Obama Owns This Crisis

Obama created an unnecessary financial crisis. Not that we would have escaped eventually having one, but he played like a fool into the Republican desire to use the debt ceiling to push for budget cuts, and he tried outsmarting them to get his long standing desire of entitlements cuts through. Having the S&P downgrade hit when the Eurozone crisis was in an acute phase was like rolling a car full of explosives into a burning house. “Obama victory” may come to be the modern version of “Pyrrhic victory”.

And the man touted as a silver tongued orator can’t even talk up the markets. He actually managed to talk them down. Big time.

As numbed readers no doubt know, the S&P closed down 6.66%. BAC fell a stunning 20% on the day and its CDS spreads are up big. The VIX rose over 50% to 50. The FT Alphaville (hat tip reader Scott) point out that the VIX is backwardized. From their chat with Christopher Cole of Artemis Capital (boldface theirs):

In regard to VIX futures curve backwardization since 2004 the front two contracts of the VIX futures curve have traded at a discount to spot VIX approximately 25% of the time. Currently the entire VIX futures curve shows inversion and this shape has only occurred 13% of the time since 2004. Negative convexity across the entire curve usually only occurs during systematically important shock events such as the 2008 financial crash, Bear Stearns bankruptcy, 2010 flash crash, and the 2007 credit market meltdown.

It is important to understand the fundamental and structural dynamics underlying VIX futures curve inversions. The traditional explanation is that VIX futures curve backwardization implies the market’s expectation of volatility mean reversion or that the VIX will decline from elevated levels. An alternative explanation is structural, implying that investors who bought VIX futures and options as tail risk insurance are now all rushing to “cash-in” on the payout at the same time, artificially pushing the curve downward.

This may explain the mixed forecasting record of the VIX futures curve in backwardization as the spot VIX has breached the discounted VIX futures price to expiry only 62% of the time since 2004. The average duration of a VIX futures curve backwardization is only 4 days, however when the entire curve in backwardization implying a systematically important event, the curve can exhibit negative convexity for much longer periods including 64 consecutive days of full curve inversion during the 2008 financial crisis.

Or to quote the financial maven Bette Davis, “Hang onto your hat, we’re in for a bumpy ride.”

I’ve started #ReasonsToPrimaryObama. The Wrongway Prez needs to be replaced, and we need alternatives beyond the ones being served up by the Republicans.

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  1. LJR

    I’m not sure I should take someone who doesn’t know the difference between “systematically” and “systemically” all that seriously. Sounds like another MBA out of his depth.

    1. CB

      I know the difference and being a truly lousy typist and usually typing in a rush, this is a mistake I’m sure I’ve made. I do believe I’ve seen Yves in a typo or two and her credibility is intact.

      1. Yves Smith Post author

        The part he objected to was a quote from FT Alphaville. That was not my doing.

        1. CB

          I know. Didn’t mean to imply otherwise. I just think for bad typists who type fast, it’s an easy mistake to make and not a credibility problem.

    2. craazyman

      sytematically is the term of art. if you can call it art. it always bothered me too, language-wise, but that’s what the textbooks will say. I think it goes back to William Sharpe and MPT. I guess if you make it you can call it whatever you want. I like that principle in principle, but still, it should be “systemic”, just for gracefullness of language.

    3. PT Barnum

      It’s amusing that those who easily swallow the logically… and sometimes physically impossible… are such fanatics about spelling.

      But I guess everyone needs some standards. And once someone has discarded reason and truth, well then, spelling it is!

    4. David

      “Systemic” vs “systematic” error I’ve seen so much I hardly notice any more.

      “Backwardizated” instead of “backwardated” is new on me, and he kept doing it over and over. Usually people who don’t know the word don’t use it at all. That was quite annoying.

      That said, the historical info about backwardation in the VIX was interesting.

  2. KnotRP

    > BAC fell a stunning 20%

    Is “stunning” the new “unexpected”?

    Proper use in a sentence: It’s stunning that BAC has a market value above $0, particularly after consuming the Countrywide Chalice laced with Iocane. The smartest bank in the world, eh?

    1. Anonymous Jones

      I hear BAC spent the last few years building up an immunity to Iocane powder.

      But since we know that Iocane powder comes from Australia, and Australia is populated by criminals, perhaps the existence of Iocane powder at BAC has increased criminality and that massive control fraud has led to the juking of the immunization stats. Hmmm….

      More importantly, however, let’s just remember not to get into a land war in Asia. Oh, wait…

  3. john

    After watching the dow close like Niki Lauda in Germany http://www.youtube.com/watch?v=YWksORxA9l0
    I was astonished to see the grizzled visage of Bill Black on CNBC exchanging world views with some deeply compromised neo-liberal fundy!

    No one is in control, Bill Black can get on CNBC! Will marauding bands of erstwhile enforcers advect through the fence at the White House?

  4. gs_runsthiscountry

    If it wasn’t already, it is now, that is to say a one term POTUS has been signed sealed and delivered; 2012 now officially up for grabs, the field is now WFO…aka wide F open.

    1. gs_runsthiscountry

      Let me tack on my bet…wish I were in vegas now.

      New POTUS 2012..drum roll….Jon Huntsman.


      1. psychohistorian

        I read somewhere that Michael Moore put Matt Damon’s name forward.

        Personally I just want someone that is not bought and paid for by the global inherited rich that run our world….and believe in the concept of sharing as a society.

        1. gs_runsthiscountry

          oh heck, everyone just throw their hat in the ring…lol

          I am sure some MSM outlet will give a certain 5 time bankrupt real estate investor face time again in the next 24 hours. I can not even type or utter his name.

          As Bob Dylan would say: clowns to the left jokers to the right stuck in the middle with you.

          1. citizendave

            and there’s something going on around here, but you don’t know what it is, do you, Mr. Jones?

          2. David

            Don’t have a hat, but can I throw my beret in the ring or would that be considered too French ?

          3. psychohistorian


            Lets form a conspiracy. I have worn berets for the past 35+ years and am sure wearing them has contributed to my deluded mind……

            The Bob Dylan that keeps me alive is from Is Alright Ma…….

            Those not busy being born are busy dying.

          4. ScottS

            “No reason to get excited,”
            The thief, he kindly spoke
            “There are many here among us
            Who feel that life is but a joke
            But you and I, we’ve been through that
            And this is not our fate
            So let us not talk falsely now, the hour is getting late”

          1. Doug Terpstra

            I’d go for Bernie too, in a heartbeat, though he must be exceedingly tired these days. I can’t imagine him weathering the campaign trail.

            Absent Bernie, as someone said here the other day, a stray dog will do, American-born of course.

          2. Kurt L

            The late, great folksinger U. Utah Phillips used to run perennially as a member of the “Do-Nothing Party.” He solemnly promised to do nothing but “scratch my ass” if elected. I think he should still be eligible to run as a “Do-Nothing” candidate; if anything, he’s guaranteed to keep his campaign promise now!

      2. Neo-Realist

        A pro civil unions Huntsman won’t survive the wrath of the come to jesus faction of the republican party in the primary. Mittens for all his flaws is the one to beat and the one with the serious money to run the table in the primary and the general election.

    2. noash

      Been ready for this one-term president to go or some time now. Un-inspiring. Less than reassuring. Disconnected. Weak.
      I may have campaigned for him, but I won’t even vote him the next go-around.

      1. John L

        If you think Obama is disappointing, just wait until you get a good look at the crop of GOP candidates wanting his job. Bachmann, Romney, Pawlanty, Perry, etc, etc, etc. Deregulators, know nothings, religious radicals, idealogues, and far-right panderers, and you’d allow one of THEM to take the reins of the Presidency?

        I’ll take a disappointing Obama over anyone (including Huntsman, who has zero chance in the primaries) on the Teabag/GOP side of the aisle.

        And anyone who believes Obama could have gotten a better deal from the McConnell/Boehner/Teabag crowd over debt reduction needs to go retake a Civics class. There may be some smart economists here, but some really naive political scientists.

  5. Anonymous

    ‘America, you’ll always be triple-A to me.’

    The president is seriously out to lunch.

  6. BDBlue

    I agree that Obama needs to go and that the oligarchs may have overplayed their hand with the S&P downgrade, setting off something that they weren’t prepared to deal with entirely. But Obama’s talking has been very useful overall and I wouldn’t undersell it. The reason why he’s been so valuable to the oligarchs and why they continue to back him in 2012 is because only a D (with the residual good will of the New Deal) could sell their policies like Obama has sold them. Stop Me Before I Vote Again took a look at the change in public opinion on a variety of issues, which generally tends to be more “left” than its politicians, since Obama took office:

    Here are the percentage-point changes in the U.S. public’s view of government spending by topic area, from 2008 to 2010, per the latest GSS:

    Improving and Protecting the Environment

    percentage saying “too little” being spent: -7.2
    percentage saying “too much” being spent: +2.0

    Improving and Protecting the Nation’s Health

    “too little”: -15.9
    “too much”: +10.8

    Solving the Problems of Big Cities

    “too little”: -5.8
    “too much”: +7.0

    Improving the Condition of Blacks

    “too little”: -5.5
    “too much”: +3.1


    “too little”: +0.4
    “too much”: -4.8


    “too little”: -2.2
    “too much”: +4.2

    Assistance to the Poor

    “too little”: -2.7
    “too much”: +1.8

    Social Security

    “too little: -4.3
    “too much”: +2.5

    Mass Transportation

    “too little”: -6.0
    “too much”: +2.9

    Assistance for Childcare

    “too little”: -2.7
    “too much”: +0.9

    Tell me, could John McCain have done that?

    1. Peter T

      Disappointing numbers indeed. I am surprised by the increased willingness to spend on the military, which runs counter the general trend to cut – very disappointing.

      1. Just Tired

        I’d like an end to Obama’s wars yesterday but, sad to say, you don’t want to know where unemployment will go! It’s sick but it’s also a fact. The military is the only jobs program that Obama has successfully implemented!

    2. Yves Smith Post author

      You need to weight all that by how much people care about those issues.

      No jobs, hours increases and pay reductions for those that have jobs, and falling stock and real estate markets trump all the stuff on that list.

  7. Viator

    Soros Rumored To Be Investor Who Made $1 Billion On Trade U.S. Credit Rating Would Be Downgraded…

    (Daily Mail) — A mystery investor or hedge fund reportedly made a bet of almost $1billion at odds of 10/1 last month that the U.S. would lose its AAA credit rating. Now questions are being asked of whether the trader had inside information before placing the $850million bet in the futures market.
    There are mounting rumours that investor George Soros, 80, famously known as ‘the man who broke the Bank of England’, could be involved. He made more than $1billion on currency speculation when the British pound left the Exchange Rate Mechanism on Black Wednesday in 1992. The latest bet was made on July 21 on trades of 5,370 ten-year Treasury futures and 3,100 Treasury bond futures, reported ETF Daily News.

    Now the investor’s gamble seems to have paid off after Standard and Poor’s issued a credit rating downgrade from AAA to AA+ last Friday. Whoever it is stands to earn a 1,000 per cent return on their money, with the expectation that interest rates will be going up after the downgrade.


    1. psychohistorian

      Hell, I could have told you that the US would lose its rating. This opinion is not rocket science but I am not making an excuse for Soros about it either.

      If anything it may say something about the fire fight that may be going on among the global inherited rich because if they are not looking over their shoulders they are more stupid than they seem.

      Us little folk may never know what really goes on over the next period of this crisis.

      1. ambrit

        Dear psychohistorian;
        We may not know, but we’ll do most of the suffering resulting from those ‘mystery moments.’

    2. Maximilien

      I call “bullshit”. Who was the whacked-out counterparty who gave 10-1 odds on such a proposition in these rigged markets? If AIG taught us anything, it’s the lunacy of trying to pick up pennies in front of a steamroller.

    3. rd

      The worst thing for people and entities to believe they have power is to find out they are irrelevant. Here are the key financial news stories from the weekend.

      S&P downgrades US credit rating – Result: Treasuries rise big time in the next trading session. S&P proved they are irrelevant.

      Timothy Geithner announces that he has decided to stay on through 2012 – Result: US stock market plummets 6%. Now that is POWER!

      Trichet announces that Europe is stabilized – Result: European stock markets plunge and country CDS’s spike. Now that is POWER!

      Obama coming on and speaking just threw a little bit of rubbing alcohol on a raging bonfire. Result: not quite irrelevant but certainly did not exhibit power.

  8. scraping_by

    I agree with BDBlue, though it’s important to not stint the credit. As a closet anti-government terrorist, Barry has the cooperation of the public anti-government terrorists who run the House and the flagrant anti-government terrorists who run the Supreme Court. Throw in enough senators who are closet anti-government terrorists, and you get a “none dare call it treason” moment in our history.

    Barry grovels and simpers well with others. Honest elections in the primaries would get rid of all of them, but that’s another job entirely.

  9. curlydan

    “I’ve started #ReasonsToPrimaryObama. ”

    Oh no you didn’t?!?

    You’ve got to get this posted to FDL. They’ll make you queen for the day!

  10. Peter T

    “Whoever it is stands to earn a 1,000 per cent return on their money, with the expectation that interest rates will be going up after the downgrade.”

    But rates didn’t go up, they went down, probably signalling lower expectation for the economy. Maybe the whole S&P event wasn’t that important for the direction of stocks; they have been on a downslide since the debt ceiling deal.

    1. Yves Smith Post author

      I suppose I appreciate the defense, but but this was not my doing but is a quote from a source! And that from FT Alphaville!

      Please check and see what is happening.

  11. Peter T

    “The Wrongway Prez needs to be replaced, and we need alternatives beyond the ones being served up by the Republicans.”

    I agree that a primary challenge would be a good thing, but didn’t you expect a primary to only move some goalposts of political discourse but not to replace Obama as Democratic candidate?

    Which serious candidates who could be a serious Democratic candidates do you see out there: Hillary, Dean, Warren, ???

    1. Maximilien

      Matt Taibbi!! Young, angry, and completely untainted by any political or corporate service (as far as I know).

    1. Max424

      I didn’t always feel that way, but I do now. Although, really, I can’t even say that, because I tune out the dumb son-of-a-bitch at every opportunity.

      “Honey! Where’s the remote? Obama’s on our telly!”

      1. Rex

        I’m with you 100%. Even if I turn the sound down, his metronomic head pivoting between the left and right prompters drives me nuts. Has he ever spoken looking directly into the camera? What a sorry excuse for a leader this automaton is.

        He shoulda been a contender. What an epic Fail.

      2. Doug Terpstra

        Second that! The man now triggers an involuntary gag reflex; bile rises like basalt lava.

    2. Maximilien


      I fell for his lies in ’08, and I’ve been politically cynical for a long, long time. I believed he was sincere about change, but that when he got to Washington his efforts would be thwarted by entrenched forces more powerful than he. His honest attempts at reform would fail.

      Well, we didn’t even get any attempts. Which leads me to ask: Did he really believe his own promises, or was he just lying very, very, skillfully?

      Is there a doctor in the house…..I mean, a psychiatrist? Because I would really like a psychological assessment of Obama. The man is a complete mystery to me.

  12. Hugh

    As President Obama would no doubt say, we need to look forward not backwardated.

    Personally, I think Obama shares ownership of this crisis with all our kleptocratic elites, especially those on Wall Street and in the Congress. I would also note that this is a crisis for us, but not a crisis for them if they can stick us with the bill for it or if they can use it to increase their power and wealth relative to the rest of us.

  13. CE

    A strong primary challenger will hand the presidency to the Republicans (like 1980). A weak primary challenger will weaken any progressive/anti-corporate/actual reform/pro-stimulus arguments.

    Obama, while a fine rod for lightening, in the end is just subject to the same corpacracy every other democratic president would be.

    1. Peter T

      1980 would probably have been lost even without any help from Kennedy, due to bad economy: it’s not so much the challenge that makes president weaker, but weak presidents invite challenges. A challenge can reduce the incumbent’s advantage, but that depends also on the way the challenge is brought forward, as an attack or as positive campaigning. While positive campaigning is not so effective without attacks, it could be tried in the primary from both sides, under a Democrat’s agreement to not support the Republicans.

  14. Q

    Michael Moore says Matt Damon. Many want Bernie Sanders, but he says he won’t run. Anyone within or associated with the Democratic Party is not going to run against president. 1. They’d need to be a solid progressive Democrat to even consider it being necessary, fewer and fewer are, and 2. They’d need to have the spine to do it, something “progressive” Democrats may not have. Other hurdles are being taken seriously enough by the media (sorry Kucinich and Nader), and by extension the public, and to have a name people already recognize.

    I honestly think if our option is Obama and a Republican, unless that candidate is an outright nut-case, the Republican is the better choice if Democrats win the house and senate. Obama likely hopes Democrats lose the house and senate so he can keep pushing through his agenda using the Republicans, if there aren’t enough sure-win blue dogs to help him. So, the downside to that strategy is there being a Republican presidency, house, and senate.

    There isn’t a democracy in the US, so looking for any signs of hope through the election process is going to lead us nowhere quite honestly. We have one more party to chose from the China and North Korea, but just like them, the candidates we have to chose from, especially for the highest positions of power, and pre-selected.

  15. Hugh

    I posted this in the market thread but this is the short form of the day’s trading events:

    The Dow closed at 10,809.36 down 634.76 or 5.55%.
    The Nasdaq closed at 2,357.69 down 174.72 or 6.90%.
    S&P closed at 1,119.46 down 79.92 or 6.66% for you mark of the beast fans.
    The NYMEX near oil future fell $6.32 to $80.56, a drop of 7.27%.

    Bank of America lost 20.32% of its value. Its market cap dropped to $65.97 billion, a loss of nearly $16 billion in a single day.
    Citigroup lost 16.42% of its value today, also a $16 billion loss. Its market cap is down to $81.63 billion.
    AIG lost 10.04%, a $4.5 billion loss. Its market cap sits at $40.57 billion.
    Even the vampire squid lost (6.01%) nearly $4 billion off its market cap.

    These are losses on top of losses from last week.

    In a flight to safety, the yield on 10 year Treasury notes dropped 0.214% to 2.344%.

    There are both real and manufactured reasons for all this. Among real causes, economic data for the US economy hasn’t been good. The bad fundamentals are beginning to shine through all the happy talk. Europe’s euro crisis has been heating up. And China’s bubbles are still out there. Among the manufactured causes, there was the debt ceiling debate, the downgrade, and the use of both to set up the looting of entitlement programs.

  16. tooearly

    or maybe not. how do you know the boys are not totally happy to see the tankage? without it, how were they going to get QE3 threw with lots of bells and whistles for the banksters?

    1. Because

      Who cares about QE3? Less and less. It means nothing. It means little. You don’t get it nor has the money system works in the US.

      At some point “QE” will be completely ignored and not even bothered to reference.

    2. Maximilien

      The boys just want volatility. Down or up, it don’t matter to them. They just want Action, which feeds their addiction to fees and gambling. The last thing the boys want are market doldrums.

      Read about the bear market of ’73-’74 (there’s a short section about it in Adam Smith’s “The Money Game”). Woo-eee! Thems years was some doldrums. Wall Street’s worst nightmare.

  17. David Graves

    Max24 is right–the seatbelt line in ‘All ABout Eve’. But who cut the brake hoses?

  18. craazyman

    I’m still for a Robert Reich/Elizabeth Warren ticket.

    “The First Reich!” Yeah!

    That’ll shut up all the Militia dudes in the cammo. Hell, some might even vote for him out of confusion. ha ahhahaha ahahahahahah ahahahaha!!!

    1. chris

      I hope you are kidding. I thought the president was getting delusional but you are still blaming Gbush for today’s problems……that is off the chart. It is time to accept responsibility that Obama is not doing the job. What about yes we can? wasn’t he going to fix every thing? His speeches were hollow before he was elected but many people fell for his charm. Now his speeches are completely out of touch with reality and getting worse.

      1. Peter T

        Yes, today’s problems are still mostly due to Bush II, starting from the unpaid tax cuts to the unpaid wars and the unpaid (and therefore not well working) regulatory agencies. Reagan used the Jimmy-Carter-excuse until 1984, and Obama should have pointed out the mistakes of the Bush administration but didn’t. The Republicans won’t be grateful for it.

    2. Paul Tioxon

      If Al Franken ran for president and Ben Stein ran for his VP, it would be a Franken Stein ticket. MOOOO HHHHAAAA HHHHH aaaaaaahhhh!!!

      1. ambrit

        At least we’d have two competant fellows who actually work at being funny ha ha, not funny, oh no! As an added plus, we’d have two fairly serious men from opposite political camps. Finally, an internal dialogue at the highest levels of government!

  19. aet

    This depression started in GW Bush’s last term,and the numbers, properly adjusted, are just now getting out:


    US GDP was down over 9 % (nine per cent!!) in 2008.

    O’bama inherited the disgusting results of eight years of GOP mis-management.
    It was – and is – far far worse than the Republicans have ever let on…nobody’ll be saying that “Gopvernment must shrink” in three or four years.

    1. aet

      From the article I just linked to:

      “The new numbers change the figure yet again, to a shocking 8.9% fall in GDP. For 2009 as a whole, the American economy shrank by 3.5% rather than the previously reported 2.6%. American output has yet to reattain its 2007 peak. On a per-person basis, inflation-adjusted GDP stands at virtually the same level as in the second quarter of 2005. America is six years into a lost decade.”

      I’d say the verdict is in on GW Bush’s economic policies, wouldn’t you?

      Re-elect the GOP? Why?

      1. Tertium Squid

        Because the alternative is Democrats?

        Vote third party. Always. You’re guy will still lose for now but the duopoly will notice the loss of support.

          1. psychohistorian

            I respectfully disagree.

            I think that the global inherited rich only own two parties in this country at this time. I will not vote for either at the presidential level and would love to see a green or whatever candidate get some excitement going.

            That said, if a 3rd party candidate of any sort starts showing promise you can bet that another “alternative” party will suddenly appear fronting yet another puppet of the rich that don’t look like the others.

        1. Wazmo

          last time we had a third party candidate Clinton won. And we all know what policies got enacted on his watch and who the players were.

      1. chris

        “Not every president can be a financial expert. That’s what delegation is for. But like Bush, Obama consistently surrounds himself with political-hack second-raters. That’s why, despite probably having little concept of what’s going on in the financial markets, Obama does in fact ‘own this crisis”

        President’s should be expected to be highly skilled in the area of financial analysis. It is not rocket science. It is clear that a president with no knowledge of the financial and monetary system will be a deer in the head lights just like obama. What I don’t understand is why people are so willing to accept such low standards in the White House. We have become so shallow as a nation that we will let anyone with a hollywood smile and a good line of BS to feed us into the role of president. Wel this is what we get…..There should be an intelligence requirement just to keep so many dumb asses from attmepting to get into the white house. It wouldn’t stop the flow of stupidity however, because we can see that some of the finest institutions in the world can allow in stupid people. Manipulation by the self absorbed seemed to fool americans on a daily basis. Si se puede

        1. ambrit

          Sr. Chris;
          Por favor, no me diga eses mentiras. Tenemos un Presidente inefectual, y un governmiento de brutos y putos. Dios nos salva!

    2. Jim Haygood

      ‘Obama inherited the disgusting results of eight years of GOP mis-management.’

      Correct. And how did he respond? He chose a Federal Reserve bankster, Tim Geithner, as Treasury Secretary. He immediately signed on to another bailout of the FIRE sector in the early months of his presidency. He promptly wrote off the prospect of impeaching Bush.

      O’Bomber didn’t merely continue Bush’s illegal Afghan war — he tripled/i> the troop commitment, and similarly escalated the lawless drone executions.

      Instead of opposing Bernanke’s harebrained QE2 scheme, Obama didn’t utter a peep. Plenty of analysts are on record since last summer, saying that when the Fed’s phony-money stimulus expired, asset prices would revert right back to where they were. Prediction fulfilled.

      Having allowed the Federal Reserve, throughout his term, to hoover up junk assets on shaky statutory authority, Obama is in no position to oppose the ECB’s ruinous folly of doing the same with peripheral European debt. Since Europe is not fiscally unified as the US is, the euro is going to crack up as a result of Trichet’s historic blunder.

      Not every president can be a financial expert. That’s what delegation is for. But like Bush, Obama consistently surrounds himself with political-hack second-raters. That’s why, despite probably having little concept of what’s going on in the financial markets, Obama does in fact ‘own this crisis.’

      1. aet

        the point is that he did not have the numbers that we do now – and the numbers run the show.
        Now we know, and they (the numbers, that is) show that austerity is most ill-advised at this time as a policy.

        1. Kurt L

          Ha, now you sound like me… just before I hang up the phone on those bottom feeders from the DNC asking for my dollars to support Obama in ’12!

      2. Johnny Clamboat

        Hey now, at least he ended the Patriot Act, introduced transparency, ended the Drug War, refrained from starting wars in Asia and Africa, engineered a net spending cut, ended deficit spending, closed Guantanamo and scaled back the Imperial Presidency.

        So he’s got that goin’ for him.

  20. Jack


    “Obama put Social Security and Medicare cuts on the table, and capitulated on a debt ceiling deal.

    Once again, politically speaking, this notion is pure stupidity.

    Obama never ACTUALLY put such cuts “on the table.” To say so makes you politically naïve. One of the key components of legislative politics involves posturing. For months, Republicans had been demanding cuts in entitlement programs in order to raise the debt ceiling. (Yes, I know John Conyers said they hadn’t a week or so ago, but that’s not true. This is why you have to check facts, REGARDLESS of source. Here is just one example. And here’s another. And here’s yet another. Note the dates. You get the point. Check facts, even when John Conyers says it. )

    If you’ll recall, the original deadline for raising the ceiling was April 15, then it was May 16. Through some clever accounting, Treasury was able to extend the deadline to a “drop-dead” date of August 2. (Just between us, we probably had another week or two; neither Obama nor Geithner seem particularly careless about things like this.) So, after months of watching Republicans dicking around with the phony debt ceiling “crisis” and demanding huge entitlement “reforms” every step of the way, Obama finally called their bluff.

    Contrary to what some lefty blogs told us, however, the president NEVER made any specific detailed cuts public, and probably didn’t make any privately, either. He simply dared them to mention something specific that they wanted to cut. (He did this before, by the way; how many times during the health care debate did Obama challenge the Republicans to come up with specific things they wanted to do to health care reform, and they never responded.) He threw out a number, too; $4 trillion.

    This was great politics on a number of levels. First of all, it forced the Republicans to panic. I know many of you naysayers don’t actually pay attention to what happens; you’re too enamored of your own feigned “expertise” to notice. But what happened was priceless. Within hours – on a weekend, no less! – Speaker Orange Boner proposed a much smaller spending cut package, containing ZERO cuts to Social Security, Medicare or Medicaid. And Miss McConnell came out of his turtle shell long enough to offer up a proposal that would actually give the president authority to raise the debt ceiling.

    Why would they not take him up on the offer to cut? Because they’re already on record trying to kill Medicare. I mean DUH! He knew they would NEVER want to be on record as wanting to harm seniors to that degree.

    Not only that, but if you were paying attention (I know, you were too busy kvetching to notice), a whole lot of Democrats appeared all over the media, promising to protect Social Security and Medicare, come hell or high water.

    In other words, where some very narrowly focused individuals saw Obama sacrificing Social Security and Medicare to the far right to resolve a phony “crisis,” the reality was, he was attempting to tar and feather the Republicans, politically speaking, while simultaneously helping the Democrats look good to everyone outside the Tea Party.

    And look at the “deal” he made. The deal pretty much guarantees the Bush tax cuts will expire at the end of 2012, and limits initial tax cuts to $22 billion before the beginning of 2013, at which time, IF we do our jobs right, Democrats will take back the House, and we’ll have put a major dent into the “Party of Hell No.” In other words, if you people would stop whining about the Democrats and start attacking the worst political problems we have, then 90% of these cuts can be reversed. No harm, no foul.

    To understand politics, you have to look at the entire landscape. You have to step back and view everything, and stop reacting to isolated acts before you understand them. And by all means, you need to trust political allies and wait to see RESULTS before you pass judgment.

    Three times in 7 months, the Republican Party has drawn a line in the sand, and all three times, President Obama went toe-to-toe with them and got them to accept a hell of a lot less than they said they wanted. If you believe the Orange Boner’s claim that he got 98% of what he wanted, then you are one gullible human being. He and the Republican Party got exactly dick. They got to save a little face, by agreeing to a “deal” that amounted to a clean debt ceiling bill, with a few token cuts thrown in to appease their base. The bill largely guarantees that the Bush tax cuts will expire, and it guarantees that for every dollar they agree to cut, fifty cents MUST come from defense.

    I’ll say that again. If they extend the Bush tax cuts beyond 2012, according to this bill, they have to cut the equivalent amount in spending and HALF of that amount will have to come from Defense. During an election year.

    Seriously, if you think that’s what the Republicans envisioned as a debt ceiling “deal” heading into this thing, I wonder what they’re smoking on your home planet.”

    Another perspective

      1. aet

        No, they are Bush’s; and they are disastrous, and it’s the republicans who won’t repeal them.

        1. Tertium Squid

          Hmm – where is Obama getting his billion dollar election machine war chest from? Did you send him the quarters from your piggy bank?

          Get ready for profit repatriation too. See how many D’s vote for it…

    1. jonbull

      Hey, looks like you nailed it as far as I’m concerned. It’s easy to sit here and criticize Obama from the left, but what the hell other option is there? I know readers of this site aren’t down with the Tea Party, so why not put your energy into mobilizing populist or progressive movements within the Democratic Party? Attacking its executive in this manner does not help your own cause.

      1. aet

        If you think that the people who attack Obama with anonymous internet posts and comments are the “leftists” they claim that they are, I have a bridge in NYC to sell you.

        1. bobh


          So, let me see if I get your drift. You think that people anonymously criticizing Obama from the left in blog comments are actually right wingers posing as leftists in order to discredit Obama. I sometimes think anonymous Obama loyalists are actually right-wingers posing as center-left Democrats because they are afraid Obama will lose the 2012 election and not finish destroying the Democratic party. No thanks on the bridge.

          – a real, anonymous leftist

    2. bobh

      “To understand politics, you have to look at the entire landscape. You have to step back and view everything, and stop reacting to isolated acts before you understand them. And by all means, you need to trust political allies and wait to see RESULTS before you pass judgment.”

      Let me see if I get this. Obama is a brilliant politician who has outsmarted the Republicans and maneuvered them into a corner by giving them almost everything they have asked for since January 2009. He is strategizing on behalf of working people and the middle class by keeping the tax breaks for the wealthy in place for another couple of years, giving trillions to Wall Street banks and making the Republicans look bad and Democrats look good so that he and the Democrats eventually win some elections. And then they will cut military spending, restore Medicare and we all get jobs and free Bubble-Up and liberal judges. Rope-a-Dope. Three-dimensional chess. Any idea on the timetable for these RESULTS? And if none of this happens, what story will you tell yourself next?

      1. psychohistorian

        I judge people by what they do not some n-dimensional chess game that somebody thinks they are playing.

        My bottom line is that it looks to me like we are killing more innocent people in my/our name than before…..and just not being told about it as much.

        In another few days or weeks we will come to a watershed. At that time if Obama does not show support for the people over the global inherited rich with some structural change, we will see clearly his intentions.

        The time for n-dimensional chess is coming to a close. You either believe in sharing and act with humanistic intent or you are an anti-social, anti-rule-of-law “very bad” (grin) person…..don’t want to offend the pearl clutchers.

      2. Cedric Regula

        That makes my wave function collapse in all the right places.

        But I think jack has this problem too:

        How are they gonna fit all that into a 15 second Obama campaign commercial?

    3. Yves Smith Post author


      With all due respect, this is complete bullshit.

      Obama said the week he was in office that he was going to cut entitlements. He said that publicly, and said it longer form at a dinner at George Will’s house, in which he told conservatives specifically that he would “reform” Social Security and Medicare once the economy was stabilized. They said they emerged from the dinner “encouraged”.

      This is the same game he has played all along, he pretends the Republicans are dragging him when it is exactly where he wants to do. And he did’t even pretend, he didn’t make any effort NOT to cut SS and Medicare.

      Remember when the Republicans wanted to go with a smaller deal and he wanted $4 trillion? Same trick.

      And Obama has gone toe to toe on nothing. That sort of writing smacks of hackery, whether you do that as your day job or not.

      1. Tao Jonesing

        In 2007, Obama signalled that Social Security was on the table during the primary season.

        As Krugman noted:




        Add on top of that the fact that he economic advisory team during the primary season included a Social Security privatizer, and the handwriting was on the wall. I said as much at the time.

      2. grandiosity

        Yves – I looked for a reference for this meeting and found a bunch on Huffington Post but none mentioned what you said. Do you have a source?

        1. Yves Smith Post author

          Paul Jay reported it on Real News Network and cited the source, I can get it from him.

          1. grandiosity

            @foppe – thanks, that was very helpful.

            The interview indicates he wanted to come in as a problem solver on a fairly uncontroversial centrist agenda. To his credit, he has been very consistent on these themes while in office.

            Looks to me as if this may be Congress’s problem.

    4. rd

      This could be his strategy.

      However, the whole lot of them are just dancing around the ring tryng to win on points while their constituents are getting repeatedly hammered to the mat. The debt ceiling debate was only one step less disgusting than the Terry Schiavo fiasco.

      Yes, I believe that George Bush and the Republican Congress played a major role from 2001 to 2006 in setting the stage for the disastrous few years, but Obama has done a marvelous imitation of Hoover in not being able to address the major issues that arose out of the 2008 debacle. Bringing Geithner in as Treasury Secretary will probably go down in history as one of the great all-time financial, economic, and political blunders. He was able to help create a sugar high over the past two years. However,I think the next year is going to be ugly and may very well cost Obama the election, although the Republicans are trying very hard not to offer serious candidates.

    5. Mickey Marzick in Akron, Ohio

      Well said Jack!

      I’ve been down this road more than once with these “leftists” or is it infantile disorders that I’ve grown tired of attemting to reason with them. The hole has been dug for well nigh 40 years and people believed that it was going to be fixed in 4 compounded by the worst “recession” in our lifetime? Get real. A miracle worker Obama ain’t, but I never expected him to do much anyways – perhaps slow the bullet train to AUSTERITY down a bit which he has. But not much else…

      But this blog does nothing but hammer Democrats – to what purpose I ask? CUI BONO in the short term? It sure as hell won’t be working people! And the latter are all that “leftists” should care about, utopian or otherwise, especially since we will bear the brunt of this nonsense.

      No, these “leftists” would rather have their ideological purity and ALL three branches of the Federal government controlled by REACTIONARY Republicans. I know they already do… with Obama, right? Must be a replay of the IMMISERATION thesis…

      If you think the past 30 years has been bad, just wait… NAKED CAPITALISM 2.0 will be an eye opener. It can get much worse!

    6. JTFaraday

      “But what happened was priceless. Within hours – on a weekend, no less! – Speaker Orange Boner proposed a much smaller spending cut package, containing ZERO cuts to Social Security, Medicare or Medicaid. And Miss McConnell came out of his turtle shell long enough to offer up a proposal that would actually give the president authority to raise the debt ceiling.

      Why would they not take him up on the offer to cut? Because they’re already on record trying to kill Medicare. I mean DUH! He knew they would NEVER want to be on record as wanting to harm seniors to that degree.”

      I guess it takes an awful lot of verbiage to explain the eleven dimensional chess. The real explanation is much simpler.

      Obama is to the RIGHT of non-Tea veteran Republicans like Boehner and McConnell who– unlike the novice ideologically blinkered Teapers who are already on their way to being voted out– know full well that their base consists primarily of aging people in Sarah Palin’s Real America, whose singular demand is that they “keep the Guvmint’s hands off my Medicare and Social Security!!!”

      Despite all that verbiage, you don’t absolve Obama of being the Head Teaper, of stating exactly what he wants and really meaning it.

      If Boner and McConnell offered Bam the moon, taking cuts to Medicare and SS off the table in the process and thus appealing to relieved peon voters across the ideological spectrum, why didn’t Bam just take it and run with it? He didn’t take it because he WANTS “to get his hands on Medicare and Social Security.”

      The thing is, Bam and his fellow Teapers just ran out of time. Thus, despite dragging the two ends to the middle on the *temporary* deal, S&P almost immediately downgraded the US with continuing demands for the original joint Bam-Teaper $4 trillion in cuts.

      The Bam-Teaper jihadis will be back again looking to get their “grand bargain” out of the career “third rail” politicians, you can count on that.

      For his part, Bam doesn’t care if he’s on an electoral suicide mission. He has a billion dollar pool and a base of eleven dimensional stooges he bets will enable him to survive the crash.

  21. Michael Fiorillo

    Incredible: Wall Street got a Black man to take the fall (with more than a little willful participation of his own) for Great Depression 2.0, as well as the final interment of the remains of the Democratic Party.

    As Obama was never intended to be anything but a useful effigy and transitional figure, now the real Hard Guys will dispense with the soft focus brands, and go long Misery.

      1. Jim Haygood

        Compare the actual futures index numbers to today’s closes. The DAX and CAC futures are pointing to a 3% drop from today’s close, not 10%. The differentials haven’t been updated, and should be disregarded.

  22. Frank R

    Obama will be re-elected. Too many tax eaters and lemmings. He’ll get his $1B war chest and demonize any opponent. Sad, but true.

    1. aet

      That is no way to refer to the Pentagon and the defense department…how’s that spending now as a percent of GDP? Shrinking or climbing?

      1. ambrit

        Sorry to nitpick, but, the real value judgement here is just what all that money is being spent on. If the Pentagon started a big infrastructure rebuilding program in the interests of ‘National Security,’ we’d have a popular Junta right quick. As it is, it’s looking more like a ‘Shadow Government’ every day.

  23. prostratedragon

    From All About Eve:

    Fasten your seatbelts. It’s going to be a bumpy night!

    Great way to forget all this nonsense for a couple of hourss without destroying one’s mind.

  24. rps

    Obama owns this one? A simple statement indeed. Obama is the epitome of the Peter Principle. Voted in by a constituency that ignored the simple truth, he was in over his head, inexperienced politically, and thought he could surround himself with Goldman Sachs, Harvard, and Princeton talent to conceal his ignorance of governance and DC wheeling and dealing. The blame belongs to the voters who live in lala land of hopey-changey slogans and bought Obama as if he were the newest tech gadget on the market.

    Hilary’s words come back to haunt us in her campaign ad of the 3am phone call questioning whether the inexperienced junior senator from Illinois was ready.

    1. linda in chicago

      But rps, Hillary is the gal who gave her hedge-funder daughter the $5 mil send-off into married bliss… when she talks about sharing the wealth, it is not with people like me, of that I can be certain…

  25. Charles Frith

    I am puzzled that people don’t get what’s going on here. A managed torpedo of the destructive virus called capitalism. I applaud Obama for having the guts to implode the system. Any other choice is dragging the inevitable pain out longer.

    Read Obama’s masters dissertation for evidence of my assertions.

    1. psychohistorian

      I will read the thing if you provide a cite….i’m lazy and a doubter.

      You might not like what I have to say about it but what the hey.

  26. rps

    “But there is one thing we know for sure: the problem with our economy is not the American people. Instead, the problem is, in part, the bankrupt ideas that have governed us for the last seven years. They have rewarded the very few at the expense of the many.
    We need a president who will run the government and manage the economy. American people don’t hire a President to talk about our problems but to solve them, to set a vision for the future, and then to roll up our sleeves and get about fulfilling it.
    It’s time for a President who believes that leading an economic comeback is a fulltime, hands-on job. Who renews our commitment to a strong and prosperous middle class and brings business, labor and government together to restore America’s competitiveness in a fast changing world. A president who has a vision for a twenty-first century economy based on shared prosperity. Where we measure our success not by the wealth at the very top but by how broadly wealth is shared….

    I don’t think any of us want to be part of the first generation of Americans to leave our country worse off than when we found it. That would be such a breach with what American history has meant to all of us……” Hillary Clinton, Solutions for the American Economy January 24, 2008

  27. Steve Zielinski

    “Obama created an unnecessary financial crisis. Not that we would have escaped eventually having one, but he played like a fool into the Republican desire to use the debt ceiling to push for budget cuts, and he tried outsmarting them to get his long standing desire of entitlements cuts through.”

    Another take on Obama’s tactics is seeing him as treating the GOP and their reactionary side car as his stalking horse. He just let the rightwing go to where he wanted it to go. I just do not see Obama as being that weak and feckless.

    1. Yves Smith Post author

      It was reckless not to understand:

      1. The seriously deflationary impact of cutting spending in a weak economy with a big debt overhang

      2. How threatening not to pay Treasuries as part of a game of chicken would totally freak investors out and damage US credibility around the world generally.

        1. Yves Smith Post author

          Absolutely not.

          First, Obama refused to get the deficit ceiling lifted last year, when the Dems controlled both houses, as part of the extension of the Bush tax cuts. When asked about it, he made lame excuses about how he was sure the Republicans would act in good faith.

          Second, as we have discussed ad nauseum, Obama had at least three routes for circumventing the debt ceiling. He was most assuredly not a hostage of Congress and could have called their bluff at any time.

  28. Hugh

    Amazing that people are still arguing that there is any real difference between Democrats or Republicans, or that Obama isn’t pursuing the agenda he wants, or even, blast from the past, what Hillary would have done. There is no substantial difference between the Democrats and the Republicans. There are only atmospherics. Otherwise, both are pursuing the same corporatist, kleptocratic program. As is Obama. Hillary would just have been more of the same.

    The main weapon in class warfare is distraction, and all of these theological discussions that take place in the framework of the two parties are distractive. It is rather like listening to an after action report on a train wreck. Some blame the engineer’s right hand. Others think that it was his left. Yet others delving deeper think the left index finger might have done a better job than the thumb. What makes this all so silly and time wasting is that no one is looking at engineer and recognizing that all these distinctions are meaningless. It’s not the right hand or the left. It’s the engineer. Similarly here, it’s not the Democrats or the Republicans. They are just extensions of our kleptocratic elites. You vote for a Democrat or a Republican, you are voting for kleptocracy, period. You may not like that. You may decry the lack of choice, but that’s the reality. If you don’t like it, create alternatives because those alternatives are not going to create themselves.

  29. Wyndtunnel

    Obama’s speech today was the so remarkably unremarkable. If he’s not going to step up to the podium and proclaim that the Bankers are now his mortal enemies, or, say, anoint himself Regent Protector, he should just stay the frak home.

  30. Cedric Regula

    File: Debt Ceilings Don’t Go Away – They Just Go Up Little By Little!

    From ZH – They project the interim hike is breached by end of September!


    Treasury Adds Another $20 Billion In Debt Overnight, Just $160 Billion Below Revised Ceiling

    Ok, someone please explain this one to us because we must be a little slow. Wasn’t the whole thing with the debt ceiling hike such that no more Congressional melodramas would have to be inflicted upon the population until after Obama [won|lost] the 2012 elections? Because according to the one again exponentially increasing debt balance of the US Treasury (there is another $51 billion in debt/cash coming in next week), the total US treasury balance (subject to the ceiling) is $14.54 trillion (and $14.58 trillion for total), an increase of $20 billion overnight, the Treasury will hit its latest ceiling no later than the end of September. As the latest DTS statement indicates, the debt ceiling now is $14.694 trillion: a number which Tim Geithner will hit in about a month. So if this is due to a planned expansion as part of the two step plan, we would like to understand how it works, because the $400 billion additional ceiling is barely sufficient to cover the catch up in funding for the SSN and the various governmental trust funds. And the far bigger concern is that tax receipts are about to plunge courtesy of the imminent double dip. So we wonder just based on what assumptions does the Treasury believe that its issuance needs will be met by this paltry debt ceiling.

  31. Doug Terpstra

    “BAC fell a stunning 20% on the day and its CDS spreads are up big.” YES! As you said earlier, it couldn’t happen to a nicer bank (except for all the rest…GS, JPM, Citi, etc.).

    BofA, BAC, stiffed us recently on a loan application for a foreclosure purchase—though we surely dodged a bullet. As runner-up buyer, at 40% of sale price in ’08, we were set to buy and repair the house using a 203k loan. After design work and bidding pushed the time frame, BAC still assured us they could meet a 45-day close, because we had all docs ready, clean credit, and no debt and way below LTV ratios. But even after 60 agonizing days and two (paid) HUD extensions, they still refused to assure us of closing within yet another 15-day extension, (citing esoteric underwriting conditions of which we were never notified).

    Finally, when HUD threatened cancellation, we asked BAC for docs, a written assurance, or failing that, a customary loan-denial letter, since the delays were not our fault, in order to recoup our earnest deposit. Despite now being past 60-days and 15-days beyond their assured close, BAC refused a denial letter or any assurance of doc delivery. Instead, at the eleventh hour, they issued a letter of “application withdrawn at customer request” — the equivalent of ‘buyer got cold feet’— clearly insufficient for recouping our earnest deposit. The “best” part —they said that to issue a denial letter would be “untruthful and dishonest” (HA, BAC, no kidding!). We were floored, as was the listing agent who had followed the process. In the end the agent simply doctored a denial to submit to HUD and we got our earnest back.

    But due to BAC’s depraved indifference, we are still out the $600 appraisal fee, extension fees, design fees, 203K consultant fees, etc., plus a pant load of time and energy. We’re considering a claim for all that but in this climate and BAC hanging by a thread it’s probably a fool’s errand.

    Sorry this amounts to a filibuster, but I relate our experience hoping to divert others from a similar fate—expecting good-faith treatment from a predatory moneychanger. If BAC gives you an appealing loan estimate, run, don’t walk! They’ll hang you out to dry or sting you and let you drown halfway across the river. It’s rather unchristian, but I am simply delighted to witness BAC sinking instead in their own toxic swamp.

    It must be providence. After all that, it increasingly appears that Phoenix housing is quite likely to follow Vegas as Vegas follows Detroit. Watching the market meltdown the last few days, my wife said, “Oh I’m sooooh glad BAC shafted us!”

  32. Aaron Bernard

    “he played like a fool into the Republican desire to use the debt ceiling to push for budget cuts”

    Are you referring to those increases in spending that are less than they would have been otherwise because of how baseline budgeting works?

    I surely hope not, because that would mean you’ve really jumped the shark.

  33. ella

    Obama has negligently or intentionally played into the R’s plans as evidenced by his failure to limit eliminate the destructive Bush Tax cuts and wars. Bush substantially added to the debt and deficit. How are we supposed to pay for this folly? Surely, no one could be that naive. The math here is simple. What did Obama think would happen as revenues fall? Duh, the debt increases.

  34. Mickey Marzick in Akron, Ohio

    Since we’re having so much fun… beating up on Obama.

    What if Obama and his political masters have concluded that it’s time to administer the shock doctrine to the global economy? To tank it by destroying the very “business confidence” on which it ultimately depends. No better way than to play chicken with Treasuries, right Yves? All along it has been assumed that Obama wants “capitalism” to recover. [The Chinese are still communists, right?] What if capitalist economic collapse is their real goal? He has played the stooge to bait the trap. So what if he takes the blame or in this case, the credit. Mission accomplished! [Depends on who writes the history book…]

    Economic collapse would certainly usher in changes. Who stands to gain more from the economic collapse of capitalism, the little people or the wealthy? To the extent that massive debt mountains would be eliminated who would suffer the biggest hit? The wealthy counting on their interest and dividends or the “little people” in debt up to their eyeballs. Call it a debt jubilee… public and private! Now that’s change we can believe in!

    A global reset of the table… and don’t assume automatically that the Chinese or Japanese see things like we do; that they’ve become more like US – looters all the same. Wishful thinking and western arrogance again?

    We all agree that keeping the current patient on life support facilitates the looting which we would all like to end, right? How better to end the looting than by killing this patient once and for all? What do we care? We’ve been left out in the cold by Naked Capitalism for 40 years. Why should we give a flying fuck whether it survives or not? Ask yourself what offers more promise? Economic collapse or continued looting? Which do you prefer?

    Just thinking the unthinkable… a momentary lapse of reason perhaps.

    1. JTFaraday

      If the only way you can rehabilitate Obama is by proposing that he is a do-gooder Marxist double agent secretly working toward a total collapse of global capitalism that results in a D-Party command and control economy because you’re envious of the Chinese government work farms… then I think we’re getting close to capitulation on this ridiculous eleven dimensional chess meme.

      Because I know you know you are GUARANTEED to NOT win that disaster capitalism game, and you better get your hopey changey out that that’s not the game they’re playing to win.

      1. Mickey Marzick in Akron, Ohio


        Making light because I no longer take NC seriously. It’s little more than a rag with which “leftists'” can vent their anger and frustration against the bete noire and each other. Fratricide to what purpose? CUI BONO?

        It will change nothing. And until a viable alternative emerges, the country will drift rightwards into the abyss of austerity.

        Can you give me an alternative, JT, for 2012? Or do you like the idea of REACTIONARY Republicans controlling all three branches of the federal government in 2013?

        1. JTFaraday

          I could care less who gets paid to screw the public in 2012. I don’t like any of them.

        2. Foppe

          Mickey: I’m sorry to have to say so, but you strike me as pretty lazy. You don’t have to answer, but try to formulate a personal answer to this question: how many more “lesser evil” elections do you need before you’ll believe that the democratic party doesn’t care?
          Where do you think this ‘viable alternative’ is going to come from except through action? All this quasi-intellectual whining about black sheep, abysses and ‘who benefits’, and shouting about REACTIONARIES aside, what your comment shows is that you want to have your viable alternative party handed to you on a platter. This isn’t going to happen.
          The only way you can have a new party is either by demanding for public funding of elections via mass riots, or via setting up new unions, and figuring out some way to organize political power/concentration of power somehow — things that are going to be extremely hard given Taft-Hartley and other “right-to-work” pro-corporate legislation.
          Get this through your head — change hurts, but hoping for change from within the democratic party is never going to get you anything.

          1. Mickey Marzick in Akron, Ohio


            Lazy? Handed to me on a platter? You don’t even know me… but no matter.

            What kind of action do you propose? Reform or revolution? Violent or nonviolent? ORGANIZE – done the union organizer bit in my younger days. MARCHED/PROTEST done that too many times to count. [Solidarity Day 1980 in DC?] Been downtown once or twice along the way too. Can you say the same? Even toyed with the idea of a third party years ago with a union friend. When that didn’t pan out began to consider the possibility of a GENERAL STRIKE… Have you? Or do you want me to go first? Yeah, that’s what I thought. Do you even know what syndicalism is? Does it matter? If trying to describe a set of conditions and their likely outcome is whining then most of us on NC are “whiners”. Providing viable alternatives is no mean task.

            Voting for the lesser of the two evils is motivated by my hope and sincere desire that doing so might possibly lessen the pain inflicted on those less fortunate than myself. [No I am not wealthy but I am not poor.] Perhaps the residual effect of having been raised Catholic, university education, or simply collective responsibility, it doesn’t matter. But that’s the only reason I vote for the lesser of the two evils. Other people don’t deserve to suffer because you or I don’t care to vote or believe that they’re going to suffer anyways because Democrats don’t care. Electoral immiseration is irresponsible and might as well be NIHILISM – plain and simple. Punishing people even more on the presumption that they will take to the streets? And then watch safely from the ‘burbs while they are mowed down? That’s nihilism! [I still live in Akron] What happens if they “break” instead – the whipped dog syndrome? Ever consider the possibility that the spirit of a human being can be broken? Has it collectively? Where have all the rubberworkers, autoworkers, and steelworkers gone? Collective action becomes more difficult when conditions that made such behavior more possible and successful have disappeared. Atomized individuals looking out for number one rarely join forces to pursue a common goal, right? Only sissies or slackers need a union, right?

            I’ve worked hard to stay out of debt – no mortgage, car payments, revolving credit, and donate to the local food bank. I have a garden and its bounty feeds my family and my neighbors. Put up 11 qts of frozen green beans last night. Whatever is left come Fall goes to the food bank. I may be a lot of things but I’m not lazy. Nor do I expect to have the viable alternative handed to me on a platter. I have tried to create my own! How bout you?

            I have fought against this insanity for most of my adult life, trashed one career in the process, and tried to educate those around me by example in the hope that it would lay the foundations for the critical mass essential to any “action” producing positive change over time. Yes, one person at a time one day at a time. It’s a slow process.

            In the meantime one has to work with the cards he/she is dealt. The country has steadily moved to the right and I have been unable to prevent it. In this respect I have failed. If you have any suggestions for something that I or others could have done differently we’re all ears. But the hole has been dug for well nigh 40 years and it will take a bit more time to undo the insanity. Perhaps it will cave in on its own. But what action can we take to help it along? Stop voting for Democrats? That isn’t going to do it either. Absent a viable alternative you only ensure Republican victories. So, could you put a little more meat on that bone?

            In 1968 the “NEW LEFT” refused to vote for Hubert Humphrey and Nixon won the election. .. In 2000 many friends disillusioned with the Democrats voted for Nader and we know how that turned out. I concede the Democrats can afford to be cynical. There’s nothing looming on the horizon to replace them. So should we concede 2012 to the Republicans right now and attempt to put our house in order for 2016, assuming that the “critical mass” of which I alluded to above will be there? I can’t do it alone and neither can you. Call me stubborn, or even stupid, but don’t call me lazy until you have walked the path I have. I have created an alternative – myself – within the larger structural forces of which I am a part. Revolutions begin with one person… and he or she rarely lives to see them come to pass.

            Action must have purpose with the consequences well thought out. That requires education and organization. Otherwise, it gets people fired, jailed, or worse. And they usually then are abandoned to fend for themselves. The latter is one lesson I have learned from experience. Perhaps recognizing that “progress” is THEIR definition of progress is the first step. Of course once you’ve taken that step then you have to provide your own definition of progress. To me it’s quite simple: Is life for the average American getting better or worse, easier or harder? If not, why not? What can be done to change this? It simply isn’t about whether I’m better off and the other 99 aren’t. We are in this together.

            There’s a learning curve involved Foppe and I hope I’ve convinced you in some way that intellectual laziness is not one thing I’m guilty of. Nor am I whining or waiting for you to lead me to the promised land. You be the judge…

          2. Foppe

            Mickey: I apologize for calling you lazy; it wasn’t quite the point I was trying to make.
            And you are correct to assume that I cannot boast of having a similar history (I wasn’t even born in 1980). As for the type of reform/revolution I am thinking of: I would humbly suggest that this is not yet ‘the time’ for either of those things; what is needed first are new modes of organization. In times past, I might have even suggested churches as a viable avenue, but I’m not sure this would work for the majority of Americans today (if only because of that monstrosity that is the prosperity gospel). In any case, to give you a hint of what I am thinking of, see this and this video. The first one might be somewhat more theoretical/abstract than you may find useful, though it seems to me a very good framework. The second lays out a few more practical suggestions and hints for how to organize, or at least where to look for people.

  35. Moopheus

    “The Wrongway Prez needs to be replaced, and we need alternatives beyond the ones being served up by the Republicans.”

    Yes, but who? Gotta start naming names. And I basically agree with Hugh that the problem is not so much “liberal vs. conservative” or “democrat v. republican” but how much of a captive of Wall Street they are. Sure, there are other issues, but in terms of what’s most pressing for the next four years, cleaning the Stygian stables of the economy has to be primary. And yes, it has to be a Democrat, someone who can force Obama to go out on the primary campaign trail. A third-party candidate can’t do that, much as I’d like to see it.

  36. sascha neuhaus

    It’s time that you guys understand that the US is a debt country and that you guys have a serious problem with your household. No need to fingerpoint except into your own face!


  37. sascha neuhaus

    … and no, trickle down theory is wrong and less taxes for the rich so that they can spend more does not work. Neither does a completely unregulated free market with high import customs work.

  38. reXteryalizer

    Oboma has NOT brought CHANGE, In fact ~~ THE ONLY real THING needing CHANGE !

    Was Barack Hussein Obama II.

    Barack Hussein Obama II ( Who hates American Values )

    Who who is A ” SELF PROCLAIMED Enemy ” ~ of responsible, Morally Conscious HARD WORKING Americans.

    oBOMAS supporters KNOW~ that Barack Hussein Obama II, WILL FORCE YOU to paY THEM, out of your PockeT ….

    This UN~CHANGABLE fraud, has done His VERY BEST to Inspire VIOLENCE.

    THESE ARE OBAMAS OWN WORDS.. saying “Bring it on” To his supporters.

    Oboma ~ Demands Saying “Get ready for hand-to-hand combat with your fellow Americans”

    – Obama has ALSO DECLARED to his Supporters

    “I want all Americans to get in each others faces!–

    Obama demands !

    “You bring a knife to a fight pal, we’ll bring a gun” – Obama Cant wait to get everybody involved in some kind OF CONFRONTATION of some sort….


    Obama has ALSO DECLARED “Republicans are our enemies”-

    ** Obama on ACORN Mobs: “I don’t want to quell anger. I think people are right to be angry! I’m angry!”

    ANGER VIOLENCE and more taxes….. THIS IS OBAMAS Change for america

    /“Hit Back Twice As Hard”. He commands !


    *Obama on the private sector: ~~ “We talk to these folks…~ / so I know whose ass to KICK.“
    OBOMA wants to KICK your ass /

    Shouting THAT Republican victory would mean ~ “hand to hand combat”

    HE IS EXPECTING people to kill & BE VIOLENT / for their immoral CAUSES

    * Obama Tells democrats: “ I’m itching for a fight.” !

    PLEASE go to reXes NEW WebsiTe ~ ! Oboma *( Just like Adolf Hitler~~ In that oBOMA~~~ Demands ! — [ THE FINAL SOLUTION – ~ For Un~Wanted Children

    Barak Obama A MURDERER .~Torturing UNWANTED babys on DEATH ROE


    OBAMA supports TAKING a little NEW BORN innocent child.. / BORN. ALIVE ~

    sTabing it iN the head & SUCKs ITS BRAINS OUT.

    He also demands, that a Child SURVIVING a FAILED ABORTION, Has no RIGHT to Life or medical care.

  39. reXteryalizer

    And JUST one more thing if you will allow//

    And no disrespect or distain is intended for the OFFICE of our GREAT PRESIDENCY

    and White House.

    Respect and honor and a great varity of reasons hold the United States

    Presidency in our Prayers and hopes for continued blessing and truthfull success.

    BUT the truth is STILL THE TRUTH .

    oBOMA does what he has to do~~~ just to get by.

    Feeding his donors and supporters Un merited fuel, is HIS only OBJECTIVE.

    this is HIS main OBJECTIVE.

    The only REASON things SEEM to get done, is because the people who

    SURROUND oBOMA, Drape the American Flag around him, WHILE HE shoves it off of himself,

    in disheveled pride. and NUMB ignorance.

    While, He admits, Boldly and sneeringly, he has done plenty of COCAINE.

    Please Use your head and tell us, BECAUSE we need and deserve to know…

    Why would we want a NUMB cacK heaD in the White House.

    oBOMA should have stayed *( WHERE HE WAS ) ~ in the DOPE house. !

  40. Alan A

    At least please get the ‘All About Eve’ refernce right. “Fasten your seatbelts, it’s going to be a bumpy night”. A one-minute Google search might have helped.

  41. Joe Buck

    I’m bitterly disappointed by Obama (I expected to be somewhat disappointed, but not this much). Still, I think progressives would be better off putting energy into getting as many progressive Democrats into the House as possible. While Pelosi has sometimes been disappointing, she’s been vastly better than Reid or Obama. I’d take Speaker Pelosi and president Romney over Speaker Boehner and president Obama any day.

    If Obama gets a primary opponent, he’ll win. It could be a valuable effort if progressive arguments get national attention, but we can count on the media to claim that Obama’s positions are the leftmost “serious” positions that they need to cover.

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