Duh!

By J. Thomas Duffy 

We haven't, until today, riffed at all on the faux Hatfield-McCoy battles of the Debt Ceiling debacle.

 

The Dems blew their chances for this to be a no-brainer last year, when they held all the cards.

The Party of Noicans want us all to fight over potato rations and dirty rain water, unless they get what they want, which is an end to Medicare and Social Security. 

Lassie's friend, Little Timmy, is warning the sky is falling.

Krugman is standing on a chair, screaming at the top of his lungs, but nobody in Congress or the White House is listening.



Mommy Moose is threatening The Crying Man that she'll kick his ass (and knock out all his teeth for mumbling about it) if he caves to the Dems.

So it took Matthew Yglesias today to give a proverbial "head slap" to everybody: 

Surveying the scene, perhaps everyone should take a deep breath and recall the traditional way the country has avoided default when the debt ceiling needs raising: Congress raises the debt ceiling.

It’s that simple. The same kind of “clean” debt ceiling increase that’s passed repeatedly over the past 100 years will allow the country to avoid default without tax increases, without defense cuts, and without slashing entitlement spending. Education will be spared. So will transportation, health care, farm subsidies, and everything else. The interest rates investors are charging the American government to buy our debt are extremely low right now. The world economy is suffering from an excessive demand for American debt, not by reluctance to lend. All we need to do to keep our finances flowing is to raise the statutory debt ceiling. At some point, things will change, and we may face a crisis that requires bipartisan dealmaking and “tough choices.” Right now, though, the only crisis we face is an entirely self-created one. House Republicans wanted to create a hostage situation to force President Obama to propose steep spending cuts. But when Obama came to the table with a proposal for steep cuts, it turned out that Republicans don’t actually want to sign a bipartisan deal. Which is fine. Don’t sign a deal! The absence of a deal in no way forces a crisis. Just raise the debt ceiling, fight the 2012 elections, and pick up the long-term budget issue then.

The world has plenty of problems on its plate right now. The long-term U.S. structural deficit isn’t one of them. The expiration of the Treasury Department’s borrowing authority is one. And the latter problem can be solved without addressing the former. 

Naw, that's too easy...

The new date now is August 2nd for the Economic Meteor to make its fiery crash, which means we have nearly three weeks for all this bullshit to continue before either Obama gives us more of that Hope & Change and the Dems cave to the Party of Noicans, or somebody pulls up Yglesias' post and the lapdog media can go back to covering The Wasilla Whiz Kid (who, along with boasting she can kick anyone's ass in an election,  is aghast now over the price of Slim Jims).

Let's hope we don't have to bring Joe Gideon out for a curtain call. 

Bye Bye Life - "All That Jazz" (1979)


(Cross-posted at The Garlic.)

The United States of Goldman Sachs

By Edward Copeland 

In 2007, Charles Ferguson directed the great documentary No End in Sight. Last year, he helmed another that told the story of an entirely different type of destruction, Inside Job, only this time the war wasn't against another country, it was against the world's financial system and instead of only those actually in Iraq and their families paying a price, we all suffered for Wall Street's greed and Washington's malfeasance.

As Ferguson did in No End in Sight, he makes a very complicated subject easier to understand through his masterful presentation of the facts and history of the situation (narrated by Matt Damon here) and interviews with key subjects. It's not an easy task in Inside Job because trying to explain the mechanics of financial derivatives and its role in the economic collapse is nowhere near as easy to do as it was to show all the mistakes and blunders involved in the Iraq war.

Not surprisingly, most of the key figures such as Alan Greenspan, Timothy Geithner, etc., refused to be interviewed for the film, but what's shocking is that Wall Street and financial service figures who do give interviews feel completely at ease showing their arrogance and defending the industry's actions.

Inside Job, briskly edited by Chad Beck and Adam Bolt, shows how decades of deregulation under presidents of both parties led to one crisis after another, each bigger than the last, with seemingly no one in Washington learning any lessons.

The film also provides fascinating tidbits such as the fact that as recently as the early 1970s bond traders' salaries were low enough, that some had to take second jobs to make ends meet. It also tells how employees of various financial firms engaged in cocaine-fueled parties with prostitutes which were billed to the companies as things such as computer supplies.

The handful of firms who would tell their clients a purchase was good while betting on its failure behind their back is staggering, though not as staggering as the refusal of regulators to do any regulating or the number of former top Goldman Sachs executives who end up serving in presidential administrations of both parties. (When Hank Paulson stepped down as Goldman CEO to be Dubya's treasury secretary, he had to sell $450 million in Goldman Sachs stock but thanks to a law signed by the first Bush, he paid exactly zero taxes on it and some say the rich are taxed too much?)

Ferguson's No End in Sight proved to be not only informative, but to provoke outrage at all of the things that were and weren't done prior to the Iraq war. Inside Job does just the same for the history of the financial collapse, especially when you see all of the names who profited from Wall Street's greed that have populated the Obama Administration, not that he invented the problem.

It began with Reagan, got worse with the first Bush, declined further under Clinton and took the big nosedive under the second Bush. Now, Obama's advisers come from the same group and Congress passes reforms without teeth because Wall Street controls what happens. Inside Job tells this infuriating story in great detail and it tells it well.

(Cross-posted at Edward Copeland on Film.)