Feeds:
Posts
Comments

Posts Tagged ‘John Boehner’

I sat helplessly last weekend on my couch holding my baby in awful anticipation of the carnage that would surely be wrought in the stock markets Monday. Sometimes I knock capitalism, but I do so as a grudging participant. Full disclosure: I own mutual funds and get sick when I see my savings plummet in a couple of days of panicked selling.

My Clark Kent job during the day is financial reporting, and I’ve gained some perspectives over the years about economics. But what I’ve learned mostly is that it’s a difficult subject that one wants to approach with curious humility. As Jesus said in “Paradise Regained,” the wisest of us admit we don’t know anything, and although he was likely not talking about U.S. Treasury bonds, he could well have been. Why? Because the financial experts with the Ph.D.s also didn’t know what would happen if the U.S. were downgraded; the best of them admit that they can only guess based on their experience and incomplete data and pure prognostication. No two experts will agree about what the sovereign debt going from the holy AAA to AA+ really means.

So let’s go over what we do know.

1) Monday, panicked investors, scared of downgraded government bonds, fled the stock market … to invest in downgraded government bonds. That’s a bit like burning a village to save it.

A bit of finance 101: There are two values to a company–its stock price and then its intrinsic value based on what the value of all its inventories, cash flows, etc. are. Everybody panicked not based on the intrinsic value of the companies they held but because they knew other people would freak out. Not knowing the price of catastrophe, they created one. They decided out of pure fear to abandon stock holdings regardless of whether these companies actually held bad government debt on their books.

In actuality, the credit of many U.S. corporations is probably better than that of America right now. Chances are, a lot of these companies we fled Monday had good balance sheets, growing sales and less debt than they did a couple of years ago. But the one thing that ties liberals and conservatives together, evidently, is an adrenal gland. Monday, we all turned into rats in a burning building and cleared out. After buying high, we sold low. Some investors figured it out Tuesday and went back. But it was likely rich people taking advantage of suckers, getting deals, and getting richer.

Government debt will indeed become more expensive–for the government that is. It will now cost more for the United States (i.e., you and me) to borrow, which could indeed chill the economy at a crucial time. But most of the world hums along assuming that the mighty U.S., the biggest economy in the world, can still pay its bills. Double AA is still a far cry from deadbeat dad. Sure, more expensive debt could mean money doesn’t flow around as much. But there are a lot of economists who say that’s not such a bad thing. Having a world awash in cheap money forever, the way we have in the past few years, is not possible or desirable. In  fact, it’s one of the reasons we are in our current economic crisis, because we can’t use interest rates already at zero as an incentive anymore by lowering them. A weak dollar means that everybody is looking for better places to park their money. Could be stocks. Could be gold. In any case, those assets will become inflated again–priced at something beyond what they are really worth, exhorting suckers to buy in and create, to wit, a new recession scenario.

2) Standard & Poor’s cannot be entirely trusted when it downgrades U.S. debt.  The company made not merely an analytical decision to downgrade on Friday, but a political one–and I’m talking about the politics of S&P. I used to work at Standard & Poor’s, not as an analyst but as an editor, and though I wouldn’t dare create my own credit analysis of the United States, I did read the company’s press release, and I do know a few things about the culture there and the hurt pride in its ranks when it was caught with its pants down in 2008. The company had before the financial meltdown given high ratings to mortgage backed securities that were not remotely deserved, and this echo chamber of positivity allowed a lot of shitty paper to be passed around like botulism to some of our biggest financial institutions. Standard & Poor’s, as well as the other credit agencies, are in a strange position. They can behave like quasi-government organizations, because they serve a quasi-regulatory function: U.S. corporations must by law have credit ratings if they want to borrow. For the same reason, it is assumed that S&P, Moody’s, etc., offer completely objective opinions on companies’ creditworthiness. But that myth was shattered in 2008. Standard & Poor’s is not a monastery; it is the single most profitable subsidiary of McGraw-Hill. And the public is not its main customer–the companies being rated are. I would never attack the integrity of my former colleagues or slight their intelligence and probity, but the whole process at the credit agencies is fraught with conflict of interest in the agency’s desire to please the corporations writing the checks. Since the credit crisis struck, obviously S&P has had to do a lot to improve its image. So it had something to prove two weeks ago when it slashed U.S. credit. The stakes were raised when the U.S. government (who, we find out, did get to review their own rating) found mistakes in the accounting and the agency had to backtrack. At the end of the day, S&P couldn’t look like the borrower was again dictating the terms, and so Standard & Poor’s practically admitted in its press release that Washington in-fighting had as much to do with the downgrade as the financial facts on their face. S&P said a pox on both your houses (of Congress). It sounds awfully superficial and defensive.

3) But hey, as long as we’re blaming politics, let’s finally admit: The Tea Party Republicans are psychos.

Remember, the debate over the U.S. and its creditworthiness has to do not over whether the United States can pay its bills (it certainly can) but about whether it will. Lots of people, including the Congressional Budget Office, said very plainly last year that if you want U.S. debt as a percentage of GDP to skyrocket to 80% and beyond, all you have to do is keep George W. Bush’s odious tax cuts in place. People mistakenly think that the blame is equal here: Democrats spend, Republicans won’t tax. But only one side of the Congressional aisle showed its agenda so egregiously, using the threat of economic collapse to get its way: the GOP. Not hard to expect, since Republicans have not compromised on tax issues in, I don ‘t know … ever. Barack Obama (who, like Bill Clinton seems to draw bigger ire from crazy Republicans even as he does exactly what they want) has thus found himself trying to make medicine not with responsible, moderating budget balancers but with a Manson Family elected to office using the simplest, stupidest, most meretricious rhetoric there is on out of work American gulls. Michele Bachmann, et al., have now practically admitted they are willing to destroy the American economy for ideological reasons (protecting the rich with the absurd conviction that they are protecting all of us). Here’s news, Republicans: income taxes have not gone up in years and years and years. In fact, Barack Obama cut them in 2009 and extended Bush’s deep cuts at the end of 2010.

And it hasn’t helped at all. The economy does not care. What is needed is economic activity to create jobs, and the government spending you so despise IS economic activity.  Your piggish unwillingness to concede this fact, something understood by most business people and most economists (if you bothered to read one book or earnings call), has you teetering on a bizarre precipice between cognitive dissonance and schizophrenia. Many Republicans were outraged that Newsweek ran a picture of Michele Bachmann this week with crazy eyes. Well, the news, this week, is that professional pregnant woman harasser Michele Bachmann is crazy.

The New York Times is as confused as ever about the Tea Partiers and what they want. Two years ago, the paper wrote a piece on these scrappy town hall rebels and decided they were just honest libertarians disgusted with both parties and government overreach. Now, evidently, the paper or the Tea Partiers themselves have changed their mind. The movement is  just rock-ribbed Reaganites, who didn’t really care about spending that much, they really just wanted low taxes and a strong military. In other words, they don’t want the government to spend money unless it’s on things they want the government to spend money on. I’m not the New York Times, so I don’t have to patronize them: Tea Partiers are stupid. They are stupid down to the crust on their toenails and the slime on their outhouse doors. Libertarianism as they define it is anarchy. Socialism as they define it is 8 hour work days and child labor laws and affordable health care and banking regulations. They have no philosophy other than disgruntlement, no basis for the arguments they make other than faith. They demand Social Security and a strong military and refuse to pay for both. They demand entitlements for themselves but call any other form of government assistance “wealth redistribution.” It is likely that their aging parents, if still alive, are getting 50% of their income from Social Security, and their answer to that is: “Government is the problem.”

4) And so I come to the last point. Comedy works in 3s, but I’m adding a fourth because this is unfortunately not funny: Last week was your own fault, America. Blame Congress. Blame Barack Obama. It’s a waste of time. It’s you, America. You clearly wanted a war in Iraq you would not pay for, along with a prescription drug benefit you would not pay for, and these things are still source of most of our budgetary woes. (No, it’s not Barack Obama’s health care plan.) You wanted affordable health care but changed your mind when presented with the ugly details. You protect rich people because you think one day you could be Madonna. Yet you, as if your eyes were warped by an optical illusion as you stand under a skyscraper, don’t really understand how big it is–how much richer the rich are and how much they have the game stacked against you.

John Boehner is not the devil. He’s just an elected reflection of your confusion. Barack Obama is not the antichrist. He’s a man you ask to do everything, and whom you hate when he doesn’t accomplish it … and sometimes hate when he does. So stop griping, America. Own up to your own part in this and enjoy the second job you’re going to have to take at night to live the way your parents did.

Advertisements

Read Full Post »

The Republican-controlled House of Representatives, having postponed legislation for a few days to observe a more civil tone after a weekend of violence, has returned to work in a spirit of compromise and unity with the Democrats across the aisle, introducing a new piece of legislation showing the shared convictions of a nation coping with loss.

It is known by its unifying title, the “Repealing the Job-Killing Health Care Law Act.”

“Hey, wait a minute …” said Democrats. “That’s not very nice.”

A largely symbolic piece of legislation, since the Democrats still control the Senate, Republicans tweaked it a bit so it read instead, “Shooting Down the Health Care Act Act.” In lieu of that, they suggested the “Cutting Life Support on the Health Care Act Act,” and “Killing Health Care Reform In A Bathtub,” and the “Returning to a Belligerent Posture Following A Weekend of Mock Civility Act.”

“After the tragic events of last weekend, we have hopefully returned to a new era of friendship, noblesse oblige and tact,” said majority leader Eric Cantor as he introduced the “Terminating the Health Care Bill With Extreme Prejudice Act.”

Were those bills to stall, Republicans say they would introduce the “Euthanizing the Health Care Reform Act With An Overdose of Morphine and Digitalis,” and the  “Guns Don’t Kill People, The Health Care Reform Act Kills People Act.” Like the others, these bills aim to remove last year’s main Democrat achievement, a law aimed of insuring 95% of all Americans by offering subsidies to small businesses and increasing the age at which children can no longer remain on their parents’ insurance plants. If that bill fails, Republicans say, they will continue to pursue a spirit of concordance and compromise by floating a bill, again largely symbolic, called the  “I Fuck Your Health Care Bill in the Eye Socket Reconciliation Act,” and if not that, they’ll try the “You Talking To Me? Health Care Reform Assassination Act.”

Other titles for future legislation, should these not pass, are the “Beheading the Democrats’ Stupid Health Care Legislation,” the “Snuffing Out the Health Care Reform with a Pillow Act,” the “Throwing Lit Matches At Democratic Faces Act,” the “Sowing Discord For Cheap Political Points Act” and “The Patriot Act.”

Again, all mostly time-wasting, symbolic titles that won’t go to Senate and really don’t do anything other than promote the new spirit of harmony.

“Americans after this weekend are showing a new unity,” said John Boehner as he introduced the “Screw Unity and Screw U Act.” We cannot let a few deranged individuals upset our Democracy and spread dissension, and that’s why we support this new bill, subtitled ‘The Democratic Criminals Are Assaulting Your Liberties Act.'”

After those bills die predictable deaths, having served absolutely no purpose at all, Republicans say they may simply call it the “Supporting Gabrielle Giffords By Repealing Legislation that Gabrielle Giffords Supported Act.”

Read Full Post »

Here are several first drafts of President Obama’s speech following his party’s upset in the midterm elections on Tuesday.

My fellow Americans,

I stand here before you today humbled, but also a bit confused about what you might have been thinking Tuesday when, like a lot of spoiled brats, you voted…

Tuesday was a historic day in America’s history. After we Democrats spent the last two years communicating the need for changes in our health care and financial sectors, you Americans took the initiative by boldly shooting the messenger…

My fellow Americans,

I’m still scratching my head at how shit-all stupid you could be…

My fellow Americans,

We saw at the polls Tuesday that Americans are very impatient and angry about the pace of change. Therefore it should not be surprising that they elected people to Congress who don’t actually agree with them on anything …

Russ Feingold has been a maverick legislator. That’s why you brave mavericks out there kicked him to death like a scrawny yearling…

Is it just me or does Nancy Pelosi look like a scary helicopter mom?

Dear Americans,

Did you read the damn health care bill? It said you didn’t have to change insurers. It was right there in print. I guess asking that you read is too m…..

Dear Voters,

To my independent friends in particular: Do you just vote against everything or do you actually have any beliefs?

My fellow Americans,

You say you want to roll back big government, and that you are mad the government has failed to get you a job. I am very sorry it is too late for you to work through the logic and do the math on that statement and change your ghastly abhorrent vote that you made on T…

My fellow Americans,

You know, right wingers, if you screamed “capitalized medicine” as often as you scream “socialized medicine,” you’d probably realize that both sound pretty scary, that is if you could think for two …

Half of voters unhappy with the health care bill thought it went too far. Half thought it didn’t go far enough. John Boehner sees this as a mandate. If he won the lottery, I suppose he’d think it was because he was smart.

Dear voters,

I want to congratulate the wealthiest 2% of Americans for winning Tuesday’s election. Oh let’s admit it, you win every election…

You kicked out more people who voted against health care than voted for it, just because you seem to like kicking people out. If I’ve learned anything, it’s that I shouldn’t listen to you at all.

Dear voters,

How about that Charlie Sheen? What a putz!

Dear voters,

I’m putting “too big to fail” on the dollar, since you all seem to like meaningless sentiments.

My fellow Americans,

I have tried my hardest to remain nonpartisan and stay above the fray. But I guess it’s hard to stay above the fray when you are dealing with a chimpanzee who is trying to eat your face, therefore …

My fellow Americans,

Boy was I ever shellacked this week…

Read Full Post »