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CNN Interviews on Debt Deal: Knaves, Thieves and Liars

6:36 am in Uncategorized by Scarecrow

CNN’s State of the Union featured Mitch McConnell, Chuck Schumer and Gene Sperling, ending with Mark Zandi. Their collective task, and they all agree on this, was to sound reasonable while not explaining what really matters in the emerging deal President Obama is hoping to impose on a helpless, and increasingly hopeless nation.

There were no guests to represent the victims of this deal, and there will be tens of millions of them.  CNN invited no one who could explain or argue what a terrible deal this would be for the nation.   The nation’s economy, the elderly, the poor and the unrepresented are about to take a serious drubbing, but thank the gods both Democrats and Republicans, Congress and the President will willingly administer the beatings and continue them until morale improves.

The basic components are reported to include:

1.  Raising the debt limit by enough to get us into 2013, about $2.6 trillion or so.  (No one thinks to ask, what then? Do we destroy even more government then?)

2.  Cutting spending by at least the same amount, possibly even up to $3 trillion?

3.  Agreeing to about half of those cuts now.

4.   Creating a 12-member, Cat Food II Commission to achieve the other half by the end of the year, by greasing the Congressional skids for more cuts.

5.  Adding “triggers,” so that if the Cat Food II Commission fails to agree, automatic measures are imposed to achieve the debt reduction goals.

6.  Allowing a vote on some form of balance budget amendment to the Constitution.

7.  Not mentioned: Remaining silent on anything that the country actually needs, like jobs, rescuing states, alleviating poverty and income equality, reining in the financial sector, stopping the looting, holding these criminals accountable, making the investments needed now and in the future, or planning to rescue the economy if it tanks again from the stupidest economic policies one could possibly imagine.

According to Mitch McConnell, who refused to reveal any details other than those designed to assure his craziest supporters, the deal may ultimately include as much as $3 trillion in spending cuts but include no new revenues. Host Gloria Borger asked, why would he expect Democrats to accept a deal with no revenues?  Mitch trotted out the half chestnut that even the President agrees that raising taxes when the economy is weak would be a terrible idea.

Okay, but predictably, Ms. Borger did not then ask why the same implicitly Keynesian argument McConnell is using to protest tax increases does not apply with at least equal or greater force to spending cuts and government layoffs when the economy is weak.  So Mitch McConnell never had to confront his favorite talking point’s hypocrisy.

Borger asked whether there might be any new revenues coming out of the Cat Food II Commission.  “There are no tax increases in this deal,” he said.

Then it was Chuck Schumer’s turn to lie to the American people.  He didn’t explain why, two days after the Commerce Department report showed that the economy is close to sliding back into official recession and the prospects for reducing unemployment are dismal, he and fellow Democrats were not screaming for a jobs and stimulus plan instead of spending cuts.

He wasn’t ask how he can assure the country that $3 trillion in spending cuts over the next decade will not hurt the economy and millions of Americans and seriously degrade vital public services.  Nor was he asked how the Democratic leadership can justify a total capitulation to Republican blackmail and adopting their talking points.

No, Chuck’s main concern was making sure that when the Cat Food II Commission fails to agree, the triggers that kick in to impose further carnage on the economy and hurt millions of real people will hurt some Republican sacred cow too.   Yeah, Chuck, that will make us all feel better.  Gosh, we lost Medicare and Social Security benefits, but man, we sure stuck those hedge fund guys!

Next we heard from Gene Sperling, the White House spinner.  He repeated, as David Plouffe did on Meet the Press, all of the Administration’s talking points we’ve heard from Obama and Bill Daley, most of which are illogical, economically backwards and/or morally offensive.  “You can’t ask for sacrifice from seniors,” Sperling started off.  But he didn’t know when to shut up.  Instead he added “without asking for some sacrifice from the well off.”  So, you can hurt seniors.

In the Orwellian universe in which this White House spins, “shared sacrifice” means that it’s okay to hurt seniors and extract even more from the poor and those without political power as long as we also change the tax treatment for hedge funds or corporate jets.  “Compromise” means giving away the store, caving in to Republican blackmail, enraging Democrats and betraying everyone who voted for Obama or the Democrats.  And then Sperling repeated the gibberish about how all this will restore confidence to the business community.

Next, Mark Zandi said the reported deal is a “great deal,” and that the $3 trillion reduction comes close to the “down payment” that will get us to “sustainability.”  The market will react very positively, he assured us, knowing the reason is because lots of market folks believe this gibberish.

Would this improve the economy or create jobs, Borger ask?  “Yes,” he said, forgetting that it contradicts everything he’s ever said about the effects of stimulus, the need for more, and the negative consequences of reducing government support while the economy is weak.  There must be a dozen of his quotes out there,does Gloria Borger know?  This deal will provide “certainty,”  Zandi assured us, thus laying the foundation for improved growth in coming months.  Confidence fairies flew out of my screen.

The only hope the American people ever had during this mugging, though no one but Krugman is ever allowed on tv to explain it, was that this abysmal Congress would deadlock.  That would force the President of the United States to ask his lawyers again whether there was anything in the Constitution that gave him sufficient executive authority to tell Congress and the Republican crazies to kiss off and tell his Treasury Secretary to avoid default and pay the nation’s bills, all of them.

“Uh, well, gosh, now that you asked in that light, Mr. President, there are actually several ways you could do this . . . “  And then David Plouffe would send an apology to David Gregory for declaring the opposite today.

But that was never what President Barack Obama wanted.  He used the phony debt crisis and debt limits extortion to get what he’s always wanted: shared responsibility in cutting programs for the elderly and the poor, while protecting the interests of the financial backers whose millions he’ll need to get re-elected.  And never mind that he’s destroyed what’s left of the Democratic Party, not to mention a nation’s hopes for humane government.

Did the GOP Play Hooky During Third Grade Math?

12:52 pm in Uncategorized by Scarecrow

Compared to laying siege to government, hurting millions, and putting the economy at risk, it’s only a minor irritant, I suppose, one of the dozens of little misrepresentations that we are so used to hearing from the right wing that we just shrug our shoulders and wait for something new. But the fact the media almost never pushes back suggests that letting it slide is a mistake. And it’s just fractions!

Remember third grade math? Sure you do. It’s when you probably first learned fractions. Numerators! Denominators? Percentages! Pies! Well, it seems many right wingers skipped that year, because they can’t recall that a fraction has both a numerator and a denominator, so the size of the fraction depends on both.

So night after night, apparent third grade dropouts tell news anchors and talk show hosts, none of whom even sighs (sigh), that government spending has exploded under Socialist Obama. Before Obama, it was about 19 percent of GDP or 1/5th. But now its almost 1/4th, or 24 percent of GDP.

Tom Coburn said that on my public tv. Boehner and McConnell and Kyl say that. Every Tea-GOP and rightwinger has it tatooed on their foreheads, and Sarah Palin has is written on her palm. From 19 to 24 percent! Yikes!

Here’s Professor Krugman dragging us back to third grade with The Truth about federal spending:

The fact is that federal spending rose from 19.6% of GDP in fiscal 2007 to 23.8% of GDP in fiscal 2010. So isn’t that a huge spending spree? Well, no.

First of all, the size of a ratio depends on the denominator as well as the numerator. GDP has fallen sharply relative to the economy’s potential; here’s the ratio of real GDP to the CBO’s estimate of potential GDP:

Krugman goes on to use actual data related to the denominator. Facts! math! Annoying. How does he remember this complicated stuff?

He then shows that the remaining increase in the numerator is due almost entirely to reduced revenues and higher safety net spending caused by the recession, plus temporary stimulus spending, also necessitated by the recession, that’s now phasing out.

Bottom line. No permanent increase in the size of government. It’s the recession, not due to Obama. And Republicans either don’t know third grade math or they’re just lying.

We all know this, but it’s still stunning, and disheartening, that an entire party can be that dishonest and get away with this nonsense night after night.

Update: Mark Thoma of the Economist’s View finds David Frum also stunned by the Wall Street Journal’s denial of elementary math.

If you were to write a story about government debt, you’d probably be inclined to write about the two sets of government decisions that produce deficits or surpluses: decisions about expenditure and decisions about revenue. You’d want to do that not only as a matter of fairness, but also as a matter of math.

And that’s why, my friend, you would wash out as a WSJ editorialist. They wrote this editorial without any reference to revenues whatsoever. Boom! Gone! Don’t deny reality. Defy reality. . . .

One of the many traps and impediments facing a Journal editorialist writing about debt is that up until 2009, the US debt burden rose most under the two presidents the Journal most ardently supported: Ronald Reagan and George W. Bush. The debt burden declined most under the presidents the Journal most despises – Dwight Eisenhower, Bill Clinton and Jimmy Carter.

Math has a well known liberal bias.

NYT Economist: Economy Gasping for Air, So Cut off Air Supply Slowly

8:47 am in Uncategorized by Scarecrow

Catherine Rampell, the New York Times’ usually sensible economist, provides a good commentary on today’s depressing Commerce Department report on our stagnant economy. If you read the first two thirds of her article, you’d logically conclude that unless we can find a replacement for the rapidly fading federal stimulus, there isn’t anything on the horizon to raise GDP growth and boost employment. Logically she ends with this:

“There’s not going to be additional monetary stimulus, and it’s hard to imagine any fiscal stimulus given the current discussion in Washington,” Mr. Ryding said. “So what’s going to get us out of this? The inevitable conclusion is time, and that’s not very satisfactory.”

But somewhere in the middle, without warning or logic, Rampell gets captured by Pod People.

The Commerce Department report tells us the economic recession was much deeper than previously believed — we are still not back to the GDP levels of 2007. And the second dip this year, while not yet technically a “recession” because GDP growth hasn’t gone negative yet, was worse than originally reported.

As Dean Baker reminds us, demand was crushed, the 2009 stimulus helped reverse that, but the stimulus is quickly winding down and is now offset by severe reductions in state government spending.

The result is entirely predictable: Depressed demand from people losing $6 or $7 trillion in wealth, plus declining or negative stimulus, equals a declining economy, with little or no growth and worsening unemployment. You couldn’t ask for a clearer confirmation of Keynes and the need for immediate, substantial new stimulus.

So what happens when a sensible economist becomes a Pod Person? They say things like this:

Washington, therefore, has a delicate balancing act in its current debt ceiling debates. Given the unsustainable debt trajectory that the economy is on — primarily because of the country’s growing health care obligations — Congress needs to impose greater fiscal discipline. But imposing too much too soon, or being too focused on the wrong types of spending cuts, could be self-defeating by weakening growth so greatly that tax revenue falls and requires the country to borrow even more.  

Given inflation concerns, it also seemed unlikely that the Federal Reserve will swoop in with another round of monetary easing to goose growth.

Shorter Rampell: The economy is gasping for air, so we need to cut off the oxygen supply more slowly. Since core inflation is very low, the Fed should worry about hyper inflation. And because our private health providers charge too much to provide less than universal coverage, we have a debt crisis and should cut Medicare.

You can’t argue with Pod People.

(For a human interpretation of today’s dismal economic report, see Dean Baker.

What Is Standard and Poor’s Agenda? Because It Ain’t About Default Risk or Economics

7:52 pm in Uncategorized by Scarecrow

While drafting this post, Jane Hamsher asked me to check on what reputable economists were saying about the underlying premises of the debt debate and the position S&P is taking about the risks of a US default. After reading her timeline and checking the Econ sites, here is what I found.

There doesn’t seem to be a sound basis for the current debt hysteria, or for S&P’s insistence on at least a $4 trillion down payment on debt reduction as a reasonable condition for maintaing a strong credit rating, any more than there is for the crackpot notion that a non-crazy US can be forced to default on its debt.

As every reputable economist keeps reminding us (see, e.g., James K. Galbraith, Joe Stiglitz, FT’s Martin Wolf, Peter Radford, Bruce Bartlett, Warren Mosler, etc), the US is not Greece and does not face its risk of default. Unlike Greece, the US has its own currency, and unlike Greece, its debt is denominated and would be paid in its own currency. It can create that currency at will. So the only way the US can be forced into default is if Congress and the President do something that would be insane, like refuse to raise the debt limit, and the President then refuse to use the Executive authority of the Constitution to prevent a default.

Further, the notion that the US is anywhere close to some theoretical or practical limit to its borrowing authority is questionable at best (more from Shiller and Krugman). It’s not supported by our own history nor the examples in other countries (e.g., Japan).

And we aren’t facing some out of control deficit crisis either. As Simon Johnson, James Kwak and others have pointed out, if the US simply allowed the Bush tax cuts to expire as scheduled, and we assumed other likely changes — some positive (less war), some negative (doc and AMT “fixes”) — to occur as expected, the US primary budget (excludes interest) would be in balance or surplus by 2021.

So there’s no looming debt crisis over that 10 year period. Rather, as many economists tell us, and today’s awful Commerce Department report tells us, the real “deficit” we face is a jobs and spending deficit, because were not spending enough to create or even move strongly towards full employment.

The problem in later decades is the escalation in private health care costs, which represent an economy-wide problem, not a separate Medicare crisis. Wanna fix that? Start with Medicare for All, not forcing seniors to wait two years longer.

The officers of S&P may have their own reasons for squeezing the Administration or wishing the debt-GDP ratio were lower — such as forcing Congress to cut spending on Social Security and Medicare and thus pushing the elderly into greater reliance on their favorite Wall Street clients and their privatized alternatives. But they don’t have a solid economic theory to support it nor do they have the rating competence or credibility (Mike Konczal; more from Krugman) to justify telling investors their own arbitrary ideological preferences should be the basis for assessing US default risks.

Whatever S&P’s agenda, it has nothing to do with avoiding default risks or putting the US on sound fiscal footing. It’s time the media and Congress started asking them what their political agenda is and whom it serves.

President Emily Litella To Supporters: “Never Mind” the Balance Thing

7:36 am in Uncategorized by Scarecrow

"Never Mind"

On Monday night, President Worse than Hoover urged all good Americans to call Congress and demand they “balance” egregious spending cuts with a few tax increases that we would not call tax increases, arguing that if you change the taxation of hedge funds, it’s okay to cut Social Security.

On Wednesday morning, after the CBO reported that neither the Reid cuts-only plan nor the Boehner cuts-only plan would cut as much as each claimed, both men announced they would work to make their respective cuts-only plans even worse by adding even more cuts only.

In response, President Emily Litella told his supporters, “never mind!” He’ll now propose to combine Reid’s awful plan A with Boehner’s godawful plan B, and we’re good.

After this, it’s probably prudent to assume the only people who still accept anything this President says may well be Pod People. Check under your beds.

Krugman on the Debt Debate: Cults, Centrists and Balance

6:31 pm in Uncategorized by Scarecrow

Paul Krugman laments on his blog that the nation is suffering from “the destructive influence of a cult that has really poisoned our political system.” The cult he identifies is not the right-wing crazies in the Tea-GOP, though they’re bad enough, but the media’s unthinking assumption that the “center” between opposing positions is the responsible position.

Here’s Krugman on The Cult that is destroying America:

No, the cult that I see as reflecting a true moral failure is the cult of balance, of centrism.

Think about what’s happening right now. We have a crisis in which the right is making insane demands, while the president and Democrats in Congress are bending over backward to be accommodating — offering plans that are all spending cuts and no taxes, plans that are far to the right of public opinion.

So what do most news reports say? They portray it as a situation in which both sides are equally partisan, equally intransigent — because news reports always do that. And we have influential pundits calling out for a new centrist party, a new centrist president, to get us away from the evils of partisanship.

Krugman goes on to note this media habit means there’s no penalty for extreme behavior, so we get crazier and crazier results. I agree with that, but I think a related problem here is how the media is allowing Mr. Obama and others to define the responsible center.

In the debt reduction negotiations, the President keeps arguing for a “balanced” approach that includes both spending cuts and revenue increases. He wants the media to regard that definition of “balance” as the responsible centrist approach, and I think some have bought that view (eg, see this NYT editorial).

But the country’s actual center does not agree. As Jon Walker and David Dayen’s posts on polling results keep telling us, nothing the President and Democratic leaders (let alone the Republicans) are proposing is close to the political center.

All the polls show Americans strongly oppose cutting Social Security, Medicare and other programs/benefits for the poor and middle class. Instead of (and not in addition to) cuts, they support increased revenues, making the rich and large corporations pay more in taxes if needed to help lower deficits. Somewhere between 60 and 80 percent of Americans, including both parties and independents, consistently support those views. The Administration’s proposals are extremist.

Nor does Mr. Obama have coherent definitions of “balance” or “shared sacrifice.” He defines debt reduction “balance” as requiring the rich to give up a little something — a few tax breaks — so that the non-rich — students, the elderly, the poor, etc — don’t have to carry as much of the burden of deficit reduction. But there’s no logical connection between these two categories.

It’s either fair or not fair to cut student loans, or food stamps, or health and safety agencies, or Social Security or Medicare benefits for the elderly. For example, since [all Women and Children's program beneficiaries and] most Social Security/Medicare recipients depend heavily on those benefits to avoid poverty, there is no credible argument for cutting or delaying their benefits. If anything, we should be increasing those benefits and providing them earlier.

That fairness has nothing to do with whether or not hedge fund advisers get a tax break or corporate jets get different deductions. There’s no level of increased taxes on millionaires or hedge fund owners that would make it okay to punish seniors or to reduce benefits for women and children on the edge of poverty.

So Mr. Obama is talking cruel nonsense when he argues for “balance.” These elements don’t “balance” each other.

The current federal budget is not balanced, but this imbalance is not how Washington understands it. A balanced budget would pursue the level of federal spending we need to move the economy strongly towards full employment. By that measure, we need to be spending more.

[Seen in this light, state budgets are not "balanced" when they lay off tens of thousands of workers and close essential state services. They are extremely underfunded, primarily because the federal government is failing its responsibility to make up for declining revenues and higher safety net spending resulting for a national "lesser depression."] Many other government programs warrant either more or less spending, depending on their importance and efficacy in furthering the public interest.

When is the last time you heard a reporter ask the President or Congress how their spending proposals met these needs?

[To be sure, we need to reform taxes,] but it would be helpful to consider the severely unequal distribution of wealth and income that has allowed almost all of the increase in national wealth over the last two or three decades to be captured by a tiny fraction, the richest people in the country. The percentage of wealth and income left to the poor, middle class and average workers has been virtually stagnant or worse.

Why aren’t reporters asking politicians whether their notions of “shared sacrifice” would reverse or exacerbate that egregious maldistribution? If they examine these proposals, they’d report that all of those under consideration — from Simpson Bowles through Harry Reid’s surrender proposal to Boehner’s predator enabling — would make matters worse. That’s not “shared sacrifice.” It’s legalized theft, systematically transferring more wealth from the poor and middle class to the wealthy.

So it’s not just the media’s cultish addiction to some perverted “centrist” view. It’s also the media’s unwillingness to explain that when the President and Congress use terms like “balanced” or “shared sacrifice,” they don’t mean what you think they mean.

[Wed. a.m. edits]

NYT’s Sorkin: The Titanic Has Enough Life Boats for the Rich, So What’s the Problem

10:50 am in Uncategorized by Scarecrow

SS 'Titanic' leaving Southampton.

SS 'Titanic' leaving Southampton. by National Maritime Museum

The debt limit debate has certainly been a fertile ground for silly commentary, and now Andrew Ross Sorkin, who contributes to the New York Times Business Deal Book, offers his own contribution.

Sorkin notes that the stock markets and bond traders have not yet panicked, even though the debt limit negotiations have broken down. So he runs out to quote those who say all the scaremongering was both wrong and a strategic mistake, and those who issued warnings have lost all credibility.

The thrust of Sorkin’s article, however, is not merely about political credibility or negotiating strategy. It is about whose interests are at risk.

Without acknowledging it, Mr. Sorkin is simply giving credence to a favorite Tea-GOP talking point, that Tim Geithner has more than enough revenues coming in to pay the interest and principal on bonds and other sovereign credit obligations. So there is no risk of “default” and it’s irresponsible scaremongering to tell granny she might not see her Social Security checks or get Medicare. The market can do the math, and that’s why investors have not panicked yet.

Of course, the non-wealthy can also do the math, and they can figure out that if these preferred creditors are fully protected, but the government is funding close to 40 percent of it’s spending via deficits, a lot of other people will not be funded. It’s just math, and that is essentially the point Geithner has been making. This thought doesn’t appear in Sorkin’s article.

With more obligations than revenues, someone must lose. Tim Geithner, probably not everyone’s choice for protecting main street America over banks, Wall Street and foreign creditors, will make the calls on what gets paid and what doesn’t, no doubt with with help from Bill Daley, Dan Pfeiffer, and Barack Obama. Feel better?

And isn’t that the Tea-GOP game plan? If they can’t force the government to slash the New Deal in a Boehner/Obama grand screwing, or the current Harry Reid or Boehner versions of that, they’ll force the contraction another way. And what will that contraction do to the economy, Ross?

Sorkin can’t be bothered to mention, let alone discuss, what a major cut in government spending on everything else would do to the economy. Those who have looked at one scenario suggest that a 10 percent hit on GDP could essentially crash the economy again, never mind what that means to millions of real people who could be devastated and to essential government health and safety services.

But not to worry. There are enough life boats for the rich, so those of you who do not have first class tickets, please don’t cluster around the boats. It just complicates the rescue plan.

Elizabeth Drew Wants a Better President, Also a Pony

11:24 am in Uncategorized by Scarecrow

A pony for Elizabeth (photo: Tambako the Jaguar)

A pony for Elizabeth (photo: Tambako the Jaguar)

You can hardly blame the growing number of decent folks, long respected, admired writers like Elizabeth Drew, who are now, or still, calling on Barack Obama to stop being a wimp, a disappointment, a terrible negotiator, or a betrayer to his people, principles and Party and become a better President. But he won’t, people, so what’s plan B?

I’m a great fan of Ms. Drew; have been for, um, decades. In her now widely seen article, she joins many others urging Mr. Obama to just say no to the economic terrorists holding the government, its credit, its finances and its functions hostage. Just demand a clean, no strings bill to raise the debt limit and tell the nation, and the Tea-GOP, that he’s had enough. The nation would cheer.

The problem with all such urgings is they assume the President is being forced to accept terrible public policy, and that only a stiffer spine, backed by his supporters, or perhaps a more clever bargaining strategy, would release the inner President he keeps hidden. Read the rest of this entry →

NYT’s Ross Douthat Illustrates Paul Krugman’s Point on False Equivalencies

7:42 am in Uncategorized by Scarecrow

Paul Krugman’s blog today laments another example of false equivalence, when he catches Clive Crook claiming that if the shoe were on the other foot, Democrats would behave like the Tea-GOP. They’d take the US credit to the brink, holding the economy hostage to impose the Democrats’ policy objectives, so they’re just as bad as the Tea-GOP crazies who have created the debt limit crisis.

From Krugman’s blog, Clive Crook Is Drowning America:

Crook accurately describes the destructive behavior of the GOP and how it’s making the country ungovernable. But does he then condemn the perpetrators? Not exactly. Instead, he calls a plague on both houses:

If positions were reversed, Democrats would feel just as entitled to disable, by any means necessary, their enemies’ legislative accomplishments.

Would they? Did they in fact behave like that when Republicans held the White House? No, they didn’t; Crook equates real GOP behavior with an imagined Democratic future. . . .

The NYT conservative columnist, Ross Douthat, then illustrates Krugman’s point. Right across the NYT op ed page from Krugman’s regular Monday column is this pernicious example from Douthat.

Some conservatives first assumed the Norwegian killings were done by Muslims, but now Ross is struggling to deal with the right wing political preferences and writings of the alleged killer of over 90 people. To be sure, Ross’s column acknowledges the links between obvious terrorism and right wing, Christian extremists. But Douthat can’t just make that point; he’s got to drag a Democrat into the same sewer.

In his opening paragraphs, Douthat insists on reminding us first that his right wing blogger buddies once made jokes about how Al Gore argued against the destruction of the environment. And if you cherry pick Gore’s quotes, you can find rhetoric that might have been echoed in the writings of the Unabomber, Theodore Kaczynski:

Was it the bearded hermit who hailed “isolated pockets of resistance fighters” for struggling against modern society’s “assault on the earth”? No, that would be the former vice president. Was it Kaczynski, the mathematics Ph.D. turned mad bomber, who complained about the “destructive” impact of bringing a child into “the hugely consumptionist way of life so common in the industrial world”? No, Gore again.

Well, that settles it. The former Vice President of the United States wrote an “eco-manifesto” and talked like an eco terrorist and stoked mass murder, because he thought human resource extraction was “destructive,” a point I thought was undeniable. So when you think about Norway, remember what Al Gore said.

Of course, Douthat then denies he’s trying to make the connection he just spent the first three paragraphs making.

Having planted that little gem in his readers’ heads with his opening paragraphs, Douthat is now cleared with his buddies to sound reasonable by admitting the undeniable — that the suspect in the Norway murders was reportedly a violent, right wing Christian extremist instead of the Muslim some of them first assumed.

I’m wondering if the NYT op-ed editors even raised an eyebrow when they saw Douthat’s “right-wing monster.”

White House CoS, Bill Daley, Has No Clue What’s Keeping US Out of a Depression

7:36 am in Uncategorized by Scarecrow

Visit msnbc.com for breaking news, world news, and news about the economy

Appearing on Meet the Press, White House Chief of Staff, William Daley made one of the most clueless statements about the American economy we’re likely to hear outside the Tea-GOP.

Explaining why the President was putting so much effort into trying to reach a grand bargain with John Boehner that would include trillions in spending cuts on worthwhile government programs, Mr. Daley essentially said that Obama was doing this not merely because we need to raise the debt limit, but because, “this deficit is a serious drag on the economy.”

Think about that: “The deficit is a serious drag on the economy.”

Apparently, the man closest to the President of the United States, and on whom the President relies for political and economy advice, does not know that the only reason the terrible unemployment numbers that may end his President’s re-election hopes are at 9.2 percent and not 11 or 12 percent or higher is because of the increased federal deficit spending of the last two years.

And the only thing that can keep unemployment from reaching higher levels in 2012 is continued federal spending, which they will cover via more deficits. If Mr. Daley’s diagnosis were translated into policy — and that seems to be what’s happening — he and his President will need new jobs in 2013.

Now I wouldn’t expect a political appointee to know much about some accounting identity that explains why federal primary deficits are inescapable when the private sector just lost trillions in housing wealth and we have a trade deficit. So never mind that chasm.

But how is it possible Mr. Daley cannot recall that the principal reasons Mr. Obama proposed and signed the deficit spending stimulus bill in 2009 were to avert a depression and keep unemployment from rising and, they hoped, to reduce it below the higher levels predicted at the time. That their predictions were too optimistic and thus the stimulus too small has become fodder for Tea-GOP demagoguery, but that’s another story.

On the debt reduction negotiations, David Gregory asked Mr. Daley what he must have thought was a gotcha now question. He showed Mr. Daley a graphic showing the increase in the total debt since Obama took office, with the debt going from $10 trillion to $14 trillion or so, and projected to rise another $2 trillion.

Then Gregory smuggly concluded, “can’t you [Mr. Daley] see the logic of those who argue that given this huge increase in the debt, it makes sense that we reduce that only with spending cuts and not tax increases?”

The correct response to a question that jaw-droppingly stupid would have been to award Gregory the Douglas Feith Award and terminate his contract with NBC. Daley may not get the allusion and couldn’t say that in any event.

But in responding, Daley couldn’t even remember to remind viewers that the bulk of that debt increase was entirely the result of the recession: fallen tax revenues and increased safety-net spending, plus the stimulus, all responding to the recession Mr. Obama inherited. Instead, he left us with the lecture on how the debt or deficit was a serious drag on the economy, so our President was really focused on that.

There isn’t a single adult left in this conversation.