremists. These crazy people hate the American way of life because we are FREE and our society is FREE. We must be prepared to know and understand the truth. America is FREE. Ask your mother and father, your teacher, your preacher, what this really means. What does it mean to be FREE? Why are we a FREE people?
We are free to think, free to be honest, free to write, free to live as we wish. We are America. America does not hate other people in the world, but we love the world in which we live and will defend our way of life. On the remaining pages of this book we talk about our freedoms and our way of life.
The sight of a crumbling Cult of Obama—and with it the end of the progressive presidency—has many on the left so frustrated that they simply dismiss the very idea of ideological debate. To challenge the morality and rationality of Obamanomics only means you're bought, too stupid to know any better or, most likely, both. A slack-jawed hostage-taking saboteur.
In public, Republican presidential hopeful Michele Bachmann spends much of her time railing against government spending. In private, Bachmann spends quite a bit of time requesting government spending.
A Freedom of Information Act request filed by The Huffington Post with three separate federal agencies reveals that on at least 16 separate occasions, Bachmann petitioned the federal government for direct financial help or aid. A large chunk of those requests were for funds set aside through President Obama's stimulus program, which Bachmann once labeled "fantasy economics." Bachmann made two more of those requests to the Environmental Protection Agency, an institution that she has suggested she would eliminate if she were in the White House. Taken as a whole, the letters underscore what Bachmann's critics describe as a glaring distance between her campaign oratory and her actual conduct as a lawmaker. Combined with previous revelations that Bachmann personally relied on a federally subsidized home loan while her husband's business benefited from Medicaid payments, it appears that one of the Tea Party's most cherished members has demonstrated that the government does, in fact, play a constructive role — at least in her life and district ........ What's more, the phenomenon certainly isn't limited to Bachmann — all kinds of right-wing lawmakers who swear public investments are fundamentally evil, including plenty of this year's radical freshman class, have spent a fair amount of time pleading for more public investment in their states and districts, insisting the spending would be good for the economy ....
Ever since the credit rating agency S&P downgraded U.S. credit to AA+ on Friday night, Republicans have desperately trying to pin the blame on President Obama, even though, as National Journal put it, "it's hard to read the S&P analysis as anything other than a blast at Republicans." S&P called out the GOP for using the debt ceiling as a political football and for its flat refusal to consider new revenue as part of any plan to reduce long-term deficits.
Earlier this week Rep. Allen West (R-FL) claimed that the S&P downgrade "has nothing to do with increasing revenues," while some Republicans have said that passing a Balanced Budget Amendment would have prevented the downgrade, both of which S&P disagreed with. House Speaker John Boehner (R-OH) yesterday jumped into the same pool, saying that the downgrade could have been avoided if only Democrats had embraced the House Republican budget and its plan to eliminate Medicare:
But whatever else they are, the riots can't just be driven by criminality. Professional shoplifters are probably furious, as there's nothing left to steal. Nick de Bois, MP for Enfield North, insists criminal gangs organised the riots, "stashing the stolen goods in their Volkswagen GTIs". So that explains it; it's a mass robbery planned in advance by thousands of people across Britain, with help from the Volkswagen GTI owners' club.
It's more likely that he doesn't know, just as most of us don't know, why exactly this is happening. But everyone likes to have a guess. Some people are blaming BlackBerry phones, as if throughout history it's not been possible to organise a riot without a BlackBerry. Before the storming of the Bastille there must have been criminals across Paris sending messages such as "C u by drawbridge 2 mash da Kng shd b gr8."
One thing that's probably true is that the more stable and secure your life is, the less likely you are to smash windows and set fire to an assortment of buildings. For example, it's unlikely the managing director of an investment bank would announce to the shareholders: "Our strategy for increasing profits in the third quarter is to decrease investment in oil futures, and instead do in the windows of Foot Locker in Ealing and shove hundreds of trainers in a Volkswagen GTI."
S&P's intrusion into American politics is also ironic because, as I pointed out recently, much of our current debt is directly or indirectly due to S&P's failures (along with the failures of the two other major credit-rating agencies — Fitch and Moody's) to do their jobs before the financial meltdown. Until the eve of the collapse S&P gave triple-A ratings to some of the Street's riskiest packages of mortgage-backed securities and collateralized debt obligations.
Had S&P done its job and warned investors how much risk Wall Street was taking on, the housing and debt bubbles wouldn't have become so large – and their bursts wouldn't have brought down much of the economy. You and I and other taxpayers wouldn't have had to bail out Wall Street; millions of Americans would now be working now instead of collecting unemployment insurance; the government wouldn't have had to inject the economy with a massive stimulus to save millions of other jobs; and far more tax revenue would now be pouring into the Treasury from individuals and businesses doing better than they are now.
In other words, had Standard & Poor's done its job over the last decade, today's budget deficit would be far smaller and the nation's future debt wouldn't look so menacing.
"Do you believe in marriage?" I asked.
"I do not," answered the fair little Anarchist, as promptly as before. "I believe that when two people love each other that no judge, minister or court, or body of people, have anything to do with it. They themselves are the ones to determine the relations which they shall hold with one another. When that relation becomes irksome to either party, or one of the parties, then it can be as quietly terminated as it was formed."
Miss Goldman gave a little nod of her head to emphasize her words, and quite a pretty head it was, crowned with soft brown hair, combed with a bang and brushed to one side. Her eyes are the honest blue, her complexion clear and white. Her nose tough rather broad and of a Teutonic type, was well formed. She is short of stature, with a well-rounded figure. Her whole type is more German than Russian. The only serious physical failing that she has is in her eyes. She is so extremely nearsighted that with glasses she can scarcely distinguish print.
"The alliance should be formed," she continued, "not as it is now, to give the woman a support and home, but because the love is there, and that state of affairs can only be brought about by an internal revolution, in short, Anarchy."
Layoffs at the state and local level were mitigated in 2009 by the Recovery Act, which saved thousands of jobs that would have otherwise been eliminated. Those funds have since been exhausted, and the public sector is back to making severe layoffs.
This is what David Leonhardt recently described as "an unforced economic error" — with all of the problems we can't control, this is one problem we know exactly how to prevent. We just choose not to, thanks to the Republicans' ideology.
Indeed, it's important to remember that these job losses are, in the eyes of Republicans, a positive development. Under the GOP economic model, the public sector is supposed to lose jobs, and as part of the party's austerity agenda, this is a problem that must get worse on purpose.
Earlier this year, for example, House Speaker John Boehner (R-Ohio) was asked about his spending-cut plans and the fact that the cuts would force thousands of public-sector workers from their jobs. "So be it," the Republican said.
In other words, deliberately making unemployment worse wasn't seen as a problem. This is a feature of the GOP model, not a bug
The Tea Baggers won, confusing both Democrats and Republicans by refusing to act like politicians, eschewing all the usual motivations such as their own self-interest or party affinity or even the general welfare of the country. You can't negotiate with cement. Giving proof to the old adage: "Never get in a fight with an ugly person, they got nothing to lose."
With impeccable timing, today Pamela Geller is hyping the release of her new book, published by the far right’s craziest pseudo-news and Birther site, World Net Daily: Stop the Islamization of America: A Practical Guide to the Resistance ....
.... It's impossible to miss the similarity to another book: the manifesto of Oslo mass murderer Anders Behring Breivik, with the same themes, the same over-the-top paranoia, the same mindless hatred, bigotry, and conspiracy theorizing.
In the synopsis at Amazon, if you substituted "Anders Breivik" for "Pamela Geller," and "Norway" for "America," it would describe Breivik’s book exactly.
Americans for Prosperity, the conservative advocacy group backed by billionaires Charles and David Koch, has been accused of attempting to suppress Democratic voter turnout in the Wisconsin Senate recall elections.
Patch.com reported that Charles Shultz, a Democrat who lives in the 10th Senate District, received an absentee ballot application form last week from AFP that contained incorrect information on it. The form instructed him to mail it back to the wrong location by Aug. 11 -- two days after the recall election in his district between Sen. Sheila Harsdorf (R) and Shelly Moore (D) is set to take place, on Aug. 9.
Politico obtained a copy of the AFP mailer, which was also distributed to voters in the 2nd District.
The Wisconsin Democratic Party filed a formal complaint Tuesday with the state's Government Accountability Board over the issue, accusing AFP of "falsely representing the time frame" for the upcoming August 9 recall election. Shultz filed his own complaint with the GAB on Saturday.
But the campaign against drunkenness doesn't seem to have learned from the "Just say no" anti-drugs campaign, which connects with hardly anyone as it insists drugs lead rapidly to disaster and aren't fun. But if they weren't fun there'd be no need to tell people not to take them, just as there's no need to tell people "Just say no" to sticking your bare arse into a nest of wasps because no one does it anyway because it's not fun.
Tech juggernaut Apple had a whopping $76.2 billion in cash and marketable securities at the end of June, according to its last earnings report. Unlike the U.S. government, which is scrambling to avoid defaulting on its debt, Apple takes in more money than it spends.
This symbolic feat—the world's most highly valued tech company surpassing the fiscal strength of the world's most powerful nation—is just the latest pinnacle for Apple, which has been on an unprecedented roll ....
With the Massachusetts Democratic Party attacking Senator Scott Brown for refusing to film a video for the "It Gets Better Project," which offers moral support to gay teens, the National Republican Senatorial Committee came to Brown's defense today with a shot at the project's founder, Dan Savage.
Savage, who edits the Seattle alt-weekly The Stranger, is best known as an often-raunchy syndicated sex columnist.
Emails NRSC communications director Brian Walsh:
If, as the old saying goes, you’re known by the company you keep, than the voters of Massachusetts deserve to know who Democrat Party operatives are teaming up with to spread outrageous attacks on Scott Brown’s character. It’s truly reached a new level of desperation in their efforts to tear down Scott Brown, but we look forward to hearing whether state and national Democrat leaders agree with Dan Savage’s long history of lewd, violent and anti-Christian rhetoric. Given their press conference call today, one has to presume at this point that they do.
Some market observers speculate that a downgrade would be a non-event: Japan, for example, went from a rating of AAA to AA without much drama. Others suggest that a downgrade would increase Treasury’s borrowing costs by $100 billion a year or more, making our already unsustainable deficit trajectory even worse.
There are no rules to define what is systemic and what isn’t — or to accurately predict the consequences of an economic shock. Each crisis is unique. How exactly it will affect financial markets, companies and our economy is impossible to know. Nonetheless, recent examples offer guidance.
In 2008, a number of once-cherished beliefs were turned upside down: (1) that home prices in America would never fall; (2) that AAA-rated subprime securities are money-good; (3) that a major investment bank would never fail. Consumers, investors and companies allocated capital according to these truths. When the beliefs were revealed to be false, massive shocks were inflicted on the economy as financial markets rapidly adjusted to account for these new risks.
... Standard & Poor's has gone a step further: It says even if the debt ceiling is raised next week, it might still lower the nation's credit rating -- unless the deal also contains a credible, bipartisan plan to reduce the long-term budget deficit by $4 trillion. This is something neither Senate Majority Leader Harry Reid's nor House Speaker John Boehner's plans would accomplish.
Now I don't mean to be impertinent, but as long as America pays its debts on time, who is Standard & Poor's to tell America how much debt it has to shed and by when?
Until the eve of Wall Street's collapse in late 2007, S&P gave triple-A ratings to what turned out to be some of the Street's riskiest packages of mortgage-backed securities.
Had S&P done its job, we wouldn't have had the debt and housing bubbles to begin with. That means taxpayers wouldn't have had to bail out Wall Street. We probably wouldn't have had a Great Recession. Millions of Americans wouldn't be jobless and collecting unemployment benefits. There'd be no need for the stimulus that saved 3 million other jobs. And far more tax revenue would have been pouring into the Treasury.
In other words, had S&P done its job, the federal budget deficit would likely be far smaller than it is today -- and S&P wouldn't be threatening the United States with a downgrade if we didn't come up with a plan for shrinking it.
And why has S&P decided to get into public policy now anyway? Where was it when President George W. Bush turned a $5 trillion budget surplus bequeathed to him by Bill Clinton into a gaping deficit?