Politco.com article on GOP candidate for special election to US House
In light of this report, who can deny that the Republican Party (in Nevada, at least) has become the vessel and willing tool of dangerous reactionary demagoguery? And on what basis can one rate the Republican Party of any other state superior to that of Nevada?
The only difference between reactionary and revolutionary demagogues is that the former simply pander to the ignorant prejudices of the masses as they find them, while the latter attempt to manipulate and rearrange them. In the long run both are equally dangerous to any system of ordered liberty.
With “conservatives” like this, who needs Bolsheviks? (Indeed, did Lenin cause default on the Czar’s debt with any less insouciant contempt than Amodei threatens default on “Obama’s”? But Lenin was not a fool, and unlike Amodei and the Nevada GOP, he really had nothing to fear from the bondholders … )
Tuesday, June 21, 2011
Wednesday, June 15, 2011
Debt Ceiling: Paying Attention to the Politics
John Zogby's 6/15 column for Forbes magazine noted that his organization's most recent poll had found 52% opposed to a debt-ceiling increase and 41% in favor. He went on to observe:
The set of likely Republican primary voters, in Congressional districts represented by a Republican, and/or in states with one or more Republican Senator, is a very special subset of the general population. But the perceived attitudes of this subset will be crucial in determining whether the necessary majorities for affirmative Congressional action to increase the existing cap on full-faith-and-credit borrowing can be mustered.
I suspect the package Tea Party voters would demand in order to approve the debt-ceiling hike is much bigger than the package Congressional leaders, of either and/or both parties, could deliver.
(How many bond traders have as yet even considered these Washington dynamics, much less given them the detailed scrutiny they demand? All indications are that Wall Street continues to assume, blithely, that the necessary ceiling increase, with or without some fiscal austerity bonus, wil be forthcoming in good time.)
Avoiding default, therefore, depends on (a.) selling the Tea Party masses on the need for a debt-ceiling increase, or (b.) persuading Congressional Republicans to do the statesmanlike and responsible, but possibly politically suicidal, thing and vote for a bill that does not include abolition of the Department of Education and the Federal Reserve.
Contempt for all experts, even a profound suspicion of the very notion of expertise, however, is one of the hallmarks of this "conservative" movement. Who will explain the dangers to one of their seething town-hall meetings with any hope of being listened to? Even if such a brave person emerged, he would face the constant rejoinder that failure to rein in the deficits must someday produce the increased borrowing costs and downward fiscal spiral that ceiling-hike advocates warn against. While this observation may be valid, there is a big difference between "someday" and two months from today.
But the Tea Party believes that even if there should be some consternation in the bond market come August, it will be able to set things right. Warnings of the risk of more dire consequences will have little effect, because it is easy for this cohort to dismiss the "speculative" predictions of "so-called experts." Besides, they can find experts of their own to tell them what they want to hear. It also doesn't help that the warnings sound very much like those sounded by Wall Street and the Bush Adminisration in the course of their first, unsuccessful effort to obain the TARP legislation.
On that occasion, it took a jolt from the stock market to prod Congress into action. On this issue, continued inaction will most certainly result in a jolt. The concern I have been expressing is that the shock, when at last it comes, could well be huge, wholly uncontrollable in its immediate sequellae, and epochally catastrophic in its ultimate consequences.
There remains the hope that Boehner, McConnell and today's crop of GOP groundlings will brave political ruin to do the responsible and statesmanlike thing.
'Nuff said.
It does not help that this gang has played "Chicken" with the Democrats before and won, coming out with jalopy unscathed and glorious. When you talk to them of the urgency and peril of the situation, they only calculate the greater certainty of their foes' capitulation, and begin devising another escalation of their own demands.
45% of all voters would be more likely to support the [debt-ceiling] increase if major budget cuts are part of the deal. That includes slightly more than one-half of the voters who oppose raising the debt ceiling. So if Washington could satisfy them with cuts, we could have voter consensus on a deal.But have the pollsters separated out the data by "Red" and "Blue" states, or better yet, by Congressional district? What does a Republican up for re-election in 2012 have to deliver along with the debt-ceiling hike in order for primary voters in his state or district to forgive a "Yea" vote? That is what each such Congressional Republican is and will be asking himself. Sarah Palin's comment with regard to increasing the debt ceiling was simply, "Hell, no!" and anecdotal evidence (a perusal of comments left on news websites) suggests that the profane pixy from Wasilla did not overstate the "Tea Party" position.
The set of likely Republican primary voters, in Congressional districts represented by a Republican, and/or in states with one or more Republican Senator, is a very special subset of the general population. But the perceived attitudes of this subset will be crucial in determining whether the necessary majorities for affirmative Congressional action to increase the existing cap on full-faith-and-credit borrowing can be mustered.
I suspect the package Tea Party voters would demand in order to approve the debt-ceiling hike is much bigger than the package Congressional leaders, of either and/or both parties, could deliver.
(How many bond traders have as yet even considered these Washington dynamics, much less given them the detailed scrutiny they demand? All indications are that Wall Street continues to assume, blithely, that the necessary ceiling increase, with or without some fiscal austerity bonus, wil be forthcoming in good time.)
Avoiding default, therefore, depends on (a.) selling the Tea Party masses on the need for a debt-ceiling increase, or (b.) persuading Congressional Republicans to do the statesmanlike and responsible, but possibly politically suicidal, thing and vote for a bill that does not include abolition of the Department of Education and the Federal Reserve.
Contempt for all experts, even a profound suspicion of the very notion of expertise, however, is one of the hallmarks of this "conservative" movement. Who will explain the dangers to one of their seething town-hall meetings with any hope of being listened to? Even if such a brave person emerged, he would face the constant rejoinder that failure to rein in the deficits must someday produce the increased borrowing costs and downward fiscal spiral that ceiling-hike advocates warn against. While this observation may be valid, there is a big difference between "someday" and two months from today.
But the Tea Party believes that even if there should be some consternation in the bond market come August, it will be able to set things right. Warnings of the risk of more dire consequences will have little effect, because it is easy for this cohort to dismiss the "speculative" predictions of "so-called experts." Besides, they can find experts of their own to tell them what they want to hear. It also doesn't help that the warnings sound very much like those sounded by Wall Street and the Bush Adminisration in the course of their first, unsuccessful effort to obain the TARP legislation.
On that occasion, it took a jolt from the stock market to prod Congress into action. On this issue, continued inaction will most certainly result in a jolt. The concern I have been expressing is that the shock, when at last it comes, could well be huge, wholly uncontrollable in its immediate sequellae, and epochally catastrophic in its ultimate consequences.
There remains the hope that Boehner, McConnell and today's crop of GOP groundlings will brave political ruin to do the responsible and statesmanlike thing.
'Nuff said.
It does not help that this gang has played "Chicken" with the Democrats before and won, coming out with jalopy unscathed and glorious. When you talk to them of the urgency and peril of the situation, they only calculate the greater certainty of their foes' capitulation, and begin devising another escalation of their own demands.
Friday, June 10, 2011
Riding the Dragon?
Wednesday Li Daokui, an adviser to the People's Bank of China, told reporters in Beijing that he hopes Republicans in control of the US House of Representatives will "stop playing with fire. ... I really worry about the risks of a U.S. debt default, which I think may lead to a decline in the dollar's value."
USA Today article
Ya think?
Even getting to the point where holders of US debt perceive a significant risk of default, however "brief" or "technical" -- which they don't, yet, and I believe they don't only because they fail to grasp the seriousness of the situation in Washington -- could very well lead to large-scale selling of such debt. But exchanging Treasury debt for dollars makes no sense, because dollars are merely another form of US government debt. The worried bondholders would, directly or indirectly, trade Treasury obligations for something else: Aussie dollars, cruzeros, copper futures, gold bullion, etc. The net effect is large-scale selling of US dollars. That's why Li is right to anticipate a decline in the dollar's value.
The question is, how far and how fast would the dollar fall? And the further question: at this (post-Lehman, post-TARP, post-QE1 & 2) juncture, how far and fast can the dollar fall without collapsing altogether?
The perception that the dollar's value is declining rapidly would accelerate the movement out of Treasuries and all other dollar-denominated debt. Thus the dollar's value declines even faster. At a certain point, a goodly number of people around the world begin to think it very likely that by tomorrow afternoon the number of yuan/euros/ounces of gold/barrels of oil/widgets FOB Detroit/economic good X that you can get for a dollar will be appreciably smaller than the number you can get right now. Then the dollar-dumping begins in earnest.
At this point, the fact that Emperor Dollar really is stark naked and there is nobody who can even toss a blanket or a towel around him will become inescapably clear to those who are paying attention. In light of recent history, the Fed and the Treasury probably could not even respond effectively to another Lehman Brothers. A run on the dollar sparked by anticipation of a Treasury default would be Lehman Brothers x 100 (at least). Measures that in days of yore might have shored the dollar up will only aggravate the panic. And the realization that there really is no bottom under a plunging dollar will engender generalized and absolute panic.
Those with any understanding of the situation will recognize that the world as we have known it is ending. The sudden death of the world's only reserve currency, the one universal measure and store of value and the vital medium of global commerce, would bring world (and even US domestic) trade to a screeching halt and spell financial, and therfore economic, Armaggedon.
Playing with fire, indeed. Only, one would think that the rich literary history of China might provide an even stronger, and thus more apt, metaphor.
USA Today article
Ya think?
Even getting to the point where holders of US debt perceive a significant risk of default, however "brief" or "technical" -- which they don't, yet, and I believe they don't only because they fail to grasp the seriousness of the situation in Washington -- could very well lead to large-scale selling of such debt. But exchanging Treasury debt for dollars makes no sense, because dollars are merely another form of US government debt. The worried bondholders would, directly or indirectly, trade Treasury obligations for something else: Aussie dollars, cruzeros, copper futures, gold bullion, etc. The net effect is large-scale selling of US dollars. That's why Li is right to anticipate a decline in the dollar's value.
The question is, how far and how fast would the dollar fall? And the further question: at this (post-Lehman, post-TARP, post-QE1 & 2) juncture, how far and fast can the dollar fall without collapsing altogether?
The perception that the dollar's value is declining rapidly would accelerate the movement out of Treasuries and all other dollar-denominated debt. Thus the dollar's value declines even faster. At a certain point, a goodly number of people around the world begin to think it very likely that by tomorrow afternoon the number of yuan/euros/ounces of gold/barrels of oil/widgets FOB Detroit/economic good X that you can get for a dollar will be appreciably smaller than the number you can get right now. Then the dollar-dumping begins in earnest.
At this point, the fact that Emperor Dollar really is stark naked and there is nobody who can even toss a blanket or a towel around him will become inescapably clear to those who are paying attention. In light of recent history, the Fed and the Treasury probably could not even respond effectively to another Lehman Brothers. A run on the dollar sparked by anticipation of a Treasury default would be Lehman Brothers x 100 (at least). Measures that in days of yore might have shored the dollar up will only aggravate the panic. And the realization that there really is no bottom under a plunging dollar will engender generalized and absolute panic.
Those with any understanding of the situation will recognize that the world as we have known it is ending. The sudden death of the world's only reserve currency, the one universal measure and store of value and the vital medium of global commerce, would bring world (and even US domestic) trade to a screeching halt and spell financial, and therfore economic, Armaggedon.
Playing with fire, indeed. Only, one would think that the rich literary history of China might provide an even stronger, and thus more apt, metaphor.
Wednesday, June 8, 2011
Palin Recruits Revere for Trivialization of II Amendment
In late spring of 2012, Palin traveled with her family on what she described as an "American History" bus tour. On the New England leg of the tour she gave comments to a Boston TV crew regarding their visit to Paul Revere's house, saying that it was
"he [Revere] who warned uhh the the British that they weren't gonna be taking away our arms uhh by ringing those bells and uhh making sure as he's riding his horse through town to send those warning shots and bells that uhh we were gonna be secure and we were gonna be free."
http://www.youtube.com/watch?v=5dRqaDrhgb8&feature=related
These remarks attracted considerable attention from the mainstream media.
A few have defended the accuracy of these comments by pointing to the fact that Revere, while briefly held under arrest by the British, gave an exaggerated account of Revolutionary forces in and movements toward the Lexington-Concord vicinity. Revere is generally believed to have been intentionally dispensing misinformation, but his precise motive for this has been a subject of historical speculation. The contention that he was trying to discourage the British from advancing their patrols rapidly into that vicinity in order to prevent the arrest of Revolutionary leaders Hancock and Adams is generally associated with the (revisionist) view that the Revolutionaries in Revere's circle felt the arms stored in or near the Concord Armory were safe from seizure by the British because they had been hidden, and the whole "British are coming" project was prompted by fear of political arrests rather than the desire to maintain Revolutionary control of the arms that had been stored at the Armory for use of the local militia. The more generally accepted view is that Revere hoped to induce the British to move toward Concord more slowly than they otherwise might have, in order to give the Revolutionary militia more time to assemble and organize for the defense of the Armory.
Palin's remarks almost certainly were not based on the little known details of the British interrogation and release of Revere. In fact, they were closely associated with the conventional view that the British were moving to seize the arms at Concord and the Revolutionaries were assembling to repulse the British and keep the arms under their own control. Whether or not Palin understood exactly whom Revere intended to warn of what and/or exactly what auditory signals, when and where, were employed by Revere (and her remarks clearly suggest she understood neither) she was perhaps correct in a deeper sense. The Founding Fathers would certainly have understood a profound connection between the famous history of the "Shot Heard 'Round the World," i.e., the British movement toward and Revolutionary defense of Lexington and Concord (that is to say, the version of it that had been generally received, as opposed to the protection-of- Hancock-and-Adams version that was either uncovered or invented by certain later historians) and the Second Amendment. Palin was trying to highlight that connection.
Palin's remarks about Paul Revere's ride provoked considerable discussion. What they did not initiate was a serious conversation about the political intent and significance of the Second Amendment, the era of musketry and rifle fire and associated rise of citizen armies, introduced and typified by the American Revolution and the Battle of Valmy, or the Amendment's continuing meaning in a world where the weapons of conclusive significance in the American armory are thermonuclear bombs and tactical air support, and the comparative irrelevance of musketry and rifle fire is being demonstrated day by day in Libya.
"he [Revere] who warned uhh the the British that they weren't gonna be taking away our arms uhh by ringing those bells and uhh making sure as he's riding his horse through town to send those warning shots and bells that uhh we were gonna be secure and we were gonna be free."
http://www.youtube.com/watch?v=5dRqaDrhgb8&feature=related
These remarks attracted considerable attention from the mainstream media.
A few have defended the accuracy of these comments by pointing to the fact that Revere, while briefly held under arrest by the British, gave an exaggerated account of Revolutionary forces in and movements toward the Lexington-Concord vicinity. Revere is generally believed to have been intentionally dispensing misinformation, but his precise motive for this has been a subject of historical speculation. The contention that he was trying to discourage the British from advancing their patrols rapidly into that vicinity in order to prevent the arrest of Revolutionary leaders Hancock and Adams is generally associated with the (revisionist) view that the Revolutionaries in Revere's circle felt the arms stored in or near the Concord Armory were safe from seizure by the British because they had been hidden, and the whole "British are coming" project was prompted by fear of political arrests rather than the desire to maintain Revolutionary control of the arms that had been stored at the Armory for use of the local militia. The more generally accepted view is that Revere hoped to induce the British to move toward Concord more slowly than they otherwise might have, in order to give the Revolutionary militia more time to assemble and organize for the defense of the Armory.
Palin's remarks almost certainly were not based on the little known details of the British interrogation and release of Revere. In fact, they were closely associated with the conventional view that the British were moving to seize the arms at Concord and the Revolutionaries were assembling to repulse the British and keep the arms under their own control. Whether or not Palin understood exactly whom Revere intended to warn of what and/or exactly what auditory signals, when and where, were employed by Revere (and her remarks clearly suggest she understood neither) she was perhaps correct in a deeper sense. The Founding Fathers would certainly have understood a profound connection between the famous history of the "Shot Heard 'Round the World," i.e., the British movement toward and Revolutionary defense of Lexington and Concord (that is to say, the version of it that had been generally received, as opposed to the protection-of- Hancock-and-Adams version that was either uncovered or invented by certain later historians) and the Second Amendment. Palin was trying to highlight that connection.
Palin's remarks about Paul Revere's ride provoked considerable discussion. What they did not initiate was a serious conversation about the political intent and significance of the Second Amendment, the era of musketry and rifle fire and associated rise of citizen armies, introduced and typified by the American Revolution and the Battle of Valmy, or the Amendment's continuing meaning in a world where the weapons of conclusive significance in the American armory are thermonuclear bombs and tactical air support, and the comparative irrelevance of musketry and rifle fire is being demonstrated day by day in Libya.
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