In the face of repudiation of their trickle down economic ideology, it would seem implausible that persistent Republican voices have either not read or have little understanding of the real message from Standard and Poor’s downgrade of long-term U.S. credit rating to AA+. (see full text
If they were open to being so informed, Republicans would see that the S&P’s prime concern with the Debt Ceiling Agreement (aka the Budget Control Act) was that a “majority of Republicans in Congress continue to resist any measure that would raise revenues”. Reading through the document, Republican intransigence is obvious as a root cause for the downgrade as House Speaker John “I got 98% of what I wanted. I’m happy” Boehner bragged as he delivered for his corporate constituents. Even predictions of an imminent double-dip has not inhibited Majority Leader Eric Cantor from advising his pack of Alpha males to resist any compromise on increased revenues. In the face of market volatility and deepening economic jitters, what it will take remains an unfathomable mystery for neo-Republicans to shake off their self-deception and accept the real world. Instead, the country is burdened with a Republican party that espouses an irrational opposition to common sense and in their lust to destroy any government benefits by, of and for the People, unwittingly reveal a pathological contempt for democracy and its egalitarian principles.
While G.W. Bush's budgetary games created a financial profligacy to rival Ancient Rome in its final days, Republicans have dared to blame Democrats for 'out of control' spending. As market chaos reigns, Republican hyperbole remains strangely silent, as they hunker down, no doubt formulating a response that will demand final destruction of the country’s favorite Big Three social safety net programs.
Despite well-deserved criticism of S&P’s failure to do their job prior to the 2008 meltdown, the downgrade has affirmed the inadequacy of the bi-partisan Debt Ceiling Agreement and has taught the American public the necessity of increasing revenues and that a jobs program will spur growth.
In a tacit rebuke to Republicans apparently immune from tweaks of conscience, the S&P’s analysis asserts that “American governance and policymaking is less stable, less effective and less predictable” with “near term progress…less likely than previously assumed and will remain a contentious and fitful process.” Although making no policy recommendations on the ‘mix of spending and revenue measures’ necessary to put the US on the path to fiscal sanity, S&P predicts that with no new revenue generation and even with $2.1 trillion in cuts, the US debt burden will continue to grow. In other words, S&P’s reduced credit rating did not contemplate added revenues that might be derived from increased tax generation or bringing the $240 billion spent on US military excursions around the world home to Detroit or the south Bronx.
Standard and Poor’s further stated that they changed their projected scenario assuming that the “Bush 2001 and 2003 tax cuts scheduled to expire in 2012 will remain in place” citing that a higher debt trajectory could lead to a second lowered rating unless initiatives such as the “lapsing of the 2001 and 2003 tax cuts for high earners lead to fiscal consolidation measures likely to slow the deterioration of the government's debt dynamics.” In order words, if nothing is done to raise revenues, the downgrade to AA+ may be only the first if the Obama Administration and the Republicans continue to screw with the economy.
It was three full days after the downgrade before the White House, silent with the President at Camp David over the weekend, spoke out as the American public and the markets waited, desperate for assurance that Someone was in charge. What Americans needed to hear was a strong and focused President with a little spunk and a lot of vision announcing that an Executive Order establishing an Infrastructure Bank was about to be signed or that an emergency massive public works jobs bill would be rushed through Congress – daring the Republicans to obfuscate in this time of an unprecedented national crisis - and reminding us of the deleterious effect of budget cuts that will not create jobs or stimulate the economy wouldn’t have hurt either.
Instead, as the market dropped 645 points on Monday, no reassurance was forthcoming and the President inexplicably offered no new initiatives. Still touting his now discredited ‘balanced’ approach, the President urged extension of unemployment insurance and payroll tax deductions, both small potatoes in the present context, as if either will make a significant contribution to stimulate the economy. The problem, of course, is that it is not clear whether the President agrees or not with the same ‘voo-doo’ economic principles that the S&P report tacitly rejected.
The President, in resuscitating a speech he has given a dozen times before, conveyed no sense of urgency, accepted no personal responsibility for his role in the ill-conceived Agreement and provided no indication that he would imminently transform into a ‘crisis’ leader. Lacking any realistic assessment that he understood the immediate crisis or that he had a comprehensive action plan, Obama, still wearing the mantle of a candidate on the stump, exhorted that ‘This is the United States of America and it will always be a triple A country” assuming that his words would rally the markets – they did not.
The reality that the President’s admiration for Ronald Reagan has always surpassed his admiration for FDR who restarted a depressed economy in 1937 after a precipitous stock market drop, should have been prophetic. As the President and Treasury Secretary focus blame on the tea party and Standard and Poor’s, both are amnesiac to the fact that the President yielded too much, too soon to Republicans, just as many Congressional Democrats, complicit, enfeebled and perfidious during the 3 month debt ceiling discussion, share responsibility for what has occurred. What was once a stark fundamental different view of government is more muddled today than ever and the reality is that neither political party has shown an ability to govern.
As the consequence of a risky DCA without revenues, the American public deserves to know which, if any, of the President’s economic advisors endorsed the final Agreement.? Did any of them make the case to the President that massive budget cuts without revenues would come back and bite Obama in the ass? Perhaps it was Austen Goolsbee of the President’s Council of Economic Advisors who appeared on Jon Stewart’s program immediately after the Agreement was reached as all had a jolly good time or perhaps it was Treasury Secretary Tim Geithner, last of the President’s original economic team, who never looks like he’s having a good time. Geithner’s assertion that the American economy is “strong” is indicative of a complete disconnect between the Administration and life outside-the-beltway for average Americans. In a masterful stroke of timing, Geithner, who earlier indicated he would step down after the debt ceiling and was urged by Obama to remain, no doubt in recognition for the terrific job he has done on the recovery, has announced he will stay at Treasury. Phew, that’s a relief.
Immediately following the President’s solitary signing of the Budget Control Act without the usual celebratory bi-partisan crowd, much of the liberal media presented Obama as being ‘held hostage’ by the Republicans as if the Agreement was against his will while, in reality, the President favored a much higher package of cuts at $4 trillion. It follows that many Congressional Democrats oblivious to the crisis, who would otherwise be having a snit fit if a Republican were in the White House, were also ‘forced’ to abdicate their fiduciary responsibility as they voted for what will ultimately be judged as a travesty of representative government.
Assuming that being ’held hostage’ (in a political context) means without shackles and a cage, what does that say about the ability of ‘hostages” to do their job, as being too inexperienced or lacking a political maturity to exercise the necessary leadership skills.
On the other hand, no self-respecting hostage with inner grit or a wealth of personal resources that enabled a whirlwind rise from a lowly community organizer to the most important gig on the planet in little more than a decade would allow oneself to be easy prey to the dictates of a morally inferior bunch of hooligans. Such a climb up that celebrated ladder is due to more than just extraordinary luck and some healthy chutzpah – it takes a rare combination of iron will, a single-minded ambition bordering on the fanatic and a phenomenal self-confidence that instinctively knows how to accomplish goals.
Unfortunately, those qualities have failed to materialize into a 21st Century ‘crisis leader’ necessary to shepard this once-great country and its people through the woods.