It’s a tough time to be a conservative intellectual.
From The Weekly Standard to The Wall Street Journal, on the pages of policy periodicals and opinion sections, the egghead right’s longing for a presidential candidate of ideas — first Mitch Daniels, then Paul Ryan — has been endless, intense and unrequited.
Profoundly dissatisfied with the current field, that dull ache may only grow more acute after Ryan’s decision Monday to take himself out of the running.
The problem, in shorthand: To many conservative elites, Rick Perry is a dope, Michele Bachmann is a joke and Mitt Romney is a fraud.
WHAT’S REALLY HAPPENING – Don’t believe anyone who tells you this is a replay of 2008. It’s not. Or at least it shouldn’t be. European sovereign debt problems are significant but unlike the huge credit and real-estate price bubble that burst in the U.S. in 2008 and infected the balance sheets of nearly every bank on earth and crushed consumers leading to a deep, prolonged recession. And the wild market swings of the last week have very little to do with the S&P downgrade, no matter how many lazy news stories keep making the erroneous connection.
The S&P report was a very negative headline but it is no longer having any real impact on a market that is trying to figure out how far the European crisis is going to spread, how much banks are exposed to potential sovereign losses and how slow global growth will be the rest of this year and next. If anyone was worried about U.S. credit-worthiness the 10-year Treasury would not be yielding 2.20 percent, which adjusted for inflation is LESS THAN ZERO.
No one is worried about Uncle Sam’s credit or the ability of the U.S. to deal with its long-term debt if it can get growth moving again. The U.S. could easily pass another big stimulus package without bothering the market at all. And at these rates (which amount to FREE MONEY) it would be a huge bargain (not that there is any chance it will happen).
During the process of finding a support level, the market is whipsawed by every rumor and data point and giant momentum swings feed on themselves, often with the help of pre-set computer algorithms and aggressive professional traders (AKA face-rippers). At some point (hopefully soon) a consensus will emerge on where equities should be priced and calm will return. Until then, if you are able, don’t pay much attention to the daily freak outs. Because the only thing that could make 2011 look more like 2008 is a lot more irrational fear.
REALITY CHECK— “Taxes key to Mitt’s ’04 pitch to S&P,” by Ben Smith: “Gov. Mitt Romney lobbied the credit ratings agency Standard & Poor’s in 2004 to raise his state’s credit rating in part because Massachusetts had raised taxes during an economic downturn two years earlier. The claim was part of a presentation to the ratings agency obtained by POLITICO under a state freedom of information law … ‘When I was governor, S&P rewarded Massachusetts with a credit rating upgrade for our sound fiscal management and the underlying strength of our economy,’ Romney boasted [after last week’s U.S. S&P downgrade]. … But Romney’s case to S&P [for Mass. in ’04]… bears a far closer resemblance to the right-of-center grand compromise rejected by House Republicans this year …
“Romney’s administration made the case to Standard & Poor’s that his state was creditworthy because of both spending cuts … and new revenues, including fees he imposed and tax ‘loopholes’ he closed. … Romney’s aides, asked about the presentation, pointed out that Romney, once he took office as governor in 2003, never signed a tax increase, but instead passed on most of the fruits of an economic boom to taxpayers in the form of tax cuts.” Story includes links to Romney’s 2004 deck, split in five parts http://bit.ly/qKIn0c
Dude flip-flops more than my Rainbows.
News organizations that break big stories will soon get a little more credit — and maybe even a little traffic — from The Associated Press. Beginning Aug. 1, whenever the AP picks up a local story from a member for rewriting and distribution, the text of AP’s story will include a link back to the original report.
Reporting from Washington—
As the debt ceiling debate enters its final stages, House Republicans face increasing political isolation in their opposition to sweeping budget reforms that President Obama has pushed for and polls show most Americans now prefer.
Republican resistance to compromise has turned a significant bloc of voters against them, according to several new polls, and has frustrated members of their own leadership as well as establishment GOP figures.
The fear among leading Republicans is that the party may lose an opportunity to lock in budget cuts that go beyond anything Democrats had previously been willing to consider. Five-term Rep. Tom Cole (R-Okla.) said he had never seen any spending reductions attached to a debt ceiling vote.
“It’s inconceivable,” Cole said. “Some of the members who haven’t been here don’t appreciate how much John Boehner has gotten for them.”
If the House Republicans screw this up and we don’t get something passed, they are going to be the rallying point and reason for which Obama gets another term in office.
WHEN IN DOUBT, RENAME IT – One humble thought that occurred to M.M. is to write some kind of emergency legislation that doesn’t touch the phrase “debt limit.” Call it the “Protect American Jobs Act of 2011,” and include language expressing great disdain over Washington spending but acknowledging the need to shift the borrowing limit to “prevent the loss of hundreds of thousands of jobs that would occur if American debt is downgraded and interest rates that every small business owner has to pay go sharply higher.” Throw in something in about moms, baseball and apple pie and everyone can go have a good summer and not fear that a crummy economy is about to become a dead one.
I don’t think anyone would fall for this, but it’s a nice idea.
KISS OF DEATH? NYT LIKES McCONNELL PLAN – NYT lead editorial: “The plan is no less cynical than the original threat, but if the House goes along, it may allow Washington, the credit markets and the American people to breathe a little easier. Mr. McConnell’s plan would allow President Obama to raise the debt ceiling by $2.5 trillion in three increments through the end of 2012. Congress could vote to disapprove each increment, but the president could veto its resolutions of disapproval, and the debt ceiling would then rise. … The proposal is clearly meant to shift all the blame for raising the debt ceiling onto the president, and away from Republicans. http://nyti.ms/r0WLOQ
A sprawling coalition of Wall Street and Main Street business leaders sent an unmistakable message to lawmakers Tuesday: Enough squabbling. Get the debt ceiling raised.
The Republican freshman might have been voted in by “the people,” but they’re funding came from Wall St. Who really gave you a mandate?
Well, that was unexpected. After months of negotiations, after the White House offered Republicans a deal that would raise the Medicare eligibility age and cut Social Security by hundreds of billions of dollars and forswear any future leverage on the tax issue, McConnell countered with a deal in which the two sides wouldn’t so much reach an agreement as they would agree that if they don’t reach an agreement, Republicans will let Obama raise the debt ceiling and Obama will let Republicans criticize him for it.
McConnell is an evil, evil genius. He realizes the kids in the House aren’t going to let a deal happen and understands the importance of raising the debt ceiling.
While I don’t like the man at all, this is an extremely well played political move. My hat is off to you, Mr. McConnell
Cantor added that his party’s concession is “the fact that we are voting — the fact that we are even discussing voting for a debt ceiling increase.”
And with this, the House Majority Leader has slipped into true madness.
First, characterizing a willingness to raise the debt ceiling as some kind of enormous sacrifice is insane. We’re talking about paying a bill for money we’ve already spent. Cantor wants the political world to understand that his party sees this as an “existential” problem? Maybe he can start by explaining why Republicans had no qualms about voting to raise the debt ceiling seven out of the eight years Bush was in office.
Maybe it only became “an existential problem” after a Democrat got elected?
I said this yesterday.