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News and Opinion
This is by David Dayen, for Pacific Standard magazine. On the front page, the title is "The Sequester is Going to Hurt (But Not Fast Enough)".
The Strange Game Theory of the SequesterThe Obama admin (and a lot of others) have been focused on who is to blame for the cuts and the pain that comes with it, but as time goes on, it really won't be that simple. Dayen points out that the cuts will not be felt for at least a month. As I have been saying, this is all going to mix in with whatever cuts come along with the debt ceiling and budget deal that will be worked out in just four weeks. If the debt ceiling is raised for only a short period, each time it happens, there will be opportunities for more cuts, a death by a thousand cuts scenario. And this is short term thinking. After a year or so, how many people are going to remember which house of Congress was causing problems, or who even controlled the House and Senate when the cuts happened? Major things that happen always get attributed to whoever was president at the time and the party considered to have been in control. How many people remember which party controlled the House or Senate when NAFTA was passed? They don't. They blame Clinton and Democrats. In this radio interview with Sam Seder, Dayen makes a lot of other good points that complement the article above, and some points that are not in the article. And after they go for Social Security, all bets are off in the blame game. One other interesting thing Dayen mentions is that nobody in Congress was calling for a repeal of the sequestration until a couple of days ago when a number of people from the House Progressive caucus called for it. I think that is the most telling aspect of this. Both of the bills raised in the Senate yesterday were symbolic, as was the five hour debate around them. Everyone knew neither bill would pass. Kabuki. Nobody called for repeal of the sequester, except a last minute call by some members of the Progressive caucus, which is also looking like kabuki. So maybe Dayen is right -- the strategy is to let the cuts go through and hope that the pain will cause pressure from the public which will force Republicans to agree to more revenue generating actions. This makes some sense but it doesn't explain the kind of panicky behavior we've seen from the White House (via Sperling) this week when Woodward pointed out that the sequester was Obama's idea. Perhaps that just interfered with their careful management of the propaganda around the whole thing which is part of the strategy. I tend to think that part of the strategy will be to reverse some of the sequester cuts (some of the defense cuts especially) during the debt ceiling and budget actions at the end of March. Obama was very clear during one of the debates about that, saying that they were "not going to happen". I also think there is a possibility of an 11th hour deal for at least some of this and if not that, an opportunity to muck with it at the end of March, perhaps in a huge confusing bill.
The Obama administration's strange, doomed austerity gambit.
Barring the biggest Washington miracle since Dolly Madison ferreted paintings out of a burning White House in 1812, sequestration—the automatic, across-the-board cuts to defense, discretionary and certain health programs totaling $85 billion in the 2013 fiscal year, and $1.176 trillion over the next decade—will take effect March 1. The Congressional Budget Office has estimated that these cuts will cost 750,000 jobs in 2013, and reduce gross domestic product for 2013 by up to 0.5%. The effects stand to be disastrous: that much is clear. But when it comes to the politics of the sequester—and the gamesmanship involved—very little is as it seems.
So we have a cock-eyed scenario where the White House may well want to ramp up economy-strangling cuts quickly, in an inversion of the normal order. Unlike the Hippocratic oath, the watchword here is “first, do some harm.”
The question is, will it work? Can Obama—provided he decides not to hold the sequester’s pain at bay—make the pain come fast enough? Unfortunately for this plan, the picayune clockwork of government is likely to get in the way. A combination of complex budget rules, sequestration limits, and the ordinary instincts of agency heads may slow down the effects of the sequester and leave the public with the mistaken impression—for a crucial couple of months—that austerity doesn’t really bite.
So now the Obama Administration appears to want to shock the political system into action with a bout of rapid-onset austerity. But here’s why that’s unlikely to work: (Warning: the next seven paragraphs get kinda wonky.) [...]
The Age of Austerity (with David Dayen)In this Atlantic article, the author tells you not to blame Obama or Boehner, blame the SuperCongress, from fifteen months ago, and it was all about taxes and entitlements. Social Security is always in the mix here, even though it has nothing to do with the debt or deficit. But they always try to throw it in there as part of a debt crisis. You'd almost think that this whole thing, all of it, is about giving Democrats cover to cut Social Security and modify Medicare without taking the political hit that is sure to come with it.
Published on Feb 27, 2013
David Dayen, explained how sequester cuts will impact the economy, how long it will take to feel the Sequester, the politics of the sequester, why the local media is doing a better job covering the sequester, the teachable moment the Obama Administration is missing, why a government shutdown maybe the best anti austerity strategy and how will the media cover budget cuts...
This clip from the Majority Report, live M-F at 12 noon EST and via daily podcast at http://Majority.FM
Here's Who Is Really to Blame for SequestrationWhat are they saying over on the right? Blaming, of course, but is there anything in there that gives an idea of what's happening? They want all spending cuts to come from "entitlements". Krauthammer doesn't specify which ones. Social Security? How does that affect the budget? And whenever Medicare is touched, they use it against the Democrats in campaign attack ads and pretend to be the defenders of Medicare. They're crazy, and salivating for Democrats to cut these programs so that they can get back into the White House, IMHO. They don't really give a damn about the spending. Republican presidents are wild spenders. Maybe they could triple or quadruple the war, defense and Homeland Security spending if they could do away with those meddlesome programs that actually help people! Everybody wants that White House. That is where the real money and power is for you and all of your friends, and all the cool military toys. From the NRO:
Don't look at Obama or Republicans in Congress. The failure of the bipartisan "supercommittee" 15 months ago created the current mess.
Sequestration -- automatic cuts to defense and discretionary spending -- was to be the punishment if the supercommittee could not come up with a plan. The cuts were designed to be as clumsy and inflexible as possible, in order to motivate lawmakers to come up with a better approach. That's why agency heads have very little discretion on which programs are hit by the cuts: They were designed to inflict maximum suffering on both parties' priorities, with little wiggle room to mitigate the pain. Republicans would be motivated to compromise to keep defense spending from being axed, while Democrats would come to the table to protect domestic programs.
But it didn't take long for the two sides to realize there was little middle ground between their irreconcilable positions. Republicans wouldn't raise taxes, and Democrats wouldn't cut entitlements. Each side offered what it saw as concessions -- Republicans proposing modest revenue increases from tax reform, Democrats offering trims to Medicare and Medicaid. But each side saw the other's idea of "compromise" as laughably insufficient.
The administration has every incentive to make the sky fall.
Which demonstrates that, for Obama, this is not about deficit reduction, which interests him not at all. The purpose is purely political: to complete his Election Day victory by breaking the Republican opposition.
When the GOP House passed an alternative that cut where the real money is — entitlement spending — President Obama threatened a veto. Meaning, he would have insisted that the sequester go into effect — the very same sequester he now tells us will bring on Armageddon.
At the fiscal cliff, Obama broke — and split — the Republicans on taxes. With the sequester, he intends to break them on spending. Make the cuts as painful as possible, and watch the Republicans come crawling for a “balanced” (i.e., tax-hiking) deal.
Competing sequester bills fail in Senate
Competing partisan proposals to avert potentially devastating budget cuts due to take effect Friday failed to advance in the Senate on Thursday as Congress prepared to leave Washington for the weekend without taking action to deal with the looming sequester.
The measures had been expected to fail — they were largely intended to allow each party to demonstrate that their political opponents were resisting reasonable ideas that could lessen the impact of the $85 billion across-the-board cuts.
Cuts Roll In as Time Runs OutEditorial from the Washington Post. A lot of scolding going on and a lot of talk about how Medicare and Social Security have to be cut/reformed and how tax reform is needed -- the next phase of austerity coming down the pike.
No Last-Minute Deal; Spending Reductions Won't Touch Deficit's Biggest Drivers
Changes to entitlement programs are politically difficult, but some lawmakers said they would try this year as a way to end the stalemate. "I had a lot of senators call me today,'' said Mr. Graham, one of the few Republicans who has recently expressed willingness to include revenue increases. "They said, 'Let's rethink the big deal.' "
"I think we are derelict in our responsibilities to ignore the realities of entitlements," said Sen. Richard Durbin (D., Ill.). "It is impossible to say we are defenders of Medicare and ignore the looming deadline of 11 or 12 years when it is going to be insolvent. We're not defenders. We're basically standing by and watching its demise.''
Washington fails to govern as the sequester arrives
TO GOVERN IS to choose. By missing Friday’s deadline for averting $85 billion worth of across-the-board spending cuts to defense and domestic programs, Congress and President Obama have chosen not to govern. Instead, each side has concluded that its interest lies in letting the “sequester” proceed as scheduled — and then trying to win the political blame game.
This abdication is bad public policy.
First, it’s never wise to cut spending without discriminating between the necessary and the wasteful, or without regard to the short-term effect on economic growth. [...] destabilizes federal agencies [...] especially dangerous with respect to the Defense Department, whose leaders have repeatedly warned that national security is at risk. [...] will do little to solve the country’s long-term budget problem, which can be addressed only through a combination of significant entitlement and revenue-raising tax reform.
Manning: Before Wikileaks, Leaked Docs Offered to NYT, WaPoOptics? During the same week that the administration illustrates how much pain the sequester cuts are going to cause, they give another $60 million to Syrian rebels to help overthrow a government. But school lunch programs must be cut and federal employees must be furloughed.
Whistleblower reads prepared statement: Wanted documents to reveal "true costs of war"
In what The Guardian's correspondent Ed Pilkington describes as a "bombshell" revelation, Bradley Manning on Thursday revealed that prior to reaching out to Wikileaks with a trove of government and military documents, the whistleblower first contacted more established media outlets, including the New York Times and Washington Post, but was brushed off by editors.
Such testimony belies the US government's ongoing insinuation that Wikileaks—which specifically describes itself as a "not-for-profit media organization"—somehow played a role in compelling Manning to leak the documents. It further provides evidence that Manning was acting in the capacity of a true government or military whistleblower by proactively seeking out the media in hopes of bringing to light what he considered information vital to the public interest.
In regards to his leak of the collateral murder video, Manning said, "I was disturbed by the response to injured children" and that the soldiers captured in the video "seemed to not value human life by referring to [their targets] as 'dead bastards.'"
He also said that he released the intelligence because he wanted to "spark a domestic public debate about our foreign policy and the war in general," and added: "At the time I believed, and I still believe, these are ... [among] ... the most significant documents of our time."
U.S. Steps Up Aid to Syrian Opposition, Pledging $60 MillionMoon of Alabama.
ROME — The food rations and medical supplies that Secretary of State John Kerry said Thursday would be provided to the Free Syrian Army mark the first time that the United States has publicly committed itself to sending nonlethal aid to the armed factions that are battling President Bashar al-Assad.
Mr. Assad is “out of time and must be out of power,” Mr. Kerry asserted after meeting here with Moaz al-Khatib, the leader of the Syrian opposition coalition.
The United States is also providing $60 million to help the political wing of the Syrian anti-Assad coalition improve the delivery of basic services like sanitation and education in areas it has already wrested from the government’s control.
A covert program to train rebel fighters, which State Department officials here were not prepared to discuss, has also been under way. According to an official in Washington, who asked not to be identified, the C.I.A. since last year has been training groups of Syrian rebels in Jordan.
U.S. Confirms Training The TerroristsCol. Pat Lang.
Just for the record. Three days ago I wrote:There are U.S. special forces on the Jordan boarder with Syria. They will likely have trained the insurgents on their new weapons.Today the New York Times writes:On Wednesday, senior administration officials said that a training mission for the rebels at a base in the region, which is already under way, represented the deepest American involvement yet in the Syrian conflict, though the size and scope of the mission is not clear, nor is its host country.That training mission has been underway since the U.S. sent special forces to the Syrian border in Jordan more than five month ago. [...] insurgency propaganda was started even before the insurgency and was done, like in other countries, by U.S. financed groups.
"Poor John Kerry" and the Syrian rebels
The Syrian rebels are dominated by AQ people. Many of the others in the SNA are Islamist jihadis of their own "branding." The Saudis have announced that they are increasing the level of their support to the "freedom fighters" in Syria. What sort of "freedom" do you think the rebels desire in Syria? IMO it is the freedom to do what Saudi Arabia tells them to do.
Now the rebels have thumbed their noses at Kerry and Obama. They are not interested in a compromise with the Assad secular state. I ask you, as they would, how could they compromise when they are on "a mission from God?" Oh, right, that was the "Blues Brothers."
I predict that Kerry will find that he can nothing with "diplomacy" in this crisis and then, despairing and fearful for his reputation he will take up the neocon banner along with McCain and Graham.
He will end by recommending direct military support for the rebels. pl
AIPAC To Hill: Don't Touch Israel Aid
At a time when sequestration is about to take a big bite out of the Pentagon budget, the American Israel Public Affairs Committee (AIPAC) will be sending thousands of its citizen lobbyists to Capitol Hill next week to make sure Israel is exempted from any spending cuts.
The 13,000 expected AIPAC activists will be telling Congress not to touch Israel's $3-billion-plus annual security assistance and to vote for legislation declaring the Jewish state a "major strategic ally."
AIPAC's annual policy conference begins Sunday and culminates Tuesday with personal visits by constituents to hundreds of members of the House and Senate.
Trio Of Democrats Introduce Legislation To Tax Financial Transactions
A trio of Democratic lawmakers today introduced legislation to institute a small tax on financial transactions, a proposal that would reduce volatility in financial markets and raise substantial revenue for the federal government. Under the plan from Sens. Tom Harkin (D-IA) and Sheldon Whitehouse (D-RI) and Rep. Peter DeFazio (D-OR), financial trades would be subject to a 0.03 percent tax, which they say would raise approximately $352 billion in revenue over the next decade.
Ron Fournier's amazing admission about his service to White House officialsUh oh. Robert Salomon of NYU says "CFD bets at center of Heinz case. Derivatives like these (pure bets) cry out for return to Glass-Steagall". Marcy Wheeler says "Huh. Is it possible that Qaddafi's bad investment and inside trading on ketchup will FINALLY get Goldman in trouble?" Uh oh. Naked ketchup bets (naked meaning doing options or bets on shares you don't own, you're naked). Goldman has lawyered up.
As the trivial though bitter bickering between the White House and press corps intensifies, truths about their relationship emerge
Fournier then makes the following confession about why he won't reveal the identity of this mean person; I know it's a bit naive, but I actually found this slightly shocking:"Going back to my first political beat, covering Bill Clinton's administration in Arkansas and later in Washington, I've had a practice that is fairly common in journalism:[...]
"A handful of sources I deal with regularly are granted blanket anonymity. Any time we communicate, they know I am prepared to report the information at will (matters of fact, not spin or opinion) and that I will not attribute it to them."
As trivial as it is, this bickering between the White House and these media mavens is becoming quite intense. They're accustomed to mutually serving one another's interests, not trying to publicly embarrass the other. But I so hope this acrimony continues to escalate, as there's an important public value in having light shined on this behavior: behavior that they normally ensure festers in the dark.
Heinz Case May Involve a Side Bet in London
Regulators have escalated an investigation into suspicious trades placed ahead of the $23 billion takeover of H. J. Heinz, focusing on a complex derivative bet routed through London, according to two people briefed on the matter.
The development builds on a recent regulatory action mounted against a Goldman Sachs account in Switzerland that bought Heinz options contracts. It also comes a week after the Federal Bureau of Investigation said it opened a criminal inquiry.
Now the S.E.C. is looking into a more opaque corner of the investing world, examining a product known as a contract-for-difference, a derivative that allows investors to bet on changes in the price of stocks without owning the shares. Such contracts are not regulated in the United States, but are popular in Britain. Regulators there recently opened an inquiry into the Heinz trades, one of the people briefed on the matter said.
The suspicious options trades were routed through a Goldman Sachs account in Zurich, where laws prevent the firm from sharing details of the account holder’s identity.
Dismissed head of Libya sovereign wealth fund stays put
The LIA's assets were temporarily frozen during the 2011 war, and the new management has sought their release. The LIA has stakes in Italian bank Unicredit as well as oil and gas group Eni.
Separately on Thursday, LIA said in a statement it was taking legal advice over losses on structured products managed by Goldman Sachs.
Zeidan told reporters he had a met a team from the International Monetary Fund (IMF) and Libya would seek the IMF's advice on its budget as well as domestic and foreign investment.
Libya’s Nightmarish WinterHeh, this is interesting. Do you buy this? Maybe I just don't understand the politics of the right or the current state of affairs in the R party. But I think if Christie wanted to be at CPAC, he'd be at CPAC. He's not focused on Republican voters anymore. He took care of that business early in his term. He's focused on getting the Independent votes, taking Dem votes, and disassociating himself with the establishment Republican party. They are toxic. He can paint himself as the savior of the R party, bringing it back to their glory days of Reagan, and convince the center and left leaning voters that he's moderate enough for their vote. LOL, the power brokers in the party were begging him to run in 2012 and all of a sudden they are snubbing him? Heh. The guy is crazy like a fox. He's got most of the people in my blue state convinced that he's the man.
That threat was serious enough that even his major compromises with the West – ending support for terrorism, dropping his pursuit of nuclear technology, working with the US military and intelligence services – were not enough to protect him. One of the few African nations with independent wealth, Gaddafi had plans to make the continent independent of Western institutions like the IMF, and World Bank.
Gaddafi was the force behind the creation of the African Investment Bank, and in 2011 of the African Monetary Fund to be based in Yaounde, Libya with a US$42 billion capital fund and the African Central Bank based in Abuja, in Nigeria. The IMF, whose economic blackmail has resulted in social devastation throughout the developing world, was headed for irrelevance. The same countries the bombed Libya tried for years to undermine these efforts but failed. Faced with the severe damage caused to the global financial system by the 2008 meltdown, getting rid of Gaddafi was even more important. Gaddafi’s longer term plans for a single African currency backed by gold – and no longer accepting US dollars in payment for oil – was an even greater threat as it would have weakened an already weaken US dollar.
Chris Christie wishes CPAC ‘all the best’
New Jersey Gov. Chris Christie might have been snubbed by the Conservative Political Action Conference, but he wishes CPAC “all the best.”
“So I didn’t know that I hadn’t been invited to CPAC until like two days ago when I saw it in the news,” Christie (R-N.J.) said in a clip posted on his YouTube page Wednesday, his first comments on CPAC since news broke this week that Christie was not invited to speak. “So, yeah, apparently I haven’t been invited. Listen, I wish them all the best. They’re gonna have their conference, they’re gonna have a bunch of people speaking there, they don’t want to invite me, that’s their call. It’s their organization, it’s their business and they get to decide who they want to have come and not come.”
Storyville: The Queen of Versailles, BBC Four
Canny, compulsive documentary takes the American Dream to its illogical extreme
Admittedly on one level, the Siegels’ story is as familiar as they come: Florida real-estate mogul David got rich fast in the early Noughties thanks to the credit-spiking success of his timeshare company – fittingly, a company that provided people with the opportunity to live in homes they could never afford outright – but got hit with equal force by the credit crunch.
What sets this family apart from the average recession-stricken American household is their aspirations. When the 2008 crisis came, the Siegels were midway through building their dream home from the ground up – a 90,000 square foot monstrosity made in the image of the Palace of Versailles. It was to have 30 bedrooms, 10 kitchens, a bowling alley, an ice rink, a beauty salon, multiple tennis courts and its own baseball field. It remains, even now as it languishes in a purgatorial state of semi-completion, the largest house in America.
Blog Posts and Tweets of Interest
U.S. soldier Bradley Manning pleads guilty to misusing classified data in Wikileaks case reut.rs/13qvzX1— Reuters Top News (@Reuters) February 28, 2013
Bradley Manning on "Collateral Murder" video: "Most alarming was the bloodlust" of the air weapons team. #WikiLeaks— Kevin Gosztola (@kgosztola) February 28, 2013
Will Amnesty and Human Rights Watchhave the courage to name Bradley Manning a political prisoner? Or do we need to wait 20 years?— WikiLeaks (@wikileaks) February 28, 2013
Secret US gov agents testifying against alleged WikiLeaks source will hide behind "physical screens or disguises," courthousenews.com/2013/02/27/552…— WikiLeaks (@wikileaks) February 28, 2013
The most important, detailed article on the Manning case so far: "journalism on the internet is an act of war" alexaobrien.com/secondsight/wi…— WikiLeaks (@wikileaks) February 28, 2013
Camera is fixed on the judge in case we see the 'classified' docs already published across world on the WL website.#Manning— Alexa O'Brien (@carwinb) February 28, 2013
@benjaminwittes But as to Brennan's confirmation (note delay in vote to Tuesday), I think it's a tough calculation.— emptywheel (@emptywheel) February 28, 2013
House Judiciary Committee Written Statements for Today's Drone Hearing j.mp/Wil7iI— Julian Sanchez (@normative) February 27, 2013
Obama Memo Threatens Whistleblower Protections pogo.org/blog/2013/02/o…— POGOBlog (@POGOBlog) February 28, 2013
Oh, wow - look at how cozy with WH officials and unbelievably petulant Ron Fournier isnationaljournal.com/politics/why-b…— Glenn Greenwald (@ggreenwald) February 28, 2013
Super Big Shot Rich Guy Jamie Dimon bullying Mike Mayo on a conference call. Very 2006. Also dickish. bloom.bg/128Szua— Jeff Macke (@JeffMacke) February 27, 2013
Jack Lew takes the oath as Treasury Secretary - How the US dollar did under Geithner bit.ly/ZMcTAb— ForexLive (@ForexLive) February 28, 2013
Huh. Is it possible that Qaddafi's bad investment and inside trading on ketchup will FINALLY get Goldman in trouble?— emptywheel (@emptywheel) February 28, 2013
JPMorgan Chase CEO Jamie Dimon: 'We Actually Benefit From Downturns' huff.to/XjzGiy | "We" must refer to CEOs.— Rick Cooley (@rcooley123) February 28, 2013
.@thestalwart's mancrush on Jamie Dimon is just adorable.— Blake Hounshell (@blakehounshell) February 28, 2013
Whoa. Jamie Dimon is on Fox Biz wearing Wrangler blue jeans, and I'm wearing Wrangler blue jeans as well right now.— Joseph Weisenthal (@TheStalwart) February 28, 2013
Jamie Dimon to Mike Mayo: ‘That’s Why I’m Richer Than You’ dlvr.it/30zjTZ $$— Barry Ritholtz (@ritholtz) February 27, 2013
All these Vatican scandals make me wish for the uncontroversial good old days of Inquisitions and Crusades.— Stephen Colbert (@StephenAtHome) February 26, 2013
Shiver me timbers! RT @peasantparty: Pirate Jack Lew is about to be in control of our Treasure!— Jim White (@JimWhiteGNV) February 28, 2013
I'm more concerned about Scalia Law than Sharia Law— Zirgar (@Zirgar) February 28, 2013
Somebody's going to prison today on account of the U.S.'s criminal torture regime. But it's the goddamned wrong guy. It's @johnkiriakou.— Dan Froomkin (@froomkin) February 28, 2013
The Real Legacy of 'Zero Dark Thirty' Will Be in Interrogation Rooms - Atlantic Mobile theatlantic.com/entertainment/…— Jeffrey Kaye (@jeff_kaye) February 28, 2013
Eric Clapton,Jeff Beck,Jimmy Page-Layla,With A Little Help @ M.S. G (A.R.M.S. Concert 12-8-83)