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NYC Mayor Bloomberg Gives Goldman Sachs a Hug Over Hurt Fee Fees

8:41 am in Economy by Scarecrow

Marks: Ms. Piggy and Kermit (Wikipedia)

This is what happens when banksters rule your country.

New York City Mayor Michael Bloomberg visited Goldman Sachs Group Inc. (GS)’s headquarters in Manhattan in a show of support after a departing employee publicly criticized the firm’s culture yesterday.

“The mayor stopped by to make clear that the company is a vital part of the city’s economy, and the kind of unfair attacks that we’re seeing can eventually hurt all New Yorkers,” said Stu Loeser, a spokesman for the mayor.

“Unfair attacks”??  Just to be clear, what the resigning midlevel exec in the GS London office said in his New York Times op-ed was that the culture at Goldman Sachs was such that its clients were being bilked by trading schemes knowingly designed to rip them off, while the GS execs laughed about how gullible their “muppet” clients were for trusting them. That was shocking, but it wasn’t unfair or news, because that’s essentially what we’d already been told, in sworn testimony.  It’s what Senator Levin’s hearings and investigations found, what the SEC found in the case it settled, and what the Financial Crisis Commission found in its investigation and final report.

Goldman’s vultures should be shunned in polite company, even evoking the “good grief, I’m running for President!” statements from the likes of Mitt Romney, even though some of his best friends are vultures.  But apparently those rules don’t apply to Mayor Bloomberg. A mid-level exec reveals the GS culture is led by a bunch of thugs who bilk their clients and laugh about it behind their backs, and the billionaire Mayor of New York feels he needs to give the thugs a hug because their fee fees (literally) might be hurt?

In a rational country, that would end a politician’s career, but it won’t in today’s America. Instead we get to shake our heads in disbelief amidst rumors that Bloomberg may replace Tim Geithner as Secretary of the Treasury. (And never mind that Larry Summers, who helped defend Wall Street deregulation and argued during Dodd-Frank that TBTF banks are needed, is now being considered to run the World Bank.)  How reassuring that the man being considered for Treasury is someone who knows the value in having a Wall Street fully capable of tanking the world economy, defrauding whole nations, looting their clients, putting millions out of work, and . . . getting away with it.

Meanwhile, Tim Geithner was busy with a misdirection of his own, explaining that while it was politically unpopular, bailing out the banking system was necessary to avoid a depression. So brave Tim courageously did it anyway.

He reiterated his view that, around the time of the financial crisis, the public probably would not have supported the bailouts for banks that helped cause the crisis. But Mr. Geithner added that past financial crises had been made worse by governments that failed to act with appropriate force because they were afraid of doing something that was unpopular.

True, but a misdirection.

Most of Geithner’s critics give him and Bernanke credit for rescuing the financial system, per se, but fault them for leaving the criminal banksters in charge of that system and then allowing only watered down rules in Dodd-Frank for reining them in. The beef is they’ve done precious little to change the industry’s most harmful practices and incentives. The TBTF banks are now more consolidated, bigger and more powerful than before.

You can’t tell whether this is an ideological blind spot or just being disingenuous. Geithner is deflecting the issue, conflating the essential financial functions of the banking system with the banksters who manipulate it and their personal financial incentives. You can argue the Feds had to push trillions into the system to avoid a total depression, but they didn’t have to leave the criminals in charge of it.  So the crooks are still in charge, and as we’ve seen in the mortgage fraud cases they continue their criminal activities. Yet no one is being prosecuted.

The lesson is clear: Have you hugged your GS overseers today?  They’re very sensitive.

Governance As Bain Capitalism, Where American Workers Become Mitt’s Dog

10:29 am in Economy, Politics, Republican party by Scarecrow

The wealthy keepers of the Republican Party are in full panic mode since Mitt Romney foolishly put his brand of American capitalism on trial. Yes, he did it to himself. As soon as Romney made the ridiculous claim that his success at becoming rich from leveraged buy outs was his main qualification to be President, it was certain that his even dumber rivals would ask whether Mitt’s brand of capitalism was good for America or instead, “vultures” who were “looting” companies, enriching themselves and firing hapless workers.

Aware of the danger to the rigged game that makes a few fabulously wealthy at the expense of the many, the GOP’s financial elites must now invent fantastic narratives to defend “creative destruction”. This comes at a time when sensible voters are realizing they constitute the destruction part. What Romney helped create and successfully, ruthlessly, exploit was the enrichment of a favored few, including himself, while he and his friends became indifferent to the destruction of the middle class and American labor.

Of course, the questions Mitt himself raised are exactly what the country should be debating. After Wall Street’s self delusion and greed tanked the economy, throwing millions out of work and into fraud-laden foreclosures, the number one economic issue of our times should be whether the malefactors of wealth through financial engineering should be allowed anywhere near governmental power over the economy. Anything but a resounding “Are you nuts?!” is preposterous, so the next governance question is how do we exorcise these demons from the body politic.

The malefactors manipulated political influence in successive administrations via the heavily bribed corporate wings of both parties to bail themselves out with zero accountability. That they show little remorse and only token concern for their millions of victims only amplifies the issue’s primacy.

However he may resemble Gordon Gekko, you would think a man as clever or cynical as Romney would realize his becoming rich by putting corporate profits ahead of people while exacerbating the shameful disparity in income and wealth could become an automatic disqualification to lead a nation desperate to move in a different direction. But of course with enormous greed come enormous ego and equally enormous indifference to those who get strapped to the roof of the Mitt family wagon. As we watch Mitt-like GOP governors extend the destruction, it’s clear American labor is now Mitt’s dog.

It’s both amusing and appalling to hear Romney try to change the subject. He first whined that his rivals were attacking free enterprise or capitalism itself, and that would be “a terrible mistake for the party [no kidding!] and the country [hardly].”  Next he hid by saying this was just like Obama bailing out the auto industry, which of course Mitt had opposed. Even the Obama people could distinguish between actions designed solely to profit investors and those intended to save a strategically important American industry, its jobs and the economy. Private interests are not the same as public interests, but that’s what we should be clarifying this election. Too bad neither party seems to grasp this.

There’s a spate of right wing op-eds today asking whether Romney’s business experience qualifies him to be President. At WaPo, Robert Samuelson starts his column with that question, but then he ducks the answer when the examples from the Mitt era at Bain suggest it might not even have been a net good for business. Oh, my. So he just stops writing.

The Times David Brooks is even more embarrassed by the question and the evidence that drives the answer, so he too ducks. He diverts our attention by claiming that what we really need is not so much the CEO in politics but a President from the aristocratic class who looks to [Brooks'] God for guidance on how to govern America. I thought that was what Mitt and most of the GOP contenders were claiming for themselves. If only a just goddess actually used Zeus’ thunderbolts . . .

That leaves us with Paul Krugman’s dismissal in America is not a corporation.

But what really struck me was how Mr. Romney characterized President Obama’s actions: “He did it to try to save the business.” No, he didn’t; he did it to save the industry, and thereby to save jobs that would otherwise have been lost, deepening America’s slump. Does Mr. Romney understand the distinction?

America certainly needs better economic policies than it has right now — and while most of the blame for poor policies belongs to Republicans and their scorched-earth opposition to anything constructive, the president has made some important mistakes. But we’re not going to get better policies if the man sitting in the Oval Office next year sees his job as being that of engineering a leveraged buyout of America Inc.

More from the LA Times: Private Equity: Bad Rep, but Is it Deserved?

Oh My! CNBC’s Jim Cramer Goes Anti-Rick Santelli Over GOP Clown Debate

7:13 am in Economy, Republican party by Scarecrow

I don’t know what got into Jim Cramer.  Apparently, he must have thought the GOP Clown Car debate CNBC inflicted on its viewers involved a group of grown ups discussing serious economic and financial issue in a serious way.

Did he not know, before last night, that this group of GOP specimens includes some of the silliest, most clueless, confused, misinformed and/or intellectually challenged/dishonest bunch of charlatans ever assembled by a national political party?  Was he really surprised to learn these clowns perfectly reflect what the Republican Party has become, that they have nothing useful or even coherent to say about any of the nation’s real problems?

Europe is teetering on the edge of a financial collapse so serious it’s likely to cause a recession or worse there and drag the US back into it here.  Sounds like a serous topic, right?  And part of the reason is Europe’s leaders became enthralled with the same dishonest deficit/debt hysteria that afflicts the GOP and most of the Congressional Democrats, not to mention the President and his not-the-Chief of Staff corporate bagman.

Much like the US, Europe is burdened with incompetent political and economic leadership, epitomized there by a depressingly (literally) irresponsible European Central Bank. Collectively, they’re strangling their own economies in the absurd belief that if you punish and impoverish the debtors that buy your stuff, creditor nations that sell them that stuff will be just fine.

Sensible people understand the ECB’s abdication of its core responsibilities — e.g., lender of last resort in a financial crisis — will hasten collapse in Europe.  So naturally, half of the GOP’s clowns want to abolish the central bank here or “hurt” the Fed Chairman if he does something sensible to help the recovery, and the ones who know this is wrong are too cowardly to explain why that’s nuts.

It’s possible that Huntsman understands part of this — but he will never let on and it doesn’t matter for Mr. 1% anyway — and that Romney, in wandering between positions, misunderstands the rest but will take whatever position his audience needs to hear.  But it’s not credible that anyone else on that stage, including half of CNBC’s questioners — Rick Santelli! –  grasps what’s happening in Europe or here.

The GOP’s proposals are a mindless collection of talking points and pointless initiatives that at best would do nothing except give money to friends but collectively would make things worse.  In the meantime, their colleagues in Congress doggedly refuse to even debate even modest proposals that might actually help the unemployed and rescue homeowners and drowning states.

But this is not news.  We’ve known for some time that the GOP has become hopelessly corrupt, confused, corporatized, criminal and captured by teh stupid.  The one thing it’s definitely not is conservative.   It’s destructive of everything, and that means they’re dangerous. Even George Will knows this.

The Republican party should be abolished for the good of the country, and it’s astonishing that Jim Cramer is just discovering this.   Will Maria now admit it too?

“The First Thing We Do, . . .” Let’s Occupy the Super Committee

10:56 am in Economy by Scarecrow

Here’s a practical suggestion for those puzzled, impatient, frustrated or made hopeful by the Occupy Wall Street Movement.  Demand that the Congressional Super Committee meeting in secret somewhere in the off-Wall Street boardrooms of our nation’s capital disband, cease to function, go away . . . repeal its mandate and then subject its members to 30 days of public ridicule, if not rotten tomatoes.

Yeah, it’s time to occupy, disrupt, harass and disband the forgotten but still secretly conspiring Super Committee, the wealthy implementers of perhaps the dumbest act of economic self immolation since 1937.  Except for the war forever! Pentagon, the clowns in the GOP House Caucus, the lawless Justice Department, or the current White House political team, it’s hard to imagine a group of federal officials more intent and focused on doing serious, irreparable damage to the public interest or the social fabric that holds the Republic together.

Almost every evil that presumably matters to the Occupy Movement is being confirmed and negotiated behind closed doors by 12 representatives of the 1 Percent.  Almost everything they’re likely to agree to will harm significant portions — most likely the least well off — of the 99%.

And why are they doing this? Because they’ve bought the failed economic gibberish spread by an ideological cult of deficit hysterics, charlatans like Paul Ryan or billionaires like Peter Peterson, himself a perfect example of the 1 Percent.

There’s no doubt that what they’re selling is economic gibberish; their remedies have repeatedly failed in Greece, in Spain, in France, in Portugal, in Italy, and now clearly in Great Britain. From today’s New York Times editorial, discussing Britain’s Self-Inflicted Misery:

Austerity was a deliberate ideological choice by Prime Minister David Cameron’s ruling coalition of Conservatives and Liberal Democrats, elected 17 months ago. It has failed and can be expected to keep failing. But neither party is yet prepared to acknowledge that reality and change course.

Britain’s economy has barely grown since the budget cuts began taking effect late last year. The most recent quarterly figures showed the economy flat-lining, with growth at 0.1 percent.

New figures released this week reported Britain’s highest jobless numbers in more than 15 years. Independent analysts expect unemployment — now 8.1 percent — to keep rising in the months ahead. The government has kept its promise to slash public-sector jobs — more than 100,000 have been lost in recent months. But its deficit-reduction policies have failed to revive the business confidence that was supposed to spur private-sector hiring.

Drastic public spending cuts were the wrong deficit-reduction strategy for the weakened British economy a year ago. And they are the wrong strategy for the faltering American economy today. Britain’s unhappy experience is further evidence that radical reductions in federal spending will do little but stifle economic recovery.

But it’s not just the macro economic effects we should worry about from radically reduced federal spending.  It’s what the 1 Percenters think they’ll have to cut in an environment where Washington consistently ignores the public’s wishes — and the complaints of the Occupy movement — to curtail the military’s adventurism, strengthen education and the safety nets, provide universal health care, invest in infrastructure and get the rich to cover much more of the costs of maintaining a decent country.

When all of these democratically popular and worthwhile matters are ruled off the table, what the super secret cabal will go after is environmental, health and safety regulations; Medicaid, health research and coverage; weather and climate change monitoring and reduction; alternative energy support; emergency services; funding for financial oversight and anti-trust enforcement, consumer protection and enforcement actions against mortgage fraud, and so on.

In other words, there’s a strong overlap between the governmental functions the Super Committee is targeting to cut and the list of grievances that are driving tens of thousands of Occupiers to protest and millions more to stand in support.

The debt-limit deal last Summer gave the Super Committee a job-killing, recession-provoking, public-interest defunding mandate.   Every official who supported that deal deserves to be thrown out of office.  All of them.

The appointed Committee members exemplify precisely the corruption of government captured by the money and economic interests of the 1 Percent.  With it’s millionaire members and their links to campaign fund raising from the financial and energy sectors, the Super Committee is the epitome of everything the Occupy movement is protesting.

The Super Committee members and every member of Congress know this.  That’s why they’re meeting in secret, and the only interests who have unfettered access to their deliberations are the lobbyists for the 1 Percent.

And that’s why Congress and the Obama Administration, in a moment of extreme cowardice, agreed to impose a phony mandate on themselves to legitimize the anti-public, pro-corporate, pro-Wall Street proposals likely to emerge from the Super Committee.   It’s time to turn out their lights.

“Our Project Will Create Lots of Jobs!” Yes, but So Will Its Alternative

10:23 am in Economy, Energy by Scarecrow

Workers at Cardiff Mine disaster, 1913 (photo: Library of Congress)

Whenever we have debates about whether to approve more oil drilling, or more coal mountain-top removal, or another coal plant, the arguments always come down to jobs.  The advocates of the project tell us how many jobs will be involved in the construction or extraction processes or operating the plants.  And the opponents are left to argue over whether the jobs numbers are exaggerated, or whether they’re only temporary instead of permanent, or comparative macroeconomic effects.

So it’s not surprising that the advocates of the Keystone XL Pipeline and related tar sands oil development have bussed in lots of supposed pipeline construction and oil workers to argue at the State Department hearings on the Environmental Impact Statement for why the project should go forward and why it’s in America’s national interest. It will create jobs and allow us to use less oil from bad places

Opponents sometimes find these arguments difficult to counter; you don’t want to argue against someone’s job.   Both sides then offer expert studies on how many jobs would be created by the proposed activities.  These efforts are fine and worth doing, I suppose, but I think they miss the broader picture.

We have an economy whose annual GDP is about $15 trillion.  We use enormous amounts of energy, of all types, probably more than any other nation.  In an economy as large as ours that relies on energy as much as ours, there will always be a large number of jobs that depend on the industries that provide that energy.

So of course, any large fossil energy source, whether it’s coal or oil or natural gas, will employ lots of people.  Large projects to extract, refine, transport and market those carbon fossil products will each provide many jobs.

But exactly the same is true of renewable energy industries like solar, wind, geothermal and even more so for energy efficiency endeavors.  There are plenty of studies showing that if we directed more of the nation’s wealth towards solar and wind and energy efficiency efforts, those too would create and sustain large numbers of jobs.  And doing the right thing is a terrific investment.

When you generate electricity from wind or solar power, you need to generate less electricity from coal or natural gas.   You need less coal and less gas to be extracted and transported.  And making our homes and offices more energy efficient takes lots of labor, but the resulting efficiency improvements also mean using less energy generated from coal and natural gas.  All of these “alternative energy” efforts create and require hundreds of thousands of jobs.  And those jobs are growing and growing fast.

So the question has never been whether we should extract more carbon from oil or coal or gas to provide jobs, because providing enough energy for this country will always provide lots of jobs.  Always.

The jobs question is, and always has been, whether we want those jobs building safer, cleaner, renewable energy technologies and efficiency improvements, or we want only jobs extracting, refining and burning dirtier, harmful, carbon-based energy sources.

We’re going to have plenty of energy jobs — hundreds of thousands of them — either way.  It just depends on where we focus our money and efforts and what we want the consequences of our choices to be.  But one way, the smart way, we get clean, renewable sources that don’t destroy the environment or the health of our children and elderly, and they rescue the planet from catastrophic global climate change . . .  and the other way we get environmentally destructive extraction, unsafe industries, unhealthy communities with huge health care costs and a heated up, endangered planet.

The comparative job numbers are interesting, but you don’t really need them to decide the smart thing to do.  It’s a fairly simple, no-brainer of a choice, once you understand what the real choice is all about.

Pelosi’s Picks for Super Committee Embrace Tea-GOP Economics and Budget Gibberish

3:05 pm in Economy, Government by Scarecrow

If you’re hoping that Nancy Pelosi’s picks for the Congressional Super Committee have either the wisdom or courage to stand against the job-killing spending cuts Obama and Congress imposed on the nation, you’ll be disappointed.

Two of Nancy Pelosi’s picks, Chris Van Hollen (D-MD) and Rep. Xavier Becerra (D-CA), revealed that their understanding of depression economics is no better than Herbert Hoover’s or Michele Bachmann’s. From Brian Buetler at TPM:

Democrats on the new joint deficit Super Committee will seek more than the $1.5 trillion in deficit reduction they’ve been tasked with finding, in order to help offset some of those costs [of funding jobs programs].

“All of us would like to set as a target for ourselves even more than $1.5 trillion,” Rep. Chris Van Hollen (D-MD), who’s also the top House Democrat on the Budget Committee, told reporters at a Tuesday Capitol press conference. . . .

Committee member Rep. Xavier Becerra (D-CA) agrees with Van Hollen, and says he’d be willing to put key progressive programs on the table if it gives Congress more running room to shore up the economy now.

“It’s incumbent upon the Congress and the government not to make things worse,” Becerra said. “I’m looking at the last six months and I’m not seeing how job growth has come from some of this cutting of services, but again I’ll be open to it so long as…there’s proof that the proposal will lead to job growth and deficit reduction.”

Where do they come up with these absurd notions? Read the rest of this entry →

What Jonathan Chait Doesn’t Understand About Obama

6:55 pm in Economy, President Obama by Scarecrow

Jonathan Chait

Jonathan Chait

I suppose we should be grateful that TNR’s Jonathan Chait voluteered to write an apologia for President Obama as a way to explain to those he identifies with “the left” why Obama’s not such a bad President and to remind the “left” there were extenuating circumstances that explain the President’s failure, or refusal, to achieve what the left wanted and the country needed.

But one has to wonder: is Chait’s defense all the President’s supporters have left?  Because when Chait leaves out what really matters to Obama’s liberal critics, the piece comes off as an argument for Obama announcing “I shall not seek, and I will not accept . . .”

To assess the President’s performance, one must start with a more coherent story of what Obama and the country faced in January 2009 and what those conditions called for after eight disastrous years of the Bush presidency.  Some of us said both before and after the election that the devastation wrought by Bush on the Constitution, on the idea of government, on the rule of law and on the economy was so crippling and massive, it would likely take years to reverse it. But some things were clearly priorities and needed to be addressed immediately. Read the rest of this entry →

What Is Mr. Obama’s Principle on Recreating Slaves?

6:21 pm in Economy, Politics, Uncategorized by Scarecrow

Abraham Lincoln

"Abraham Lincoln" from onlinewoman on flickr

The President of the United States is not a descendant of former slaves, which may make it easier for him to draw analogies to what President Lincoln once said — see David Dayen’s post on Obama’s last lecture — about his willingness to make compromises about freeing slaves to advance his goal of preserving the Union.

Let’s recall what Lincoln actually wrote in his letter of 1862 to Horace Greeley in which he explained his Emancipation policy as it related to saving the Union:

. . . I would save the Union. I would save it the shortest way under the Constitution. The sooner the national authority can be restored the nearer the Union will be “the Union as it was.” If there be those who would not save the Union unless they could at the same time save Slavery, I do not agree with them. If there be those who would not save the Union unless they could at the same time destroy Slavery, I do not agree with them. My paramount object in this struggle is to save the Union, and is not either to save or destroy Slavery. If I could save the Union without freeing any slave, I would do it, and if I could save it by freeing all the slaves, I would do it, and if I could save it by freeing some and leaving others alone, I would also do that. What I do about Slavery and the colored race, I do because I believe it helps to save this Union, and what I forbear, I forbear because I do not believe it would help to save the Union. . . . Read the rest of this entry →

Move Over Doug Feith: Lawrence O’Donnell Has a Friend

7:10 am in Economy, Politics, Uncategorized by Scarecrow

There’s a fascinating, or should I say, depressing, debate occurring in Washington over how much federal spending should be cut as a condition for raising the debt ceiling, which everyone except the Tea-GOP crazies understands must be raised. There is a somewhat less important debate about the President’s strategy in getting to an answer.

Over several nights, MSNBC’s Lawrence O’Donnell (Last Word) has argued that Mr. Obama has pursued a brilliant strategy that has not only split the Republicans over their unwillingness to accept any tax increases but also put him in an advantageous position for getting a “clean” debt limit bill without egregious cuts, as well as gaining political traction as the only responsible adult in the room.

I’ve noted that this theory, while implying Mr. Obama is lying, conveniently ignores important facts and consequences about Mr Obama’s assumed strategy.

Never mind that with Mr. Obama’s consent/direction, Harry Reid is trying to make the “clean” bill as dirty as he can so that a least a few Tea-GOPs can vote for it and not force cowardly Democratic Blue Dogs to vote as though the country was more important than their reelection. I’ll only add that in yesterday’s press conference, the President reinforced points that increase my concerns about the economic message he keeps sending.

The President has again told voters that dramatically reducing our debt has to be the nation’s priority; we can’t fix the economy nor adequately relieve the real unemployment crisis unless we first solve the faux debt problem. So if we only raise the debt limit (McConnell’s original “clean” bill that Mr. O’Donnell thinks is Obama’s clever goal) without a major “down payment” on debt reduction, Washington and voters will continue to be preoccupied by the debt.

Well, as long as the President and the Tea-GOP both insist that we can’t fix the economy or create enough jobs unless we dramatically reduce the debt, then there’s no reason to expect this President or this Congress to fix the economy or create enough jobs.

That’s a very clever argument for not fixing the economy or creating jobs, or being blamed for it, but apparently, the perversity of relentlessly promoting that false belief has escaped Mr. Obama’s supporters, who seem to pay no heed to the dozens of economists telling us our leaders have their priorities backwards.

Pointing out this perversity is causing severe angst among Obama fans, who have now latched onto Lawrence O’Donnell’s lecturing progressives for their thoughtless criticism of Mr. Obama’s brilliant strategy.

In this wondrous article, progressives are accused of being naive, ignorant of American history, hypocrites in complaining about raising retirement ages now but ignoring that already happened, and best of all, simply too young and immature to know much, compared to O’Donnell who knows how to use a computer to edit the number in the debt limit statute. Read it all; it’s a treasure.

So what evidence is there of these crimes, and particularly the crime that hypocritical progressives are indifferent to the current eligibility ages in Medicare and Social Security?

I guess that when most progressives were proposing, in the health care debate, that Medicare be extended to everyone, or failing that, at least extending it down to 55, and failing that, at least let people buy into Medicare as an option on the Exchanges, and failing that, at least offer a public option linked to Medicare rates on the exchange that might one day become the equivalent of Medicare, that must have meant that none of us ever had a problem with raising the eligibility age of Medicare.

And when progressives argued for temporarily lowering the age for Social Security to help relieve the jobless crisis, and when Jane Hamsher this week front paged an article by James K. Galbraith in which, among other things, Professor Galbraith recommends, as he did in 2009, that we lower the eligibility age for Social Security at least temporarily as a jobs recovery measure, and when Jon Walker and I (and probably many others) endorsed that idea during the stimulus debates and again when they first started talking about “reforming” Social Security, and when we noted during the Cat Food deliberations that it was looney to consider raising the eligibility age further when millions of newly jobless were already being pushed prematurely onto lower benefit levels of Social Security and Medicare, that that obviously meant progressives were just fine with the fact the eligibility age for full benefits had been raised already.

It’s only slightly annoying that, without having any facts, Mr. O’Donnell’s friend assumes that those of us criticizing Mr. Obama’s economic views and who oppose putting Medicare and Social Security benefit cuts on the table must be too young and immature to remember much history. Ignoring the gratuitous insult to younger people, many of us are retirement age or older, and some of us recall being drafted to help kill little brown people in Vietnam. I guess none of us was wise enough to learn anything about politicians claiming to be against things like needless war and torture and indefinite detention but then engaging in or covering for them.

It is no revelation that Mr. Obama may think he can benefit with independents by insulting progressives. And it’s possible that when progressives push back, that helps him in some perverse way disconnected from the public interest. He and his brilliant political team now have the economy languishing, unemployment at 9.2 to 17 percent and the Tea-GOP holding US credit and the economy hostage. They’ve got him running several points behind the generic representative of one of the stupidest, most destructive political parties in American history. But O’Donnell’s friend concludes that every time progressives push back against Mr. Obama’s flawed policies, they’re helping Mr. Obama.

By that logic, the way for progressives to pressure the Administration to adopt policies in line with progressive values is to stand on a chair and clap as hard as they can every time the President reenforces Tea-GOP talking points, publicly criticizes liberals or undermines the progressive elements of the New Deal that produced a 50 year run of rising incomes, expanding middle class, and success for the country, never mind the Democratic Party. Of course, that would only confuse the independents, wouldn’t it?

Step down, Doug Feith; you’ve lost the title.

Related Updates from Americablog: Larry Summers on Obama’s 2009 plan to “reform” Social Security and Medicare.

From DeLong, citing David Dayen: No, no, no; first loot, then burn

Why Is Larry O’Donnell Implying Obama Lied to the Country and the Tea-GOP?

6:04 pm in Economy, Politics by Scarecrow

MSNBC’s Lawrence O’Donnell can barely contain his self-adulatory glee in coming up with the theory that President Obama has outfoxed the Tea-GOP in the debt limit negotiations. But the question is, why should the country be happy about what his argument implies for the President’s principles and veracity?

It’s clear that the Tea-GOP are now seriously split — between the crazies and the predators — over what to do about Mr. Obama’s insistence on more tax revenues as a condition for significant spending cuts. Since the holy Tea-GOP mantra is that any (net) tax increase is comparable to original sin and will get you expelled from Grover Norquist’s grace, the faithful don’t know whether to follow Mitch McConnell’s exit strategy, which at least keeps them in grace for now, or Eric Cantor’s no-exit strategy which . . . well, it’s not clear what would happen, but it’s got the Business Roundtable, the Chamber of Commerce, the Federal Reserve, IMF and Wall Street freaking out.

O’Donnell’s theory, however, holds that President Obama essentially lied to John Boehner and Mitch McConnell. He lied by falsely telling them — and telling the public in his press conferences — that he’d accept dramatically reduced domestic spending, including significant reductions in Social Security and Medicare benefits, if only the Tea-GOP would accept net tax/revenue increases on a 3:1 ratio. And that’s okay, because he never really agreed to such cuts but knew the Tea-GOP would reject the offer, so he wouldn’t have to agree.

O’Donnell insists this was a clever lie, and those stupid Republicans and (O’Donnell loves this part) those mean progressive bloggers (I guess that includes me!) naively took Obama at his word. What fools! Since all the fools were duped, time has now run out on the debt limit, the financial elites will rein in the crazies, Obama will get a “clean” bill, and the Republican leaders will be seen by their base as unprincipled fools. So was Jay Carney lying today when he downplayed Mitch McConnell’s exit plan?

“This is not a preferred option,” White House Press Secretary Jay Carney said of McConnell’s proposal in his daily briefing. . . .

“The president is firmly committed to significant cuts in spending and to dealing with our deficit and debt problems in a balanced way,” he said. “Bigger is better. … It’s an opportunity for a game-changer, to put the United States on much firmer ground as we really get into the 21st century and the economic competition that confronts us.”

A plausible theory needs to accommodate and explain virtually all of the facts and observations relevant to it; otherwise it’s not credible. And Mr. O’Donnell has conveniently left out some important facts.

The President and his advisers have repeatedly told the American people that the nation needs to “tighten its belt” and get its “fiscal house in order.” He’s said repeatedly that the deficits and debt are contributing to business uncertainty, and this uncertainty is preventing the economy from recovering broadly enough to solve the very serious unemployment problem. He’s said we can’t even have a useful conversation about jobs until this debt problem is solved. He’s promoted the priority of debt reduction through White House appointments and Alan Simpson’s Catfood Commission, choosing individuals who claim deficits and the debt constitute a “crisis.”

Mr. Obama has also argued in public that the debt limit talks are an opportune moment to resolve these issues, and because they are so important, the talks should include massive spending reductions, a Grand Bargain. We need to think big, he’s said, and “if not now, then when?”

Now I agree with economists who think Obama’s economic assessments are not merely a misunderstanding of our economic situation, but unsupported, dangerous gibberish. But put that aside. O’Donnell’s theory implies that the President was either lying when he said those things, or he’s just lied to the Tea-GOP in a way that may tank the opportunity Mr. Obama claims we need to accomplish what he told us was a prerequisite to economic recovery.

So where’s the truth? Does the President actually believe the things he said in public? If so, hasn’t he just made it less likely he’ll achieve his goals, because he’s misled the Republicans (and the country) and humiliated their leaders whose agreement he needs? Or was he lying when he made all those arguments about the connection between deficit/debt reductions and fixing the economy? If so, then where’s his jobs program and why has he been embracing talking points that make such a program harder to achieve?

What should voters, particularly those who care about Social Security and Medicare, think? Should they assume that Mr. Obama really would accept significantly lower benefits for those on Social Security and Medicare in exchange for higher taxes on carried interest and changing deductions for corporate jets? Where does that leave the Democratic Party? Or should voters assume Mr. Obama was lying about all that and would never accept the deal he said he’d make?

It would be tragic if Mr. Obama achieved what he claimed to be pursuing, whether or not it embarrassed Tea-GOP leaders. But even if all that has happened is that Obama has split and humiliated those leaders, we’re still stuck with a President who claims to believe economic notions that would harm millions of people. Unless he was lying. Next theory?