Today, I’m not simply referencing the equities market collapse over the past week, including today’s significant losses as of 2:30 p.m. There are many other reasons for this week’s swan dive. So, eager as I may be to do so, I can’t put this entirely at the door of the GOP and its maniacal dancing monkeys, the Tea party. This week, though, undeniably, the debt “deal” is among the forces decimating equity prices and Americans’ confidence.
The deal’s unrelenting tight-fisted approach seems, at present, to rule out any fiscal stimulus emerging from Congress. The independent Federal Reserve’s “according to Hoyle” monetary stimulus efforts seem to have done little good stimulating employment growth and lending so far, and it shouldn’t be expected to be helpful in the future. The fed funds rate has for a long time been as low as a snake in a cesspool, and, today, the Treasuries that were almost a pariah two days ago are rallying across the board, sending interest rates lower than low. To what avail after four years of recession? (Note: We never emerged from it in 2009 . . .) And now, without fiscal stimulus, the country and the equally shaky world faces a likely killing dose of American “fiscal austerity” and the further unemployment it brings with it. Who will be able to buy cars, refrigerators, computers, or bubble gum? Who, then, will be able to provide the earnings that could revive this critically sick stock market?
Well, no one, it seems, in D.C., thought about that very much. The Tea Party wrecking crew pushed our overly accommodating President and most of the Democratic and Republican parties into a final package that will pummel employment at all levels and in all sectors. The debt ceiling deal just signed into law will, perhaps radically, worsen employment, lessen personal income, and diminish already anemic personal spending. If we avoid what would be remembered as the 2nd Great Depression, we need to make some WPA-type Hail Mary passes, and soon.
For now, though, the Tea Party and the GOP it commands stand stolidly and stubbornly by the windows in their House and watch all this destruction without so much as offering the tiniest ray of hope that we, as a nation, will pull together again as we did in the 1930s. Unfortunately, the President, an apparently conflict averse leader, as well as much of the far too “civil” Democratic party, also watch from afar as well. Just watching, it seems, deeming it too uncivil or uncouth or strenuous to fight for the country. The unindicted co-conspirators.
Among commentators almost everywhere, this July was a month of growing worry about the likelihood of raising the debt ceiling. The Treasury bond market, often a bellwether of investor nervousness, basked in overall confidence, however. The 10-year Treasury Note, for example, actually rallied 40 basis points from July 1st through July 29th, the last trading day of the month, with yields dropping from 3.19% to 2.79%. In the face of a worrying outlook for Congressional action on the debt ceiling and deficit, this was quite a rally – a rather exuberant show of confidence. Six month T-Bills, however, looked ahead at what it viewed as storm clouds and ran the other way, with prices falling, and yields rising from 0.002 to 0.09, still a historic low yield even at 0.09, but a noticeable price decline nonetheless.
This divergence between the long and the short ends of the yield curve signals a reluctance to buy short-term treasuries with a six month horizon while the outcome of debt ceilings and deficits are so uncertain. But the rally in long term securities appears to be a bet that any injury to U.S. creditworthiness resulting from the debt ceiling drama will be relatively short-lived, otherwise we’d have witnessed a July swan dive in the 10-year notes. We saw quite the opposite.
With the government rapidly running out of cash, let’s hope the Treasury market has it right, especially the 10-year neighborhood. They’re supposed to be the “smart money,” after all. Yet, they’ve been misled and misleading before, many times; have we forgotten the pants down mishap of a few years ago? And then, particularly in the unknown waters we still sail upon, as Donald Rumsfeld once lectured us – there are those unknown unknowns . . .
“They all step back and say — ‘The president needs to get this done.’ At a certain point they need to do their job.’” President Barack Obama, press conference, 06-29-2011
For many years people have demanded, “Congress should just do its job!” Often, they mean “Why don’t you partisan hacks just sit your butts down and compromise? That’s a legislator’s job, isn’t it?” It’s time to recall that a significant portion of the present 112th Congress was elected to do just the opposite, particularly the Tea Party freshmen. So why now do so many voters, beltway pundits – and members of congress themselves – believe the primary “job” of Congress is to compromise, canoodle, and concur? Well, frankly, that’s a false belief. Even without the present debt ceiling controversy, in most truly important matters the real “job” of this Congress is generally to not compromise; rather, it’s to embrace partisanship like a five year-old squeezes her favorite stuffed bear.
Remember too, another strong belief among us is “Elections have consequences!”, and it’s here that Tea Party high-handedness is best understood. In fact, arrogant pigheadedness is their job description precisely because, firstly, they are who they are, and, secondly, “elections have consequences.” Let the devil take the hind-most — and, especially, the debt ceiling.
‘“Being a Member of Congress Is a Diagnosis Not a JobDescription” (paraphrasing Anna Quindlen). Folks often believe that Congresspeople, like any other working stiffs, have an official job description that includes a phrase something like “get stuff done.” Yet, no “official” job description exists for members of this presently besotted congressional occupation. Of course, there are constitutional provisions setting out the powers and limitations of the legislative branch (Article I), and there are internal congressional rules and ethics requirements that apply to their members. But job descriptions? Nada.
Whenever, as now, these major fiscal controversies come to the fore, most of us “default” to citing a job requirement that compels those pesky legislators to get together and schmooze out a compromise. Last November, though, our country engaged in another historic slash and burn campaign to see who could most abrasively shout down their least favorite candidate. Back then, we viewed our political rivals as bums incapable of rational thought, and quite possibly unable, without heroic staff assistance, to pull on their underpants in the morning.
Just Be Business-Like and Do Your Jobs! Somehow, now, however, after a massively divisive election, we ask these folks to sit crossed legged on the ground around a fire, to powwow reasonably, and deliver us from evil. Indeed, many of us contributed to the rancor now existing, yet, clearly, none so much as the Tea Party. They court rancor. They attract it, seemingly merrily. It’s their wheelhouse. The Tea Partiers led the way with fact-free notions of fiscal responsibility that basically amounted to cutting the federal government back to a slimmed down Coast Guard on jet skis.
My Job Description Is Four Words “Block, Hinder, Whine, Snort.” If you want a job description for the Tea Party, that’s about it. As Gertrude Stein said in 1935 about her ancestral home in Oakland, “There is no there there.” These Tea Partying dingbats came to D.C. almost uniformly undereducated in virtually every essential subject matter and deeply “under-moralized” regarding the hopes and needs of most of their fellow citizens. Regrettably, these amoral legislators were shunt off to D.C. by a group of matching constituents. Here’s their “job description” for these winning TP candidates: remain as hardheaded and uncompromising as Hitler (sorry, Mr. Godwin, but here he actually seems to fit): regarding the debt ceiling, the deficit, and the budget. These TP’s have not disappointed (although, unsurprisingly, a scattering of U.S. securities-owners among their own voters are a bit nervous). The country at large, though, is plainly disgusted, but not nearly enough.
I’m Just Talkin’ ‘Bout My G-g-g-generation . . . Instead of attacking these intransigent Tea Party dunderheads as incessantly as they deserve, the D.C. beltway’s journalistic twiterati, with few exceptions, misinforms a country famished for analysis. Primarily, they unctuously opine, it’s “the GOP,” “the Dems,” “politics as usual,” and, remarkably, “the President” who are the primary stumbling blocks to a debt ceiling/deficit cutting compromise. They, we are told, resist compromise; they won’t just sit like adults and do their jobs.
Indeed, the Tea Party is often mentioned as intractable, yet there’s unbalanced “reportage,” by and large, as reporters and t.v. newsertainment readers give the TP a pass. They barely attempt to hold them truly and publicly accountable and fail to investigate and report the utter economic idiocy of the Tea Party’s so-called alternatives. And truth telling is desperately needed. After all, what these back benchers are doing is not simply blockading an earmark creating a U.S. Goat Racing Team. They are quite simply – and aggressively – throwing the nation into the abyss with a deranged Plan A, and with nothing more than “let’s see what happens” as its Plan B.
In a real sense, the TP’s have already won a major battle, if not yet the war. These back bencher kids with the beanies on their heads have, with their simplistic “job descriptions,” brought both houses of Congress and the presidency to a loud, screeching halt. Nothing offered by President Obama, Mitch McConnell, Harry Reid, or Speaker Boehner meets the demands of this sniveling band of punks. Although utterly unlike the generation The Who helped usher in, the Tea Partiers’ rantings remind me of my generation’s anthem,
Why don’t you all f-fade away (Talkin’ ’bout my generation) And don’t try to dig what we all s-s-say (Talkin’ ’bout my generation) I’m not trying to cause a big s-s-sensation (Talkin’ ’bout my generation) I’m just talkin’ ’bout my g-g-g-generation (Talkin’ ’bout my generation)
This is my generation This is my generation, baby
If this TP “generation,” the Tricorn Topped Congressloonies, succeed in their goal of violently deconstructing the national government with nothing but fractured history and a rigid belief system to replace it, we’ll be in an America that, truly, the Founders could not have foreseen. The country they shed real blood for, courted public hanging for, and carefully nurtured, is now brought to the brink by a rabble of misinformed and misguided individuals who call themselves the Founders’ true believers. Would the Founders not reject such economic recklessness with the national debt and disdain for the common good?
Perhaps, though, should the debt ceiling collapse on their watch and cause what many believe will be a worldwide financial meltdown, the prime movers of this event, the Tea Party generation, will meet a comeuppance. Believers as they are in our history, they just may be reacquainted with another old American tradition:
Tomorrow morning President Obama hosts some friends and enemies at his big white house. They’ll powwow about bills for this and bills for that. Who will pay for them? Will we pay for them at all? Can we even afford a weekend summer vacation in Arlington, Virginia, just across the Potomac River? The big question, though, suggested by an unsettling report by WaPo tonight, is whether President Obama is ready to sell the ranch, lock, stock, and barrel.
Cave Or Pave? The Washington Post reported tonight that “President Obama is pressing congressional leaders to consider a far-reaching debt-reduction plan that would force Democrats to accept major changes to Social Security and Medicare in exchange for Republican support for fresh tax revenue. . .As part of his pitch, Obama is proposing significant reductions in Medicare spending and for the first time is offering to tackle the rising cost of Social Security, according to people in both parties with knowledge of the proposal.”
My fondest hope is that he doesn’t really want to put much of Medicare or Social Security on the table, if at all. I can’t believe – I must not believe – he’d cave again as he did last December. Or will he pave the way to GOP humiliation?
My gentler angels suggest that the Medicare/Social Security talk is a political gambit designed to highlight the GOP anti-tax jihad, and to further isolate them as the stumbling block to a budget (and debt ceiling) agreement. The President may be betting all-in that he can win on his home field when he meets congressional leaders at the White House tomorrow.
There, afterwards, he can roll out the bully pulpit and go directly to the American people. Tomorrow, if the GOP resists even the slightest amount of tax revenue increases, he can herald it to a nation where many cannot understand why the wealthiest among them should not pay a fair share. GOP stickiness on taxes is well-known, of course. House Majority Leader Eric Cantor (R-VA), for example, agreed to discuss the elimination of tax breaks like the one for corporate jets, yet – remarkably – he refused to do so if an eliminated tax break resulted in any increase whatever to federal revenues. Here’s how much he’s willing to budge on increasing tax revenue: “If the president wants to talk loopholes, we’ll be glad to talk loopholes . . . we’re not for any proposal that increases taxes, and any type of discussion should be coupled with offsetting tax cuts somewhere else.”
How generous of him. In any event, even that “concession” – worthless as it is – was kiboshed by Senate Minority Leader Mitch “We look a lot like Greece already” McConnell (R-KY).
The hypocrisy stuns, as always. Remember – as a commenter at Political Animal did:
“John Boehner, Mitch McConnell, Eric Cantor, John Kyle, etc.all voted for multiple debt limit increases and multiple budgets that included deficit spending (before we had a Democrat in the White House). If Mitch thinks we are like Greece, then he can look in a mirror and see the reason.”
