Ian Welsh

The horizon is not so far as we can see, but as far as we can imagine

Category: Barack Obama Page 3 of 13

If there is a default it is because both Obama and Republicans want it

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On October 8, 2013

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I don’t know if there’ll be a debt default.  What I do know is this: if Obama doesn’t want to default he has options. Forget the platinum coin nonsense (though he could if he wanted), Obama can just tell the Treasury to keep on keeping on, and continue selling treasuries.  There isn’t anything Congress can do about that, they don’t have the votes to actually impeach him, they don’t have an army, they don’t have the balls to, say, lock up the Treasury Secretary.  In short, they don’t have an army.

Now I assume Obama doesn’t want a default.  But, to be sure, I could be wrong.  Why?  Because a default throws all the cards in the air. It lets you remake the country in your image.  Obama has long wanted a “Grand Bargain” and the ultimate neo-liberal no-no is defaulting on bond-holders.  Then, of course, there are all the SS checks…

If there is a default, whoever sets the terms of the new arrangement gets to remake America in their image.  Obama might want a crack that that.

We’ll see.

Why The Republicans Shut The Government Down and Threaten the Debt Ceiling

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On October 6, 2013

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HBR has an article by Justin Fox on the government shutdown in Washington in game theory terms.  It’s good as far as it goes, but it amounts to this:

  1. It works, they get some of what they want
  2. People keep doing what works.

Let’s add some more specifics.

The article mentions that the freezing of redistricting in most Republican states means that Republicans can’t lose the House.  What it fails to mention is this: they can lose their seats by losing the primary.  The Tea Party (unlike progressives) is very good at winning primaries.  Even if they don’t succeed in a primary challenge, their challenges are serious, and politicians don’t want to chance it.  Fighting a challenge is expensive, risky and time consuming.

Fox notes that Obama has repeatedly given in.

But has he?  Remember the famous FDR comment, “I agree with you, now make me do it?”

Obama has a long record of statements and actions which indicate he wants a lower deficit, wants to cut back on entitlement and spending and desires a grand bargain.

Were Republicans making him do things he really didn’t want to do?  Perhaps he might have chosen to do things somewhat differently (he wants mostly spending cuts but at least some new taxes, they want no new taxes).  But the goals of the Republicans (cut entitlements and the deficit) and Obama’s goals (cut the deficit and entitlements) aren’t that far apart.  What they differ on is the exact way in which it should be done.

Obama agreed to past debt negotiation events because he wanted to. He did have other options.  He could simply declare that the constitution says that debts must be paid, argue that one law (the debt-ceiling) does not outweigh another (the budget) and tell the treasury to keep on keeping on.  There is nothing the House, alone, could do about that.

Obama, in other words, to use a game theory term, has a unilateral move: something he can do that cannot (or will not) be stopped by other actors.  His BATNA (best alternative to a negotiated settlement) is to simply tell the House to suck it and keep spending.  He chose not to do so.

When you’re dealing with game theory you have to consider all the players possible moves and their goals.  Obama and the Republicans have been in an extended negotiation over not whether to do a Grand Bargain cutting entitlements or whether to cut the deficit, but what that bargain will look like and how the deficit will be cut.

Add in one more player: Democrats.  Obama cannot, using just Democratic votes, get the entitlement cuts he wants, this was true even when Democrats controlled the House.  Republicans can vote for entitlement cuts and get reelected, too many Democrats can’t.  To slash Social Security and Medicare Obama must have Republican votes.

In other words, this multi-year session of threats about the debt limit, the government shutdown, the furloughs, is a multi-year negotiation between Obama and Republicans.

The Beauty of Obama’s Clapper Appointment

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On August 13, 2013

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As you’ve probably heard, Obama has appointed James Clapper (the man who lied under oath to Congress about NSA spying) to review NSA spying.

I am in awe, few things have impressed me this deeply.

This isn’t just a middle finger to everyone to everyone who is against blanket surveillance (aka. the majority of Americans), it is Obama saying “Kiss My Ass.”

It’s really hard for most people to understand just how much contempt our lords and masters have for us.  They really don’t give a fuck what’s good for us, what we like, or what we think.  They are rich, or powerful, or famous because they deserve it, and if we aren’t any of those things then they don’t give two fucks what we think.  By not being rich, powerful or famous we have proven we don’t deserve any say.  After all, if we had any qualities that were worthwhile beyond the sort of qualities you praise in a dog, we wouldn’t be peons, would we.

In this, Obama is very similar to Bush, actually, but in general it’s a characteristic of everyone near the top of our current society.  Starting at about the Senior VP level, people decide that they deserve everything they’ve got and everyone else doesn’t.  If they did, they’d have it.

The media is full of studies showing that power decreases empathy, and I’ll bet that’s true throughout history. But I’ll also bet this, the degree to which it is true is social, and in many times and places it has been less true.  Over the last couple generations we’ve seen a significant, measurable fall in the general level of empathy in the population as a whole.  If you have an ideology which glorifies greed and which claims that society is a meritocracy when there is copious evidence to the contrary, those who win will believe they “deserve” what they have, and everyone else “deserves” what they have.  Add to that objective circumstances which amount to dog-eat-dop (there simply are not enough good jobs to go around) and people will either band together, or turn on each other.  Generally, we’ve chosen, for ideological reasons, to turn on each other.

This isn’t necessary: it isn’t what happened in the US in the Great Depression, for example.  It’s a choice, and our choice is to be bastards to each other.

 

The Left Wing Case Against Obama and Obama’s Next Term

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On November 3, 2012

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Matt Stoller’s made the left wing case against Obama, and then responded to his critics, who, he’s right, don’t address his points.  The two articles are excellent, and you should read them.

I haven’t really bothered writing that much about the election because it simply isn’t very important, despite the hysteria.  Romney would probably be worse on the margins, but the difference is at the margins, except, possibly, for the Supreme Court.  The most intellectually honest argument for Obama can be summarized as “he’s an evil man who has gutted the constitution and done everything possible to enshrine oligarchy, but he’ll probably appoint a Justice who will keep Roe. v. Wade and a few shattered spars of the Bill of Rights around.”

The key thing to realize is that Obama is the President who normalized Bush’s Republic.  He normalized routine civil liberties violations, normalized anti-immigrant raids, normalized the eternal war on terror, pushed executive power even further than Bush with a unilateral war against the wishes of Congress in Libya and by arrogating for himself the right to kill any American.  He made sure the rich not only stayed rich, in the face of a financial collapse which he could have used to break their power, but has increased inequality significantly.  The wealth and wages of ordinary Americans have dropped, the portion of the country’s income going to the wealthy has increased, and the US is well on its way to becoming a corrupt petro-state.  Nothing is more hilarious than Mayor Bloomberg endorsing Obama because of climate change, when Obama has quite deliberately overseen a huge increase in hydrocarbon production and openly embraces so-called “clean” coal.   Obama may agree that Global Warming exists, and Romney may pretend that it doesn’t, but the policies of the two are functionally identical and the money Obama spent on renewables was so horribly misspent as to do nothing but discredit the industry.

The argument for “who cares” is simple enough.  Yes, Romney will be worse than Obama in certain respects, but if Obama is not in charge, then the Democrats are far more likely to oppose both civil liberties absuses and efforts to cut Social Security and Medicare.

Let me tell you how Obama’s second term will play out.

1) He will appoint a milquetoast “liberal” to the Supremes.  You’ll keep the remains of Roe vs. Wade, but he’ll keep doing things like overruling Plan B as an over the counter medication, because he doesn’t really believe that girls impregnated by their fathers have a right not to have the child.  And every case that enshrines oligarchy, like Citizens United or HCR, will go for oligarchy (you aren’t stupid enough to think that Roberts switched his vote for any reasons other than to give insurance companies their bailout and gut Medicaid, I hope.)

2) The economy will struggle along till he gets his grand bargain, then it will absolutely crater.  You’ve got a couple years of lousy but not awful economy at most, use it, because years 3 and 4 are going to be awful.

3) He will make a Grand Bargain.  Winning by only a small margin of the popular vote will help with this.  The rich will pay slightly more, but most of the money will come from cutting Social Security, Medicare and other such programs.  The Republicans will give him just enough votes to pass it, so that it will be the Democrats who have gutted SS and Medicare.

4) The Republicans will nominate a right wing crazy in 2016.  He will stand a good chance of winning, because the Democrats, having cut SS and Medicare will now stand for nothing other than “fear the Supreme Court!”  In fact, the Republicans will run as the defenders of SS and Medicare.

Because the Republican Congress is now extremely far right wing, in fact reactionary, when they get their President, they will be able to do almost anything they want.  And all they will need is the House and 51 votes in the Senate, because they will not play stupid games about the filibuster, they’ll pass under reconciliation or just do it with 51 votes and tell everyone to go fuck themselves.  There will be no nonsense about super-majorities.  HCR will, at that point, be removed or gutted.  The court decision making Medicaid optional, however, will remain the law of the land.

Reelecting Obama does mean a better economy for the next couple years.  It does mean that people who can afford health care with mandated issue, and who must have it to make the bridge to Medicare, will get that.  It means nothing else.  It will gut the Democratic coalition, it will make a reactionary right wing president far more likely, it will kick the restructuring of the economy which is needed down the road further, making it more difficult when, or rather if, it ever occurs.  It will make the Grand Compromise, meaning SS and Medicare cuts, far more possible than if Romney were in power and Democrats were opposing the bill.  And yes, poor women will still be able, at least theoretically, to get abortions (upper middle class women are always able to get them, since they can travel.)

Is it worth it?  I don’t, personally, think so.  As with Matt Stoller and many others, if I could vote, I wouldn’t vote Obama.  To be clear, I wouldn’t vote for Romney either.  I’d probably vote for Jill Stein, making a third party viable starts with, oh, voting for it

On edit: one more thing, there is no excuse to vote for Obama if you are not in a swing state.  NONE.  Vote third party.

Tax Increases on the Rich

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On September 19, 2011

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are not going pass. Period. Obama is doing this so he can look like a liberal, because he knows it won’t pass. If he wanted this sort of policy, he needed to do it in his first few months.  He didn’t and he doesn’t, this is re-election positioning. If you are treating it as anything else, you are being played.

Oh, and while I approve of the “Wall Street Occupation” it isn’t going to do a damn thing unless it costs Wall Street large amounts of money.  Which would require different tactics than are being used.  Still, it’s a start.

The Short on the President’s “Job Plan”

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On September 8, 2011

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The plan is supposedly 447 billion.  By my count about 253 billion of that is in tax cuts.  Corporations are sitting on a ton of money, tax cuts will not make them hire.  Minor tax cuts for households will be used primarily for debt de-leveraging unless there is a general recovery with wage increases, since people will not spend in a depressionary environment.  Most of the spending is on projects which are run by states, and the money is fungible and will be effectively diverted to avoid tax increases.

There are no structural fixes for what is wrong with the economy here.  There is nothing to deal with the fact that even if it did work (it won’t) it would cause a run up in commodity prices, especially oil, which would crush the recovery anyway.  There is nothing to deal with the fact that most US banks are still bankrupt, except some incentives for Americans to buy houses so securitization can continue.  There is nothing to stop employers from calculation the tax rebates as effective raises, and thus not offering raises themselves (which is what they will do.)  There is nothing to make any corporation which already doesn’t pay taxes (more than you want to think about) to pay those taxes.

This stimulus is more than half tax cuts, which is worse than the first stimulus.  It is not as large as the first stimulus.  It will probably save or create a few jobs, but it will not kick the country out of depression.

All of this even assuming you’re stupid enough to believe this will pass as envisioned.  It won’t.  Obama is a weak president, and the Republicans will not pass most of the useful parts of this bill, though no doubt they’ll be happy to pass the tax cuts.

Oh, and Obama wants the entire thing offset by deficit reduction.  Given how weak a stimulus this is to begin with, I predict that if passed with offsets it WILL DO MORE DAMAGE TO THE ECONOMY THAN GOOD.

I see various progressives who think talk matters are cheering the wording of Obama’s speech.  He sure does talk purdy, doesn’t he?  Reminds me of his promises during the election campaign, in fact.

(White House Fact Sheet) (pdf)

Comments on the S&P Downgrade

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On August 6, 2011

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Aside from hysterical laughter, here are the key points:

  1. Obviously the US isn’t even close to insolvent.  The gold in Fort Knox is held on the books at $37/ounce, for example.  Most Federal lands are held on the books at 19th century valuations.  Not to mention that the US’s debt is denominated in its own currency, which means it could simply be printed, and that the US government has a lot of unused room to tax, should it ever deign to use that on people with money, as opposed to those without.
  2. As everyone is pointing out, the idea that S&P, who rated all the subprime trash as AAA, has any credibility, is a joke.
  3. However, Obama and Democrats refused to destroy S&P when they had the opportunity and every reason to do so.  The submprime crisis could not have been nearly as bad without S&P and the other rating’s agencies rating trash AAA so that investors who must buy AAA by law could do so.  To put it simply, S&P engaged in systematic fraud.  They, like everyone on Wall Street and in the major banks, have not been indicted for this.  The choice to not indict is policy.  Obama’s policy.
  4. If Obama did not want this to happen, it would not happen.  Could you imagine what LBJ, Nixon or Truman (or, hell, Bush Jr.) would have done if a rating’s agency tried this?  The President has the necessary tools to utterly destroy S&P and every senior analyst working for them.  You could use terrorism statutes or RICO, just as two examples.  Send the FBI into their offices, seize all the assets of both the company and everyone working for it, and then got through their records.   I guarantee, as absolutely as the sun will rise tomorrow morning, that there is enough evidence of fraud in those records to put them away for life.  In the meantime, RICO laws are used to seize all the assets of everyone involved, meaning they will be using public defenders (don’t like a bad law? Use it against real people.)  When S&P informed the White House they were going to downgrade, the White House could have quietly let them know what the consequences would be.
  5. The US has effectively unlimited drawing rights from the IMF.  Those drawing rights mean that if any of the core economies have an AAA rating, in effect, so does the US.  (ie. if Germany is AAA, so is America.)
  6. S&P knows all this.  They are doing this because they know the President and Congress and the real people in the oligarchy want it done.  Remember, a downgrade increases rates, and that is a direct increase to their income.  And they know the US can pay, they aren’t fooled by idiotic talk about a default.  The US may default at some point, but that will be a political decision.
  7. This is another manufactured crisis, on top of the original manufactured debt ceiling crisis.  The oligarchy wants the opportunity to buy federal assets at dimes on the dollar. They believe they don’t need the poor or middle class anymore, so they are good with getting rid of SS and Medicare.  And Obama is, as he always has been, onside with this.

These people, are, however, playing with fire.  Just because it’s a crisis that didn’t have to happen, a crisis, that is manufactured as another looting opportunity, doesn’t mean that it won’t have real consequences.

If you’re pro-Obama you’re an idiot, on the payroll, or evil

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On August 4, 2011

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Look folks, at this point, Obama has made possible what a Republican president like McCain couldn’t do.  What a Republican president like Bush failed to do: he is gutting social security and Medicare.

Americans would have been better off with McCain because the Democratic party would not have allowed what just happened, and the GOP would have just passed McCain’s debt limit increase.

This doesn’t mean the next Republican president won’t be worse than Obama, he probably will.  But he will be worse in large part because of Obama, because Obama has institutionalized Bush’s constitutional order and taken it even further, in creating the so-called Super Congress to end run the democratic process.  He will be worse because Obama, by legitimizing “deficits are evil” and delegitimizing civilian Keynesian stimulus (by screwing it up, which I predicted the day he announced his botched stimulus bill) he has made the only possible Keynesian stimulus a military one.  At some point President Teabag will realize that the only thing which will provide enough help to the economy to get him reelected is a new, even bigger war.

This, along with a nuclear bomb to the economy, is Obama’s legacy.  And if you are still shilling for him, I hope to hell you’re on the payroll, because at least then you have a good reason for it.  Otherwise you’re a fool, or far, far worse.

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