Archive for December, 2010

Cat Food Commission: Why won’t the damn thing die already?!?!?

Monday, December 20th, 2010

Democrats have a real problem with rhetoric. They keep describing “zombie ideas” as though they had the slightest credibility.

People tend to forget that Ronald Reagan often gave ground on policy substance — most notably, he ended up enacting multiple tax increases. But he never wavered on ideas, never backed down from the position that his ideology was right and his opponents were wrong.

President Obama, by contrast, has consistently tried to reach across the aisle by lending cover to right-wing myths.

Unfortunately, one of those myths is that the Cat Food Commission’s work has not been rendered completely irrelevant by the big tax break given to people who didn’t need it and who won’t use it for anything that will help the rest of us.

The idea is to pre-empt an even more draconian set of budget cuts likely to be proposed by the incoming House Budget Committee chairman, Rep. Paul Ryan (R-Wis.)

[…]

White House strategists believe this can also give Obama “credit” for getting serious about deficit reduction…

So, in order to “fight” wacko Republican notions that aren’t grounded in reality, the President and his people want to preemptively surrender and to simply hand over grandma’s Social Security check without so much as a whimper so that they can gain “credit” (Republicans will continue to call him a Socialist in any event) for “solving” something that never was a problem to begin with.

Yeah…gee, what could possibly go wrong with a plan like that?

Update: Jane Hamsher of FireDogLake agrees that our President doesn’t appear to know very much about negotiating strategy.

Krugman explains the housing bubble

Sunday, December 19th, 2010

From his 16 Dec 2010 piece:

It’s not as if the story of the crisis is particularly obscure. First, there was a widely spread housing bubble, not just in the United States, but in Ireland, Spain, and other countries as well. This bubble was inflated by irresponsible lending, made possible both by bank deregulation and the failure to extend regulation to “shadow banks,” which weren’t covered by traditional regulation but nonetheless engaged in banking activities and created bank-type risks.

[…]

In the world according to the G.O.P. commissioners, it’s all the fault of government do-gooders, who used various levers — especially Fannie Mae and Freddie Mac, the government-sponsored loan-guarantee agencies — to promote loans to low-income borrowers. Wall Street — I mean, the private sector — erred only to the extent that it got suckered into going along with this government-created bubble.

It’s hard to overstate how wrongheaded all of this is. For one thing, as I’ve already noted, the housing bubble was international — and Fannie and Freddie weren’t guaranteeing mortgages in Latvia. Nor were they guaranteeing loans in commercial real estate, which also experienced a huge bubble.

[…]

Last week, Spencer Bachus, the incoming G.O.P. chairman of the House Financial Services Committee, told The Birmingham News that “in Washington, the view is that the banks are to be regulated, and my view is that Washington and the regulators are there to serve the banks.”

The future, with the Republicans controlling  the House (Which has control of spending) isn’t looking so hot. Not only are the Republicans absolutely determined to avoid comprehending how the housing bubble began, they very clearly don’t want to do anything to fix it.

Update: Just for the fun of it, here’s the Republican explanation.

Bubbles happen. In retrospect, they always seem easy to identify, but as they are building, experts debate whether they exist—and, if so, why.

[…]

We will likely never have a complete explanation for why there was a housing bubble, but we have some clues.

[…]

For one, investors shared the same mindset as borrowers, enticed by the belief that home prices ould never fall on a national scale.

Yup, it’s all very mysterious and no on really knows.

Unfortunately, a partial win

Saturday, December 4th, 2010

Conservatives/Republicans/Tea Party folks got a partial win on the Cat Food Commission. As Representative Paul Ryan (R-WI) says:

…the Social Security plan in the deficit-reduction proposal by President Obama’s fiscal commission showed there may be room for compromise on the issue between Democrats and Republicans.

“It’s not where [Republicans] would go, but it’s getting close,” he told BNA Dec. 2.

No, the right wing didn’t win entirely, but enough Democrats crossed party lines to make the entire exercise worthwhile from their point of view.

As is pointed out here, the case that our economy is in crisis and thereby needs the drastic solutions presented, is far from convincing. The fearmongering that the Commission’s report engages in is wildly irresponsible.  

Cat Food Commission failure

Wednesday, December 1st, 2010

Cat Food Commission fail!!! The Commission appears to be unable to even get a majority, let alone the supermajority that their charter insists they should get, for their proposal.

 

The biggest problem, of course, is in getting the elected members onboard.  Republicans don’t want to raise taxes at all (The proposal is 2:1 spending cuts to taxation increases) and Democrats don’t want to needlessly hurt constituents with unnecessary spending cuts (“Cuts in Social Security will gradually increase poverty and early death among the old. Cuts in the mortgage interest deduction will further drive down home values while hardly affecting those rich enough to pay cash. Killing the Earned Income Tax Credit will reverse a highly effective anti-poverty program for working people.” Galbraith)

 

Naturally, the WaPo is covering up the fact that the Commission is obliged by law to make its proposal today and then cease to exist.

 

Hang it up, dissolve the Commission, send everyone home.