Category: Budget

Contemptible Ratf%$# Decides Not to Run for Reelection

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Senator, and Glenn Quagmire impersonator, Max Baucus

I am referring, of course, to  short timer Senator Max Baucus, who has announced that he will not be running for reelection:

Sen. Max Baucus (D-Mont.), one of the most influential congressional figures of his era, announced his intention Tuesday to retire, a move that could produce sweeping changes in the political and legislative landscape over the next two years.

 The announcement could mark the beginning of one of the most consequential periods in Baucus’s long public career, because he pledged to devote the rest of his time in Washington to pursuing a comprehensive rewrite of the federal tax code, an effort that many see as key to breaking the fiscal gridlock that has paralyzed Washington in recent years.

BTW, if thie following paragraph does not fill you with dread, you have no soul:

That paralysis of taxes and spending has been a central feature of Obama’s presidency, and Baucus said that when the president called him Tuesday about his retirement, the talk quickly turned to tax reform. “They’re going to get tired of me,” Baucus said in an interview, adding that White House officials do not “know themselves where they are” on a strategy for ending the stalemate.

Because Baucus has been a cancer on the Senate in general, and Democratic Party in particular, and unencumbered by the potential for reelection, I think that he will try to f%$# the Democratic Party, and the country in any way he can.

After all, he has to be angling to get a cushy, and highly remunerative, gif from corporate America after he retires

As TPM reporter Brian Beutler pithily observes, it’s not just that he comes from a conservative state, and so has to hew right.   It is that he hews right except when the politics make it absolutely impossible for him to do so:

Some pols are more or less faithful party-men who stray on occasion during challenging electoral cycles. Baucus, by contrast, has amassed a remarkably consistent record of working at cross-purposes with the rest of his party whether politics in Montana have demanded it or not.

 He voted for the Bush Tax Cuts in 2001; then after securing re-election, and against the will of Democratic leadership, supported a Medicare prescription drug benefit that routed tax payer money through private insurers. He spent months and months behind closed doors with GOP lawmakers in 2009 in a futile search for bipartisan support for what became the Affordable Care Act. That quixotic effort dragged on well past the point at which party leaders believed it might pay off, and it delayed legislative action for so long that the bill nearly died when Democrats lost Ted Kennedy’s seat to Scott Brown in early 2010.

 ………

 A key exception to this track record is his long history of bucking GOP attempts to slash and privatize popular social insurance programs like Medicare and Social Security. But viewed through the prism of his broader approach to politics, this seems more an idiosyncratic instance of liberal priorities lining up with Baucus’ venal decision making, than an expression of genuine commitment to the legacy of the New Deal and Great Society.

 By contrast, his recent votes against gun legislation and the Democratic budget are vintage Baucus. One can argue that this sort of “independent streak” might protect Montana Democratic candidates in the abstract. But polling on the specifics doesn’t really back up the view that Baucus needed to buck his party on these measures to remain viable. Which helps explain why Baucus’ fellow Montanan Jon Tester (whom, I should note as a caveat won’t be in cycle again until 2018) voted ‘yes’ on both occasions.

(Read the whole thing)

I would also note that he, and his staff leave a trail of slime all the way to K Street:

Restaurant chains like McDonald’s want to keep their lucrative tax credit for hiring veterans. Altria, the tobacco giant, wants to cut the corporate tax rate. And Sapphire Energy, a small alternative energy company, is determined to protect a tax incentive it believes could turn algae into a popular motor fuel.

 To make their case as Congress prepares to debate a rewrite of the nation’s tax code, this diverse set of businesses has at least one strategy in common: they have retained firms that employ lobbyists who are former aides to Max Baucus, the chairman of the Senate Finance Committee, which will have a crucial role in shaping any legislation.

 No other lawmaker on Capitol Hill has such a sizable constellation of former aides working as tax lobbyists, representing blue-chip clients that include telecommunications businesses, oil companies, retailers and financial firms, according to an analysis by LegiStorm, an online database that tracks Congressional staff members and lobbying. At least 28 aides who have worked for Mr. Baucus, Democrat of Montana, since he became the committee chairman in 2001 have lobbied on tax issues during the Obama administration — more than any other current member of Congress, according to the analysis of lobbying filings performed for The New York Times.

 “K Street is literally littered with former Baucus staffers,” said Jade West, an executive at a wholesalers’ trade association that relies on a former finance panel aide, Mary Burke Baker. “It opens doors that allow you to make the case.”

(emphasis mine)

Hopefully, former Montana Governor Brian Schweitzer, who is popular and rather liberal by the standards of Montana politics.

Sarah Palin Did One Right Thing, and Alaska Republicans Vote to Overturn It

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She changed the royalty structure for oil extracted from the state, and now Republicans have reversed this in a give away to big oil:

The Alaska Senate on Sunday afternoon approved the oil-tax bill that passed the House 13 hours before, sending to Gov. Sean Parnell the measure he had sought to save billions of dollars for Alaska’s leading industry.

The Senate vote was 12-8 to concur with the revised bill that the House approved 24-15 just before 2 a.m. Sunday morning (on reconsideration, three Republicans switched to support the bill). The Senate vote came past the midway point of the 90th day of the 90-day session.

Parnell said that Alaska’s current tax regime, which he backed as lieutenant governor in 2007 when it was pushed by Gov. Sarah Palin, is broken. It is taking so much money from industry, he said, that producers have been investing elsewhere, explaining the decline in oil production here. His bill, modified but not changed drastically in either the House or Senate, effectively wipes out Palin’s tax policy, Alaska’s Clear and Equitable Share, or ACES.

The new bill ends ACES big progressive tax steps, where tax rates increase as the price of oil rises. Parnell and supporters said the progressive tax was punitive toward industry. ACES supporters agreed that the tax took too much money at high oil prices, but the remedy was to lower the rate — not toss it.

Today’s Republican Party in Alaska: too radical, too stupid, and too obsequious to big oil for Sarah Palin.

That is truly a major mind f%$#, and Alaska, arguably the state which is least suited to the actual cultivation of bananas, is an a clown like banana republic.

Just When You Thought that Obama Could Not Get Any Worse………

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He is proposing to sell the Tennessee Valley Authority to Wall Street for some magic beans:

The headline issue, cutting Social Security benefits by changing the measurement of inflation (the “chained CPI”), is something that writers on Naked Capitalism have been predicting for a long time. What has come as a shocking (but not surprising) twist is a bombshell buried in Obama’s budget: the proposed privatization of the Tennessee Valley Association. At this point I think it’s important to quote a part of this section of the budget at length:

TVA is a self-financing Government corporation, funding operations through electricity sales and bond financing. In order to meet its future capacity needs, fulfill its environmental responsibilities, and modernize its aging generation system, TVA’s current capital investment plan includes more than $25 billion of expenditures over the next 10 years. However, TVA’s anticipated capital needs are likely to quickly exceed the agency’s $30 billion statutory cap on indebtedness. Reducing or eliminating the Federal Government’s role in programs such as TVA, which have achieved their original objectives and no longer require Federal participation, can help put the Nation on a sustainable fiscal path. Given TVA’s debt constraints and the impact to the Federal deficit of its increasing capital expenditures, the Administration intends to undertake a strategic review of options for addressing TVA’s financial situation, including the possible divestiture of TVA, in part or as a whole.

Notice how nonsensical the justification for the “divestiture of TVA” is. The authors clearly acknowledge that the Tennessee Valley Authority is a “self-financing Government corporation”. The TVA issues its own debt and also has income from electricity sales. Yet because its capital expenditures are counted as part of the federal deficit for accounting purposes, privatizing the TVA supposedly counts as a “spending cut”. This is the willful blindness of orthodox thought taken to extreme levels. Privatizing the TVA doesn’t shrink the amount of debt in the economy one cent; all it does is bring that debt onto private balance sheets. In fact, private investors will buy the Authority on mainly on credit, increasing the amount of private debt.

Note also whoever buys this will pay far less than market value, because that is how this sh%$ works, and since they get it on the cheap, their goal will be to suck the marrow out of it, and to raise rates on the people it serves as fast as it possibly can.

That’s more than 9 million people he wants to f%$# like a drunk sorority girl.

Thatcher was too smart to privatize Britrail, but John Major was not, and the result was crappy service and fatal accidents.

It is so bad that even the Tories have disavowed selling off rail.

You will see the same from privatizing the TVA.

So, he’s going after two of the remaining jewels in the crown of the New Deal, the TVA, and Social Security.

He’s doing it because he wants to, because, except for the appeals to racial bigotry and abortion criminalization, he’s well to the right of Ronald Reagan, and he hates the liberal wing of the Democrat Party in general, and the New Deal in particular.

I’m beginning to think that I should add the tag “Manchurian Democrat” to posts like this.

And Cue the Republicans Accusing Obama of Throwing Grandma Out on the Streets in 3 … 2 … 1 …

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Because offering cuts that Republicans are afraid to mention in public work so well

Well, right now:

Appearing on CNN, the National Republican Congressional Committee chairman accused Obama of “trying to balance this budget on the backs of seniors” and signaled Republicans may try to use the changes against Democrats in the coming election.

 Walden’s comments come even as key Republicans have embraced Obama’s “chained CPI” proposal to cut Social Security benefits.

 “I thought it’s very intriguing in that his budget really lays out kind of a shocking attack on seniors, if you will,” Walden (Ore.) said. “We haven’t seen all the detail yet, so we’ll look at it. But I’ll tell you, when you’re going after seniors the way he’s already done on Obamacare, taking $700 billion out of Medicare to put into Obamacare, and now coming back at seniors again — I think you’re crossing that line very quickly here in terms of denying access to seniors for health care…”

Not only is this mind-blowingly bad policy, it is mind-blowingly bad politics.

And let us remember something important:  Social Security contributes nothing to the deficit, and it will not for decades.

Once again, we have Obama playing the Manchurian Democrat.

The Non Farm Payroll Numbers Sucks

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Only 88,000 Jobs were created:

American employers added an estimated 88,000 jobs to their payrolls last month, compared with 268,000 in February, according to a Labor Department report released Friday. It was the slowest pace of growth since last June, and less than half of what economists had expected.

It also was the start of a third consecutive spring in which employers tapered off their hiring after a healthy start to the year. Slowdowns in the previous two years could be attributed to flare-ups in the European debt crisis, but this time the cause is less obvious. The recent payroll tax increase or other fiscal tightening in Washington could be partly to blame for the sudden retreat in hiring, but neither seems to be showing up much yet in other relevant economic data.

“People were starting to believe the economy was really picking up steam, and desperately wanted this report to be better,” said Joshua Shapiro, chief economist at MFR Inc. “But that didn’t happen.”

Paul Krugman understands what is causing this:

That deficit has declined from 5.6 percent of potential GDP in 2011 to 2.5 percent in 2013 — that’s 3 percent of GDP, which is a lot of austerity. Not all of that cut has even hit yet — the sequester isn’t in the macro numbers yet — but the rise in the payroll tax is very clearly driving the latest bad numbers, which show big declines in retail.

This is Obama policies that we are talking about largely.  Notwithstanding the posturing by Republicans, all they really want is to cut the social safety net and cut taxes for rich guys.

Obama is the one who really wants to cut the deficit in the middle of a recession.

His “Grand Bargain” is all about balancing the budget in the relatively near future while bridging the difference parties. 

It is a dangerous delusion.

Obama is Not On Our Side

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After increasing signs that even rank and file Republicans oppose to cutting Social Security, but Barack Obama is determined to throw mama from the train:

President Obama next week will take the political risk of formally proposing cuts to Social Security and Medicare in his annual budget in an effort to demonstrate his willingness to compromise with Republicans and revive prospects for a long-term deficit-reduction deal, administration officials say.

In a significant shift in fiscal strategy, Mr. Obama on Wednesday will send a budget plan to Capitol Hill that departs from the usual presidential wish list that Republicans typically declare dead on arrival. Instead it will embody the final compromise offer that he made to Speaker John A. Boehner late last year, before Mr. Boehner abandoned negotiations in opposition to the president’s demand for higher taxes from wealthy individuals and some corporations.

 Congressional Republicans have dug in against any new tax revenues after higher taxes for the affluent were approved at the start of the year. The administration’s hope is to create cracks in Republicans’ antitax resistance, especially in the Senate, as constituents complain about the across-the-board cuts in military and domestic programs that took effect March 1.

 Mr. Obama’s proposed deficit reduction would replace those cuts. And if Republicans continue to resist the president, the White House believes that most Americans will blame them for the fiscal paralysis.

Yeah, and who is going to take the blame for gutting Social Security?

Seriously, when I have referred to him as the Manchurian Democrat, I was being prophetic.

He just flushed Democratic protection of Social Security down the f%$#ing toilet.

This is so contemptible MoveOn has gotten its hipster head out of its hipster ass and condemned his move without taking the time to set it up as a lame video contest:

“President Obama’s plan to cut Social Security would harm seniors who worked hard all their lives. Under this plan, a typical 80-year-old woman would lose the equivalent of three months worth of food every year. That’s unconscionable.

 It’s even more outrageous given that Republicans in Congress aren’t even asking for this Social Security cut. This time, the drive to cut Social Security is being led by President Obama and Democrats.

 Millions of MoveOn members did not work night and day to put President Obama into office so that he could propose policies that would hurt some of our most vulnerable people. Just as we fought and defeated President Bush’s plan to privatize Social Security, we will mobilize and stop this attempt to diminish the vital guarantee of Social Security. MoveOn’s 8 million members will not stand by and watch a Democratic President chip away at one of the most successful government programs of all time. Every member of Congress — Democrat or Republican — who votes for this proposal should expect to be held accountable.”

Call your Congresscritter, and tell them that you will do your best to have them primaried if they vote to support this.

Yeah, the Sequester is Benign………

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That’s why cancer clinics are unable to treat thousands of patients:

Cancer clinics across the country have begun turning away thousands of Medicare patients, blaming the sequester budget cuts.

Oncologists say the reduced funding, which took effect for Medicare on April 1, makes it impossible to administer expensive chemotherapy drugs while staying afloat financially.

Patients at these clinics would need to seek treatment elsewhere, such as at hospitals that might not have the capacity to accommodate them.

“If we treated the patients receiving the most expensive drugs, we’d be out of business in six months to a year,” said Jeff Vacirca, chief executive of North Shore Hematology Oncology Associates in New York. “The drugs we’re going to lose money on we’re not going to administer right now.”

………

The care will likely be more expensive: One study from actuarial firm Milliman found that chemotherapy delivered in a hospital setting costs the federal government an average of $6,500 more annually than care delivered in a community clinic.

Those costs can trickle down to patients, who are responsible for picking up a certain amount of the medical bills. Milliman found that Medicare patients ended up with an average of $650 more in out-of-pocket costs when they were seen only in a hospital setting.

So, not only are we going to kill grandma, it’s going to cost us more money to do so.

Well, anything to make Grover Norquist happy, I guess.

I Worked There for 2 Years

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It looks like the Pentagon will shutter down BAE’s plant in York Pennsylvania for 2 years:

A contentious political battle erupted last year when the Army opted to end production of the Abrams tank. Now the Army faces a repeat, this time, over the Bradley.

The manufacturer of the Army’s Bradley infantry fighting vehicle, BAE Systems, is seeking to persuade the service to reverse a decision to stop work at the company’s assembly line in York, Penn., for three years beginning in 2014.

BAE executives are pleading the case that is often made in these situations: It would be more costly to the government to shut down and reopen the line three years later than it would be to keep it open, even with a reduced workload. Army officials defend their decision as a necessary move to cut costs in the face of declining budgets. They also contend that closing down the BAE plant temporarily should not cause any risk to the force, as the Army owns a large fleet of more than 3,000 Bradleys, most of which have low mileage and have been updated with new weapons and electronics.

What is particularly notable is this map that they included with the story.  It’s a list of where their subcontractors are located:

Seriously, the overpriced stuff that we buy for our military would not be so f%$#ing  overpriced if defense contractors did not play “paint by numbers” with states and Congressional districts to game our politica system.

I’m not sure how to fix this, but this sh%$ needs to end.

Pernicious Contemptible Ratf%$#s

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Republican Senators, who just included the NRA’s wet dreams in the continuing resolution to keep the government running:

With gun safety measures headed to the Senate floor, members of the House and Senate appropriations committees have quietly made permanent four formerly temporary gun-rights provisions largely favored by Republicans. Those provisions are part of a spending bill that would keep the government running through Sept. 30.

The provisions, which have been renewed separately at various points, would prohibit the Bureau of Alcohol, Tobacco, Firearms and Explosives from requiring gun dealers to conduct annual inventories to ensure that they have not lost guns or had them stolen, and would retain a broad definition of “antique” guns that can be imported into the United States outside of normal regulations.

Another amendment would prevent the A.T.F. from refusing to renew a dealer’s license for lack of business; many licensed dealers who are not actively engaged in selling firearms can now obtain a license to sell guns and often fly under the radar of the agency and other law enforcement officials, which gun control advocates argue leads to a freer flow of illegal guns.

A final measure would require the bureau to attach a disclaimer to data about guns to indicate that it “cannot be used to draw broad conclusions about firearms-related crimes.”

Officials from the A.T.F. have long complained that quirky laws passed by Congress hamstring their ability to curb gun crimes. For example, under federal laws the bureau is prohibited from creating a federal registry of gun transactions, making it hard to track illegal guns.

Many of the provisions have been regularly added to appropriations bills since 2004. But Senate Democrats on the committee — pushed by Republicans and some Democrats who have made gun rights a signature issue — reluctantly agreed to make them permanent to stave off what they saw as an even more far-reaching House version of the bill.

The House offering contained a new rider that would prevent the A.T.F. from requiring gun dealers on the Southwest border to notify the agency when selling two or more long guns — semiautomatic rifles, higher than .22 caliber with detachable magazines — to the same buyer within five days. These firearms are the preferred weapons of Mexican drug cartels, Senate aides said.

The NRA is a toxic institution. It poisons our society.

We need to make it as toxic in politics as it is in society.

Quote of the Day

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Even though, as the headline shows, I have little Italian, and less Italian politics, I’m so chuffed that Beppe Grillo did well in yesterday’s Italian elections — even though he was neither a wizened, permanently tanned, and shamelessly unrehabilitated whoremonger nor a Goldman Sachs alumnus (sorry for the redundancy) — that I thought I’d do a wrap-up before conventional wisdom completely congeals. Alert readers will, of course, correct and amplify this post in comments!

—Lambert Strether of Corrente on the recent Italian elections.

(emphasis mine)

Of course, the whoremonger is Berulusconi, and the Goldman Sachs alum is Monti.

The election results were as follows:

Italy’s center-left coalition won the most votes in the parliamentary election, mustering 110,000 more votes than its traditional rival, final data from the Interior Ministry showed early Tuesday.

 The victory came thanks to inclusion of the SVP party, a regionalist movement that has long ruled the German-speaking South Tyrol region.

 Pier Luigi Bersani’s center-left coalition had 29.54% of the total vote while Silvio Berlusconi’s center-right coalition had 29.18% of the vote.

 Under Italy’s electoral law, the winner of the most votes wins 340 of the 630 seats in the lower house, while losers split the rest proportionally.

 “It’s too close to call,” said Angelino Alfano, the head of Mr. Berlusconi’s People of Freedom party, signaling he may demand a closer scrutiny of the vote tally.

 In fact, Italy’s two main coalitions of the past 20 years together claimed less than half of all eligible votes, and their combined total fell more than 10 million from the last national vote in 2008.

 Turnout was the lowest in Italian history at 75%, but the big surprise was Beppe Grillo’s Five-Star Movement, an anti-establishment party born only three years ago, which took 25.55% of the vote. Activists in his party said they had no interest in negotiating “little stitched-up backroom deals.”

 Outgoing Prime Minister Mario Monti’s centrist coalition won 10.56% of the vote as support for the two veteran politicians he chose to ally with collapsed. Gianfranco Fini, once Mr. Berlusconi’s virtual dauphin, won 0.465 of the vote while Pierferdinando Casini’s UDC party, which claims to be the heir of the Christian Democrat party that ruled Italy for decades, won 1.78%, final data showed.

I would disagree with the assessment on Monti’s lack of performance.

This vote, albeit one with low turnout by Italian standards, was about a rejection of austerity and German Hegemony in the EU.

Of course, it did not help that Monti was completely clueless about  how widely loathed the very serious people are loathed: (H/t Paul Krugman)

There was a symbolic moment in the Italian elections when I knew that the game was up for Mario Monti, the defeated prime minister. It was when in the middle of the campaign – in the midst of an anti-establishment insurgence – he took off to Davos to be with his friends from international finance and politics. I know his visit to the elite gathering in the Swiss mountains was not an issue in the campaign, but it signaled to me an almost comic lack of political realism.

(emphasis mine)

Yes, sipping champagne with the rich ratf%$#s who ruined the world economy, and then end up even richer, that’s a productive use of your time.

I’m with Simon Johnson on this:  We need to break the back of the privileged class that broke the world as a first step to fixing the world.

The so-called “Technocrats” like Monti are just water carriers for these folks, and as such, are a part of the problem, not a part of the solution.

Oh Snap!

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4th quarter GDP fell by an 0.1% rate:

The federal government helped bring the economic recovery to a virtual halt late last year as cuts in military spending and other factors overwhelmed the Federal Reserve’s expanded campaign to stimulate growth.

Disappointing data released Wednesday underscore how tighter fiscal policy may continue to weigh on growth in the future as government spending, which increased steadily in recent decades and expanded hugely during the recession, plays a diminished role in the United States economy.

Significant federal spending cuts are scheduled to take effect March 1, and most Americans are also now paying higher payroll taxes with the expiration of a temporary cut in early January.

The economy contracted at an annual rate of 0.1 percent in the last three months of 2012, the worst quarter since the economy crawled out of the last recession, hampered by the lower military spending, fewer exports and smaller business stockpiles, preliminary government figures indicated on Wednesday. The Fed, in a separate appraisal, said economic activity “paused in recent months.”

The private sector is recovering, but cuts in federal spending more than offset this.

This is not as bad as what the Germans are doing with the Euro Zone.  We are experiencing a sort of “austerity lite”, and it is doing real damage to our economy.

More Agreement With the IMF

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They are saying that Britain should back off its austerity policies:

Britain should tone down its austerity plans to help the struggling economy, the International Monetary Fund’s chief economist has suggested.

Olivier Blanchard said the budget in March would be a good time for George Osborne to “take stock” of his plan A.

The comments, in an interview with BBC Radio 4’s Today programme, came after the IMF trimmed its forecasts for the UK and global growth. The British economy is now expected to expand by 1% rather than 1.1% this year, and 1.9% rather than 2.2% next year.

Twice in a day I agree with them.

Go figure.

What a Surprise, Another Cave

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Another Cave

Yes, as a final f%$# you to the average American, the White House has ruled out the platinum coin:

The Treasury Department will not mint a trillion-dollar platinum coin to get around the debt ceiling. If they did, the Federal Reserve would not accept it.

 That’s the bottom line of the statement that Anthony Coley, a spokesman for the Treasury Department, gave me today. “Neither the Treasury Department nor the Federal Reserve believes that the law can or should be used to facilitate the production of platinum coins for the purpose of avoiding an increase in the debt limit,” he said.

 The inclusion of the Federal Reserve is significant. For the platinum coin idea to work, the Federal Reserve would have to treat it as a legal way for the Treasury Department to create currency. If they don’t believe it’s legal and would not credit the Treasury Department’s deposit, the platinum coin would be worthless.

The idea of minting a platinum coin to invalidate the debt ceiling comes from a few key sentences tacked onto the 1997 Omnibus Consolidated Appropriations Act. “Notwithstanding any other provision of law,” it reads, “the Secretary of the Treasury may mint and issue platinum coins in such quantity and of such variety as the Secretary determines to be appropriate.”

Even if you decide that you will not do this, you do not take this off the table without getting something in return.

At best, it’s a kind of mania with the Obama, he wants to be seen as the reasonable person in the room, even when in a situation where this does not work, at worst, he’s getting everything that he wants, which includes savaging Medicare, Medicaid, and Social Security.

History Repeats Itself………

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They’re Back!!  Yes, the symbol looks very familiar

The Golden Dawn, the resurgent Greek Fascist party.

Rather surprisingly, their increasing popularity in Greece, along with the increasing violence associated with their actions, along with evidence that Greek police are increasingly directly colluding with them.

When you consider the fact EU measures have produced an economic collapse that has women in labor refused admission to hospital, and a descent to a barter economy, you would think that the Greek ruling elite, as well as the Eurocrats in Brussels, along with the Germans who pull their chain, would be running around like their hair was on fire about this.

It’s not happening, because the however uncomfortable the corrupt Greek elites are with Fascists, they hate the Greek left as manifested by SYRIZA, the Greek party of the left, because if they win, they threaten to undermine the kleptocratic duopoly of the PASOK New Democracy party.

On the European Union side, however uncomfortable they are with Fascism, they hate the Greek left as manifested by SYRIZA, and more generally they hate the underlying ideas that the EU bureaucracy should serve the will of the people (witness the gyrations to prevent votes on EU expansion once the referenda started to fail), and that neoliberal bank coddling policies are a bad.

So, why is there the studious ignorance regarding the rise of Fascism in Greece (and in a number of other EU nations)?

Well, when you look at the attitudes of the Eurocrats toward SYRIZA, or the Left Party in Germany, or similar, you see a hell of a lot more alarm at them, but they are not xenophobic violent antidemocratic groups.

I would argue that what we are seeing is a tacit endorsement of the rise in Fascism in Europe, because they are seen as “useful idiots” who can serve to counteract the threat of a resurgent left, either by providing an outlet for nationalist sentiments, or through violence.

Does this sound familiar to you?  It does to me.

In the late 1920s and the early 1930s, industrialists funded Fascists all over Europe, most notably in Germany, because of concerns about potential gains of leftists parties as a result of the economic collapse. (Yes, I know, Godwin’s Law)

I’m wondering when we are going to see the blond boy singing Tomorrow Belongs to Me.

My brother is pessimist.  He expects there to be a collapse the EU and war in the near future.

I am an optimist.  I expect there to be a collapse the EU and cold war in the near future.

Until the Eurocrats are put back under public control, and until Germany realizes that their morality play wet dreams do nothing but kill people, I do not see a better outcome in the next couple of decades.

Boehner told Reid to go Cheney Himself

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Republicans, such classy people:

House Speaker John Boehner couldn’t hold back when he spotted Senate Majority Leader Harry Reid in the White House lobby last Friday.

It was only a few days before the nation would go over the fiscal cliff, no bipartisan agreement was in sight, and Reid had just publicly accused Boehner of running a “dictatorship” in the House and caring more about holding onto his gavel than striking a deal.

“Go f— yourself,” Boehner sniped as he pointed his finger at Reid, according to multiple sources present.

Reid, a bit startled, replied: “What are you talking about?”

Boehner repeated: “Go f— yourself.”

The harsh exchange just a few steps from the Oval Office — which Boehner later bragged about to fellow Republicans — was only one episode in nearly two months of high-stakes negotiations laced with distrust, miscommunication, false starts and yelling matches as Washington struggled to ward off $500 billion in tax hikes and spending cuts.

Seriously, this sort of childish sh%$ is not the mark of someone who you can negotiate with in good faith.

Saying it in the middle of a contentious meeting is one thing, but this was a “drive by” f%$# you, and then he bragged about it to colleagues.

This is College Republican bullsh%$, and it is an indication of just how unserious the Republican leadership is about doing their jobs.

I experienced this when I was in the SGA Senate at UMass, and dealt with people who later figured in the Abramhoff, and they freuently behaved the same way, but they were in their early 20s, and it was the student senate.

That is why this deal is so bad.  Barack Obama just gave the keys to Eddie Haskell, and this does not bode well.

A New Year, More Caving

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Your Obama Hat. Useful for Caving

Well, it’s not surprising.

New year, same old Obama. He caved, permanent tax cut, permanent reduction on the AMT, permanent reduction of the inheritance tax, and temporary continuation of extended unemployment benefits and a few other social programs, and 3 months on the debt ceiling.

Obama wants his grand bargain, where he guts Social Security, Medicare, and Medicaid, and he’ll continue to subvert his own bargaining position so that he can have granny eating cat food.*

*In the interest of health, I would suggest that people eat dog food, and not cat food. Cats because they are one of the few true carnivores, do not need the complex carbohydrates and fats that people, and dogs do. As such, dog food is better for you than cat food because it provides carbs and essential fatty acids. A dog can go blind if it is fed on cat food, but a cat lives just fine on dog food. The phenomenon is known as rabbit starvation.

Worst………Speaker………Ever

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You cannot negotiate with him, because, when push comes to shove, he is completely incapable of delivering the votes, even on a meaningless vote that was intended to call out a President that his caucus hates:

I just finished laughing from this spectacle on the House floor today. The House leadership tried desperately to pass “Plan B,” the main part of which was an extension of the Bush tax cuts on the first $1 million of income. In truth, all of the other giveaways in it would actually result in lower taxes for many wealthy earners, but tax rates have this weird power, especially within the Republican caucus. And you could just feel today that conservatives weren’t willing to pass the bill, even at that ridiculously high level. John Boehner and the leadership added a sweetener in the form of a package that eliminated the sequester on defense spending and applied it to more discretionary spending cuts, and even that barely passed, tainted by the association to Plan B.

We waited for a vote. And waited. Then the House Republicans held a closed caucus. And then Boehner had to come out and call the whole thing off.

The House did not take up the tax measure today because it did not have sufficient support from our members to pass. Now it is up to the president to work with Senator Reid on legislation to avert the fiscal cliff. The House has already passed legislation to stop all of the January 1 tax rate increases and replace the sequester with responsible spending cuts that will begin to address our nation’s crippling debt. The Senate must now act.

This is astonishing. Boehner spent three days talking up Plan B, which you just don’t do without the votes in hand. But conservative groups rule the House, and they turned against a bill that gives tax breaks to everyone making up to $1 million, along with enough reductions in other taxes to soften the blow for those poor millionaires. But House Republicans just aren’t going to do it, on this or any tax increase.

Seriously, negotiating with John Boehner is over the budget like negotiating with the Tatyana Egorova, coach of FC Rossiyanka, the leading Russian women’s soccer team over nuclear arms reductions.

Even if you assume good faith negotiations, they simply cannot deliver on their promises.

Platinum Coin Seigniorage Is Starting to Get Mainstream Coverage

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Joe Firestone notes that we are starting to see coverage in the media of the trillion dollar platinum coin:

Did the MSM’s new wave of commentaries on platinum coin seigniorage (PCS) miss the really big story about it? Of course, I think it did, and I’ll continue my review of the MSM commentaries with the efforts of Chris Hayes at MSNBC, substituting as host on the Rachel Maddow show (12/05 at 9:20 PM); and John Carney at CNBC (12/06 at 11:54 AM). This is my second review post on this subject.

Platinum Coin Seigniorage is the idea that the US Treasury can use its right to print coins or arbitrary value, (the Federal Reserve has this power with regard to paper and electronic currency) which can then be used to pay down the debt by depositing at the Federal Reserve.

I think that this is a good thing, and so does Firestone, but he takes issue with a couple of points made by Hayes and Carney.

First, he objects to their characterization that such an action is unlikely to happen. I disagree.

I understand his point, that the legal and economic barriers to doing this are not great, but the psychological and political barriers, particularly for two people as wedded to economic and financial orthodoxy as Barack Obama and Timothy Geithner does make the possibility that this strategy would be implemented to be vanishingly small.

The area where I disagree is his argument that using the coin won’t cause inflation.

While it is clear that if the coins are used exclusively to retire debt held by the Fed will not have much inflationary effect, Federal Reserve held Treasury Bonds are basically an accounting trick.

That being said, if you start retiring other debt, that money has to go somewhere, and if the trillions parked in US government securities need to find another place to park, one could expect these funds to slosh around and this would have an inflationary effect.

My more significant area of disagreement is his assumption that inflation is a bad thing, which is why he argues against the potential inflationary impacts.

I do not think that inflation right now is a bad thing. Given that we have a significant debt overhang, and inflation serves to devalue debt, favoring the debtor over the creditor, I think that inflation is a good thing.

In a very real way, we are in a position very similar to that at the end of the 1800s, when William Jennings Bryan gave his “Cross of Gold” speech.

Seigniorage is today’s free silver, and much like free silver, it is not a likely to be implemented, except as a bargaining strategy.

Canada Drops F-35

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The news that Canada has decided to cancel its purchase of 65 F-35 Joint Strike Fighters is a stunner.

It’s the first cancellation, and Canada is more than a customer, it is also one of the original 9 nations that formed the JSF consortium:

The F-35 jet fighter purchase, the most persistent thorn in the federal government’s side and the subject of a devastating auditor-general’s report last spring, is dead.

Faced with the imminent release of an audit by accountants KPMG that will push the total projected life-cycle costs of the aircraft above $30 billion, the operations committee of the federal Cabinet decided to scrap the controversial sole-source program and go back to the drawing board, a source familiar with the decision said.

This occurred after Chief of the Defence Staff Thomas Lawson, while en route overseas, was called back urgently to appear before the committee, the source said.

The decision is sure to have ripple effects around the world, as any reduction in the number of aircraft on order causes the price to go up for all the other buyers. Canada is one of nine F-35 consortium members, including the United States.

………

Last spring, Ferguson ignited a political firestorm when he reported that the top-line cost cited by the Conservatives in the 2011 election campaign — $9 billion for 65 planes, or $15 billion including maintenance and other life-cycle costs — was $10-billion below the Defence Department’s internal estimate.

Even the internal figure of $25.1 billion was suspect, critics said, because it assumed a 20-year life cycle. The longevity of the Lockheed-Martin-built aircraft, according to the Pentagon, is 36 years.

KPMG’s audit, due out next week, has confirmed the contention, long made by critics such as former assistant deputy minister (materiel) Alan Williams, that the F-35 program’s real cost would be much higher than any previously stated government estimate, sources say.

H/t Christina Mackenzie at the Ares blog.

Understand also that the KPMG analysis almost certainly ignored the elephant in the room, the fact that for any nation operating the F-35, they will be opening themselves up to potentially extortionate charges for support from from the prime contractor over the life of the program, because of the highly integrated, and completely closed, architecture of the aircraft:

It is not often that governments are afforded the luxury of looking into the future before they irrevocably commit to a course of action that will have momentous long-term consequences.

Yet, this is just what the debate about the future of Britain’s fleet of Apache attack helicopters provides, not just to its own government, but also to other European governments as they prepare to order, at great cost, the US-made F-35 Joint Strike Fighter.

Britain’s problem is that it operates the AH-64D Longbow version of Apache, while the US Army is upgrading to the AH-64E Block III version. This means that “essential technical support for the British Apache fleet will be withdrawn from 2017,” as the Daily Telegraph reported Dec. 5, leaving Britain with the choice of either upgrading all or part of its Apaches to the new version, or retiring them after 2017 as they drift into early obsolescence.

………

Whether they realize it or not when they buy a US-made weapon, that is how the system works: US forces only support the weapons they operate, so it’s either keep up or drop out, and in this case either scrap your weapons or see them fade away into technical and operational irrelevance.

The other side of the coin, obviously, is that buyers of US weapons are always assured of having access to the very latest versions, improvements and upgrades decided by the US military.

………

Each time the US military decides a modification or upgrade to its F-35s, foreign customers will have to follow suit, at whatever cost Lockheed and the Pentagon decide, or else see their aircraft become obsolete as US technical support shifts to the newer version.

In fact, the situation will be infinitely more serious in the case of the F-35, as export customers will not have access to the aircraft’s source codes, nor to its more advanced maintenance methods and equipment, because all but the most basic maintenance will be carried out by Lockheed Martin in its own facilities in the United States.

Foreign operators of the F-35 will have to pay to play. But it is probable that European governments do not fully understand this consequence of buying into a major US program.

European buyers of the F-16 in the 1970s – which now all intend to buy the F-35 – were not faced with a similar situation because they had assembled their F-16s in Europe; because software source codes were not an issue at the time; and because the United States had a vested interest in keeping allies’ fighters as effective as possible during the Cold War, when profits took a back seat. None of these circumstances exist today.

Unlike the case of the UK’s AH-64Ds, the architecture of the JSF is such that if you opt out of the upgrade, and Lockheed will stops supporting that model of the aircraft, you won’t simply have an aircraft that is obsolete or obsolescent, you will have an aircraft which cannot fly, because the customer will not be allowed to have tools to maintain it.

Your $100 million dollar aircraft has become a door stop.

As an aside, one wonders whether there is will be an “off switch” on export models of the F-35.

Certainly, if I were directing foreign military sales at the Pentagon, I would demand such a feature, at least for those aircraft shipped to non NATO allies.