Budget Brinksmanship: American Exceptionalism Gone Bad

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Being exceptional apparently means never having take responsiblity for your actions.

The budget stalemate in Washington looks to be going from bad to worse. Here we are, ten days from hitting the debt ceiling limit, and by the reckoning of Wall Street’s watchful analysts, only about three weeks away from default (Treasury can do some creative footwork for a couple of weeks until some large payments must be made, in particular, Social Security disbursements), and both sides are digging in.

As we wrote earlier, House Speaker John Boehner had reportedly said privately last Friday said he would not push the US into default. Over the weekend, in public, he took a much harder line. And new reports indicate, as we speculated yesterday, that he could well decide to align with the apocalyptic Republican majority on the assumption that Obama will have to do what it takes to avoid default. And since Obama and his mouthpieces have repeatedly foresworn using sensible routes out of this impasse, like invoking the 14th Amendment or more creative devices, the Republican hard core believes its brinksmanship will force concessions from Obama.

From the National Republic (hat tip Business Insider):

In private, Boehner has told his allies that he won’t bring up a clean CR, and he’s hopeful that as the deadline nears, President Obama will deal. “There’s no way the president holds firm,” a House GOP insider predicts. “Once that crack opens, I don’t know how the debt limit will be addressed, but it won’t be by Republican capitulation.”

The New York Time similarly reports that both sides are hardening their positions. Both sides are trading barbs; there’s no sign that anyone is interested in talking, nor any indication that terms are being discussed privately while the public mudslinging continues:

Not only was Washington apparently no closer to resolving the dual crises, but the tensions between the parties and between President Obama and the Republican-controlled House seemed to worsen, with differences becoming personal and public….

Mr. Obama and Congressional Democrats have dug in, telling Republicans to capitulate because it is a basic responsibility of Congress to keep the government solvent and open for business. To give in, the Democrats argue, would only encourage Republicans to demand concessions every time the government needs financing, which happens annually, or an increase in the debt limit, which has occurred more than 40 times since Ronald Reagan became president….

With so much at stake, the recriminations seemed to widen the gap between the parties. Mr. Reid’s office reiterated that Mr. Boehner had reneged on his word that the House would pass a simple stopgap financing bill if Democrats agreed that it would reflect current spending levels (they did). It also accused Mr. Boehner of working hand in glove with Democratic leaders to maintain health insurance subsidies that the speaker is now attacking for members of Congress and their staff members.

There was one odd bit of to-in and fro-ing on the Democratic side. The Senate is out to try to pass a clean debt ceiling limit bill, which would give another year of breathing room. That would allow the House to act quickly, since there are by all accounts (except Boehner’s) enough Republican votes in the House to pass such a bill if Boehner would put it up for a vote. There is a possibility of a Senate filibuster, however, as two Democratic senators are opposed and neither side appears to have a good reading as to how many Republican Senators might try to stymie the measure’s passage. As Politico reports:

Just as top Senate Democrats began to lay the groundwork to raise the U.S. government’s borrowing limit through 2014, senior White House officials refused to rule out a short-term increase. The divergent messages caused major heartburn for top Senate Democrats and gave Republicans fresh hope that they could defeat a yearlong debt ceiling hike and win concessions from President Barack Obama in this fall’s fiscal battles.

By late Monday afternoon, nervous Senate Democrats had reached out to the White House to ensure they were on the same page — and the concerns on Capitol Hill seemed to be alleviated after senior administration officials downplayed the idea of a short-term increase.

But the incident underscored the fear among the congressional Democratic leadership that President Barack Obama may eventually back away from the no-negotiation stance he and Senate Majority Leader Harry Reid (D-Nev.) have voiced for weeks in order to avoid a first-ever default. And it raised questions about Senate Democrats’ next step in the debt ceiling debate if Republicans successfully filibuster a bill to increase the $16.7 trillion national debt ceiling.

That sort of signal change suggests that Obama is still looking for every opportunity possible not simply to prevent a train wreck, but to go back to what he’d hoped for, the Goldilocks situation of not too much or too little pain, just enough to give him air cover to press for his Grand Bargain Great Betrayal without wrecking the economy or freaking out Mr. Market. But this looks to be wildly in denial. As we’ve said, he and Boehner were unable to reach a Great Betrayal last year. Boehner didn’t have the votes then. And his side has become only more intransigent since then. As several readers speculated in comments on our post yesterday (I believe Banger was first to advance the line of thought) the inability to execute on a Great Betrayal, which is something the Republicans have wanted for a long time (recall Bush wanted to privatize Social Security) and see in their grasp with an ideologically aligned President, suggests that there are other fractures in the elites, ones we can’t readily detect but are undermining that deal.

My guess is that the hidden fault line is future of the US military. Even though the reason the US didn’t go into Syria was the Russia adeptly boxing Obama when Congress and the public were already overwhelmingly opposed, it was still stunning that a President would consider such a misadventure when even the Pentagon was against it. We simply don’t have the boots to put on the ground if the conflict were to escalate, which would seem to be precisely the point of meddling. With an overextended military and a desire among a big swathe of the elites to continue the government-shrinkage exercise, the fight may be over how much the military-industrial-intel complex’s ox is gored. And this question doesn’t involve only military contractors; many US companies have extended supply lines and foreign investments that might not look so wise without a muscular US military overseas to protect them.

But whatever the underlying cause is, this game of budget chicken is looking more and more reckless and childish. It’s worse than playing Russian roulette; it’s more like fiddling with rods on a nuclear reactor while turning off the safety overrides one by one. Gideon Rachman has a terrific column at the Financial Times today discussing what a careless, destructive hegemon the US has become. And remember, Naill Ferguson in 2001 (in his book The Cash Nexus) argued that the US was an empire in denial that needed to step into its role. This was the gauntlet he and his neocon fellow travellers threw down:

Far from retreating like some giant snail behind an electronic shell, the United States should be devoting a larger percentage of its vast resources to making the world safe for capitalism and democracy….[T]hese are not naturally occurring, but require strong institutional foundations of law and order. The proper role of an imperial America is to establish these institutions where they are lacking, if necessary – as in Germany and Japan in 1945 – by military force….The reasons it will not happen are threefold: an ideological embarrassment about being seen to wield imperial power, an exaggerated notion of what Russia and China would do in response; and a pusillanimous fear of military casualties. Perhaps that is the greatest disappointment….that the leaders of the one state with the economic resources to make the world a better place lack the guts to do it.

Well, the US appears to have taken up his challenge and made a complete hash of it. As Rachman writes:

American politicians seem confident that their nation’s wealth and power allow them to get away with careless behaviour that would be swiftly punished in a weaker and poorer country…

By contrast, foreigners have sometimes paid a heavy price for careless behaviour….A large part of the rest of the world’s grim fascination with the budget crisis reflects the fear that if the US economy catches another cold, the rest of the world will get pneumonia. China has told the US not to imperil the value of its holdings of US Treasury bills and Christine Lagarde, head of the International Monetary Fund, has warned of the damage the crisis could do to the world economy. But such complaints are drowned out by self-interested bickering in Congress.

The sense that the US is prone to “careless” behaviour that puts others at risk extends to international politics. America paid a high price in lives lost and money wasted during the Iraq war. But the US has now gone home and lost interest. Iraq, meanwhile, is still in the grip of the terrible civil conflict that followed the overthrow of Saddam Hussein…

If a compromise is reached before the US Treasury runs up against the debt ceiling on October 17, then this will probably just be a case of “crisis as usual”. But if America crashes through the debt barrier, things get serious. As Gavyn Davies argued last week, it seems marginally more likely that the Obama administration will drastically cut back on current expenditure rather than default on debt payments. Moving overnight to a balanced budget would be a form of immediate forced austerity of the kind that has caused deep recessions in countries such as Greece and Spain – as they too have struggled to balance their budgets.

The difference would be that US austerity would be caused not by the pressure of the markets, or the IMF – instead it would be a self-inflicted wound that caused huge damage to ordinary Americans and to the global economy. That really would be careless.

And due to space limitations, Rachman’s list of thoughtless damage the US has inflicted on the rest of the world is woefully incomplete. He omits, for instance, our QE policy, which as central bankers in emerging markets have complained, have led to destablizing hot money inflows and outflows and have goosed commodity prices, pushing poor people into distress and even starvation. Similarly, in 2009, thanks to ethanol subsidies, the US sent 107 million tons of grain to ethanol distilleries. That represented enough food calories to feed 330 million people for one year at average world consumption levels. I’m sure readers can provide more examples in comments.

Now I am operating on the assumption that we don’t have any General Rippers who have already taken actions that can’t be reversed, and that one side or the other in this staredown will blink rather than force a voluntary debt default. But both parties look to determined not to be the one to yield. So as I indicated yesterday, it may take a temper tantrum from the Mr. Market to provide the needed deus ex machina in this ugly drama.

Sadly, the punch line is missing from the end of this clip. The Russian ambassador says something like, “We were going to announce it next Monday at the Party Congress. You know how our premier likes surprises.”

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  1. Mcmike

    Save capitalism? Protect democracy? Serve as the guiding light for enlightened nations around the globe…?

    Well isn’t that special!

    What the elites want is precisely what they are getting: the plundering of the fat plum that used to be the US national wealth.

    It’s that simple. A program that has been in the works for well more than a decade.

    What, you thought that the overstuffed complacent pile of dough that was the US middle class and public infrastructure was just going to sit there, without the vultures and hyenas noticing?

    And just as the old tales tell us, once you get your hands around the goose’s neck…

    1. Art Eclectic

      Exactly. There’s too much money in the hands of the peasants that could be put to good use gambling at the international financial casino.

    2. LillithMc

      While the Republicans ignore majority rule to shut down the government and not pay the bills, the Trans-Pacific Partnership “free trade” “NAFTA on steroids” is almost ready to be approved by Congress despite the high level of secrecy that prevents Congress from reading it. It takes away local control of land and allows multi-national corporation first rights of control over, for example, where and how to frack.

      1. bh2

        It’s probably a waste of effort to point out that the majority does rule — in the House and in the Senate, respectively. In the White House, there’s only one man and one vote, and therefore an automatic majority supporting every decision made.

        The constitencies constituting a “majority” entirely differ in the House, the Senate, and the White House. This governing arrangement was not an accident. It was deliberately intended.

        What we are invited to believe is that only one “majority” (the one in the White House) actually matters. If that is so, then we can dispense with the cost of Congress and just turn over all decision making directly to whichever man on a white horse occupies the presidential mansion.

        The nation won’t default on its debt unless Mr. Obama instructs his Treasury Secretary to ignore the 14th Amendment and pay other bills before (rather than after) paying the interest on the debt in full from ongoing revenue flowing into the Treasury.

        Failing to pay anthing else but interest and principle on the nation debt is NOT “default”. The reason for this is very simple: despite compelling labels like “mandatory expenditures”, there’s no such thing. These are political confections conjured up to make people believe what just ain’t so: that government is eternally bound to do what it says it will do when it passes legislation. It’s a lie. There is nothing “mandatory” about any federal expenditure authorized only by statute.

        E.g., the Congress and President can end or amend Social Security (or any other spending program) tomorrow with no more than majority votes in both houses and the stroke of a pen in the Oval Office.

        The only expenditure mandated by fundamental law is payment of the national debt. Period. That’s the legal equivalent of being literally carved in stone.

        All the scare talk wildly promoted by the usual pro-spending suspects about “possible” government default is therefore completely irresponsible political theatre.

        1. Calgacus

          The only expenditure mandated by fundamental law is payment of the national debt. Period. That’s the legal equivalent of being literally carved in stone.

          The “Only”, the “Period” is not correct. “Government Obligations” – things which somehow create a “property” are protected by the 5th Amendment’s takings clause. The Supreme Court has ruled that this is not restricted to the national debt, to bonds, although they have stated that they have never made the line between constitutionally protected government obligations and other spending completely clear. The Supremes (Perry) have stated that the 14th amendment debt clause was merely a confirmation of the 5th’s constitutional protection of such government obligations.

          Recent relevant cases are the 1998? Winstar case, the 2004? Cherokee Nation case (which ruled the Treasury had to pay the Cherokees even though Congress had neglected to appropriate the dough) and an Obama Justice Dept legal opinion that ACORN had to be paid what it was due, in spite of Congress’s desire to cheat a then unpopular recipient. Lower courts have differed on the obligations issues, but as far as I can tell, not a single Supreme Court justice has ever opined against the legally binding character of government obligations. As they have noted, past Congresses can thus bind future ones, contrasting to the UK or Parliamentary systems.

          I’ll take the analyses of the various law professors viewing the debt ceiling crises or the Big Coin through the optic of their pet theories more seriously when they begin referring to the body of relevant case law, which reaches back to John Marshall (Matthew Yglesias just wrote an article, approvingly quoted by Warren Mosler, that could have used a reference to old JM, who said the same thing as MY.)

  2. Paul Niemi

    Since everyone is speculating, I’ll speculate. Oct. 17 arrives, and the House Republicans have done nothing to pass the debt ceiling increase or the continuing resolution. At that point we will be in a state of emergency. The President, under emergency powers, has the legal authority to “seize assets” to pay the nation’s bills. Seizing assets can be interpreted as the power to tax. The President will face the choice of personally imposing a huge tax increase to maintain essential government services, those not now shut down, and the budget will be balanced and the nation crippled. That is how this does not end well. The Congressional Republicans will not be held accountable, because they did not record any vote for anything under Boehner’s leadership.

    1. Banger

      Assuming the House does not budge and their history would indicate that they would hold firm since that seems to be more their MO than Obama’s MO, then, as you say, the Prez will have to take extraordinary measures or compromise.

      Most people assume he will give in because that is what he always does because he is a weak President. Now this is not because he is personally “weak” it is that his Presidency has not acquired sufficient power to be able to control events. In contrast, Bush was always in a strong position because of his family’s deep roots in the political and national security field. He had his own power-base, in other words, even though he was, personally, a weak leader.

      Yet, if Obama doesn’t take a firm stand the results would be worse. Much depends, as some of us have said, on what is going on underneath the covers.

      1. Paul Niemi

        Unfortunately the only remedy for a House that does not do its job is the next election. But it has been my observation of human nature that anything anyone can do, someone will eventually do it, whether it be sky dive from outer space or default on the national debt. Oh, the explanation of the success of the evangelicals in the Republican Party you were commenting about yesterday is that they are not a new addition: they are what is left, after the moderates quit or grew old and moved to Scottsdale, so to say.

      2. s spade

        It is a waste of time to monitor this kabuki performance, which involves grandstanding and nothing else. What is going to happen? NOTHING is going to happen. The rich are going to keep getting exponentially richer, the middle class is going to keep getting squeezed, the poor are going to keep being ignored. That’s it. Don’t miss the baseball and football seasons for this.

  3. Banger

    In defense of the neocon project–it was the only project by a group of policy elites that made sense. The USG has become an imperial power by deceiving the American people for decades using the American Exceptionalism meme and using the mainstream media to pass along that particular hallucination to the people. Any journalists that did not toe the line were out of work. You could not report that the U.S. interest in propping up dictators had nothing to do with democracy. Because Americans are so stridently anti-intellectual this propaganda line was easy to lay on the peopple.

    Back to the neocons–these people were and are intellectuals who are aware of history and understand the classical view of politics. They know that power is a hard-ass game. They wanted the U.S. to rule wisely over the empire and genuinely believed the U.S. could do a good job because, compared to other countries, it was less brutal and corrupt. Had the leadership class within the U.S. been composed of sophisticated, urbane men and women who understood foreign cultures, spoke foreign languages and were well-compensated and trained for rule then this might have worked. Had we trained the equivalent of Janissaries (the highly successful institution in the earlier part of the Ottoman Empire) to help rule the world instead of training the scum of those societies in places like The School of the Americas perhaps imperial rule would have worked.

    We are simply not a culture that honors virtue or understands it. We are a society of quick fixes, deception, propaganda, duplicity with a national security apparatus that has little real interest in the welfare of the American people or the world but are and have been pursuing their own interests. There is not elite that is trained in true statecraft so the neocon idea was viable as an idea but in practice there was no cadre to carry it out as we have seen. And besides, they only deceived the people into Empire–the subject was never publicly discussed–the American people never said: let’s go for Empire!

    We are now crashing and burning due to decades of organized and systemic deception. People now are throwing up their hands and joining nasty factions like the Tea Party or just tuning out because they don’t know what is going on and they know it–but they are so anti-intellectual that there is no way for them to analyze the actual situation in this country and around the world. Real intellectuals have suffered internal exile either by being forced into second-rate universities, been denied tenure, been hounded from academia (I always think of Norm Finklestein), hounded from journalism (Chris Hedges), denied promotion in the State Dept, the CIA and so on. We have, as we can see at NC and other places on the web, a whole class of people who could have led this society into sane and wise policies largely sniping from the sides–their rightful places taken by opportunists and ass-kissers, with some exceptions.

    1. McMike

      The neocon project – like every other venture in contemporary america – was subsumed under the tsunami of profiteering, corruption, cronyism, and pilferage.

      That, and it’s no-true-scotsman idea that the beatings must be escalated until morale improves.

      Anyone that excuses torture as a mean to spreading freedom is bound to end up peeing on their shoes.

    2. from Mexico

      Banger said:

      In defense of the neocon project–it was the only project by a group of policy elites that made sense….

      Back to the neocons–these people were and are intellectuals who are aware of history and understand the classical view of politics….

      There is not elite that is trained in true statecraft so the neocon idea was viable as an idea but in practice there was no cadre to carry it out as we have seen.

      It looks like you’ve mistaken neoconservatism for a brand of realism called realpolitik, Dick Cheney for Henry Kissinger. Duncan Bell describes realism as follows:

      Realism is often associated with a crude form of realpolitik, a deeply conservative position that fetishizes the state and military power, and disdains progressive change in the international order. On this view, it can be seen as an outgrowth of the machtpolitik of the nineteenth-century German state theorists — the political philosophy translated into action by Bismarck.5 For many political theorists, realism is the antithesis of ethical reflection, not a species of it. According to Marshall Cohen, realists ‘argue that international relations must be viewed under the category of power and that the conduct of nations is, and should be, guided and judged exclusively by the amoral requirements of the national interest’. JürgenHabermas, meanwhile, states that realism constitutes the ‘quasi-ontological primacy of brute power over law’.6 Realpolitik has, of course, had adherents in the corridors of power and in academia; Henry Kissinger, straddling both domains, exemplifies this position. But realpolitik does not exhaust ‘realism’; indeed it has little in common with sophisticated understandings of it.


      And neoconservatism should not be confused with conservatism either, as Bell alludes to here:

      Realism is often seen as a form of conservatism. Many conservatives have indeed been realists, and it is certainly arguable that a coherent conservatism demands adherence to some form of realism. This is one of the reasons why the ‘neoconservatives’ look so strange from a traditional conservative perspective.57

      A good short article that explains the difference between neoconservatism and realism is this one John J. Mearsheimer:


      Realism fell out of vogue in th 1990s, with neoconservatism coming to the fore. As Bell explains, after the collapse of the Soviet Union

      A sense of optimism pervaded public political debate. Globalization was purportedly transforming the international order, and the final triumph of democratic capitalism, even the ‘end of history’, was proclaimed.10 In this ‘new world order’, realism was seen as morally bankrupt and intellectually flawed, its adherents defending, whether implicitly or explicitly, a world of cynical great power politics. It belonged to another, more primitive age. Yet the optimism soon faded. Genocide in Rwanda, vicious ethnic conflict in Somalia, East Timor, and the former Yugoslavia, and then, at the dawn of the new millennium, 9/11 and the subsequent wars in Afghanistan and Iraq, all illustrated the continuing vitality of state power and the horrors of political violence. The gross inequalities generated by neo-liberal capitalism exposed the dark side of globalization. Realism was partly rehabilitated, albeit in a more pluralistic form.11 Meanwhile, the consistent realist hostility to the Iraq War rekindled interest in the normative dimensions of realism.12

      1. Banger

        I actually read a lot of the neocons in the 90’s. Here is what I came away. They followed the conservative critique of believeing that the United States was susceptable to hedonism and sensuality and that this would cause decline in the internal strength of the country. To solve this problem we needed a national sense of common purpose to remain a dominant power. For them this purpose was war or, as they put it so eloquently and prophetically, a New Pearl Harbor. This would, they felt, galvanize the country and create a sense of commonulity that would draw our diverse populations together. They were wrong, of course.

        Conservatives, on the other hand, believed that moral purpose was breaking down and that this crisis could be solved not through war but through moral renewal coming from the inside and not through any kind of collectivism. Realpolitik conservatives, in contrast, believed that whether the population was moral or not was not important–rather what politicians did or did not do day to day to move their will and agendas through was the critical issue. Kissinger was uninterested in ideology or public morality.

        The neocons were true believers in the “American Century” as Henry Luce put it in the 40’s which would bring the world itself to a better place. Realists, in contrast don’t care about ideals or “the end of history” just make marginal improvements if you can but, above all, define and achieve your interests. Neocons were doing all this for the betterment of mankind. They wanted to conquer the ME not to dominate it as the realists would but to save it from itself. Conservatives, in contrast, were focused on cultural strength through moral discipline not foreign adventures. They were seduced by neocons because they also believed in American Exceptionalism.

        1. Andrew Watts


          The neoconservatives thought they could remake the world in America’s image. As the American experience in Iraq and Afghanistan demonstrated that wasn’t a particularly bright idea. It was insanity. The neocons seized upon the intellectual framework of Francis Fukuyama’s thesis. Basically the idea was that once a country instituted a (neo)liberal democracy there was no going back. Thus their vision of a Pax Americana would be enshrined into the annals of history. What I find to be bitterly hilarious in the face of our current dilemma is how Fukuyama spent the latter half of his book explaining how stable democracies like the United States are. History has told a different story.

          Without the guiding vision that united a majority of the DC establishment behind the neocon project and the American empire our country has begun to fragment even before this self-inflicted crisis. As the public debate over military intervention in Syria took place we caught a brief glimpse of the fissures that could tear this country apart. A majority of the citizenry is firmly against the imperial project. Meanwhile the establishment is divided based upon the narrow self-interest of various power-blocs and those other groups that serve the greater imperial purpose. These self-interested and imperial policies have masqueraded as American foreign policy for quite some time. While in recent memory our president has been a powerless arbiter of the decisions reached from within the establishment.
          Ironically the Tea Party is firmly in the camp of the anti-establishment/anti-imperial opposition. It’s for that reason alone that I don’t terribly mind if they are successful in their aims. Every setback the establishment suffers is a momentary victory for sanity. No matter how temporary that setback is.

          Ultimately, the challenge the country faces beyond the duel between the various forces of the Republic and the Empire is the articulation of a new vision of the country’s future that carefully avoids the mistakes of the past.

          Barring that outcome we will soon become the former United States.

          1. Banger

            While I agree with most of what you say and you made an excellent presentation of your views–I don’t believe that the TP is anti-establishment in its views of national security issues. There’s definitely a growing part of it that is–but currently the skepticism on military actions is because their attention is on gaining and keeping real political power. This is, basically, a coup attempt. The results will not be so good for the non-rich, however. This shake-up will hurt a lot of people and remember, the right wing position on the poor and elderly is to let them die and/or build more prisons. That is not a healthy situation. A corrupt government is still more favorable than the TP position here. In other words either way the thing turns–we are in for some big-time hurt.

            1. Andrew Watts

              I can partially agree with that sentiment. This should deny the Republic any superiority feelings of self-righteousness. As there are quite a few children of darkness among us too. Hopefully this provides a basis of understanding with those we do not agree with on the other side. While precluding any unfortunate misunderstandings that could further deepen the collective misfortune we have and are likely going to suffer in the future.

              Whether one is a citizen of the Republic or a subject of the Empire, it is guaranteed that none of us will like what the future will bring. This future was brought to us in part by leaders who thought the answer to facing the twilight of an empire was to compromise with the darkness. While cowering in fear over a citizen’s right to privacy.

              We are dancing in the middle of a minefield in the graveyard of empires. Syria was one such mine that could’ve exploded in our faces much to our collective detriment. The ongoing fiasco of a self-made budget crisis is another. Only when it could very well be too late do they finally begin to understand.

              But, I think I’m getting ahead of myself. I’ve probably lost more than a few people along the way.

        2. sue

          Krugman once defined neocons as true revolutionaries-interested only in destruction of current “order”-destabilize, shock doctrine, to profiteer…as described by Perkins’, “Confessions of An Economic Hit Man”, 70’s-80’s South-Central America.

          My brother and I worked local watering spot through university, around corner from local alternative media=”Helix”:


          We still own several copies of “Helix”, though most were given, years later, to Crowley for historical documentation.

      2. sue

        “From Mexico” has just described “Manifest Destiny”-which neoconservatism wishes to reinstitute.

    3. Ed

      I think an America as a sort of northern Brazil would have worked. In other words, a continental power that dominated its continent (North America) but largely stayed out of power politics in Eurasia, and maintained a sort of hedonistic, non-intellectual or anti-intellectual culture (as Brazil). And this is probably closer to what American elites were aiming for before Woodrow Wilson.

      The post World War 2 pax Americana would have required either a much more educated elite (with less democracy), which was George Kennan’s position, or a much more educated population. And doing what was basically a con job on the population to be able to do the empire stuff was a quick fix at best.

      So I think Banger’s analysis is excellent. One of the problem with the first approach (no cultural change, but only regional power), in addition to Wilson, was that it is hard to see how no or limited participation in World War 2 could happen, and that of course created Pax Americana. Even Brazil participated in World War 2. Though if you remove Wilson from the equation maybe you don’t get World War 2.

  4. 12312399

    a pox on everyone’s houses. what obama should do/should have done in 2011 is invoke the 14th amendment—say that even if there is no deal the Treasury will issue new debt after 10/17 and make the GOP take the matter to the Supreme Court.

    The Occam’s Razor reason why the White House doesn’t do this is obvious….the White House wants to play “good cop” and slash entitlements saying giving the GOP 80% of what they want is better than giving the GOP 100% of what they want.

    1. Sufferin'Succotash

      An even sharper Occam’s Razor explanation is that Obama won’t Go Fourteenth this time precisely because it would raise the question of why the hell he didn’t do so two years ago.
      The answer being that he was a weak tube who still thought that if You Be Nice To The Loonies They’ll Be Nice To You.

    2. NotTimothyGeithner

      This is simpler explanation not a simple explanation. Individuals are complex.

      Occam’s Razor doesn’t mean one all SIMPLER explanation. Its a simple explanation which takes all relevant factors. Let my try.

      1. Democratic elite are terrified of being labeled as liberals or lefties.
      2. In 2011, Obama’s popularity was in decline. He was losing to a generic Republican candidates. Tim Pawlenty could have crushed him.
      3. Obama is not a confrontational man. He folds to pressure if its early.
      4. Obama like so many Democrats labor under the delusion that polite and friendly people are sane and rational. Republicans who discuss defaulting and not raising the ceiling mean it as much as Obama did when he would say the same thing as a freshman Senator.
      5. Obama isn’t the super genius his supporters think he is. He is bound to limits. He lacks outside the box thinking.
      6. Obama is surrounded by yes men and a close circle of fellow travelers. In the case of Larry Summers, Obama is completely under his spell. Unlike Clinton, JFK, Ike, FDR, and Truman, Obama much like W. is not known for reaching outside his close circle advice.

      When we take into account, the behavior over time

      Fast forward to 2013. The other issue is Obama is narcissistic and can’t be wrong. Obama was on the Daily Show, he responded to a question about massive inefficiency of the HAMP program by announcing he saved the housing. Obama just assumed he solved the problem because there was a program. Despite the ongoing crisis, there hasn’t been a change in policy but just more announcements about Obama’s greatness. The problem isn’t that Obama was mistaken but that we the American people don’t understand.

      Since the platinum coin was discussed in the papers of record and signed off on by former attorney generals and treasury secretaries, the President can’t acknowledge this solution wasn’t heard. If Obama does this now, it invites the question of why he has continued to negotiate with terrorists* despite the platinum coin being an option two years ago. To take this course now would imply Obama was wrong when Obama can’t be wrong, and with the status of his circle of yes men and people Obama is devoted to, there is no one of sufficient to tell Obama he is wrong.

      Despite the length this is closer to Occam’s Razor. I would say that Obama like his first CoS, Rahm Emmanuel, may believe the old adage about not letting a crisis go to waste and wanted to use the budget crisis to make a grand bargain with the hope of altering Social Security to fluff Obama’s place in history as a Democrat who went against his own party. Despite the absurdity of fighting one’s party while being the leader of the party, this appeals to Obama**.

      There is one other issue. Obama has directed federal law enforcement to act against poor people (the drug war, immigration enforcement), not the elite and has bought into deficit non-sense himself. His proposed programs which Obots claim would save the economy are watered down versions of his Pre-Lehman, crummy versions of Hillary’s crummy promises. Obama has demonstrated that he won’t sign off on more pork projects, and he won’t target the GOP themselves or their financial backers through blocking contracts, investigating war crimes, investigating federal contracts, or using the Patriot Act to go over after tax havens. The GOP has nothing to fear from the man, and he has made it clear he won’t buy members. NAFTA was passed by building bridges and Congressional Laser tag arenas.

      *There are and never have been “moderate” Republicans despite the assertions they have left the party. They never existed, perhaps in Massachusetts but that is more about the mob and machine politics than anything.

      **I think Obama has a pop-culture view of history and tends to simplify ideas and trends over time while being devoted to the importance of noted individuals and their actions which is historically significant. “Team of Rivals” is a favorite of his, but “Team of Rivals” like many history books featured at Barnes & Noble (I have a nook) inflates the importance of actors who are often responding to events.

      1. Mcmike

        Obama could go with the platinum coin now without losing any face, he could simply say it was an extreme measure that he was hesitant to do, until the GOP finally made him do it when there was no other choice and time had run out. A doomsday solution.

        As for the Dems, I agree that they are afraid of being called liberal. Hell, the GOP is calling them socialists for enacting Romney’s Heritage Foundation plan. But I am not so sure there are any actual liberals left anyway. All I see is a lot of rich corporatists in the revolving door, who are maybe only lefti-ish on some social issues.

        1. Brooklin Bridge

          Granted Obama is narcissistic, granted he’s not as bright as people think, but he was able to back off the Syrian fiasco when he had to and it is likely he would find a way to excuse and then use the coin if it in any way advanced his agenda. But it doesn’t. He is still determined to get a Grand Bargain Betrayal out of this.

          1. Brooklin Bridge

            Another characteristic of Obama is obstinance and if you put that together with narcissism and average intellectual prouesse, Obama insisting on what he originally set out to do, cut the safety-net, becomes that much more plausible. Like lies, if Obama, never mind The President, wanted it or says it, it must either be or become truth.

          2. NotTimothyGeithner

            Obama backed off in Syria? This might be a bit of a stretch. The U.S. is still supporting the rebels with military aid, and two, the American people, Congress, the Russians, the Chinese, and the UK Parliament were opposed to the conflict or made to be opposed.

            Obama never wisely backed off. He was faced with overwhelming opposition which never happens. The House of Commons voted against a limited intervention. This was a huge deal. Obama had to be embarrassed in a very real way before he could back off from Syria. It was about citizen outrage not Obama finding an out.

            1. Crazy Horse

              Obama backed off from starting a war with Russia’s surrogate Assad? After clandestine funding and encouraging our Al Qaeda allies that form a major portion of the opposition? And after staging or encouraging the “freedom fighters” to conduct a false flag poison gas attack? And discovering that nobody in the world– even in the Orwellian Homeland would buy his charade?

              No, Obama didn’t back off from having his war. He bumbled his way into a blind alley and Vladamir Putin threw him a diplomatic lifeline that he gratefully grasped to save his ass.

              After failing to start a war to divert attention and unite the pro-Israel, pro war profiteering, pro weapons procurement, or just plain senile Republicans like McCain behind the made-for-TV bombing campaign, Obomber is now faced with having to surrender the last vestiges of his self image. He can acquiesce to the demands of the Insanity wing of the Repugnut Party or actually draw a red line in the sand and stand firm. As much as actually doing what he says is inconsistent with his past behavior, I think he will prefer to ride the horse over the cliff rather than listen to Michelle tell him every night that he is the most spineless POS she has ever met.

        2. NotTimothyGeithner

          I agree with this. The overwhelming majority wouldn’t care, and even if it was constitutional (if mind you), anyone saying, “impeachment for the platinum coin,” would be ignored, not ridiculed but ignored which is the worst situation.

          This is about Obama. He can’t change course. Although Obama possesses a certain weakness, we cannot forget this is a man who ran a serious campaign for the Presidency of the United States in the 21st century and not as an Eisenhower, Hoover, Jefferson-caliber candidate. Obama’s view of himself and his own opinions are radically different from our own.

          The opposition to the platinum coin isn’t about the electorate’s perception. Its about the notion that Obama could be wrong, and I don’t think he can function this way.

          Much like the Obots who won’t acknowledge the insanity of the Afghani surge or the stupidity of saving Lieberman’s chairmanship, Obama has his head up own a@@, but Obama has the extra arrogance of declaring he was fit to run for President despite the common criticisms bandied about by Hillary supporters his experience and lack of ideas. Obama ran for office against Hillary Clinton three years into a insignificant time in the Senate. This is an arrogant man. This is not debatable point, and when looking for why he does things, this has to be understood.

          What I and you think isn’t as relevant as what Obama thinks about himself.

          1. Cujo359

            The opposition to the platinum coin isn’t about the electorate’s perception.

            I think I can sum up the electorate’s perception in a few simple sentences:

            “What, we can fix this and without new taxes? Yippee! Let’s do that again!. Can we fix our bridges now?”

            Well, maybe I’m projecting again…

            (In case there’s any doubt – I agree with the quoted text.)

            1. NotTimothyGeithner

              I don’t know about this. Despite the efforts of the Democrats to extend the Bush tax cuts, the American people do support higher taxes on the wealthy.

              Even 50% of Republicans supported the REPEAL (not sunset; Americans didn’t know they went away their own) of the Bush tax cuts. Your dismissal of the American people and their view taxes is part of the problem.

              Barack Obama and the Democrats won in 2008 despite promising higher taxes on the wealthy and ending wars. In 2010, they lost when they didn’t follow through.

              The platinum coin is too dry for people to understand, and in the absence of dealing in huge sums on a regular basis, the difference between a Trillion and 11ty Kajillionty is irrelevant.

              Take California which isn’t as liberal Republicans claim (its just on the other side of a desert and the Rockies which makes it foreign), there was overwhelming support for higher taxes which was necessary to undo a 40 year old threshold law.

          2. Dan Kervick

            I’m inclined to disagree. I suspect minting the coin would spark a massive political firestorm. There would be interminable legal challenges and Congressional inquiries. Some middle-of-the-road Democrats would criticize Obama for exploiting a loophole in the law to encroach on Congress’s constitutionally ordained monetary authority, and the delegated authorities Congress has granted to the Fed. The Tea Party would gain traction for their message that Obama is an out-of-control tyrant by claiming that he has just engaged in a wholly unprecedented and constitutionally dangerous exercise in unilateral executive monetary coinage. Before it all shook out legally the country would be dragged through months of “Coin-gate.” Meanwhile, Obama would have foolishly squandered the political edge he currently enjoys in the polls vis-a-vis Congressional Republicans.

            1. NotTimothyGeithner

              The issue is too dry. People respond they can see and touch. Even the platinum coin branding is merely an effort to get people to discuss the ignored part of the 14th Amendment.

              The War of the Roses springs to mind. Its a sexy war. Last stands, nights charging, shifting alliances, and its followed by a king who can’t find love. It has everything. We have heard about this in books, plays, and movies.

              Here is the kicker, I would contend it was a relatively minor affair of small skirmishes fought between the last gasps of the landed aristocracy as a power and french mercenaries. Armies didn’t stay in the field, and the new king didn’t disparage the old king or face opposition from the populace because in many ways the changing nature of the economy and the rise of towns dramatically shifted power in England. If the result was King Edmund instead of Henry Tudor, it wouldn’t have mattered because the boring part about shifts in production and a renaissance within Christianity which would have put the English religion on a course of conflict with Rome still would have happened as money became an issue with barter being replaced by the counting houses.

              This is dry and boring. Its much more fun to think about the moment Blackadder beheaded Richard III fresh from victory over Henry Tudor’s forces.

              Its way more fun to discuss Pippa Middleton’s natural talents than it is to question the justice of a society which is so dependent on tourism or how they could promote the UK tourism without a royal family.

              The platinum coin will pass into the night, and people will still be wondering why so much is being spent on government waste when there schools suffer or they can’t make the rent. In the mean time, they will tell sexy stories. Look at Democrats who claim Terry Schaevo exposed the GOP. GOP polling sank before Schaevo was in media spotlight. Schaevo did nothing. Why did GOP polling sink? Largely, it was the result of the efforts against Social Security, and I think there was a sense the GOP didn’t have a mandate to act domestically. In retrospect, its much more fun to remember the stunt.

      2. Banger

        Really enjoyed your comment. I think you are, basically, right but I don’t think Obama is simply weak, I believe his position is weak. He came into office as, basically, a PR project created by some combination of finance oligarchs and DP fixers/hustlers/lobbyists who needed someone credible to defuse the growing left (as a result of Bush’s failed wars). Obama came in beholden to the power-elite that put him there. He himself headed no faction like the two Bushes did. He’s alone swimming in a shark tank–the only way he gets out alive is to cooperate with wherever the consensus of the power-elite faction tell him to go.

        This is his moment of truth–and I suggest he might decide to be more firm–two years ago he had very different pressures. Two years ago he had no alternative to compromise. First, the left had committed mass suicide during the ACA debate and had not forced Obama to the left as he requested they do and for that the collective left only has itself to blame. Second, the DP and the Administration had to reward their chance at power by going soft on the FIRE sector and assuring that the whatever growth occurred in the economy would go to high earners.

        I think Obama felt this was the cost of doing business and he could fight a rear-guard action against the nihilists in the RP that sought the complete destruction of the federal government. What he did not count on, I believe, is that the oligarchs split in their own ranks into factions and one faction believed that the only window to achieving their goal of deconstructing much of the federal government was now and that demographics guaranteed a loss of power by the right eventually since the Tea Party was floundering in regional ghettos. The right and those that supported the extreme positions of the Tea Party had reached the limit of their ability to act in a manner that was consistent with democratic institutions and now realized that they had to really think outside the box and go for the jugular and hope success in bringing Obama to his knees would make them, the right and its associated oligarchs, the focus of power in the most powerful country in the world.

        1. McMike

          Re: Obama requested to be forced to the left.

          Interesting. I must have missed the memo.

          Seriously, I’d be interested to hear your case that Obama was ready and willing to move left, if only the left forced him.

          1. Banger

            Obama had mentioned, on several occasions that progressives “make him do it” referring to leftish policies. Obama understood the real political situation. He knew, from the beginning, what he was up against.

            I will make here my little “political reality” speech. American politicians are not leaders. They are power brokers. Their job is to evaluate the relative power of various political factions and try and find policies that meet the needs of these faction–the more factions in the mix, the more complex the deals become. Now, there is no way around this unless a politicina happnes ot have his or her own power base. What is a power base or a faction? It is any group that has the power to help friends and punish enemies which is the essence of political power and there are no exceptions. I believe Obama would have been happy to sign a health care reform bill that was in line with what reasonably developed countries enjoyed as any reasonable person would. Our current system is wildly insane and there is no rational argument for it. The reason we got the ACA is that progressives did not oppose it because they profoundly misunderstood the political situation at the time. An unbending show of force by progressives would have, in my view, had a good chance of succeeding–and even if it didn’t it would have given progressives a seat at the table instead of being kicked aside and ignored from then to now.

            Similarly, had progressives supported Kucinich instead of Obama they would have forced whoever wanted to win the nomination to make a deal with Kucinich and either put him in the Cabinet or force the candidate to have people in important positions who were allied with Kucinich. Instead people were obsessed with “the first black” or “first woman” President hoopla which, politically doesn’t mean anything at all. So what happened? Why was anybody surprised at what happened? And why are people blaming Obama for sitting on the center right–what else can he do? All the left can do is to make jokes or complain. When Nixon was cowering in the WH we didn’t make jokes–we acted. We had many faults and made many mistakes but we on the left were a force to be reckoned with.

          2. Banger

            Obama did mention that his progressive campaign stances needed support form the progressives so he paraphrased FDRs request of “make me do it.”

            I honestly think Obama would have been cool with actually reforming the HC system as per the rest of the developed world. But he understands politics and the vast majority of self-described progressives do not understand politics probably because the classics are not taught in school.

            Let’s backtrack here. American politicians are not “leaders” they are power-brokers. They help negotiate deals with various factions within the power-elites. If your group or your concern does not possess political power it is ignored in the deals made in Washington.

            What is political power? It is the ability to help friends and harm enemies. You have to be able to do both or you don’t get to sit down with politicians and be part of solution. Not doing that is like playing basketball without a bal. Progressives, instead, hurl sermons at politicians and the public rather than going out and fighting for what they believe in.

            I will give an example of the lack of political sophistication of the left: during the 2008 campaign progressives were in the ascendancy after years of Bush and the financial troubles. They could have supported Dennis Kucinich, a capable, smart and erudite politician who was able to articulate and support the full spectrum of political positions. Had the left done this they would have had bargaining power in the latter part of the primaries and, perhaps, the convention. But noooooo–they had to fall for the politically empty slogans consisting of not progressive policies but “the first black” the “first woman” President as being an important basis for supporting the two main candidates–or just falling for the notion that they would be more appealing to independent voters. We would have still gotten a center-friendly candidate (Obama or Clinton) but in order to get the nomination they would have had to go through Kucinich who would have asked for a cabinet post of something like that.

            The same could be said of any issue of recent times–the American people were open to a normal HC system and it would have dramatically lowered costs–instead the left largely aligned itself with Obama, even Kucinichm, at the last moment supported the ACA since he intelligently assessed that the American left had no interest in the political game as it is played in Washington–where it is played hard, very hard. If the left had chosen to be relentless in asserting its power we would never have been in this position where we risk dismantling what is left of social democracy.

              1. Andrew Watts

                It’s not a matter of aligning with Obama. It’s about fighting him to force him to do what he would otherwise not contemplate. Most primaries are easily decided by less than one hundred thousand votes. A show of force within those party primaries can change political outcomes. This is how the Tea Party in part managed to dominate a bigger faction of the Republican Party. By pledging their blind allegiance to Hillary and Obama without considering their past voting records and policies liberals/progressives did more for instituting the center-right nature of the Obama presidency then the man himself.

                What Banger is saying is right on the money.

                1. Lambert Strether

                  Sure, I agree on the tactics; gay bundlers and Hispanics, 2012. NOT “progressives” in the health care right in 2009. I’m just saying that people who don’t “fighting him to force him to do what he would otherwise not contemplate” aren’t on “the left.”

                  Though I suppose I should consider “the left” as a fluid category, not some essentialist thing. But I’m really tired of hearing that anybody who supports a guy who’s to the right of Eisenhower — heck, of Bush — is on the left.

            1. anon y'mouse

              you speak a lot about hurting them, exerting power. how is that done, exactly? I don’t mean calling your representatives. they’ve shown that they ignore it over and over again. I don’t mean a clump of grannies standing on a corner with signs. people honk or they look away, or yell things but that changes nothing.

              unless you’re talking general strikes and sit down protests, I really am missing some part of the equation here. you talk a lot about it, but don’t give too many examples of it. that’s not a criticism, but it leaves the conversation a bit like “you don’t do what I want!” “what DO you want?” “well, you’re not doing it, is all I say….”

              around and around in circles like that.

          3. Banger

            Look, my observation is that the progressive/left section of our population does not understand politics and does not know that you have to use force–not violence, but force. You have to hurt your enemies and make them think twice before they cross you and you have to help your friends so they’ll keep coming back and help you in return.

            I don’t blame Obama for his center-right Presidency as you know. I blame the left for believing that politics is about competing sermons or complaining that “it’s not fair” means something or that having a “black” President is some kind of political victory–let’s be clear here–it means nothing.

            1. Jonas

              Very interesting analysis. As a progressive, I admit I don’t know know how to use force politically. What are you suggesting I should have done instead?

              Protested the ACA and called my congressman to strike it down because it wasn’t single payer? Would that have helped Obama pass a better form of it, or would we have gotten nothing at all? I think at that time, progressives didn’t feel all powerful, and were afraid of getting no slice of pie at all.

      3. Doug Terpstra

        It’s difficult to psychoanalyze a narcissistic power-mad sociopath, but I’d like to contribute a bit of amateur shrinkage myself.

        Obama impresses me an is an extremely gifted Harvard lawyer / blue-cult charlatan / Chicago gangster-huckster who’s been groomed and hired by Wall Street’s predator-parasites expressly to play the not-too-bright-but-articulate, clean-cut, nice-guy-appeaser in order to seduce (rmichael’s) “loser-liberals” and the “progressive” Black Caucus into buying his inexplicable ineptitude, inexperience, ignorance and cowardice. He gets a special pass; they will never question his basic integrity or good intentions but will instead redouble their efforts to articulate more clearly everything that he should do if only he were more enlightened and made aware of his options. They will spare no effort be ever more persuasive in trying to divert him from his ruinous course of serial premature capitulation and work even harder to convince his dispirited minimum-wage base that ObamneyCare would’ve been worse, to remain faithful and to spend more energy and money toward making him overcome his baffling impotence.

        It would never ever dawn on them that someone so accomplished, articulate, charismatic, and black would so readily sodomize the “f–king retarded” progressives who voted for him, that he would knowingly, blatantly violate the constitution, that he would consciously ignore conspicuous high-level fraud causing historic inequality, that he would deliberately exonerate all war crimes no matter how heinous, or that he would personally kill by remote with as much as gusto as Dick enjoyed vicarious torture—unless of course it were absolutely necessary.

        (It would also not occur to them to question how funding to al-Qaeda in Syria can be increased during a shutdown or how special forces kidnapping raids can be launched in two countries during an budget emergency, because, well, that’s national security.)

        In the view of enlightened liberals, Obama does what he does because he is not really very brave or very bright after all. He’s just a naïve product of affirmative action, led astray by appointees foisted on him by his betters. If he does commit the Grand Betrayal in the end, it will not be because he set out to do so in a Machiavellian scheme; it will only happen because the dastardly Republicans left him no choice or because we didn’t make him do the right thing. It won’t be because he’s an evil, power-mad socio-psychopath.

        1. Banger

          I don’t think that’s right. Obama has to cater to the powerful–all Presidents must, since Kennedy, defer to overwhelming power always. The issue is not Obama’s integrity which I think is fine but the refusal of the progressive/left/liberal side of the population to actually assert a political position. As I’ve mentioned many times, if you want to play politics you have to punish your enemies and reward your friends. The only alternative is to run a social movement/moral crusade and those only come along once in a blue moon. The reality is that progressives don’t want to get their hands dirty and put a hurt on anyone–you can’t do that then forget politics. I don’t mean violence here at all–I agree, more or less, with Hedges that we should remain non-violent but there are other ways to hurt noxious people and groups.

          Blaming Obama for the fact there is no effective political left is foolish. Why shouldn’t he “betray” people who are of no consequence in terms of power? Look how the right rams things down our throats–do they ever suffer consequences?

          1. James Levy

            OK, I’ll say it: because an honorable man does right. The above critique of Obama may be correct in total or in part, but the fact that Obama lacks the personal moral courage to do virtually anything right is indisputable, and it is his fault and his alone.

            I never asked Obama to succeed, but I did expect him to try. He never, ever tries hard to do the right thing.

          2. Doug Terpstra

            “Why shouldn’t he ‘betray’ people who are of no consequence in terms of power?”

            Ah, well, when you put it that way … okay, I stand corrected. And although I know it’s a lame excuse for ignorance, I’m not a Harvard Law alum. (That obvious?) I also missed the Jamie Dimon School of Savvy Business Ethics, which undoubtedly answers the following elementary questions without any silly sentimental ambiguity:

            “Why would anyone actually fulfill one’s campaign pledges when the rubes are too gullible, credulous, and politically powerless to do anything about it?”

            “Why not sell a bogus hope and change paradigm and then betray the old and infirm who are too feeble or poor to make me keep my promises or punish me when I don’t? Well, duh.”

            “Why not fund al-Qaeda in Syria, and why not start another illegal war for Israel if no one can stop me? (Damn POS Putin!)”

            “Why would any bankster worth his salt not commit mortgage fraud, launder money for cartels, price-fix utility rates, rig LIBOR, or gamble illegally with FDIC-insured deposits, when you’ve installed the right POTUS in office and the most you’ll have to worry about is a COB (cost of business) fine?”

            “Why should anyone follow the law if they own the Ministry of Justice and can have a private consultation any time they want?”

            People who don’t understand realpolitik are loser liberals — ridiculously naïve. Sorry, I’m clearly clueless. Thanks for clarifying things.

            1. Banger

              Look, I’m not trying to be insulting. I’m just saying that politics involves the application of force. And that most on the left don’t like that. Sorry. That is not my idea that is what history tells us.

              1. Doug Terpstra

                Don’t blame a scorpion or snake for obeying its instinct; blame the frog for buying the scorpion’s lies. I get that, and I’m not insulted, just disagree. Snakes in suits have no excuse and deserve impeachment for their lies and prison for their crimes. I blame feckless veal-pen liberals too for sins of omission, but to a lesser degree.

  5. sue

    “Christine Lagarde, head of the International Monetary Fund, has warned of the damage the crisis could do to the world economy.”

    Reading Perkins’, “Confessions of An Economic Hit Man”, we see how U.S. banks-Wall Street use IMF to “create” imminent disaster, to then sell off publicly
    financed infrastructure. Without public electricity and water resources, neofeudalism is no longer conceptual:


  6. sue

    “Now I am operating on the assumption that we don’t have any General Rippers who have already taken actions that can’t be reversed, and that one side or the other in this staredown will blink rather than force a voluntary debt default. But both parties look to determined not to be the one to yield. So as I indicated yesterday, it may take a temper tantrum from the Mr. Market to provide the needed deus ex machina in this ugly drama.”


  7. clarence swinney

    400 Billionaires
    or one tenth of one percent own as much wealth as 154 million.
    46 million luckie duckies get Food Stamps
    50 million have no health insurance
    60 million have zero or negative wealth
    64% have less than $1000 in savings
    When will we tax wealth instead of giving tax breaks to the rich?

    1. James Levy

      Americans have no intellectual apparatus to deal with the structural–they personalize everything. So all those stats you give, although you and I see them as exemplars of a gamed and rotten structure, the vast majority of Americans interpret as a small number of really smart guys and a whole load of lazy schmucks and blacks. They don’t understand how tax laws, inheritance, incorporation, stock options, and old boy networks contribute to that picture much more than who is smart and who works hard. I tell my students: who works harder, a man sitting at a desk trading stocks, or a man squatting in a field cutting broccoli? Then you start to unpack their assumptions: that a “smart” guy “deserves” to make several hundred thousand dollars a year, but a “dumb” guy working in the fields deserves whatever he gets. But what about the idea of hard work? I ask. And why am not I, a Ph.D. with two books, numerous publications, and a high IQ rich? The students have no answer, other than “well, that’s the way things are.”

      And most Americans, even if they can get past the “individual effort” BS, will just shrug their shoulders and say, “well, that’s the way things are.”

      1. Banger

        James, I think the ideas like “hard work is always rewarded in America” are just cant. These ideas exist like many Catholics reflexively making the sign of the cross. I don’t believe most Americans really think about the cant of American Exceptionalism. These ideas provide people with a sense of identity and are not meant to provide an accurate presentation of the world.

        Look at it this way—what if people actually believed the things you and I believe are true? It’s unpleasant, really, to believe that the rich want to turn us into serfs on their virtual feudal lands. Better to accept what the media tells you and avoid thinking too much.

        One of the bitterest bills for intellectuals to swallow is that the vast majority of Americans are solidly anti-intellectual. In some ways it is charming–it allows for lots of wild flowers and unique visions to grow but it has the effect of making to population blind to both science are reason except in the narrow specialities that make up people’s jobs.

        1. McMike

          “The world is made for people who aren’t cursed with self awareness.” – Annie Savoy, Bull Durham

      2. impermanence

        You’re rich because you decided to participate in the system, not because, “it is what it is.”

        Rich or poor, it is ALWAYS what it is.

      3. Terre Moto

        Actually, Americans do have an intellectual apparatus. It’s called The Holey Buy-bull. God said it, my preacher/priest interpreted it, and that settles it!!!

    2. Banger

      When the old leftist alliance of labor and middle-class intellectuals decide to deconstruct the web of illusions foisted on us by the propaganda organs. We also need to learn that we need to stand together and create unions, collectives, non-profits and so on instead of aiming for living isolated “individualistic” lives where we can each sink further into debt and eventual serfdom.

  8. sue

    Banger-the way to “analyze the actual situation” is to follow the money-all those CDS, invented by Wall Street, against their own invented “products”, which
    are stated have amounted to over $600 trillion by 2007, 95% owned by 6 U.S. investment banks, hidden away in Wall Street British parallel, “City of London” secrecy jurisdiction-“derivatives”, or paper debt, now transferred to FDIC=taxpayer auspices.

    Current debacle appears to be cover-up=distraction, to push past “statute of limitations” regarding many (William K Black) examples of criminogenic
    accounting fraud, and to maintain the world’s largest pile of wealth in human history.

  9. Theo

    With the Republicans’ and Obama’s insistance on the sequestration, the budget he is operating under is below the threshold of that of Paul Ryan and yet he is prepared to cut more and more and more from the safety net and other decent programs and services the government provides. This is true madness.

  10. steve from virginia

    View from the end of the gangplank is pretty unnerving, isn’t it? Those shadows just out of sight are the monsters.

    Can’t bear the debt because of the costs, can’t bear to stop borrowing because of its necessity.

    George Patton in 1945, “My men can eat their belts but my tanks have gotta have gas …” In 2013, so does everything else.

  11. Brooklin Bridge

    It looks to me like Obama will do everything in his power to put SS and Medicare back on the chopping block, among other things. I suspect that both he and Boehner feel that given past failures the more this effort is hidden under the current dramatization, that is, the utterly reckless gamesmanship now going on, the greater the chances that everyone will swallow the Grand Betrayal whole AND with a sigh of relief. Hey I love Gramps and Grandma, BUT…

    There may indeed be other significant forces such as the military moving things with their own interests underneath the efforts to serve up the last of the new deal to Wall St., but neither Boehner nor Obama will let them get in the way of the Grand Betrayal if they can possibly help it.

    But the way this thing started was simple and direct. Scare the living daylights out of everyone because that is litterally the only way you can put the New Deal up for sale and get away with it. It’s just too hot otherwise. Whether or not this is conventional wisdom or the general consensus here or elsewhere has little to do with it, but the next week should illustrate whether or not it’s valid.

    Also, Obama is not a weak president. He is a dangerous one willing to use the appearance of weakness for his own ends.

    1. LucyLulu

      Obama may want a Grand Betrayal as do generic Republicans, but the TP’ers driving this crisis aren’t particularly interested. In fact the base is more likely to oppose significant cuts to SS and Medicare, the primary programs driving the debt, since these are entitlements they’ve “earned”*. It’s programs that benefit the poor and minorities, funding the MIC, education, infrastructure or any other public investment, and regulatory agencies that they have no use for. They want to slash and cripple the government but SS and Medicare are notable exceptions among TP’ers.

      *Younger TP’ers would like to slash these programs as they predict insolvency before they will become eligible to collect benefits. However, legislators are older themselves and the GOP in general caters to an older constituency.

      This crisis is more about settling power differences than policy ones.

    2. Banger

      Obama is not a weak person but he is a weak President. His range of motion is limited by his lack of powerful alliances. He is too much at the mercy of those who got him where he is rather than people who have a personal loyalty to him. He is being used–he is not a player because the players wanted a weak, easily manipulated President that was more of a head of state than a real exec.

      1. Doug Terpstra

        You make Obama sound like such a cheap whore (apologies to legitimate prostitutes), but I think you “misunderestimate” him. No GOP Neocon could ever have implemented such a stunning record of neoliberal achievements. No GOP Neocon could have bombed Libya unchallenged, pushed thru three new rigged-trade pacts, expanded the drone war, pushed thru the NDAA, Patriot II, expanded arctic drilling, squelched cap and trade, and on and on, so effectively. And more importantly, no GOP POTUS could ever hope to deliver SS and Medicare to Jamie, as Obama is obviously poised and eager to do. It’s odd how weak his office and how mute his pulpit become only when it comes to the progressive policies he pretended to champion on the campaign trail. He’s actively working for the opposition IMO.

        Obama was hired to do by stealth what no GOP frontal assault could ever achieve. Is the walking-dead liberal class equally liable? You bet. Does that excuse or exonerate Obama’s perfidy and deceit? Hell no.

  12. kevinearick

    Boomerz Prizm Ponzi – Promises, Promises

    “…Attacks Escalate Amid Stalemate”

    The empire can surround you with its body politic, but only you can give up your spirit. Throw away the key, shut the door behind you, lock it, and drop the load on the empire in your own time. The empire always focuses on its own problem, pushing the solution farther away. You can’t choose your children; the best you can do is give them life. What they choose to do with it is up to them.

    The American middle class is better at managing ‘free’ trade than any other middle class in History; its politicians should be millionaires, and it should accrue the benefits it is receiving. And American capital is better at fermenting international tension than any other form of capital in History; its bankers should be billionaires, and it should control the reserve currency.

    Together, their marriage is better at destroying natural global breeding patterns and thereby stealing wealth than any other civil marriage in History. Cities employing its civil business practices are destroying small towns vociferously. And the potheads destroying this local economy are driving its last nail with tourism to maintain control over and hoard inputs, laundering their money into the real estate ponzi amidst a collapsing job base. So what? Given a choice between stupid and stupid, choose neither, not the lesser.

    Whether you like it or not, you chose at infancy to comply, rebel, or go your own way, and the strength of your marriage is a function of the symptomatic choices that have resulted. From the perspective of labor, transforming capital, empire participants are all relics of the past, robots fulfilling equations derived centuries ago.

    If you seek a title, a house or a Porsche, labor is not your gig. If you want to know why Henry Kissinger does what he does, examine his roots. Incumbent politicians are not re-elected, Congress does not have a dismal approval rating, real estate is not artificially scarce and labor is not artificially plentiful by accident.

    The federal budget aggregates local resource decisions, all with trade-offs, risks, rewards and unintended consequences, and it depends upon personal data you willingly give it. It’s a mirror. The United States is a military machine; that’s where the pension checks originate, and why its education, health and welfare subsystems for children suck. You cannot reduce military and expect to fund continued expansion of SS and Medicare, short of changing the culture, which cannot be done in real time.

    The only path to the future is changing your self, as an example in your community, work. That’s it. All corporate checks – public, private and non-profit, are welfare checks, for those who choose to compete in a something-for-nothing empire. Yes, boomers are better at it than any other generation in History, and have the toys to prove it. From labor’s perspective, the boomer majority learned exactly the wrong lesson. So why are you competing against it, for empire largesse?

    Which is dumber, a homeless person waiting in a disability line for alcohol, a cop writing that person a ticket for public intoxication or a judge capitalizing the increasing ‘work’ load? Income inequality is a function of marriage destruction, and this empire is better at it than any other. The stronger your marriage, the greater the passive-aggressive attack you may expect from emotional peer pressure, gossip, spying and outright tyranny.

    Economic immobility, stagnation in time, is no accident; it’s ‘equal’ standing under the law. Of course the world’s leaders want America to be the world’s policeman, and accept free trade regulation of their populations. Without internal and external tension, their idiocracies could not exist. Cut their heads off and they grow another, by design. Easy money never ends well. Cute, dumb and irresponsible becomes ugly.

    The sh-show comes ‘round full circle when civil marriage can no longer accelerate its demographic ponzi, by which time the participants hope to be dead. Empires are easy to spot; their future is always the past, and love is a peer pressure crime. Love what you do nevertheless and position your self accordingly. Love is war, against your own ignorance. Choose another that will challenge it, to get the perspective required.

    Majority vote is a group response to stimulus, itself a relic of the past. Crowd-cloud-sourcing grows the prison. If you think, labor is always building an implicit bomb. How you employ it is up to you. Pick your poison, or move forward. If an empire could compete with labor, it would not seek to take away labor’s God-given talent, parenting, and give it to others with no competence for the work. It loses before it begins, which is why it can only buy time, from you.

    1. sue

      Ross Perot was prescient-here’s documentation:


      1. LucyLulu

        Perot’s stance on trade agreements was one of the reasons I voted for Perot when he ran for president, as one of several non-primary party presidential candidates I’ve supported. He has been easily the most credible 3rd party candidate in my lifetime (60’s onward), earning close to 19% of the popular vote. I’ve come to believe since that voting for a third party candidate is throwing my vote away. Our existing bipartisan government doesn’t support their election.

        Did you know that Perot recently donated $1M to Planned Parenthood of TX to offset the cuts in funding?

  13. sue

    Kevin-interesting diatribe nontheless waxes anti-democratic-people’s representative government; libertarian-totalitarian observation notwithstanding.

    Anti-people’s representative government dogma takes many shapes, including propaganda.

    1. anon y'mouse

      you are talking to a bot. or an art experiment.

      whatever it is, I’ve never seen it do a direct response yet.

      1. sue

        anon-I get that-but hit and run needs to be put in perspective-confronted for what it is, as well…

        this sort of “thought” is think tank propaganda, designed to spin hopelessness..

        not unlike mainstream media…as William Blum iterates in his “Anti-Empire Report” this month…it is most telling what mainstream media ignores-all this false angst over “deficits” while Obama FED QE3’s $85 billion per month free money=subsidies for the banks who broke the economy, to bail out the phony products they broke it with. Can’t talk about that, so crank up the speakers to a scream and sell fear. Can’t talk about CDS, or derivatives, and how much it takes to destroy U.S. economy, or where that money resides. Can’t talk about building 7, Pentagon strike, or what is now known about JFK assassination (“The Men Who Killed Kennedy-part 6-The Trurh Shall Set You Free”). Blum’s point is well taken-it’s what they’re NOT telling people that is true-important.

        1. anon y'mouse

          you are, I suspect, totally correct. in my massive paranoia, I see subliminal direction to force you to think things you are not supposed to be aware of. it’s a mindscrambler, and I believe done intentionally.

          then again, I’ve thought that about some of the more rational, “real” posters around here as well.

  14. Gaianne

    //”My guess is that the hidden fault line is future of the US military.”//

    This may be the one new idea in today’s thread. The key point is not the kabuki of the debt-limit fight itself, but the split in the elites that is driving it. Let’s look at this idea.

    It may be that the US military is no longer paying for itself. Now, it is commonly understood that the military is a vast money sink, so how can we talk about it paying for itself? Well, think in the large. For a good while now, the US, with 6% of the world’s population diverts to itself 25% of the world’s resources. How is this possible? We tell our selves charming stories about American cleverness and industriousness, but this is mostly self-flattery. The main, real reason it is possible is the ability of the US military to tip trade relations to our advantage. For most of the second half of the 20th century this was very successful and the military was worth the cost. In the 21st century? Things are not working out so well.

    Americans have never understood how to run an empire: We never imagined there was anything to learn. Also, our very successes led to urgent research into how to counteract them, and the road to full-spectrum dominance has been matched–perhaps overmatched–by strategies of asymmetric war. And these strategies, in turn, are not things we can learn and adapt for ourselves, as they are essentially popular, while we are committed to a course of an ever-shrinking command structure trying to control an ever-enlarging subject population. To sum up in an image: From our failure in Vietnam we learned only how to keep the war out of the news–we did not learn how to win.

    To move from the overview to the particular, not only have we repeated the failures of Vietnam in the Middle East, but we now lose more troops to suicide than to actual combat. The reasons for this are mostly very, very secret, since they are built into the very heart of 21st century military operations, except for one reason which is important and well-known for many decades. That non-secret reason is this: We order the troops to do too many tours of duty. This, like the secret reasons, cannot be fixed: We would need more troops to correct the problem.

    What is the way out? I think there is none, but DARPA has to try, and look what they are pouring money into–robots, drones, and artificially intelligent fire-control systems that can wage war independently of human operators. It is all dystopian science-fantasy, of course, very high-tech and very high-energy, but it is what is wanted to solve the problem.

    What is the problem? The neo-liberal, end-of-history, outsourced, and off-shored economy requires secure, globally-reaching lines of communication tilted to favor the US. The military is thus more important than ever. But it cannot do its job–certainly not in the budget that can be afforded for it. Forget the American peon for a moment, and think about what the military has to do: Secure the favorable trade relations of American enterprizes at a price less than the profits those same enterprizes can extract from the world and allocate back to it.

    In the past the American taxpayer could have been counted a a separate economic entity that could help shoulder the cost, but those days are over: The American peon is broke.

    But now the predicament: What happens to those enterprizes of the elites that depend on a military they can no longer afford?

    Are we getting close to what this fight is really about?


    1. James Levy

      That is one superb post. It strikes at the heart of what they used to call “system’s maintenance” in PoliSci speak. This may be happening because nobody can make the cost to benefit ratios jibe, or they can’t even imagine what those numbers are looking forward. If Peak Oil and Global Warming are real (and I think they are) then the whole idea of that neoliberal “just in time” containerized world may be up in the air, and therefore a significant segment of the elites is largely frozen because they can’t see a way forward. The US military is essential for keeping the World System of capitalists and compradors going, but perhaps some people no longer see that world as viable and are looking for an alternative. From that perspective, neofeudalism makes more sense, as it is based on specific geographical centers and not the world system. I’ll have to think about this. Thanks!

      1. Lambert Strether

        Hmm. Surely capitalism is based on “geographic centers” as well? Arrighi traces the movement of capital from Genoa, to Amsterdam, to London, to Manhattan, to… points East.

        1. James Levy

          I think the whole “Davos Man” thing and the Walmart business model were predicated on the notion that the world was one global market and that the capitalist elite now swam in a different ocean than the rest of us. I read all the World System theory stuff and Arrighi, too, and in part they are right. But the ideology (and to some extent the praxis) of neoliberalism was that money would be set free of borders and regulators to go where it wanted and do as it wished. If you are looking down the road to a far less mobile, far less industrialized, and much poorer globe then finding the right niche and capturing it might look like a better bet than enforcing the current neoliberal global order (which costs a frigging fortune). We’re now considering a conflict between elites bent on international control versus ones bent on subnational control (like having the agriculture of Wisconsin and the oil shale plays of South Dakota in your back pocket by buying the governments there). I’m not sure of any of this, but it is worthy of consideration as we try to figure out what the squabble is at the top (and I think there is one).

        2. Gaianne

          Lambert, Oct 8 at 6:53 pm–

          The shift to the East, yes.

          The US might have managed things better, and lasted longer. We might have been less wasteful, less destructive (and self-destructive). But even putting aside the fact that oil today is of lower quality and higher cost than even eight years ago, the rate of production has peaked and is poised to descend. This means growth is over and capitalism is deadman walking.

          What comes next? Nobody knows, but roughly we can summarize it as jackals and vultures.

          Now if China, for example, can be more energy efficient, a rising empire can occur in Asia for a short while. But energy costs will catch up with them as well, in two decades at the outside. After that, decline is permanent, for them as well as for us.

          Can China remain a world power, while the entire world–including China!–goes into permanent decline? I am sure that is the kind of thing they think about. They are not buying up all the gold they can without a reason!

          I haven’t mentioned food, which will probably be a problem.

          The problem with a race to the bottom is that you soon get there.


          1. Moneta

            I don’t think any country has ever voluntarily cut its total energy consumption.

            Energy is power.

            1. anon y'mouse

              one critique I have of the perpetual push towards higher and higher levels of technological development is the fact that each level seems to increase our energy requirements. that may be my inaccurate assumption though, because each “refinement” also seems to allow for higher population levels which also all want dryer sheets and dryers to put them in.

              I haven’t teased apart which egg comes before which chicken in that, though. but under the plan of constant tech improvement, I don’t see how we avoid an inevitable switch to nuclear power.

              1. Gaianne

                Anon y’mouse–

                You may be right–industrial civilization is not going to willingly change into something else. However, nuclear energy already produces marginal energy returns on energy invested. This is because although nuclear fuel is energy dense, the nuclear plants and all their systems are very difficult and intensive to build. Uranium production, even at current demand, will peak in couple of decades, so the amount of time to be bought going this route is not much.

                Breeder reactors are both unproven and more technically arduous–their have been plenty of failures over the years.

                This all puts aside the probably irrelevant fact that every nuclear reactor that is not decommissioned while we still have cheap oil is fated to melt and burn and leave behind a radio-toxic exclusion zone.


            2. Gaianne


              Indeed, so it seems.

              My point is that energy constraints require a higher priority on energy efficiency. Energy-waste is built into American ideology in a fundamental way, and will not change. Chinese ideology is different. I merely hold open the possibility that they can put a higher priority on efficiency, which would allow their empire to rise even as energy shortages kick in. I did not mention demand-destruction, which is also important–anyone who is knocked out of the energy market frees up energy for others to use. The problem with demand destruction is that thoroughly deindustrialized economies no longer have value or function in the world economy. They become part of the shrinkage.



  15. Sundog

    Prediction: Nomination of Yellen will be a successful distraction from going along with the Grover Norquist playbook of permanent crisis (term of debt limit & government funding measured in weeks).

      1. different clue

        Hopefully she supports applying it against Military Retirement Pensions as well, to the hatred of Military people.
        That might lead to a Military/Civilian coalition against CCPI
        or any other threat to social pensions.

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