Links 8/1/11

I know I should write about the debt celling deal, but it is all too depressing and other people are doing the well warranted high dudgeon. I wish I were in Sydney again. This would look less awful from the other side of the world.

Switch off and stay on through worlidays Lucy Kellaway, Financial Times

Researchers Say Vulnerabilities Could Let Hackers Spring Prisoners From Cells Wired. This sounds like the plot of a summer movie.

PayPal hands over 1,000 IP Addresses to the FBI, look out Anonymous TekGoblin (hat tip reader furzy mouse)

House Panel Approves Bill Forcing ISPs To Log Users Slashdot Furzy mouse highlights this section:

A last-minute rewrite of the bill expands the information that commercial Internet providers are required to store to include customers’ names, addresses, phone numbers, credit card numbers, bank account numbers, and temporarily-assigned IP addresses.

Al Jazeera English Arrives on N.Y. Cable New York Times
Sea Change in Map of Global Risk Wall Street Journal

Worst Europe Earnings Hitting Industrials Bloomberg

Canada GDP Declines .3%, Largest Drop in Two Years – Don’t Worry It’s “Temporary”; Canadian Apologists Be Warned Michael Shedlock (hat tip reader furzy mouse)

Obama’s Grand Deficit Bargain Lost Out to 2012 Politics Bloomberg

To the intransigent go the spoils Financial Times

Contemplating the Futility Tim Duy

Ransom Paid Robert Reich

The President Surrenders on Debt Ceiling Paul Krugman, New York Times

“Great Recession” Far Worse Than We Had Been Previously Told Ed Harrison

Antidote du jour (hat tip Richard Smith):

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  1. attempter

    I know I should write about the debt celling deal, but it is all too depressing and other people are doing the well warranted high dudgeon.

    Just judging by the headlines, the links here are from a bunch of liars claiming Obama “wanted to do better” but, darn it, was held “ransom” by those nasty Republicans, had to “surrender”, and couldn’t get a good “bargain” because of “2012 politics”.

    (Of course, Obama and the Democrats had a de facto one-party dictatorship for two years and could have raised or abolished the debt ceiling at will. So this debt ceiling, and this “deal”, is nothing more or less than exactly what the Democrats wanted. Anyone who says otherwise is simply a lying pro-Dem hack.)

    The reality is that Obama is chief among those holding us hostage, but there’s no ransom we could ever pay short of our very skins. We the people are expected to submit absolutely, to make an unconditional surrender. The only bargaining is among the criminal elites themselves, how to divvy up the spoils of infinite crime.

      1. Cedric Regula

        Wrong. Do nothing would have been an improvement. That would have resulting in the Bush tax cuts auto-expiring end of 2010. No payroll tax holiday. And lack of spawning a bunch of little pork we got like extending corn ethanol subsidies.

        We would have been better off with a prayer rock in the WH.

        1. No Know

          I’m with you C. The only people who would have been worse off if Obama did nothing is people who already have way too much now. Their egos might suffer but they would still have more money than anyone needs. I wrote more in another post below. Maybe eventually Wall Street will fall because of their own saying: “Bears and bulls make money, pigs get slaughtered”. Personally rather than waiting to find out, I’d rather take a more proactive position.

          1. curlydan

            Unfortunately, letting the Bush tax cuts expire would force all filers to pay more in taxes. Here is what the Bush tax cuts primarily did:
            *a new 10% bracket was created for single filers with taxable income up to $6,000, joint filers up to $12,000, and heads of households up to $10,000.
            *the 15% bracket’s lower threshold was indexed to the new 10% bracket
            *the 28% bracket would be lowered to 25% by 2006.
            *the 31% bracket would be lowered to 28% by 2006
            *the 36% bracket would be lowered to 33% by 2006
            *the 39.6% bracket would be lowered to 35% by 2006

            To do the right thing (OK, my right thing) and restore marginal rates back on those earning $250K+ would require new legislation be passed. Bush couldn’t have sold this piece of BS without “helping” others.

            We need someone with the gut to realize that the public wants the $250K+ earners to be taxed more (72% in favor accoring to a recent WaPo poll).

          2. Johnny Clamboat

            I’m not sure how saying “Don’t tax me, tax that guy” means that you have guts.

      2. No Know

        Johnny Clamboat
        You say: “I’m not sure how saying “Don’t tax me, tax that guy” means that you have guts.”

        No one could disagree with your statement but I read and re-read the post you refer to and cannot see anything that suggests that someone is saying “Don’t tax me, ta, that guy”. The post deals with our graduated income tax system which, at this point, is well accepted. Graduated tax rates mean that people who make more pay a larger portion of their taxable income. Do you have a comment on the graduated tax rates or can you tell us exactly what your point i?

        1. Johnny Clamboat

          My comment was in response to Curly: “We need someone with the gut to realize that the public wants the $250K+ earners to be taxed more (72% in favor accoring to a recent WaPo poll).”

    1. kp

      Staggering political incompetence and a naive belief in bipartisanship (naive at least in these times) are not equivalent to criminal intentionality, as depressing and unjust as the outcome may be.

      But your inflamed rhetoric and preemptive dismissal of those who might disagree with you are precisely the kind of reasonable, nuanced arguments we desperately need. Thank you.

      1. attempter

        I haven’t pre-emptively dismissed anyone. I dismiss those who continue to reject years, decades of overwhelming evidence.

        On the contrary, it’s apologists like you who want to dogmatically pre-empt the clear record and the fact that among those knowledgeable about politics and the economy, it’s no longer possible to be innocently wrong about what’s happening.

        But thank you for parroting the hackneyed old lie that we were all just born yesterday, history has only just begun, there is no evidence record, and therefore we’ll need to wait to find out what’s really happening…How long? Really forever, for the likes of you. Certainly until it’s too late.

        And just out of curiosity, who, praytell, among these elites do you think are the well-meaning but incompetent ones who, if only filthy peasants like me would STFU, would listen to reason from civil, enlightened souls like yourself?

        1. KP

          “Anyone who says otherwise is simply a lying pro-Dem hack.”

          Followed by:

          “I haven’t pre-emptively dismissed anyone.”

          Uh, okay.

          For the record, I think Obama is and has been a complete failure. I consider him an extension of GWB, and I think the Dems are a party of fools and ninnies. Both parties have been captured by Wall Street.

          Can I not believe that the left is bad at politics, lacking foresight, and worst of all, lacking in courage, without believing they are intentionally criminal?

          1. another

            “Can I not believe that the left is bad at politics, lacking foresight, and worst of all, lacking in courage, without believing they are intentionally criminal?”

            Of course you can. Willful ignorance knows no bounds.

          2. Valissa

            “Political language — and with variations this is true of all political parties, from Conservatives to Anarchists — is designed to make lies sound truthful and murder respectable, and to give an appearance of solidity to pure wind.” — George Orwell

            “Everyone believes in the atrocities of the enemy and disbelieves in those of his own side, without ever bothering to examine the evidence.” –George Orwell

            “If liberty means anything at all, it means the right to tell people what they do not want to hear.” –George Orwell

          3. attempter

            I’ll try one more time:

            I never preemptively dismissed anyone. (You do know what those words mean, right? They mean reject without proof.)

            I now, after the criminality of Obama and the Democrats (and the liberal Leadership in general) has been proven beyond any doubt whatsoever, dismiss anyone from that criminal cadre.

            You, on the other hand, continue to preemptively dismiss this evidence because it would overturn your comfortable belief in the essential goodness of the Democratic Party. So in direct defiance of all the evidence (and of elementary school arithmetic – the Democrats had a de facto one-party dictatorship for two years; obviously anything they did was exactly what they wanted to do, no more, no less) you insist on believing the “weakness/incompetence” meme.

      2. No Know

        Would I be wrong to assume you are a Democrat? My question is, how can Obama continue to be accepted as a Democrat under the circumstances? We have what everyone wants to call a Debt Ceiling crises and now we have a Debt Ceiling solution. How in the world did the issue of the Debt Ceiling get coupled with budget reform? The answer is because Obama let it. Legions of economists and pundits provided Obama with all the cover he needed to declare that the two issues were not one. He decided, in is infinite wisdom that they were. Obama should have long ago said he disagreed with that contention and would veto any bill that contained anything other than an increase in the debt limit, and then had his minions work on a contingency plan. Result, 100% blame on Republicans for any default (as it should be). Allowing the two issues to be joined at the hip was something that should shock any right minded Democrat. Sad to say, but those Democrats who still support Obama are in denial. The party was hoodwinked into believing someone who talked the talk would walk the walk, but he is a wolf in sheep’s clothing. The last presidential election was really a continuation of the Republican primary. We never got a Democrat challenger to vote for! The question is, will Democrats be fooled again?

        1. KP

          No Know, I agree 100%. I really do.

          All I was saying is that when you start preemptively dismissing the opinions of people who disagree with you, when you start using false equivalencies and false dichotomies, and then when you project what’s in your head without listening to the argument being made (when did I say anyone was a “filthy peasant”?), it is easy to start down a path that ends in the same kind of boggled logic shown on a blackboard connecting non-profits to new global caliphates.

          The system has been broken for years. Citizens United has made it worse. But Obama has been putting tax hikes in his speeches for months, so I can believe this is not the outcome he wanted. I can believe that Obama is weak, short-sighted, bound to 2012 reelection concerns, and probably lacking a strong grasp of finance and economics, without being a liar.

          1. Valissa

            There is an incredible amount of evidence that Obama is a liar. I find it hard to undertsand why anyone still believes much of what he says. Why do you believe his speeches? There have even been numerous articles in the MSM over the years about how politicians (of both parties) say one thing to get elected and then do other stuff once they do. This is known known. Why do you continue to believe in Obama? Or in the well meaning but ineptness of the Democrats? What’s at stake for you here? I suggest studying up on the history of propaganda.

          2. No Know

            I’m with Valissa on this one. It would be nice to believe that Obama is still a good guy who just made some errors in judgment but there’s too much evidence to the contrary. Sometimes it’s better to try to take all emotion out of the question and err on the side of caution. That means, as Valissa points out, he’s a liar. The way I approach the issue is, since no one can truly know, what happens if either position is incorrect. If KP’s position is incorrect and he’s a liar, it only gets much worse. If Valissa is incorrect and he’s not a liar, how could we possibly do much worse if we replace him. Does anyone really believe that John McCain could have done more to damage progressive progress than Obama has?

          3. ScottS

            Was I the only one who heard the interview with one of his professors during the election where the professor said that Obama talked and acted like a Republican, and was surprised he was running as a Democrat?

            Is it paranoid to think that he has always been a plant? Hasn’t he been consistently selling out the left since his days in the Illinois senate? Doesn’t he say how much he admires Reagan? What more proof do you want?

            He’s not weak. He’s maximizing his campaign donations thinking it will assure him of being a two-term president. I admit I was duped too, but it’s time to get over the embarrassment and move on. Focus on a primary challenge. Or vote Republican. At least it’s easier to oppose the neoliberal BS when it comes from a Republican mouth.

            Obama has taken the baton from Governor Bush and ran with it.

          4. Doug Terpstra

            “Obama has been putting tax hikes in his speeches for months, so I can believe this is not the outcome he wanted.”

            Hey, if it’s in a political speech on the teleprompter that’s like the Apostles’ Creed or something, right? Has Obama ever let us down? And don’t call me gullible, credulous or naïve either, because I’m no chump. I also read it on the internets, or on Fox News. Yeah, that was it; Socialist Obama wants to soak the fat cats.

          5. attempter

            Is it paranoid to think that he has always been a plant?

            The evidence is that Obama’s long been a conscious political con man, probably going back at least as far as his law school days.

            Even though he was consciously a Reaganite, his scam was to identify as a Democrat, exploit his race and liberal platitudes to muster unthinking white liberal and black support (to get the votes), while all the while assuring big money that he was really their guy (to get the cash).

            Adolph Reed and others saw through his scam and were warning against him as early as the mid-90s.

            In his actions he always came through for his donors, while he was operating on stages obscure enough from the national point of view that his line of “change” rhetoric could still fool alot of people.

    2. No Know

      Obama isn’t a leader and he isn’t a negotiator — he’s an mediator and arbitrator. He is a product of political polls and sound bites that political engineers use to get them guy elected. The only problem is what he “gets done”. The number one reason he got elected is that of all candidates he (1) Could likely get things done and (2) They were on the wish list of those who voted for him. The U.S. is now a victim of the age old conundrum: Be careful what you ask for. With the possible exception of the Debt Ceiling Limit, would the country truly have been worse off is Obama had not got anything done? (And even the Debt Ceiling Limit problem was only because he spent trillions of dollars to make the economy less worse for the people who already have way too much.) For the vast majority of people, whatever Obama “got done” had so no perceivable effect. (BTW – Re Obama’s fixes of the housing crises — How many people realize that in 2013 there will be a 3.8% tax on the gross proceeds from the sale of our homes? A little present from O contained in the health care bill.) Seriously, the country would be better off if he stuck to things like the NFL strike. How’s that NBA thing going now?

      1. attempter

        Seriously, the country would be better off if he stuck to things like the NFL strike. How’s that NBA thing going now?

        Because he’d muck them up?

        (We’d be better off without those circuses, wouldn’t we?)

      2. reslez

        According to google the “home sales tax” thing is a hoax.

        The truth about the bill is that if you sell your home for a profit above the capital gains threshold of $250,000 per individual or $500,000 per couple then you would be required to pay the additional 3.8 percent tax on any gain realized over this threshold. (source)

    3. Rodger Malcolm Mitchell

      I wonder whether Yves is aware of this equation:
      Federal deficit = Net Private Saving

      This is not a theory or hypothesis. It’s an accounting statement of economic fact. Think about it very carefully, and try to visualize the implications for our economy.

      Rodger Malcolm Mitchell

      1. Foppe

        Should I now say “how deep, oh great visionary”, or “how presumptuous, oh great spouter of one-liners”? I am confused.

  2. Foppe

    Yves: I seem to recall from last year that you took a few days off during the summer.. No chance of doing the same this year?

    1. Yves Smith Post author

      Thank you for noticing. I am pretty burned out. I might take some time off just before Labor Day.

  3. Dameocrat

    I would be pretty skeptical many anonymous hackers used their real ip addresses. Their are many anonymous proxy servers they could use instead.

    1. ambrit

      Dear Dameocrat;
      Rather, this is another example of ‘Defining Deviancy Down’ a title I’ve stolen from James Fallows. (He did an excellent article in the Atlantic mucho anos ayer about it.)
      In essence, by establishing the protocol of supine collaberation now, the ‘Authorities’ have a ready made tool available for whenever they wish to suppress ANY opposition. All it takes is for the ‘Powers That Be’ to declare some individual or group to be ‘A Threat,’ and the wheels of ‘Justice’ will commence grinding. Since, as most thinking people know, the forces of ‘State Security’ are ‘Equal Opportunity,’ no one will be safe. Who is serving whom here?

      1. Ignim Brites

        Is DDD, Fallows’ phrase, or Daniel Patrick Monyihan’s or Bill Bennett’s? I want to say DPM but somehow I think it is Bennett’s. Never associated it with Fallows.

  4. Philip Pilkington

    “This would look less awful from the other side of the world.”

    It’s alright, Yves. You know there’s always someone out there ready to listen when things get testy. You know who I’m talking about… that’s right, the big guy. You know… up there.

    So, ye dispossessed and ye disillusioned, when darkness dwells and times look dire, kneel down… and praise The Coin! For it is in The Coin that we shall find everlasting peace.

    1. Jim Haygood

      Durn, who knew that the MMT (Magical Mystery Tour) trillion-dollar platinum coin was that big?

      Maybe it really IS worth a trillion.

      1. Philip Pilkington

        Darest thou question The Coin? Heathen be damned! To the depths of Hell with ye!

        1. ambrit

          Brother Phillip!
          Thou saileth close to ye dreaded “Edge of ye Worlde!”
          Worship of Ye Coin of Asmodeus be nigh unto Idolatry!
          Abjure such untrod ways! Return to thy cell and Contemplate ye Joys of ye Austere Life. Then, mayhaps, ye Master Abbot will allow thee a portion of ye Killer Bee Mead just decanted from ye Tun in ye Counting House Cellar!
          (Thou knowest, I ken, that certain Apostate Philosophers opine that Ye World be but an Anteroom to Ye Infernal Regions. Avoid Thought like Ye Plague! Embrace Conventional Wisdom and return to Ye Flock. [Tis near shearing season. Har Har.])
          Thy Brother in Keynes, Australeoambriticus.

          1. MyLessThanPrimeBeef

            If one coin is good, it’s inexcusable not to have two.

            It would be a dereliction of duty not to have two.

          2. Philip Pilkington

            It’s been a long time since I’ve felt this spiritual. But with the help of those on the Naked Capitalism website I have felt the Spirit of The Coin wash through me and purify my soul.

            Now immerse yourselves in this wonderful medieval composition by the great mystic Hildegard of Bingen and you too can cleanse your soul:


            (Seriously though, its a beautiful composition masterfully interpreted by the ever brilliant Kronos Quartet).

            Praise The Coin!

          3. MyLessThanPrimeBeef

            In the beginning, The Coin created the financial world as we know it today…

          4. Valissa

            “No one should decidedly adhere to an exposition of Scripture that with sure reason is ascertained to be false in order that, from this, Scripture not be derided by the infidels.” — St. Thomas Aquinas

          5. MyLessThanPrimeBeef

            “No one should decidedly adhere to any exposition of The Modern Monetary Theory, for surely, reason will ascertain it to be false. From this silence, The Modern Monetary Theory shall not be derided by the taxpayers.” — Econoclasticus.

          6. ambrit

            Brother Phillip;
            In sooth, thou speakest in the tongues of angels. “And the ways of Keynes are inscrutable to those of hardened heart.” Econoclasticus sayeth that, “Yea though I speak with the tongues of Angels, yet without coinage, I am as a hollow brass farthing!” (Mephitosophocles commenteth that; “Yea, without faith, Fiat be yet but a turning wheel.”) Brother Spade hath famously remarked, on the Treasures of the Worlde; “It is Ye Stuff that Dreams Are Made Of.”

  5. Externality

    The version of the deal posted on the White House website gets steadily worse as it goes along.

    It starts out by claiming that Medicare will not be affected and then, in section 4, states that “Likewise, any cuts to Medicare would be capped and limited to the provider side.” These cuts seem to be in addition to the $500B cut to Medicare included in ObamaCare.

    It also claims that the defense budget will be cut, but then exempts military retirement costs. According to House Speaker Boehner’s Power Point presentation, spending on current military and civilian personnel would not be affected either. Since personnel costs are approximately 1/4th of the defense budget, the deal effectively limits possible cuts in defense spending.

    It also creates the so-called Super Congress that we discussed here the other day. The bipartisan leadership of both houses would be able to put together a budget proposal that would be forwarded to both houses for a mandatory up-or-down vote.

  6. Philip Pilkington

    Regarding the revised GDP numbers. I’ve been wondering something for some time now. I briefly discussed it with Dean Baker via email about four months ago and he thought I might have a point then. Now, however, I really think I might have been right. From the Credit Writedowns piece:

    “…inventories are no longer growing at the previously unsustainable rate…”

    Is this really a good thing?

    I wonder — and I’ve been wondering for some time — if a lot of the recovery, for what it was, wasn’t taking the shape of a classic ‘Kitchin cycle’.

    Inventories skyrocketed, while aggregate demand seemed not to grow properly. This always seemed to me to look like there was a huge inventory glut occurring that might have to be wiped off eventually.

    Now it seems that inventory accumulation has stopped. So that brings us to the next stage of the cycle. Liquidation presumably. Which is going to lead to deflationary pressures.

  7. lambert strether

    If not a “surrender” if it’s what you want to do. Krugman hasn’t quite jumped the shark on his Obama apologism, but he has certainly examined the shark from almost every possible perspective, and without much caution, either.

    1. M.InTheCity

      “At the very least, Mr. Obama could have used the possibility of a legal end run to strengthen his bargaining position. Instead, however, he ruled all such options out from the beginning.”

      Considering how many times Big “O” has been the conservative water carrier, I think Dr. Krugman’s sentence should be classified as eminating from fantasy land. It’s like Dr. Krugman left off the last sentence which would read: “He ruled out such options because he wants what the Republicans (and his donors) want.” Now if Dr. K said that, I’d be more forgiving to the not-jumping the shark comment. The only thing Dr. K has going for him is that at least he is midly Keynesian…

  8. joebhed

    More cuts coming.
    No jobs for anyone and a Tea-Party based Republican administration in America’s future.
    Then, more cuts.

    For what?
    To rectify the government’s debt-ceiling amount against anyone’s straw-man index.
    The government’s debt.
    The people’s debt.
    To the private bankers who create money out of nothing and lend it to the government – which government has the power to create the money in the first place.
    Which government has the power to create the money in the first place.

    The only way to wipe that smirk off Rand Paul’s face is with the financial intelligencia getting behind the idea of the people’s power to create money.
    Use the $Trillion Platinum if that’s your focus.
    Use the MMT debt-less deficit spending, if so inclined.
    Use the Kucinich public money system if that works for you.
    But fer crisake, America, WTFU !
    It’s YOUR money-system.
    Which is why Henry Ford said there’d be a revolution in the morning, if the people only understood that fact.

    Or, more cuts.
    And, more cuts.
    Till you bleed, too.
    For the Money System Common.

        1. Johnny Clamboat

          I saw the deal. There are zero cuts, they are slowing the growth of spending in certain areas.

          If the forecast calls for a 6% hike in spending but they end up with only a 3% increase, it is not a spending cut. It’s a farce, a product of the world’s worst reality TV show.

          War is not peace; freedom is not slavery; ignorance is not strength.

          1. reslez

            Ten years from now will there be more people or fewer in the U.S.?

            If you share a pie with 8 people, and 2 more guests arrive, the slices for all get smaller. This is basic arithmetic: a cut, not a farce.

          2. Johnny Clamboat

            I’ll put up 100 fiatskis to 2 doughnuts wagering that Central State spending increases trump population growth plus price inflation over the next 5 years.

  9. RA

    I thought Obama had wimped out. But in the end, he has given up nothing. Cuts that will never materialize. No cuts to Medicare or defense. Just “cuts” that were already baked into the cake. If he had managed any tax increases, he would have pulled a complete fast one on the Republicans.

  10. Ignim Brites

    “After all, how can American democracy work if whichever party is most prepared to be ruthless, to threaten the nation’s economic security, gets to dictate policy? And the answer is, maybe it can’t.” Sounds like Krugman is edging up to the secession cliff. Let’s see if he can take the plunge.

    Krugman’s point that government spending cuts won’t reduce interest rates much now is possibly incorrect and possibly irrelevant. If the cuts lead to a new recession, interest rates might decline further. And the question isn’t necessarily whether or not interest rates are low now but whether the will remain subdued in the future, i.e. not be infected with an inflation premium.

    Krugman displays a surprisingly linearist mentality for an economist. “On the other side, making the economy weaker now will also hurt its long-run prospects, which will in turn reduce future revenue.” Underlying this is the great article of faith of the Keynesians (and to some extent monetarists); namely, the economy can grow linearly so long as there is enough spending (money).

    1. Francois T

      Underlying this is the great article of faith of the Keynesians (and to some extent monetarists); namely, the economy can grow linearly so long as there is enough spending (money).

      What Prof. Krugman (and a lot of other people too BTW) have been saying for months now is this: If you cut spending at a time of very fragile recovery, the probabilities of a double-dip recession are greatly enhanced.

      That is it. Nowhere do you find such a peremptory assertion that more spending ought to, in Deus ex-machina lead to more economic growth.

      1. Ignim Brites

        This is the most limited interpretation of what Krugman and the Keynesians are saying. However I think underlying this is a stronger claim that no government spending ever can conceivably hurt the economy, except perhaps spending for a war against a militarily superior nation.

          1. ambrit

            Dear Foppe;
            Allow me to quibble somewhat. At this point in time, when Glamour in its original meaning has taken the so called ‘Elites’ to Fairy Finance Land, someone has to lay the groundwork for a countervailing Politicoeconomic Narrative. All functional ‘Progressive’ movements require an intellectual basis to act out of. We here in these degenerate times have the sad task of laying the foundations for the next “change we can believe in.”
            With a supine Executive and a new “Twelve Tyrants,” America is acting out its own “Greek Tragedy.”

          2. Foppe

            You are right, of course. My point was merely that, given the state of the economy at this time, Keynesian thinking would be preferable over Austrian crime (so long as it is remembered that Keynes meant his stimuli to only be transient), and can do little harm even if overapplied (which isn’t likely to happen).
            Having said that, today’s demographics (and the uneven way in which the world’s economies are developed) are quite different from last time, so it I doubt that the US could pull of the same feat it did before, after WWII had reduced the competition to rubble.

  11. ella

    Where are the automatic tax/revenue increases in this debt deal? Why not add phasing out the Bush tax cuts, the high exemption for the estate tax, the numerous tax loopholes, and the implementation of a Tobin tax (transaction tax on all stock and bond purchases) Once again, no has considered the effect of Tax entitlements, privatization of government services, no bid contract entitlements, and on and on. Only the elites and chattering class thinks’ this debt deal effects both sides equally? Plain and simple the R’s have once again won and they will continue to win because the D’s allow them to.

    Why support the D’s when they fail to support the middle class. The middle class needs a new party with the furor of the Tea Party will to adopt the strategy and tactics of the R’s and their T party to force change. This is the real message, Washington no longer works for the middle class. Time for us to stop working for them.

    1. RA

      Actually, both of them have been treated equally in this particular deal. The whole the thing is sham. Obama loses the PR war here but he got the debt ceiling lifted without any real cuts. It’s just as if the Republicans had agreed to it with no consequences.

      He suckered them on a commission that will produce what all commissions produce. Nothing. The consequences are laughable because neither side is going to cut Medicare or defense before an election.

  12. Cedric Regula

    File: Boehnergeddon – It’s our differences that keep this relationship interesting.

    I bit early to report on Boehnergeddon today, but this reporter-observer is going cross-eyed staring at his computer monitor too much and is going to do something fun outdoors in the real world today.

    The WH releases their description of the debt deal. Personally, I hate it when they don’t put dates and timestamps on these communications, but here it is anyway.

    It really departs from the morphed Mr. B deal we have been hearing about. Most notably, Mr. B still makes a big deal about no new taxes (possibly forever), and there is a balanced budget amendment trigger if the “commision” and congress can’t agree on specific cuts by the end of the year (not that would happen).

    So the done deal is not a done deal, and the kabuki troop is headed for a backstage encore.

    Regurgitating the real news:

    S&P 500 futures go wild on debt deal, then manufacturing data released and stocks nosedive.

    Elsewhere, AP reports banks in Asia still making loans before obtaining reserves/deposits. Not so much in Europe from the looks of CDS spreads.

    The Peterson G. Peterson Foundation issues an urgent message:

    Peter Peterson picked a peck of pickled peppers;
    A peck of pickled peppers Peter Peterson picked;
    If Peter Peterson picked a peck of pickled peppers,
    Where’s the peck of pickled peppers Peter Peterson picked?

    1. MyLessThanPrimeBeef

      They don’t make kabuki actors like they used to…it’s all documented there in a monumental work called, The Rise and Fall of The Art of Kabuki Acting.

      1. Valissa

        I dunno about the rise and fall thing… I think they’ve merely raised the level of kabuki along with the debt ceiling.

        Traditional Japanese kabuki

        Bush era kabuki

        Part of the problem is that the little people have started to figure out it’s all kabuki

          1. MyLessThanPrimeBeef

            Bunraku is a great word!

            It’s the favorite pastime of eminence grises (not that I know how to say it).

            (I hope the comment goes to the right place this time)

      1. Philip Pilkington

        Cartoonists know FA about economics… who woulda thought it.

        I guess I know FA about drawing cartoons. By the way, anyone want to see the cartoons that I drew?

        1. Valissa

          Philip, the point of cartoons is to act as a counterweight to all the sturm and drang… of course some people get off on wailing and moaning, and find it very emotionally satsifying (hint – that would not be me).

          “You may explode in rage, but men will still go on doing what they have always done.” – Marcus Aurelius

          1. Valissa

            Geez, Philip… your cartoon is so terrible that it made me laugh ALOT… thanks!

            btw, you do realize they don’t teach economics at cartoonist school, right? And that they’re making fun of the politics part of the debt ceiling issue and not the economics part.

            None of the economics/economist joke sites I use have cartoons, which is too bad. I think cartoons done by real (or even amateur) economists is an untapped market.

          2. ambrit

            Brother Phillip;
            Thou cartoonest as doth ye Indigenes in Ye State of Nature!
            It doth engender merriment and contemplation! More thou canst not wish. Thy task is accomplished.
            Pax est vobiscum.

  13. Francois T

    Re: Shedlock on Canada GDP.

    There is something immensely pathetic in witnessing the slow but ineluctable descent of a once brilliant financial commentator into a curmudgeon annoyingly obsessed with some mental fixations where reason is just plain obliterated.

    With Shedlock, we have unions; His nastiness toward anything unions has become legendary (and not in a good way) on the Web…and now Canada.

    I can’t recall Shedlock writing anything nice about Canada for years. From the housing sector to the health care system to its economic performance…the northern neighbor can’t do nothing right.

    1. MyLessThanPrimeBeef

      He needs to display reader comments on the same page to balance out his views.

      Right now, it’s just him and his all too frequent referencing of himself.

  14. Francois T

    Re: House Panel Approves Bill Forcing ISPs To Log Users.

    I wouldn’t bet on president Obysmal vetoing this bill. Look ‘Ma! Mo’ surveillance powers for yo!

  15. MyLessThanPrimeBeef

    Great Recession Far Worst Than We Have Been Told…

    Interesting that we live in such a ‘sophisticated’ world that even though you have no food on the dining table for months, you will not know if you are poor until the bureau comes out with its pronouncement.

  16. MyLessThanPrimeBeef

    Hackers To Spring Prisoners From Cells.

    I like the Twitter algorithm link about outing pretending lesbians a few days ago better – here it’s possible to envision another algorithm that will somehow brainwash Beauty into dating the Beast.

  17. Foppe

    Nice article (look who’s investing in Mt coal): “Will Montana become a coal colony?“:

    Meanwhile, Arch is arranging a way to ship the coal to Asia. On July 1, Arch, Warren Buffet’s BNSF Railway, and billionaire Forrest E. Mars Jr. purchased the Tongue River Railroad Company, which holds a valuable federal permit to build a 121-mile rail link between Miles City and Decker, with a spur connecting to the Otter Creek tracts, at an estimated cost of $550 million. Earlier this year, Arch acquired a 38 percent stake in Millennium Bulk Terminals, which is attempting to build an export terminal in Longview, Washington, the idea being that the coal from Otter Creek could travel by rail to Longview and from there be shipped to Asia. The company also announced a deal to ship coal to Asia through a Canadian port near Prince Rupert, British Columbia. “These options will help us to meet our strategic objective of expanding coal sales from the Powder River Basin and the Western Bituminous Region into the world’s largest and fastest-growing coal market,” reads Arch’s annual report. The Powder River Basin, spanning southeastern Montana and northeastern Wyoming, supplies about 40 percent of the country’s coal.

  18. Foppe

    Glenn Greenwald seems to be pissed (considering that this is his third post in 36hrs or so): ‘The myth of Obama’s “blunders” and “weakness”‘

    With the details of the pending debt deal now emerging (and for a very good explanation of the key terms, see this post by former Biden economic adviser Jared Bernstein), a consensus is solidifying that (1) this is a virtually full-scale victory for the GOP and defeat for the President (who all along insisted on a “balanced” approach that included tax increases), but (2) the President, as usual, was too weak in standing up to right-wing intransigence — or simply had no options given their willingness to allow default — and was thus forced into this deal against his will. This depiction of Obama as occupying a largely powerless, toothless office incapable of standing up to Congress — or, at best, that the bad outcome happened because he’s just a weak negotiator who “blundered” — is the one that is invariably trotted out to explain away most of the bad things he does.

    It appears to be true that the President wanted tax revenues to be part of this deal. But it is absolutely false that he did not want these brutal budget cuts and was simply forced — either by his own strategic “blunders” or the “weakness” of his office — into accepting them. The evidence is overwhelming that Obama has long wanted exactly what he got: these severe domestic budget cuts and even ones well beyond these, including Social Security and Medicare, which he is likely to get with the Super-Committee created by this bill (as Robert Reich described the bill: “No tax increases on rich yet almost certain cuts in Med[icare] and Social Security . . . . Ds can no longer campaign on R’s desire to Medicare and Soc Security, now that O has agreed it”).

  19. MyLessThanPrimeBeef

    Bunraku is a great word!

    It’s the favorite pastime of eminence grises (not that I know how to say it).

  20. old.frt

    Re: Antidote du jour.
    Repetitive behavior on the part of any animal is suspect.
    Compare with rocking, head banging, pacing.
    This one, In extremis, could be an indicator of pathology.
    Do hope that someone skilled in this area is present.

  21. Jack Parsons

    It’s the new drinking game: name some giant piece of machinery and what wrong thing can you make it do?

    Let prisoners out? Skoal!
    Trap people in elevators? Health!
    Make dams flood cities? Prosit!
    Launch nuclear missiles? Salud!
    Make elevators blow through the roof like in “Charlie and the Chocolate Factory” (book and remake)? L’Chayyim!
    Make printing presses only print the Koran? What’s a printing press?

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