Wednesday, May 29, 2013

Out To Lunch

They say you only hurt the ones you love. If that's so, then Bob Dole and Olympia Snowe must be absolutely infatuated with the GOP.  Dole, in an interview on Fox News, said Ronald Reagan could not have made it in today's Republican Party. He elaborated further by saying, "I think they ought to put a sign on the national committee doors that says 'closed for repairs' until New Year’s Day next year — and spend that time going over ideas and positive agendas." Snowe, for her part, agreed with Dole, saying Republicans need to "rethink their approach as a political party."

Bob Dole and Olympia Snowe are but the latest in what has become a long list of conservatives who have expressed their reservations about what has happened to the Grand Old Party. Molly Ball in The Atlantic offers a suggestion on what the Party can do to right the ship. To sum up, Republicans need to heed the lesson that the Democrats learned in 1988, after they got their clocks cleaned for the fifth time in six tries. To be fair, some of her points are valid.

Of all the Democrats’ many problems in the late 1980s, the biggest was denial. Party activists professed that their nominees were losing not because they were too liberal but because they weren’t liberal enough. Or they said that the party simply had to do a better job of turning out its base of low-income and minority voters. Or that Democrats’ majorities in Congress and governors’ mansions proved the party was still doing fine. Some insisted that voters were being hoodwinked by the charismatic Ronald Reagan, or were just too racist and backward to embrace the righteousness of Democratic positions.

That certainly sounds an awful lot like the Republican Party of today. Indeed, an honest and objective view of politics over the years would certainly conclude that each party's base has probably suffered from the rose-colored glasses syndrome at one time or another. A bubble is a bubble, regardless of ideology.

But here's where Ball's train of thought jumps the track. While the Democrats were guilty of clinging to failed strategies and not crafting a message that mainstream America could identify with, they were never crazy or dangerous. Out of touch, maybe, but hardly out to lunch.

Find me the Democratic equivalent of a Michele Bachmann or Louie Gohmert or Ted Cruz or Rand Paul. You won't because they don't exist. Walter Mondale may have been the cure for insomnia and Michael Dukakis a Saturday Night Live punch line, but neither embarrassed his party the way the aforementioned dimwits do on a regular basis.

Michael Tomasky nailed it perfectly when he said:
The big problem with today’s Republican Party isn’t its policies. Certainly, those policies are extreme and would be deeply injurious to middle-class and poorer Americans should they be enacted. But Bob Dole wasn’t thinking, I don’t believe, just of policies. He was talking about the whole package—the intolerance, the proud stupidity, the paranoia, the resentments, the rage. These are intertwined with policy of course—indeed they often drive policy. But they are the party’s real problem. And where these “reformers” fail is that they never, ever, ever (that I have seen) criticize it with any punch at all.

And the source of all that paranoia and rage is none other than Fox News and the AM radio dial. For all the talk about the liberal bias in the media, no one approaches the vitriol of a Rush Limbaugh or Sean Hannity. There is no left-wing equivalent that comes even remotely close. Years of stoking a fire under a base that has been convinced everyone is out to get them has created a no-win scenario for the GOP. Anyone who even hints that the Party needs reforming is shunned and called a RINO.

Witness the fallout over Chris Christie's embracing of President Obama after Superstorm Sandy hit the Northeast. Whether or not you agree with Christie's positions or even whether or not you like the guy personally, he put his constituents ahead of his Party and has paid the ultimate price. The result is that he's about as popular among the far right as a cockroach at a picnic. Mark Levin refers to him as Krispy Kreme every chance he gets. And you should really get a load of what Limbaugh recently said about him.

This, ultimately, is the fatal flaw in Molly Ball's reasoning. You see, the Democrats eventually found the strength to pivot to the center and, when they did, nominated Bill Clinton in 1992. Some in the base may not have been all that enthusiastic or comfortable about compromising what they considered their core beliefs, but the majority of them bit down hard and swallowed enough of their pride to see the forest for the trees.

There is no indication that the far right is ready to have such an epiphany. Worse for the GOP, they appear to be doubling down on the crazy. Even now they are actively going after anyone not kowtowing to the Party orthodoxy. Marco Rubio, once the darling of the Tea Party, is being called out for his embracing of immigration reform. How can a political Party be expected to compete on a national level when it can't even understand basic demographic shifts in population?

The answer is it won't. The Republican Party seems hopelessly lost in its own feedback loop. It is unable or unwilling to come to grips with a staggering reality: that its own twisted ideology is responsible for its current predicament and nothing short of a complete break from that ideology will prevent what most see as a ghastly demise.


Saturday, May 25, 2013

Obama v. Obama

As scandal after scandal continues to swirl around him, it's becoming increasingly clear that Barack Obama's biggest challenge may not be from the Republican Party after all. Benghazi as a coverup story is quickly going the way of the Loch Ness Monster and, with respect to the IRS mess, the real culprit appears to be the Supreme Court which, thanks to Citizens United, allowed an unprecedented and alarming growth of soft, untraceable money into hundreds of 501(c)(4) groups. That decision, if not reversed, threatens to destroy the very republic.

No, Barack Obama's real nemesis is the man staring back at him in the mirror. That's right, folks, the chief enemy of Barack Obama is none other than Barack Obama. Worse, he appears to have declared war on himself, or at least on the man that most of us voted for.

Lost in all the fake scandals is the sad, but undeniable truth that the President is facing some rather serious scrutiny from progressives and libertarians alike over certain policies that are deeply disturbing to say the least and have far-reaching consequences both for his legacy and for the country.

The worst of these is the one involving the Department of Justice. The unwarranted and completely over-the-top seizure of phone records and emails of journalists should concern everyone regardless of political affiliation. It is one thing to protect vital national interests; it is quite another to subvert the Constitution to do it. With all the talk about Nixon lately, Obama's Justice Department is starting to resemble that of another former Republican's: George Bush.

There is no way to soft soap this. Apologists for the Obama Administration miss an important point. While freedom of the press was never meant to be taken carte blanche, what Eric Holder's department is doing is so egregious and abhorrent, it has become a lightning rod for constitutional scholars who are naturally concerned about what this might mean for journalism down the road. Whatever else you may think about the AP and Fox News, neither of them are in the same league as WikiLeaks.

It's also rather hypocritical for the DOJ to go after "whistle blowers" while at the same time turning a blind eye to the shenanigans that brought about the worst economic collapse since the Great Depression. To date, there has not been one prosecution of an executive from the financial industry over this scandal; not one! I've heard of golden parachutes but perpetual get out of jail free cards rises to the level of obscene. James Rosen is labeled a "possible co-conspirator" under the Espionage Act, yet Lloyd Blankfein and Jamie Dimon are walking the streets, free men, while actively lobbying Congress to rewrite the financial laws that will gut Dodd-Frank and also ensure their immunity from prosecution for any future calamity their criminal escapades will no doubt bring about.

Now that's scandalous!

But it doesn't end there. Obama's use of drones to carry out strikes against high-level terrorists has drawn the ire of many progressives who have expressed concern over its moral and ethical implications. What does it say about a nation that supposedly cherishes freedom and champions human rights that it would send an unmanned weapon into a sovereign nation for the express purpose of killing a civilian? Many Middle-East experts have warned that the strikes, while surgically successful, have undermined our standing within that region. That is quite an indictment, given the protracted wars during the Bush years.

I must confess I am of two minds on this one. On the one hand I am cognizant of the threat many of these individuals pose to the United States. Barack Obama, as commander in chief, certainly has an obligation to defend the homeland from those threats. He hasn't the option of being a sheep among wolves, I get that. But if there has been one constant and consistent theme within the Middle East over these many decades it has been this: America is seen, and rightly so, as a nation that has propped up ruthless dictators and exploited valuable resources for its own narrow interests; interests that were often inimical to those of the native populations in that region. It is hard to imagine that Obama's drone program isn't causing still more damage to an already badly tarnished reputation. Is Obama missing the forest for the trees? Put another way, have we not lost the war in our pursuit of winning a battle?

And last but not least we come to Gitmo. It was just over four years ago that a newly sworn in President Obama promised to close down the prison. To this day it remains open and over 100 detainees are on a hunger strike and are being forced fed to keep them alive.

At a recent press conference, Obama was interrupted by a heckler over the unnecessary delay. Yes, it is true that Congress had a lot to do with Gitmo staying open by imposing restrictions on the transfer of detainees, but the fact remains that the White House bungled the whole thing by coming to the table with its own plan late and then leaving Congressional Democrats "twisting in the wind." Whether by design or circumstance it sure looked as though the Administration wanted the prison to remain open.

Now, four years later, Obama is reopening a sore wound. Is he serious? Only time will tell. Holding a press conference is one thing; taking action is another. The DOJ, drones and Gitmo. That's quite a trifecta.

The President confessed that he is “troubled by the possibility that leak investigations may chill the investigative journalism that holds government accountable.” But it isn't the ability of investigative journalists to do their jobs that should worry him most; it's the overreach of government that would send such journalists to prison merely for doing those jobs that is the crux of the matter.

He then quoted James Madison when he said, "No nation could preserve its freedom in the midst of continual warfare." I would submit that the only true warfare going on here is the one raging within Obama's soul. And the only way for him to preserve his own freedom is to resolve those inner conflicts and contradictions that are slowly eating away at him and his presidency.

Who is he? What does he stand for? And, most importantly, what legacy does he want to leave behind? For a man who has had an extremely difficult time drawing a narrative and defining himself, Barack Obama is now at his own personal "crossroads" as it were.

The next move is his.


Tuesday, May 21, 2013

Crisis Management

Jon Favreau has a piece in The Daily Beast that, if I read it correctly, is meant to put all us "handwringers" and "bed wetters" in our place. As one of Barack Obama's speech writers, he knows the man better than most.

In his defense, he does make a number of salient points. A lot of us on the Left do tend to overreact. I remember the Denver debate very well. While I certainly wasn't calling for the President to "resign" over his performance, I was, nevertheless, extremely concerned; the same way a football coach who just saw his team squander a three-touchdown lead would be concerned. The specter of Mitt Romney stealing the election was more hellish than I could imagine.

Favreau is correct when he says that Obama isn't interested in "chasing news cycles" or adhering to Washington's "timeline." But while it might be admirable to have a president who would prefer to be "right" over being "first," I suspect that might be part of his problem.

Throughout most of his presidency, Obama has resisted the knee-jerk, reactionary, politics as usual approach to governing. Because he tends to be cautious, sometimes to a fault, more often than not, his opponents tend to get an early jump on him. That was clear all throughout the healthcare debate. Obama believed that in the end the public would see through the rhetoric and rationally come around to his way of thinking. He clearly underestimated the resilience of the opposition. The GOP redefined the whole debate and turned the tables on him. Yes, "Obamacare" eventually was passed, but to this day it remains the single most controversial piece of legislation ever signed into law. Astonishing, considering it is nothing more than Romneycare on steroids.

The debt-ceiling crisis of 2011, which Favreau cites in his piece, is, sadly, another example of Obama badly misreading the resolve of his opposition. Lost in all the insanity of that summer was the fact that his inability, or perhaps unwillingness, to strike the right deal in the 2010 lame-duck session was what brought the whole issue to the fore in the first place and, I might add, brought about the now infamous sequester that supposedly nobody wanted, but which we can't seem to get rid of.

And now we come to Triplegate (the Benghazi, IRS and AP scandals). Nobody not seriously hooked on crack or an escapee from an insane asylum believes for even a minute that the President participated in a coverup. Charges of Watergate and Nixonian behavior are sheer lunacy.

And yet this White House has spent most of the last week and a half having to defend itself, not so much against the facts, which as they slowly come out continue to exonerate the President from wrongdoing, but from the perception of ineptitude.  While Obama may not want to admit it, perception counts, especially in a town as polarized as Washington. That he hasn't come to grips with this reality is quite revealing.

It has been his failure to see the urgency of the scandals as they were brewing, more than the scandals themselves, that has plagued him the most. When Jon Stewart and Carl Bernstein start throwing you under the bus, your problem isn't merely narrative building, it's good old fashioned common sense.

Yes, many of us on the Left are nervous ninnies. And maybe we could all take a chill pill now and then. But Barack Obama would do well to remove some of that ice water that flows through his veins and occasionally see the political forest for the trees. It wouldn't eliminate every bump in the road, but it would make the journey a little less haphazard.


Saturday, May 18, 2013

Harry Reid Reaches Defcon 1

Just file this under, "What the fuck took you so long?"

Harry Reid finally got the message. After more than four years of trying his best to be the reasonable man in the room, giving the minority party the benefit of the doubt and allowing nominee after nominee to be filibustered, the majority leader has had enough.

According to a story in The Washington Post, Reid is prepared to undertake real filibuster reform this July if Senate Republicans block three upcoming nominations. The measure, referred to as going "nuclear" by its proponents, would be limited to judicial and executive branch nominations and would not affect legislation. Ostensibly, Democrats would only need 51 votes to get a nominee through the Senate, instead of the 60 votes now required.

The reason for the delay till July is due to Democrats' concern that if Reid moves forward with the rules change now it would likely kill any chance of passing immigration reform. While that is indeed a legitimate concern, most pundits have argued that Republicans stand to lose more by balking on a reform bill than Democrats, especially given the nation's demographic shift.

Of course there's always the possibility that Republicans will blink and allow all three nominations an up or down vote in the chamber. They've done it before. Call it a temporary stay of execution. That would certainly ease tensions somewhat and avoid the showdown that Reid and some Senate Democrats still don't want.

Others, though, believe a rules change is inevitable, whether it comes in July or down the road. The simple fact is that the GOP has been unwilling to listen to reason. Appeasement has clearly not worked. Sooner or later Harry Reid will be forced to do the obvious.


Friday, May 17, 2013

All Apologies

My Fellow Progressives,

I wish to sincerely apologize for a few of my most recent pieces. It seems I may have been a bit hard on Barack Obama and I know how upset that makes some of you. Reading some of your comments really brought a lump to my throat. I had no idea I had hurt you that badly. Please know, that was not my intention.

If I had only known that pointing out that our fearless leader should have gotten out in front of the current controversies that have plagued his administration a bit sooner would cause you such distress, I would never have mentioned it; or that pointing out that his failure to effectively deal with them might derail his second term agenda might be viewed as an affront to your sensibilities, I would have blotted it from my obviously right-wing propagandist brain.  And can you imagine how touched I was when so many of you expressed your true feelings to me over my criticism of the President when he agreed to waive the FAA requirement to furlough its workers. As our lord and savior, Bill Clinton, used to say, "I feel your pain."

So let me just say this to those of you who were insulted by my impertinence. I will never again critique Barack Obama. From here on out I will only write "positive good stuff," as one reader was so kind to point out. And right you are for bringing that to my attention, oh enlightened one.

What on Earth was I thinking ruffling so many feathers in such an unprofessional manner? I should be flogged and then apply for a job on Fox News, as one reader suggested. Or was that apply for the job, then get flogged?

Well you can bet the ranch that I have learned my lesson, my fellow comrades. Going forward, you can count on my loyalty to the President. Not only will I refrain from being critical of him, if I hear anybody else attacking him, I will do everything in my power to rip that person a new one, just as so many of you have had the courage to do with me.

After all, it's us against them and I would much rather be an us than a them.

Sincerely, your repentant servant.

P.S., when do I get my tin foil hat?

Thursday, May 16, 2013

The Real Threat to Obama's Second Term

According to the CBO, the budget deficit will shrink to $642 billion this year, the lowest it's been since 2008. That's approximately $200 billion less than a previous estimate from February.  Even better, the deficit is expected to be around $378 billion by 2015.

That should be great news and you'll be delighted to know I found it somewhere between the stories about Michael Vick being accused of cheating and Angelina Jolie's decision to have a double mastectomy. Not to worry, though, it was definitely ahead of the story about Selena Gomez showing off her curves in a bikini. Boy, I bet Justin Bieber is kicking himself right about now.

Oh, the lead story? You'll never guess. Seems there's this little thing going on in Washington having to do with Benghazi, the IRS and the Associated Press that is all the rage. Our beloved President is up to his ears having to fend off charges of coverup and incompetence. It's kind of like being trapped in a nightmare you can't wake up from.

Of the three "scandals," Benghazi looks like the odd man out. What was once considered to be a pissing contest between the CIA and the State Department, now appears to be a pissing contest between ABC and CNN. Both networks have released emails that ostensibly contradict each other regarding the talking points that Susan Rice used in her now infamous talk show appearances. With each passing day it looks more and more like a major screw up, nothing more. Tragic, but certainly not rising to the level of a coverup, no matter what Darrell Issa says.

It's the other two that have the potential to cause the most damage. The IRS scandal is the perfect fodder for the wingnuts on the Right who were already paranoid about the government to begin with. Now, they're practically in hyperdrive. How incompetent do you have to be to make Mark Levin sound legit? Pretty damn incompetent, that's how. Obama took an important first step by forcing the resignation of the acting director of the agency. But more heads need to roll here.

The real headache, though, is the AP scandal. There's an old, established axiom in politics. You don't fuck the fourth estate. Never. It always fucks back. Nixon found that out the hard way. Even if the DOJ had a legitimate reason for going after one or two reporters who it felt had jeopardized national security and endangered lives, this wasn't the way to go about doing it. You don't use a shark's net to catch a minnow.  It was stupid and unnecessary.

The result of this fiasco is that the media now has its dander up and is taking it out on the Administration. In case you missed yesterday's briefing - AKA, the feeding frenzy - Jay Carney was being savagely ripped apart by the White House press corp. Reporters who normally sleep walk through such briefings were channeling their inner Edward R. Murrow.

Great. After nearly three decades of phoning it in, they suddenly discovered they're reporters. Who knew?

Don't think for a moment that this is just some temporary phase that will die of its own volition. For over four years, Barack Obama has enjoyed a rather cordial relationship with the press. At the risk of sounding like a Fox News' correspondent, you could say he's been given the benefit of the doubt more often than not.

As Billy Joel once sang, "Say goodbye to Hollywood." I'm not saying Obama is the modern-day equivalent of Richard Nixon. For one thing, Nixon was a total dick and everyone knew it even before Watergate broke. Obama is nowhere near that point and most of the media - those that aren't crazed on Meth - understand that. But the heat is about to go up more than just a few degrees.

If I were the White House, I would expect a lot more confrontational press briefings. The "in your face" treatment is here to stay for the foreseeable future. The media is funny that way. It's kind of like a baseball team. When one of their own gets thrown at by the opposing pitcher, they all come together to protect their player. Deep down, they know it's bullshit, but outwardly it's all for one and one for all.

All this adds up to a major dilemma for the Administration. Obama has, at best, seven months with which to achieve something substantive for his second term. Immigration reform, gun control, a grand bargain, all are achievable, but the window of opportunity is rapidly closing. The midterms are next year. Good luck getting anything through Congress in an election year. After that it's primary season as both parties strut out their potential hopefuls for 2016. If Obama can't clean up this mess soon, he will be a lame duck president with a hostile Congress and a pissed off press corp chomping at his heals.

Legacies aren't written; they're made. Barack Obama must decide what his will be. And he better do it quick before it's too late.

Monday, May 13, 2013

The Batshit Hits the Fan

Memo to Barack Obama: There's a storm brewing in Washington and it's bearing down on your White House. This storm makes Superstorm Sandy look like a cold front, that's how big it is.  You can blame the opposition party all you want, but this time, the blame rests squarely with you. 

Your crime? Perhaps nothing. Perhaps the talking points memo clusterfuck after the Benghazi attack was nothing more than a pissing contest between the CIA and State; perhaps the IRS scandal will end with a few over zealous officials being fired, nothing more; perhaps there was a legitimate reason why the Department of Justice "obtained" phone records of AP reporters; and perhaps none of this will have legs and will eventually blow over in due time.

I wouldn't count on it.

For the first time in your presidency, your opposition hasn't had to fabricate a story about you. This one stands on its own two feet. The blood in the water is real and it's yours. What's worse, the wound is self inflicted. This isn't some bogus death panel canard, sir; it's legitimate and it's a beaut.

Do I think you had anything to do with a cover up? Of course not. Are the Republican attack dogs politically motivated? Is the Pope Catholic? And let's get one thing straight: this isn't Watergate, no matter how many times Fox News says it is.

That's hardly the point. The issue at hand, Mr. President, is that once more your inability to get on top of a festering issue, define it and prevent it from becoming a crisis is threatening to bring down your administration.

Think I'm overreacting? Maybe, but consider this. Bill Clinton got impeached for lying about getting a blow job in the Oval Office. If you don't think a Republican Party that is ten times more "out there" and loathes you even more than they did Bubba, is capable of impeaching you, then you're delusional. Infidelity is nothing compared to the deaths of four Americans, let alone the contempt people historically have had for the IRS.

Honestly, I don't know how this plays out. The damage maybe too much to overcome. But this much I do know. You need to get out front and do some damage control fast. Jay Carney's just not cutting it; not even close. Every time he takes that podium, the hole gets deeper. Right now, you're about a hundred feet from Beijing.

If you have any hope of leaving a lasting legacy in your second term, this must be put to bed. Your press conference was a nice start. But much more is needed. Defending the honor of Hillary Clinton and Ambassador Pickering is nice but ultimately superfluous. It's not their honor that's at stake here, and, with all due respect, if there's one thing we know about the Clintons, it's that they can take care of themselves. A few "heads will roll" would be appropriate right about now.

You need to take charge of this situation before it deteriorates any further.  Whether your finger prints are on the weapon or not is irrelevant; you own it by virtue of the fact that you're the commander in chief. Due mainly to your own incompetence, the wingnuts on the Right have become super charged like never before. If they can get all ramped up over bullshit like birtherism, imagine just how rabid they will get over a real story.

Imagine the Republicans not only holding the House in 2014, but taking back the Senate. That would be the definition of a nightmare scenario. Each day you fail to effectively deal with this issue brings that scenario one day closer to reality.

For four years the GOP has tried to stop you in your tracks. They have lost at the ballot box and in the court of public opinion. It would be the crime of the century to hand them this victory virtually uncontested. 

Shame on you, sir, if that happens!

Thursday, May 9, 2013

Tip of the Hat

Picking up on an earlier Keynes' theme, I stumbled upon this piece courtesy of David Frum. It is well written, well laid out, thoughtful, insightful and, given the current state we're in, economically speaking, highly relevant. There's nothing like a former drinker of the Kool-Aid to dispense with false doctrines.

What's amazing about the piece is how closely it aligns itself with what Paul Krugman has been saying for years. Hmmm.

Keynes’s Biggest Mistake


Bruce Bartlett held senior policy roles in the Reagan and George H.W. Bush administrations and served on the staffs of Representatives Jack Kemp and Ron Paul. He is the author of “The Benefit and the Burden: Tax Reform – Why We Need It and What It Will Take.”

Over the weekend, there was a kerfuffle about whether Keynesian economics ignores the long-run implications of its policies. The Harvard historian Niall Ferguson asserted that this was the case and said that it resulted from the British economist John Maynard Keynes’s homosexuality. Professor Ferguson said that those without children, as is the case with most gay men and women, necessarily had less of a long-term view of the world than those with children who will live on after their death.

Professor Ferguson has apologized for his off-the-cuff comment, which was widely interpreted as being homophobic. But before this incident fades from memory, I’d like to take the opportunity to discuss the questions raised by it: Is Keynes’s sexual orientation at all relevant to the interpretation of his economic theories? Does Keynesian economics completely ignore the long run?

First of all, Keynes’s sexual orientation has been known for some time, at least since publication of Michael Holroyd’s biography of Lytton Strachey in 1968. Strachey was a noted biographer, an active member of the literary Bloomsbury Group and one of Keynes’s lovers.

The revelation of Keynes’s homosexuality greatly excited his right-wing enemies, who have long used it to defame him and discredit his theories. A 1969 book, “Keynes at Harvard: Economic Deception as a Political Credo,” contains a long chapter on the subject, which describes Keynes as “a lifelong sexual deviant.” Like Professor Ferguson argued, it says that Keynes’s “aversion to human conception” was a key to his economic theories, which the book likened to Bolshevism.

The author of “Keynes at Harvard” is Zygmund Dobbs, but the driving force behind it was Archibald B. Roosevelt, who founded the Veritas Foundation, which published the Dobbs book. The youngest son of Theodore Roosevelt, Archibald Roosevelt was very active in right-wing politics throughout his life, attacking both Presidents Franklin D. Roosevelt and Harry S. Truman for coddling communists. In 1954, Archibald Roosevelt demanded that an organization named for his father rescind an award to the United Nations under secretary Ralph Bunche because of his “close affiliation with communism.”

Brad DeLong, an economist at the University of California, Berkeley, has posted a long list of conservative attacks on Keynes that have used his homosexuality as a reason to reject his economic theories. But even economists who had no interest in this aspect of Keynes’s life, like the economist James Buchanan, have criticized Keynesian economics for its excessively short-term focus and negative long-run consequences.

Unfortunately, Keynes himself was to a large extent responsible for giving this criticism of his work currency. That is because he titled his most important work “The General Theory of Employment, Interest and Money.” The term “general theory” obviously implies that it is applicable at all times, in all economic situations.

This was an unfortunate error, because the core insight of Keynesian economics is that there are very special economic circumstances in which the general rules of economics don’t apply and are, in fact, counterproductive.

This happens when interest rates and inflation are so low that there is no essential difference between money and bonds; money, after all, is simply a bond that pays no interest. When this happens, monetary policy becomes impotent; an increase in the money supply has no stimulative effect because it does not lead to additional spending by consumers or businesses.

Keynes called this situation a “liquidity trap.” Under such circumstances, government spending can be highly stimulative because it causes money that is sitting idle in bank reserves or savings accounts to circulate and become mobilized through consumption or investment. Thus monetary policy becomes effective once again.

This is an extremely important insight that policy makers have yet to grasp, even though interest rates on Treasury bills are just a couple of basis points above zero and inflation is virtually nonexistent. Although the Federal Reserve has increased the monetary base to almost $3 trillion today from $825 billion in 2007, it has had little apparent stimulative effect.

In normal times, one would expect such an increase in the money supply to be highly inflationary and sharply raise market interest rates. That this has not happened is proof that we have been in a liquidity trap for several years. We needed a lot more government spending than we got to get the economy out of its doldrums.

Although Keynes’s theory was most appropriate to the Great Depression, his followers did indeed believe in its general applicability and the Keynesian medicine was overapplied and misapplied during much of the postwar era, leading to stagflation in the 1970s. Conservatives like Professor Buchanan were right about that.

But in their rejection of Keynesian economics at a time when it needed to be rejected, conservatives threw the baby out with the bathwater and are now preventing its adoption when it is badly needed.

The criticism that Professor Ferguson implicitly leveled at Keynes of being excessively short-term oriented, therefore, has a grain of truth in it. But the much greater truth is that we are now holding the economy hostage to policies that are proper for the long-term – like stabilizing the debt-to-gross-domestic-product ratio – at a time when we face special circumstances that make such policies perverse.

In short, we are suffering from an excessive long-term focus that is crippling the economy in the short run, and the short run threatens never to end.

A friendly 1984 biography of Keynes by the economist Charles H. Hession acknowledged that his sexual orientation shaped his political philosophy. His homosexuality was “an independent element in his reformist tendency; as such, he was an outsider in a heterosexual world,” Professor Hession wrote.

I think this made Keynes more willing to think “outside the box,” as we say today, and consider ideas that ran counter to the conventional wisdom. But there is no reason to think he had any less concern for the long-run health of the economy or society than heterosexuals. Keynes understood that the long run is simply an infinite parade of short runs.

But Keynes erred in implying a more general applicability of his theories than he should have. We suffered for this in the past when they were misapplied in inappropriate circumstances, unfortunately discrediting them and preventing their adoption now, in highly appropriate circumstances.


Wednesday, May 8, 2013

The Attack of the Watergates

If you've been watching Fox News or listening to AM radio recently, two things should be immediately apparent: the first is you obviously are a masochist and should seek help as soon as possible; the second is that you've probably heard the word Watergate uttered at least a couple million times.

Conservatives have taken to it like deranged sociopaths take to guns. It has become the new catchphrase for everything they don't like about Barack Obama. Whenever anything bad happens that they don't like - and for the record anything they don't like is, by definition, bad - they immediately assume it's part of a vast conspiracy between the Administration and the lap dog media.

For instance, remember when Fast and Furious was the going to be the next Watergate. That quickly fizzled under the spotlight of common sense. Now the conservative universe is all abuzz over Benghazi. They have convinced themselves that what was a truly horrific tragedy that resulted in four deaths, including Ambassador Stevens, is the second coming of Nixon. Mike Huckabee has virtually predicted that President Obama "will not fill out his full term" in office, so convinced he is of a massive cover-up.

It's one thing to be stupid and racist; it's quite another to be paranoid.

The latest installment of Benghazi fever comes courtesy of Darrell Issa, who should get the Academy Award for best performance in a kangaroo court. Issa has been doing his utmost to nail the Administration ever since the GOP took the House in the 2010 midterms. So badly did he embarrass himself during the Fast and Furious hearings that even some conservative writers called him out on it.

Not to be outdone - or deterred - Issa strutted out three key witnesses whose testimony he and his fellow cohorts believed would finally blow the lid off of the Administration's "cover-up." You could practically see Sam Ervin lurking in the corner.

And what was the grand result of all this testimony. Ostensibly we learned the following: The talking points memo that Susan Rice referred to on the Sunday morning talk shows was inaccurate; there was a huge disagreement over whether to send in a special ops team from Tripoli; and the State Department had been warned about the possibility of an attack on the consulate, a warning that obviously went unheeded. Basically nothing new, if you've been paying attention.

But a cover-up? Not even close.  Mistakes were made and judgments called into question, but, despite all the huffing and puffing, Republicans still don't have a smoking gun. They can shout Watergate all they want, but until they come up with their own missing 18 minutes, all they will accomplish is coming down with a good dose of laryngitis.

Tuesday, May 7, 2013

Still Voodoo After All These Years


Maybe John Maynard Keynes didn't have all the answers for what ails an economy, but after thirty years, this much is certain: supply-side economics has been a brutal disaster. One wonders why it is still taken seriously at all. It was George H. W. Bush who first coined it - and appropriately so - as voodoo economics. By all the evidence, papa Bush knew what he was talking about.

Consider that over the last three decades income inequality has spiraled, the gap between the wealthy and the poor has widened, the top 2 percent of the population has seen their wealth balloon, while the middle class and working poor have lost ground.

Not only is supply-side economics a morally bankrupt system, financially it doesn't make any sense either. Okay maybe you don't give a damn about income inequality - screw the poor, right? - so long as, at the end of the day, the math adds up.

Except it doesn't. Not even close. To summarize, supply-siders have long maintained that by reducing taxes - specifically on the wealthy - receipts into the treasury would swell to record numbers. Proponents of this false religion refer to it as a growth economy.

Here's the problem. While tax receipts do indeed increase, they never make up for the lost revenue from the reduced taxes. In fact, interestingly enough, for every dollar that goes out, only about 80 cents comes back in. Funny, for a movement that claims to know a thing or two about how businesses are run, these fools apparently haven't figured out that losing 20 cents on the dollar is a pretty shitty investment.

All this has led to some amazingly abysmal results, both on a micro level and macro level. Paul Krugman recently observed that "if you look at United States history since World War II, you find that of the 10 presidents who preceded Barack Obama, seven left office with a debt ratio lower than when they came in. Who were the three exceptions? Ronald Reagan and the two George Bushes. So debt increases that didn’t arise either from war or from extraordinary financial crisis are entirely associated with hard-line conservative governments."

You'd think that would be enough to put the whole matter to bed. And you'd be wrong. Like a bad habit, supply-side economics simply refuses to go away. It keeps hanging around waiting for yet another chance to spring to life and wreak havoc on an unsuspecting economy. If anything, its proponents are as defiant as ever. Not even the travesty of European austerity is enough to break the denial.

I'm starting to think that Barack Obama's greatest accomplishment - and perhaps his lasting legacy - was that he didn't allow the supply-side / austerity police to destroy the American economy the way they did Europe's. 


Here We Go Again: GOP Once More Playing Chicken With the Debt Ceiling

Ever get the feeling some people just don't get it? Two years after almost wrecking the economy over the debt ceiling, House Republicans are planning a repeat performance this summer and this time you'll never guess how they plan on doing it.

Rather than tie raising the debt limit to spending cuts, like they did in 2011, John Boehner and the gang are going a different route; they are planning on tying any increase in the debt limit to the passage of tax reform. Yep, you heard right. The most complicated, gut wrenching, contentious political issue imaginable is now going to be the ransom price for avoiding another date with economic Armageddon.

Sometimes you just can't make this stuff up.

According to a story in Politico, the "framework" of a deal "has gained considerable traction" among the GOP leadership. Basically, it breaks down into four phases, each comprising three month extensions: the first would be an initial three-month extension contingent upon the understanding that the House would pass some kind of tax reform bill within three months. Once that was done another three month raise in the debt limit would follow. The Senate would then have up to three months to pass its version of tax reform in order to get another three-month bump. The last three months would come only after President Obama signs the legislation into law. Four phases for one year of debt limit increases.

Simple, except for a few minor details.

One, it is highly unlikely that the House and the Senate would pass tax reform bills that would stand up in the other chamber. Indeed, there has been a major split between the parties over tax reform and which deductions to eliminate for years. Expecting these two camps to agree on a unified bill is the stuff of fairy tales.

Two, we're talking about passing major legislation with a ticking time bomb in the background. If you thought the markets were nervous over the 2011 debacle, try that times a hundred. Tax reform is way too important an issue to shotgun under such arduous and potentially catastrophic circumstances.

And, lastly, once more President Obama will be in the position of having to negotiate with a loaded gun pointed at his head. The last time the GOP held the economy hostage we got stuck with the sequester. Obama cannot let that happen again.

The problem with negotiating with terrorists is that once you start, you can't stop. There's always another hostage to take and another ransom demand to make.

It's high time this president learned how to stand his ground, say no and mean it!


Saturday, May 4, 2013

The Bubble Syndrome

Seems my last piece, "The Enigma of Barack Obama," didn't exactly go over the way I intended. Suffice to say, it ruffled a few feathers on the Left. Apparently when it comes to critiquing President Obama - even when it's constructive - the prevailing sentiment is hands off. Do not tread here, lest ye be taken to task. And brother was I ever taken to task.

Funny, but the more I cover the world of politics, the more I realize that both ends of the political spectrum operate in a bubble of sorts. And while I am encouraged that there are far fewer wingnuts on the Left than on the Right, a bubble is a bubble. Period.

To sum up, in case you didn't read the piece, I was calling out Obama for signing the bill exempting the FAA from the harmful effects of the sequester, believing that by doing so, he was ceding badly needed leverage to force the Republicans back to the table. I also, by the way, cut him some slack for agreeing to the debt-ceiling deal in 2011 that eventually led to the sequester in the first place. One could hardly have faulted him when the entire GOP was threatening to destroy the good faith and credit of the American economy. Unfortunately for many of my fellow brethren, that part didn't get through.  All they could see was my criticism.

When it comes to Barack Obama, there apparently is no gray. Either you love the guy, and by default everything he does, or you hate him. To paraphrase a well-known George Bush euphemism, either you're with him or you're against him. There is no in between.

Which of course is ridiculous. Even the best presidents in our history have had their fair share of warts. Lincoln suspended Habeas corpus; Teddy Roosevelt was for all intents and purposes the nation's first imperialist president; and if you think the only bad thing George Washington ever did was chop down a cherry tree, you've been spending way too much time reading your children's fairytale books.

But, getting back to the current occupant of the White House, I sympathize with many progressives who are defensive of Obama. I've never seen this level of discourse and vitriol directed at one man. Some of the rhetoric has been comical when it hasn't been downright racist.  

But that's hardly an excuse for turning a blind eye and deaf ear to genuine faults and miscues. One hundred and eighty degrees from wrong is still wrong.  However you may feel about him, the man is hardly perfect. Indeed, he's proven himself to be more human than most of his predecessors. Can you imagine George Bush admitting he made a mistake the way Obama did when he said that the situation in Guantanamo could "get worse" and "fester?"

Closing ranks around him and defending every single action and deed does a disservice not only to the man, but to the principles that all of us are supposed to stand for. If we can't speak the truth then what the hell are we doing? When I see my fellow progressives behaving like their counterparts on the Right it sickens me.

I've always given this president credit where credit is due. But when he's been wrong, I have felt it my duty to bring such wrongs to light. I expect no less of my contemporaries.

Get over yourselves, people. As Bill Maher once said, "He's your president, not your boyfriend."

Thursday, May 2, 2013

The Enigma of Barack Obama

Sometimes I just can't figure Barack Obama out. He's a complete mystery to me. Over the last four years, there have been moments of tremendous exuberance, followed by inexplicable letdowns that were mind-boggling.

By now, it should be painfully obvious that when it comes to the art of negotiation, he leaves a lot to be desired and, let's face it, the man still can't draw a narrative worth a damn.  I could dredge up the debacle over healthcare again, but beating that dead horse is just cruel and inhuman.

Please don't get me wrong. I'm not one of those progressives who get all bent out of shape because Santa Claus didn't bring me everything on my Christmas list. Occasionally throwing your base under the bus is a time-honored tradition among presidents, especially those who are successful. Just ask Bill Clinton.

And, unlike Maureen Dowd, I realize this isn't 1964 or even 1984. There has never been a Congress like this in the history of the country. Expecting Obama to work with an opposition party that has made a collective decision to reject everything he stands for is absurd. Consider this: a recent bill by a GOP rep would, if passed, ostensibly prevent the government from collecting economic data needed to determine the unemployment rate. How do you deal with people that far off the reservation?

That's why I wasn't all that upset with Obama over the debt ceiling deal he made in 2011 when the Republicans were threatening not to raise the nation's debt limit if they didn't get what they wanted. In spite of what some progressives said at the time, it was a no brainer for him. The alternative would've meant economic Armageddon. No sane person would've wanted that. Obama did what he had to do, what he always does: live to fight another day.

But the problem for him is realizing he has to eventually fight. And that's where the enigma comes in. One of the components of that infamous debt deal - the sequester - is now front and center and festering like an open wound over a still very fragile economy. It's time to admit the obvious: the Republicans were lying when they said they didn't want the sequester. The truth is that this is a dream come true for them. They came to Washington to slash and burn and that's just what they're doing. The Democrats got snookered. Period.

Unfortunately for the GOP, a funny thing happened on the way to the austerity wood shed. Their constituents found out that they were going to have to wait in incredibly long lines at the airport courtesy of the effects of that very same sequester they all privately love but publicly loathe. Even the base was starting to sound off.

What to do? I know, let's allow the FAA to allocate some funds so that air-traffic controllers wouldn't have to be furloughed. Problem solved. In an amazing feat of bi-partisanship - the likes of which we haven't seen in, let's see, at least four years - both Houses of Congress passed a bill exempting the agency from the arduous effects of the sequester. All it would need is the President's signature and millions of passengers would be able to go their merry way onto their intended destinations without undue delay.

Don't you just love happy endings?

Except this isn't a happy ending. It's a political disaster for the President. Why on Earth would Obama sign a bill exempting one agency - albeit a pretty important one - from the harmful effects of the sequester while still permitting other agencies to wallow in them?  More to the point, why would Obama cede the last bit of leverage he had with respect to the sequester when there was an opening to bring the Republicans to the table and force them to agree to his demands?

It's one thing to blink when someone is holding a gun to your head; it's quite another to acquiesce without duress. Obama could've said to the GOP, "Look, it was stupid of me to agree to sign this sequester into law, just as it was equally irresponsible of you to hold the nation hostage. But guess what, it's here now and the only way out of this mess is for both sides to come together and agree on a substitute plan that accomplishes the same goals without the egregious hardship. What I'm not going to do is give you an easy way out. We made this bed together. Now we have to lie in it."

But that's not what he said. By signing the bill, Obama in essence said that the convenience of passengers at airport terminals was more important than valuable programs like Head Start and Meals on Wheels. Good luck getting the GOP back to the negotiating table now, Mr. President. The last Republican who gave a damn about the down trodden fought a war against the South.

The reality is that the sequester is here to stay. There's no incentive for Republicans to come to the table, much less cave, especially now that the one fly - pardon the pun - in the ointment has been effectively swatted, courtesy of their nemesis's signature.

Throughout his presidency, Barack Obama has had his fair share of do-over moments. I predict this one will go down as a doozy.