Archive for the ‘Politics’ Category

Reposted from Daily Kos 7 August 2015

In order to prepare for my spot today on The After Show for Netroots Radio I had to listen to both of the GOP debates…twice. I could give you insightful, thoughtful analysis especially about Republican economics but, frankly, the League of Sub-Ordinary Crackpots wore me down and I just don’t have that in me today. I’ll get to it, just not today. Instead, on The After Show I had something of a cathartic rant and I thought there might be those who would like to read it so I am posting it here as well.  – Carrots! Arilss Bunny, Netroots Radio Monetary Policy and Financial News Burrow Chief

Keep hopping for my partially exasperated, partially funny take on the candidates you won’t be hearing from for very much longer.

The GOP Kid’s Table debate: where good facts go to die. Carly Fiorina “won” and she did it without having to use a single accurate fact. Politifact verified that. Zip. Zilch. A perfect zero.

Some wunderkinder at the Kids Table thought it was news that China and Russia are using cyberwarfare. GASP Has anyone told the NSA??? I listened for the audience, to see if they had any reaction to this but there were literally only thirty-two people in the seats. “Bueller? Bueller?”

Lindsey Graham made a serious attempt to win at GOP bingo by hitting as many off-topic code words as possible in the shortest amount of time but then he basically dissolved into talking about his sad, sad life and ended up looking like he needed a hug…from John McCain.

The Kids Table Debate was the debate of NO. No on immigration. No on the economy. No on healthcare for anyone but especially no on healthcare for women. No on Dodd-Frank. No on Common Core. In fact, no on the whole Department of Education. No on the EPA. No on preserving Medicare. No on taxing those who can afford to pay taxes. No on entitlements but we’ll make it up by funding defense programs the DoD doesn’t even want.

But, to be fair, there were exceptions. Yes on Keystone XL, yes on “the fence,” and yes on killing women to save fetuses. Yes on tax cuts for everyone except working families. Yes on endangering social security. Yes on forcing China to act only in its own interests. Yes on backing Russia into a corner. Yes on blowing up all our relationships with all of our allies…except Israel. And yes on war with Iran.

These are people who live in a world of magical thinking and I don’t mean ambitious thinking, I mean unicorns are dancing the can-can under a rainbow magical thinking. These are folks who think that racing our economy to the bottom such that we can attract manufacturing jobs back from China is a good idea! I’m thinking, why stop there? Let’s use the Second Amendment to springboard into a hunting and gathering economy. Right! Are you with me?

These are people with minds and hearts so small and so focused on their own personal glory that they plan to repeal every single executive order President Obama has signed since entering the Presidency with no consideration as to what those orders might be. They only need know that they were signed by the black, Kenyan, Muslim, vegan, satan. These are truly six-shooter minds in a fully-automatic world.

These are people who think that political correctness is a problem but the seemingly daily murders of citizens by law enforcement is not.

And in closing – none of them can count. People, they asked you to describe Hillary in two words. Two words, people! TWO WORDS!

Actually, no, I take that back because I do have a question for the candidates and it is this: if you were so easily fooled by a clearly doctored video that purports to show Planned Parenthood employees saying things they did not truly say, how can you represent yourself as someone capable of evaluating conflicting intelligence reports which may or may not directly effect national security…on a daily basis?

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Reposted from Daily Kos 20 February 2015

I should begin by telling you that as I write this I have my browser open to the website of The Guardian because, quite literally, there are updates every few minutes on the exceedingly dynamic crisis between the Eurozone (EZ) and Greece. Throughout the day, as much as possible, I will add updates at the very bottom of this diary. Finally, I (aka Arliss Bunny) am the Finance News and Monetary Policy Burrow Chief for Netroots Radio and on The After Show I have covered the topic of Greece several times in recent weeks including here and here. I also went into great detail today regarding the developments of the past week. That podcast will be posted around 8PM EST today and I will add the link here when it is available. Will McLeod covers the political side of Greece on The After Show here and here. Will combines both passion and knowledge so his podcasts are not to be missed.

Keep hopping for background and a play-by-play round-up of events which I have named, “As the Euro Turns.” It is an incredible story full of drama and suspense so join me. I do recommend taking a break right now to get a snack as it’s going to be a long read.

[Speaking of “snack,” I discovered this week that there is a World Carrot Museum. A CARROT museum…!!! BEST. THING. EVER.]


It is easy to think of Greece as a small country and it is but as deflation rises and austerity continues throughout Europe, Greece finds that it is not as alone as one might imagine. Greece, Spain and Italy collectively have a population of 100 million which is one-third the population of the entire Eurozone.  In Spain and Italy, in particular, upcoming elections are favoring the anti-austerity parties and current governments have not failed to notice. On 24 January, the day before the Greek elections, the leader of Podemos, the one year-old anti-austerity party now leading in the polls in Spain, made a speech that should have kept all the austerians in the EZ awake all that night and the next as well. The current government in Italy has also been signaling ever-closer sympathy for Greece. Even in Portugal, Ireland and France, where the governments remain pro-austerity, the people and opposition parties are increasingly eschewing austerity. Loudly.

If you have not been following the Greek crisis, here are some general statistics that will baptize you instantly into the “Wow! It’s hard to believe the EZ could be so wrong and STILL remain unwilling to drop austerity” club. Since the imposition by the Troika (the European Central Bank, aka the ECB, the International Monetary Fund, aka the IMF and the European Commission aka EC) of starvation austerity onto Greece, the Greek gross domestic product (GDP) has fallen by 25%, general unemployment has risen to 26% and youth unemployment has skyrocketed to 55%. Even more chilling, of the €254.4bn in loans from the Troika between 2010 and 2014, €29.3bn has gone into Greek operating needs and the Greek contribution to the EU stability mechanism while the other €225.1bn has gone to pay debt. So, of the loans made to Greece, only 12% has gone to the citizens of Greece. The rest has gone to pay German, Dutch and Austrian banks as well as the Troika. When you hear people talking about a Greek bailout they could not be more wrong. This is a bailout of the creditor banks, pure and simple and it means that German Prime Minister Angela Merkel has a €320bn gun to her headso how ever tough she wants to sound, Greek bankruptcy and Greek exit of the Euro (known as “Grexit) would splash her sticky, bloody brains all over Germany. Don’t imagine, whatever the rhetoric, that Merkel is unaware of the consequences.

On 25 January, by huge margins, the Greek people put a new party, SYRIZA (it’s an acronym) into power and while SYRIZA is called a “radical leftist” party they actually are not. They are a center, progressive party. What makes them seem “radical” to the northern Eurozone is that they have accepted and proclaimed the reality that austerity does not now and will not ever work…in Greece or anywhere else. Also widely misunderstood, SYRIZA does not want to leave the euro or the European Union (EU). They simply want the freedom to implement proven growth strategies (rather than disproven austerity) in order to reverse the destruction of their economy.

The new Prime Minister of Greece is Alexis Tsipras and I love this quote from him,
(my party) is not a ‘threat to Europe’ but instead a force for change in its policy direction.” Tsipras and his Cabinet are planning to lead not only Greece but to blaze a path for other seriously jeopardized EZ member nations…and THAT is why the Germans fear him. Tsipras is, btw, a thoughtful, dynamic, strategic thinker and deserves an entire dKos diary dedicated to him and to the rise of SYRIZA. That will, however, not be a diary written by this rabbit as I am more of a monetary policy wonk than a political junkie.

The new Greek Finance Minister is Yanis Varoufakis. If I had my way I would confer sainthood on this guy right now. He is breathtaking in both his deep grasp of the real mechanisms of monetary and fiscal policy (he advocates the same positions as modern monetary theory) but the essential understanding that the core issue is not money, it is people. Varoufakis describes austerity as “fiscal waterboarding.” He repeatedly uses the term of art, “humanitarian crisis,” when he refers to the citizens of Greece. And he is not wrong. In keeping with Tsipras’ lead, of the EZ Varoufakis has said:

“If it is in my power to determine…Greece will neither want to leave the euro nor threaten to do so. We should not have entered the euro–that is crystal clear, but once in, it is disastrous to remove one’s-self from the Eurozone voluntarily.”

Because Varoufakis is so central to all that is happening right now I will add a bit more detail about him so that you can get a clear picture of who he is. First of all, immediately following the Greek elections, he started a whirlwind of meetings in EZ capitals with his counterparts. He never wears a suit or even a tie even when speaking at the House of Lords. It caused a flurry of glee in the British press when he showed up to meet with British Chancellor of the Exchequer, George Osborne wearing black jeans, an untucked shirt open at the collar and a leather jacket. The Guardian happily pronounced his attire “something Putin might wear on a bear hunt.” The Guardian further speculated that a suit would have conveyed “get comfortable I want to join the club” and that Varoufakis does NOT want to join. The Guardian surmised that Varoufakis wants them terrified and that this is the Greek way of signaling, “You can’t get blood from a f$&^ing stone so get real.” (This latter is my interpretation of their thought.) Varoufakis later said, in an interview with Stern, that he isn’t comfortable in suits or ties, he has never worn them and he isn’t about to start now.

Varofaukis is an economist (specializing in game theory) but he has been careful to say, in an oped piece he wrote that ran in the New York Timeson 16 February,

“If anything my game theory background convinced me that it would be pure folly to think of the current deliberations between Greece and our partners as a bargaining game to be won or lost via bluffs and tactical subterfuge.”

[If you want to keep apprised of the Greek crisis, do NOT read the New York Times. Seriously, their economics/business writers remain dedicated to their twin objectives to learn nothing about economics and to share that yawning stupidity with everyone. …You have been warned.]

He has both Greek and Australian citizenship and has taught in Athens and Australia but most recently was teaching at the University of Texas at Austin. All of this change is so recent that his wife is still in the States packing and making the arrangements to move back to Greece with their son. The Varoufakis family moved to Austin following a death treat made, via phone, to Varoufakis wherein the life of his son was threatened. Varoufakis had been involved in unearthing bank fraud and corruption prior to the threat.

Varoufakis runs a popular blog and intends to continue to do so though with shorter posts. He is also extremely active on Twitter (@yanisvaroufakis) and is a great follow.

Another new member of the Greek government is Deputy Minister of Labor and Social Solidarity, Rania Antonopoulos. Until her appointment Ms. Antonopoulos was a senior scholar at the Levy Institute of Bard Collage, one of the true homes of modern monetary theory (this is a different link than the last one). Antonopoulos has also been an advisor to the UN Development Program. One of Antonopoulos’ areas of expertise is job guarantee programs. The program she has designed for Greece over the past two years is the one that SYRIZA will be putting in place under her direction. The Levy Institute has been deeply involved with SRIZA over the past several years and its director, Dimitri Papadimitriou, has been flying to Greece every few months to lend advise.

Still hanging in there?…Perhaps a refreshing sip of carrot juice is called for. I’ll wait.

The core principle of the SYRIZA Plan is to put ordinary Greeks first. They mean to prioritize the 99% over the 1% and they have minced no words on that score. Among the ways they are planning to generate additional taxes is by clamping down on the off-shoring of income by the wealthy. They have a huge database already warmed up and they mean to use it. They are also going to break-up cartels and clamp down on criminal banks.  And they aren’t just saying this, they are already preparing the first steps.

On 4 February Varoufakis officially announced that Greece is bankrupt. The conservatives of the EZ gasped and were SHOCKED, shocked I say! As Matt O’Brien, of The Washington Post, wrote on 18 February,

“The problem is the one thing Greece won’t compromise on is the one thing Europe won’t admit:  that the bailout has failed, and needs to be scrapped.”

To elaborate on that point, on 17 February, Austrian Finance Minister Jeorg Schelling said,

“There won’t be a meeting (on Friday) where we have to listen to how the world is working.”

In other words, while clamping his hands over his ears and loudly saying “lalalalalalala” he really means,

“There won’t be a meeting on Friday where we have to listen to reality and facts.”

I feel better already.

Many have seen the SYRIZA plan to refuse to accept further bailout loans as a sign that they will not only declare bankruptcy, as indeed they already have, but that they follow-up by defaulting and will exit the euro immediately. This is a misreading of their clearly and repeatedly stated intentions.  Tsipras has said, to Bloomberg News among many others,

“Greece will repay its debts to the European Central Bank and the International Monetary Fund and reach a deal ‘soon’ with the euro-area nations that funded most of the country’s financial rescue.”


“…it means that we need time to breathe and create our own medium-term recovery program…”

They remain strongly committed to their ECB and IMF loan obligations though, in carefully worded statements, Tsipras seems to be speaking less to the loans made by other nations and while this infuriates the creditor banks, when in bankruptcy having clear priorities is always wise. From the beginning SYRIZA has been fully transparent regarding its actions and intentions so stating their priorities out loud is an expression of their commitment to deal honestly. As far as debt goes, the breakout is as follows:  €142n is owed to the EZ/IMF fund (these are speciality instruments raised only for the purpose of resolving various crisis), €53n to individual countries, €20n to the ECB in Greek government bonds and another €50b is owed by the Greek National Bank to other national central banks through the EZ payments system. If you are interested in knowing how Greece got into this situation in the first place and you guess international corporate terrorists Goldman Sachs you would be a long way to right. I did a podcast on that too and it is here.

Among the most astute commenters on Greece is Frances Coppola writing for Forbes and others. She is also an excellent Twitter follow at @Frances_Coppola. Here she is summing up the Greek position nicely,

“Greece has no intention of leaving the Euro or the EU (But others might force it out.)Greece has no intention of defaulting on its debts to primary official creditors. (But others might force it to.)

Greece is committed to pursuing policies that promote economic stability and recovery of Europe. (But others might not be.)”

While many/all believe that it is impossible for Greece to service their crushing debt load, there are some considerations that most fail to notice. (Again, hat tip to Frances Coppola for this analysis.) Greek debt already sits well below market rates and has a very long horizon for repayment. In fact, no principle payments are required on the European Financial Stability Facility bonds (EFSF bonds), mentioned above as speciality instruments, until 2022. Debt service for these primary creditors is 2.6% of GDP, so not entirely unaffordable. The current debt load is, however, 175% of GDP and some EZ idiot (achtung! pardon my sneeze) insisted that the 2012 agreement between the EU and Greece require that Greece reduce its debt load to 120% of GDP in three years! This already impossible task is made even moreso because as the Greek economy shrinks (it’s down 25%, remember) the debt to GDP load naturally floats up.

The real problem for Greece is not debt service but what is being called the “current program,” (aka “structural reforms”) the conditions Greece is required to fulfill in addition to repaying its debt. This is the tool the Troika used to impose “fiscal waterboarding”, to steal Varoufakis’ descriptor, on Greece. The “current program” includes the % of GDP requirement noted above and, even more damaging, the random edict that Greece must run a primary surplus (meaning not including interest payments) of 3% this year and 4.5% in 2016. I’ll say it again, that is the equivalent of a $720B surplus in the United States and it is insanity. In fact, it’s worse than that, it is built-in failure and everyone knows it. The 2012 agreement, to which the Germans are attached as firmly as a crustacean to a boat hull, was never intended to work. Oh, and the so-called Troika monitors, that the IMF and ECB are foisting upon the Greeks because the Troika are determined to treat Greece as a junior, less-than, not-quite-partner.

Which brings me to the TroikaThe Troika’s position is that Greece is not in bankruptcy rather it is in a “temporary liquidity shortfall” and lending more money will allow it to meet debt service obligations while “structural reforms” will lead to renewed growth.In reality Greece is in a debt deflationary spiral (a condition when income is falling and debt is rising.) William Black, in an excellent post at New Economic Perspectives, notes,

“The troika overwhelmingly provides loans to Greece. The troika rages repeatedly about what it claims is Greece’s excessive debt. The troika is shocked that extending more debt (rather than aid) to a nation it claims is in disaster because of its excessive debt levels has not transformed Greece into a neoclassical paradise. The troika loans roll over existing Greek debt or bail out banks (and their owners and creditors). Many of those banks, owners, and creditors are foreign. The troika will make money on its loans to Greece unless the terms of those loans are renegotiated or Greece defaults on the loans. The horrific price to Greece of the troika’s loans is brutal austerity.”

Mario Draghi, President of the ECB, adds this useful tip,

“But for growth to pick up, you need investment. For investment, you need confidence. And for confidence, you need structural reforms.”

…and unicorns.

For confidence you need LOTS of unicorns.

In my book, I refer to this as the “Wussing, Wussie, Wusses – Business Confidence” problem. Folks, write this down on the inside of your eyelids; business never leads. Business follows. Business NEVER hires a single employee it does not desperately need at that very moment. Period. RABBITS have figured this out. You plant a carrot seed and when it sprouts we eat the top off. You plant another seed and we eat another sprout. It’s not a carrot until it’s a carrot, people.

And just in case my word isn’t enough, in Davos the infamous New York Times tracked down the even more infamous Kenneth Rogoff who said,

“Much bigger steps need to be taken to fiscally stimulate the hardest hit European countries,” Mr. Rogoff added. “Primarily,” he said, “steps should be taken to significantly lighten the government debt of these countries, with a view to giving space and freedom for governments to spend more.”

HOLY CRAP! Even Kenneth (I can’t manage an Excel spreadsheet) Rogoff gets it. How much more simple can it possibly be?!?!

And now on to Germany… (This would be a good time to take a drink. I’m recommending the Rombauer Chardonnay but that’s just me.)

Given its action in the EU, the German point of view is neocolonialist, at best, a new Reich, at worst. The current German surplus far exceeds even the upper limit for surplus as recommended by the ECB and this is important….

Because there is ALWAYS BALANCE German surplus = debt for others. Period. It’s accounting and we all know you don’t screw with the Math Gods.

German banks are up to their eyeballs in bubbles of the worst kind, right now, this very minute, all over Europe but particularly in Greece and Spain. If you remember nothing else in this endlessly long diary (and I have already said it once) remember this:

Greek loans are all about bailing out Germany.

Only 12% of the 2012 bailout monies went to Greek operations and the Greek people, the other 89% went to cover loans. In a classic example of NYT stupid they assert,

“While Greece sees itself as being punished by creditor’s demands, Germany and a host of European officials have argued that Greece and other troubled nations in the eurozone must clean up the high debts and deficits at the root of Europe’s crisis. They say Athens has failed to make enough progress on structural reforms seen as necessary to stabilize the economy, and they are pressing Greece to raise billions of euros through more budgetary cutbacks and taxes.”

Meaning TINA (there is no option to austerity). Back in the real world, austerity is the proven cause of the continuing Greek decline – not debt, not deficits. In fact, the deficits are too small. A significant fiscal stimulus is essential for Greece to move forward. SYRIZA understands this.

Meanwhile, from their lair under a volcano, top German politicians are demanding that Greece sell islands in order to bail out German creditors. Bwhahahaha.

I’ll close this section with a couple of quotes from another first-rate article by Frances Coppola:

“The history of Europe is long and blood-spattered. It is nothing like the United States, which is a young country with a common language, clear boundaries and a single political structure. Yes, the USA fought a civil war to achieve its current degree of political unity, and there are no doubt still stresses and strains. But Europe–if you must regard it as one entity, which is problematic in itself–has fought HUNDREDS of civil wars. We do not have a single language, we still cannot agree on where our boundaries should fall and national interest always trump “European” politics. You can’t overturn tribal and cultural identities that go back thousands of years at the stroke of a few politicians’ pens.”

“The Euro is the biggest threat to peace in Western Europe that I have seen in my lifetime.”

And Now…”As the Euro Turns”…

Monday, 2 February:  Varoufakis begins his meetings with EU finance Ministers and makes news by wearing a leather jacket to meet UK chancellor of the Exchequer, George Osborne

Wednesday & Thursday, 3 & 4 February: meetings and speculation

And these two excellent tweets:

This from @Frances_Coppola

“The ECB is engineering bank runs.”

And this from @AndrewLainton

“Circular logic → possible grexit → withdrawal of collateral backing → bank run → grexit”

Thursday, 5 February:  Storm clouds began to rage in the EZ when SYRIZA kicked out the Troika monitors who had been deployed to watch over the shoulders of the Greek government dispensing discipline and austerity at will. SYRIZA had promised, during the election, to throw the monitors out and they did so. The ECB, in a tantrum rage and without required consultation, immediately “lifted the waiver” under which Greek government bonds had been allowed to trade. Prior to this the ECB had agreed to accept Greek government bonds even though Greece did not meet the ECB minimum requirements. A formal waiver was in place to allow the transactions and it was this waiver that was pulled by the ECB in a fit of pique.

Friday, 6 February: the ECB clarifies that Emergency Liquidity Assistance (ELA) funding will still be available to the Greeks but, of course, the strings on that money are many and short.

Saturday to Tuesday, 7 February to 10 February: more meetings, more speculation

Wednesday, 11 February: the first (emergency) meeting between the EZ Finance Ministers is held, in Brussels, and they get…nowhere

Thursday, 12 February: The ECB raises the Greek ELA allowance; Tsipras makes his debut in a meeting, also in Brussels, between EU Prime Ministers, and they get…nowhere

Saturday, 14 February: Varoufakis says that he believes Athens will reach agreement with the EU “even at the last minute.” and that many issues are agreed but privatizations & labor (meaning the SYRIZA promised minimum wage increase & pension repayments) remain the sticking points. Also, it is confirmed that exiting from the EZ does mean exiting from the EU and that the EU determines the “arrangements for a member state’s withdrawal.”

Sunday, 15 February: EC President Jean-Claude Juncker (of Luxembourg) announces that he has taken a “personal stake” in the negotiations and is making a “last-ditch” effort to resolve the differences. Tsipras and Varoufakis seem confident that they will come to agreement with EU finance ministers based upon the draft communique they have been given by European Commission’s Pierre Moscovici, called, cleverly, “the Moscovici Draft”. The Moscovici Draft contains no commitment to the “current program”,  and instead refers to a “new arrangement”. The Greeks say they are “happy” to sign this “splendid” draft immediately. Moscovici calls upon EU finance ministers to be “logical and not ideological”. Ummm…fat chance.

Monday, 16 February:  Fifteen minutes before the start of the meeting with the EU finance ministers, Varoufakis is handed a revised communique by Jeroen Dijsselbloem (the Dutch Finance Minister) and the language from the Moscovici Draft has disappeared and been replaced by the “current program” language which the Greeks remain unwilling to accept. All reference to “new arrangement” has been removed. The talks break down early in the day as Greeks are furious over the bait-and-switch. In the evening a third draft, the “second Moscovici communique” is released which combines elements of both previous drafts but retains the “current program” language. Both the second and third drafts essentially say,

“Give up your silly ideas of recovery so we can continue to pretend that everything is fine.”

Because things are not already screwed up enough, the third draft is translated, by the Eurogroup, to include “in line with” language but Greeks have been given a translation that means “along with”. Obviously, these are two completely different meanings.

Meanwhile, the following Very Serious People make the following statements:

Itallian Finance Minister Pier Carlo Padoan,

“ Greece leaving the EU is out of the question. I’m not worried. I am convinced that we will ultimately reach a common ground and a common decision.”

Here’s the part he didn’t say but everyone heard,

…because otherwise the Germans will be right back here again with my country after our elections.

Dijsselbloem equivocates,

“Within the program there is room to discuss.”

I call bulls*%!

Varoufakis leans in,

“In the history of the European Union nothing good has ever come out of ultimatum.”

Tsipras softens the line,

“We are ready and willing to do whatever it takes to reach an honorable agreement over the next two days.”

Tuesday, 17 February:  Because Germans complained that they hadn’t, the Greeks release their own draft IN GREEK and it is mis-translated by the Financial Times.  Chaos ensues. The Greeks also release all the documentation from the Monday meeting proving that the German claim that they had made no credible offer had been “economical with the truth.”

Greeks reiterate that they are willing to accept 70% of the “current program” requirements while a “bridge program loan extension” is put in place for a maximum of 6 months during which time a new agreement can be hammered out. As per the “current program” Greece is willing to: reduce bureaucracy (part of addressing EU corruption concerns), strengthen independence of tax administration, create a new efficient and fair system of tax litigation, modernize bankruptcy laws, reform the judicial system (another corruption issue), and dissolve cartels. BUT they make no offer to complete the other 30% of the current program – and that is one of Varoufakis’ “red lines.” In his oped in the NYT the previous day, Varoufakis had said,

“Faithful to the principle that I have no right to bluff, my answer is:  the lines that we have presented as red will not be crossed. Otherwise they would not be truly red but merely a bluff.”

More from Very Serious People:

Austrian Chancellor Werner Faymann warns that ,

“Some policy makers have underestimated the risk of Greece leaving the currency union. It would have unforeseen consequences.”

British Chancellor of Exchequer, George Osborne, weighs in with,

“The consequence of not having an agreement would be very severe for economic and financial stability.”

Wednesday, 18 February:  Per the recommendations of Tsipras, the Greek Parliament elects pro-European conservative, Prokopis Pavlopoulos to be the (largely ceremonial) President. This is a cross-party hat-tip and further unites the Greek people.

Greece announces plans to ask the EZ for a six-month bridge extension but not under the full “current program.” Greeks plan to propose a new bridging program to keep things going for six months and to pay €7bn in maturing bonds.

German Finance Minister Wolfgang Schäeuble proves he knows nothing about real world economics by saying,

“Greece would like to receive credit, but not fulfill the conditions to allow Greece to recover economically.”

He means austerity and he is…so…very…wrong.

Germans are publicly pressuring the ECB to deny further ELA funding to Greece believing the hard line will signal other anti-austerity movements that they had best not try it. Still, it is doubtful that ECB will cut-off ELA because it signals that ECB is not backing national banks and in such a sensitive environment this might cause other national banks to experience large cash outflows.

Ashoka Mody, former IMF official who helped design Ireland’s bailout, draws notice when she says,

“The ECB’s threats are completely empty. Despite all the bluster, it has no choice. The ECB has to ask itself how it can stabilize the financial system, not undermine it.”

Tsipras tells his Parliament,

“We will not succumb to psychological blackmail. We are not in a hurry and we will not compromise.”

And a new poll backs him up: 79% of Greeks support the government and 74% believe their strategy will succeed in the end.

Thursday, 19 February:  Greece formally requests a six-month extension and, as a short-term compromise, they commit to maintain fiscal balance during renegotiation period, take immediate measures on tax evasion and corruption, agree to meet all financial obligations in the interim and to refrain from unilateral action that would undermine fiscal targets. In a HUGE concession, they agree, during the extension,to be monitored by the Troika again. They do not agree to a 3% budget surplus. They also stand firm on addressing their humanitarian crisis and their plan to kick-start growth with stimulus.

Germans reject the Greek proposal out of hand.

Economist Yves Smith has pointed out that while pundits predict that the Germans will “pull up at the brink” That’s what pundits said 101 years ago…right before World War I. That gives me paws…opps!, I mean pause. (I already have paws. Silly rabbit.)

BUT German Economy Minister, Sigmar Gabriel, comes out with the statement that, “we can’t shut the door on Greece.”

Truly interesting is the the comment made by Varoufakis in an interview with Stern (this whole interview is a spectacular read),

“Angela Merkel is by far the most astute politician in Europe. There is no doubt about it. And Wolfgang Schäuble, her Finance Minister, is perhaps the only European politician with intellectual substance. He’s a genuinely committed European and a deep down federalist.”

Proving that he is genuine when he speaks of valuing the dialectic. (This is a long read but incredibly thought provoking.)

Friday, 20 February – Today: EU Finance Ministers to meet and decide to offer Greece a four month extension in which to negotiate but they slap down all Greek demands and insist that Greece color inside the lines of the “current program.”

German Finance Minister, evil #$%hole that he is (“intellectual” or not), is caught smirking while saying,

“Being in government is a date with reality, and reality is often not as nice as a dream.”

(Don’t worry, there’s an extra hot corner of hell waiting for this guy.) In the meantime, it is worth knowing that the current Board mix of the ECB is very anti-Greek but the Board rotates and the composition of the March Board is much more likely to be easier for the Greeks to work with. …and now they have four months to catch their breath, make a plan and get it done.

And before I head back down the rabbit hole for the night, a couple more quotes that are helping to keep me from screaming at my laptop about all of this:

From Economist Dean Baker,

“Europe is already suffering enormous pain because the people setting economic policy prefer morality tales to economic reality.”

And from Kemal Derviş, of Project Syndicate,

“The persistent tendency to pay lip service to social sustainability, while implementing economic programs focused on unrelenting austerity, is a leading cause of political instability in Europe.”

And, finally, from Yanis Varoufakis himself,

After all, Europe will only regain its soul when it regains the people’s trust by putting their interests center-stage.”

…and just so you know, this IS the short version.

Good night and Carrots!

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Reposted from Daily Kos 6 August 2014

This is the second bite-sized installment in my series on why monetary policy matters to progressives, why it’s worth your time to learn and why it isn’t as hard or as boring as you think.*

Having said that I’m going to start this diary by talking about fiscal policy. When I say “fiscal policy” one of three things will come to mind: a) the spending and taxation policy of Congress, b) that thing you vaguely remember from your macroeconomics class fifteen years ago which may or may not have to do with something-or-other or c) a really excellent abs workout. Actually, as I see it, this is a trick question because in practice none of these things are the case.

Fiscal policy is supposed to be the macroeconomic (I’ll explain this term below) effect on the economy of the taxing and spending policies of Congress and technically this is the case. Practically, however, no fuzzy dice. This would be because the word “policy” implies that Congress is making spending and taxation decisions based upon something other than how it effects their individual re-election campaigns and the associated campaign coffers. I’m not talking about the infamous Bridge to Nowhere or, my personal favorite, the Teapot Museum. I’m talking about reducing the funding for Head Start and unemployment benefits in favor of funding a missile system which the Pentagon has specifically said it does not need or want.

In Congress, in accordance with the Constitution, spending bills must originate in the House. This is called “the power of the purse” and by that the current House means the power of the purse to beat you down until they can wipe you off the bottom of their shoe on the nearest patch of grass. This is also called the “Paul Ryan Budget” and the clear objective is to destroy the middle class and the poor while pouring money down the throats of the top 1% until they choke our economy to death.

Congress is supposed to be using the power of the purse to spend money into the economy when it is needed and pull it out, via taxation, when the economy starts to overheat. THAT would be “fiscal policy” and there are two essential things you need to know about it.

1. Congress does not need to tax ANYONE on order to have money to spend. Congress owns this thing called a printing press and can direct the Treasury to put that press to work any time it likes. (I will cover this in much greater detail in a later installment.)

2. Inflation is not a threat when unemployment and underemployment are high and while Republicans and many elected Dems cannot understand this the concept will make perfect sense to you if you take a kale break and think about it. Inflation happens when demand exceeds supply and more can be charged for things that are suddenly in short supply. (Think Cabbage Patch dolls in 1983 or the gold iPhone 5s.) For that to be the case an economy would have to be working at full capacity both in industrial capacity and, more importantly, in labor capacity. Does anyone, anywhere on this planet think there is any way this economy is in danger of inflation? Ok, I’ll grant you, Alan Greenspan and Michelle Bachman, but I’m talking about people who might actually be in touch with reality. Anyone…anyone? Yeah, I thought not.

Congress is supposed to be thinking about the whole vegetable garden when they are making their spending and taxation decisions but they are not so the result is that annual spending, while continuing to have macroeconomic effect, is much more correctly seen as having microeconomic effect in that it is directed at specific individuals (the 1%), specific businesses (big business not Main Street) and specific (conservative) social agendas. If you want to understand the single biggest reason why the economy is still soft, this is it. The House has abrogated their fiscal responsibility completely. Period. Ffft!

It is worth saying that while “austerity” and “fix the debt” sound like macroeconomic policy they are tissue-paper thin lies used to disguise moving the wealth of the economy from the pockets of the many into the greedy hands of a few. Again, later in this series I will describe this process and how we can put an end to it so stick with me, baby. It’s going to be fun and besides, we rabbit Americans really know how to party.

Macroeconomics and microeconomics may be courses you took in college or they may be courses you avoided like the plague. Certainly, college is not necessary in order to understand the most important basics. For now, all you need to know is that macroeconomics is the big stuff: unemployment, inflation and the currency exchange rate. Functionally, monetary policy is the purview of the Federal Reserve Bank of the United States of America (the Fed.) Everyone except elected officials will immediately note that unemployment can be much more easily and directly improved by Congressional spending (fiscal policy) but, as we all know, John Bohener is much too busy regulating his level of orange to pay attention to the decimation of the middle class.

Microeconomics is, as you will have guessed, the little stuff: individuals, specific businesses or industry sectors, specific social classes. Microeconomics is how all the big stuff, macroeconomics, thumps down hard on your kitchen table and mine.  Microeconomics is personal and it’s the part that hurts but never, ever, EVER let yourself be mislead. Microeconomics flows from macroeconomics. The big stuff drives the little stuff. If Congress is only spending into the economic sectors that are the exclusive territory of the 1% and if the Fed is only spending in a manner which serves to sequester money out of the economy AND is refusing to regulate banks and investment institutions then things can only get worse. Which explains a lot.

But this doesn’t have to be the case. Progressives have formed coalitions and created memes that have moved mountains before. We must and can do it again. The first step is understanding the vocabulary and the mission. Then we do what we are best at, we raise some H-E-double-carrots. We won’t get everything we want but it is entirely within our power to get a lot more than we have now. Tune in to Netroots Radio The After Show every Thursday at 11AM EDT/8AMPDT for more. If you can’t join us for the live stream then catch the podcast available on Stitcher Radio and iTunes.

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Reposted from Daily Kos 16 February 2014 – go there to read the excellent discussion thread

For progressives it is no new story that astonishingly malnourished messaging by the Obama administration compounded by egregiously misrepresentative coverage by the mainstream media has allowed an unending flow of air to feed the anti-ACA (Obamacare) gluttons. Personal, anecdotal stories, many against and a few supporting the ACA have been around for months. What has been lacking are the “it worked for my small business” stories so I thought I would throw this onto the table for general consumption.

I own a small manufacturing business and we have always provided health insurance to our employees. This has come at great expense to our firm as the cost of our policy increased by double-digit percentages every year. In recent years, much to our shame, we could no longer survive the full cost of the insurance so we had to pass twenty percent on to all participating employees. That percentage was, in turn, enough to cause several employees to have to drop coverage entirely. We were horrified and crushed but no amount of shopping around seemed to get us close enough to be able to overcome the huge mountain of cost. Ultimately, we ended up covering seven employees for a cost of, brace yourselves, $6570.58 per month!!! Please forgive me my scoff when I hear people complain about the high cost of their coverage under the ACA. Quality insurance has, for many years, cost an obscene amount and anyone who doesn’t know that wasn’t really paying attention to all the details.

So, what have we done under the ACA?

Well, we dropped our former policy, the group coverage, for our employees…and they are thrilled.

Our former policy was equivalent to a silver plan plan under the ACA Marketplace so we asked each of our employees to go on-line into the Marketplace and find the cost of their individual silver plan options. We asked them to print out that section (which contains no actual, private, information). We calculated the median cost of a silver level plan for that person. Each employee now receives, on their paycheck, a line item called “Recommended Health Insurance Bonus” which constitutes one hundred percent of the median silver plan cost, as described above, plus the extra needed to allow for the tax hit so that each employee truly nets out the necessary amount for the insurance.

Every employee can now elect, of their own free will, to purchase insurance (or not) and at what “metal level”, utilizing the new bonus in the manner they feel is best suited for them.

Several things are notable about this.

1. We are now able to provide for 100% of the cost of insurance as opposed to eighty percent.

2. Because of where we are located, almost all the local providers of medical services are participating in plans offered through the ACA Marketplace so none of our employees experienced having to change doctors. (We were sure to check this prior to making the shift.)

3. The employees who were participating in the old policy and paying the 20% cost, no longer pay that deduction so they all received a net take-home raise (which several used to purchase gold level plans which are STILL much less expensive than what they were paying previously.)


Before the ACA we were covering seven employees at a cost of $6570.58 per month. Now we are providing for the coverage of eleven employees at a cost of $1863.76 per month. This is a savings of $56,481.84 per year!!!

…which we are using to hire a new employee and purchase some, much needed, new tooling.

The ACA is a boon for small business and we, for one, are using it to grow. There’s the small business messaging that is missing from, well, everywhere. Spread the word.

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Over the past couple of weeks the debate around platinum coin seigniorage (PCS) has been raging and that is good. In fact, it is great. Like carrot subsidies, PCS is something we should have been talking about years ago. As a rabbit American, I support both but like LetsGetItDone (LGID) who has been writing incredibly knowledgable and quite brillent posts on PCS at both The Daily Kos and the New Economic Perspectives sites, I am hoping it will be possible to leverage the current discussion into a much larger one about crating policy space.

The Power of Paper

It’s like that tired adage, give a rabbit a carrot and he eats for a day, teach a rabbit to order carrots on-line and he eats for a lifetime – or something like that. Sure, we could solve the current debt ceiling problem by minting a $1T coin but we could also chose to do more.  We could resolve the entire US debt and return our economy to full employment by minting a $60T coin.

Oh, put a sock in it each and every one of you who is sputtering something about insanity. First of all, there are some outstanding detailed explanations as to why this really will work but it all comes down to one simple thing – a fiat currency really IS a figment of our collective imagination. It IS just little pieces of paper or metal upon which we have collectively agreed to confer value and in which value is retained, in the case of the United States, by the policies of the Department of the Treasury, the Internal Revenue Service and the Federal Reserve. Beyond that, money is just paper. (Though, I have to say that in comparison to other paper, when one just happens to nibble on money, humans have a way of turning an extra special shade of white.)

Given that we know that fiat currency works, one of the things that is the most interesting about this entire debate is that no one in Congress

…or the White House

…or the Treasury

…or the Fed

has figured this whole thing out before. Part of this is because, as I have said, almost all of the people currently staffing those positions learned monetary policy at a time when the thinking was all still founded on the gold standard despite the fact that the monetary system no longer has these limits. Nixon took the country out of Bretton Woods in order to allow for growth but only a very few people managed to realize that national policy makers also needed to alter the way they thought about actual money. They needed to smash their old thinking so that the truth of the reality could become clear.

Yeah, like that happens.

I was just reading today about some complete idiot (and by “idiot” I mean conservative Republican) who is claiming that teachers teaching the distributive principle in algebra are pushing a liberal agenda. Back up the truck full of stupid. I get that once humans have their minds set on something it is hard for them to see anything else or in any other way but that won’t work for the US economy unless, of course, your objective is aligned with the GOP and your intention is to destroy the economy on “principle.” Let’s assume that since you are reading this, you are not satisfied with crashing and burning the economy and that you are willing to learn something new. Ok, now take what you think you know about debt and inflation outside and smash it against the rocks of “that’s SO ’70’s.” I can wait. (Don’t forget your jacket. It’s a bit nippy outside.)

If you still think the old “rules” of debt and inflation apply, it’s about to get a little nippy in here. Bunny teeth are sharp. I’m just sayin’.

Policy Space

For those of you who are beginning to understand the incredible power of a strong fiat currency we can now move on to what I really wanted to talk about, policy space. In speaking about policy space I am talking not about the legality of PCS and I am not talking about PCS in relationship to the debt ceiling. I am talking about why we, as progressives, should be supporting PCS for all we are worth. Progressives should be loudly supporting PCS with one voice because it would allow us, as a nation, to get past all the truly meaningless battles being fought in Washington, over shadows that live only in the backs of paranoid minds, and on to policy that could genuinely and positively effect the real world.

Let’s imagine, for instance, that we are talking about minting $60T worth of PCS coins. It could be any number but $60T is one being actively talked about so I’ll go with that for the sake of this example. (And remember, I’m not going to get into why there is no realistic way this would cause inflation or any of the other topics that have been covered by myself and LGIT as noted above.) Now, the funds made available by PCS are not pushed out immediately into the economy, as so many imagine (that really would cause inflation), rather, they are sitting in a Treasury account at the Fed. In other words, for all you MMT folk, they are a $60T entry on a spreadsheet. The first thing that happens, of course, is that all debt that falls due is paid as it is due, in full, instead of being rolled over. No more interest is paid and no new debt is created. Take that, austerians, as Paul Krugman calls those dedicated to austerity. Our debt is being retired. Done. Fin. At the same time, Congress is still in session and is suddenly in a position to authorize spending without having to deal with the canard of not having enough money. (Which, as MMTers know is NEVER the case for the US government but that is not for this blog post.) The issue would be that if we were able to mint the big coin the optics and political will around everything else changes.

As Paul Krugman cites in his 2012 book, End This Depression Now!,

And early this year, with the debate having shifted perceptibly toward a renewed focus on jobs, Republicans were on the defensive. As a result, the Obama administration was able to get a significant fraction of what it wanted…without making any major concessions.

So the first thing Congress now has is a free hand, policy space, to deal with unemployment. In point of fact, the take-over of the national zeitgeist by drummed-up concerns over debt and deficit (see a brief discussion on why FAUX News and company are so dedicated to this mantra near the end of this post) has been allowed to relegate unemployment to the backseat. Putting unemployment in the backseat in order to talk about imaginary problems denies the absolute fact that unemployment is still driving the car. So, if you are wondering why the US economy is still swerving all over the damn road, that’s the reason right there. Platinum coin seigniorage would put unemployment right back in the front seat and, in a matter of a very short time, could put everyone who wants a full-time job back to work. (The resting rate for unemployment is said to be around 3.5% so don’t ever think we are looking for Gadot/zero.)

That should be reason enough for progressives to be the biggest cheerleaders of PCS – but wait, there’s more.

Strict and seriously enforced environmental regulation could be enacted and, instead of using indirect reward like tax breaks which tie up liquidity for tiny and giant corporations alike, the government could provide upgrade grants. Jobs are created and, I love this part, everyone benefits except the bankers. Also, this would move corporations from opposing such regulation to supporting it. Imagine, all you environmentalists out there, being on the same side of an argument as American Electric Power. We still would have problems with them (“Clean Coal” anyone?), I know that, but we could move with them further down a road which would benefit all of us collectively. For small corporations, it would make it possible for them to come in to compliance with regulations which they are commonly exempt from because, if included, they would not have been able to comply.

It would allow this nation to address long-standing infrastructure crisis’ including the electrical grid, water treatment and transportation. Even major improvements to existing systems, like rail, would benefit the economy and each one of us enormously.

We could not only invest in disaster preparedness, we would have the ability to set aside funds to deal with the coming, rapidly increasing, rate of disasters including things like the fires in the West, draught in the Midwest and that’s before I even get to superstorms and hurricanes. Of course, I am already assuming that should funds be perceived as being available, the needs of the states and victims hit by Sandy would be addressed.

And on and on and on – in a manner metered by Congress and the Fed up to the point where industrial utilization is near peak levels and unemployment is down near 3.5%.

Perceived Funds

The reality is that the coin is not a necessity. All that it does is give physicality to an accounting transaction. Large PCS would make it plain to all that the US government will not and cannot run out of money. There are constraints on our economy (inflation and the exchange rate) but “having enough money” is not one of them. The ability to spend whatever we need to bring the economy into balance has been available to the government since 1971, since the day the US dollar became a fiat currency, we just haven’t realized it and haven’t used it.

What progressives need to know is that the things we want, the things we have been calling out for from the wilderness, become possible with Large PCS. Also, if by some minute chance we were able to get this President to order large PCS then we could all wipe trickle-down economics off the bottoms of our kicks on the nearest patch of grass. If for that and no other reason, we should all be getting behind this right now.

So, Why Do We Think Debt is a Big Deal?

Debt, given the current state of our economy, means nothing, so why do we, the progressives, the reality-based group, the group that actually thinks math is a real thing, believe it when we hear it? Well, folks, you have been duped and, no surprise here, you have been duped by FAUX News and company. I know, you don’t listen to FOX but you do listen to people who listen to them and all those people drank the Kool-aid. Rabbits are big on water. We oppose Kool-aid on principle. (This would probably not be the case if the orange flavor was carrot instead of orange.) Rabbits, like all prey animals, are adamantly focused on the real world so we were not taken in.

Still, one has to ask, why this meme is so important to conservatives?

Simple. Greed. Surprised? Of course not. In the dictionary under “conservative” the definition says “greedy bastards.” We all know that. So, how does their greed tie in here, you ask? Well, to start with, Pete Peterson knows. If we cut social security for reasons of austerity, where do those people go? They go right to Wall Street. If we cut Medicare, where do those people turn? They turn to the insurance industry. If anyone other than the government is funding projects where is that money coming from? Why, it is coming from the banking industry, of course. So, here is the equation:

Wall Street + Insurance Companies + Banks = Non-stop Debt Crisis Meme

That’s it. That simple. This other equation,

Platinum Coin Seigniorage = Policy Space

has been here through this entire crisis and has had nary a whisper until #MintTheCoin took off just a couple of short weeks ago and we, as progressives, absolutely must get on board. If you ever, in your entire life, wanted to be a part of making a real change that could change everything for the better, this is it. Platinum coin seigniorage isn’t the golden ticket but it’s pretty damn close. Thump!

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Memes are a strange thing. One never can really predict what will catch on and what will die with a mingy wimper. Still, economist Stephanie Kelton has to be pretty thrilled that #MintTheCoin has gained traction. She, and the entire rest of the Modern Monetary Theory (MMT) community of economists, have certainly been waiting long enough. #MintTheCoin is Dr. Kelton’s (@deficitowl) current contribution to Twitter and it’s an important one but I’ll bet you don’t know why.

Hint: the answer isn’t “debt ceiling.”

The meme has caught fire and is being promoted by the likes of both Paul Krugman and Salon (…’nuff said) as a solution to the debt ceiling via the hastily lashed together vehicles of the 14th Amendment to the US Constitution and Title 31 of the United States Code Subtitle IV, Chapter 51, Subchapter II, Section 5112. I am not going to repeat the basics of the meme because they are splashed all over the web. If you have been dead for the last couple of weeks and somehow missed them you can catch up here, here, and here. There is also, of course, the idiotic GOP response codified, for the moment, in the bill being introduced by Congressman Greg Walden (R-OR) to prevent the President and Secretary of the Treasury from taking the option of the now infamous platinum coin. My favorite part of this legislation is that it tacitly acknowledges that the Secretary of the Treasury really does have the right to mint the coin making any argument to the contrary just that much more difficult. Derp. The part of this legislation that makes me want to put my face through glass is when the Congressman drops his pail down into the my-small-business-can’t-print-money-well to which I respond,

Listen up, Dimwit, the US Federal Government is NOT a business or family and it CAN and SHOULD print money.

Now, I’ll grant you that the world is a big place and some of you thought you had better things to do than to read my post on Modern Monetary Theory vs the Fiscal Cliff (this link is to the Daily Kos cross-post because the discussion thread was excellent there) but if you do not understand the statement above, stop now and read the older post. I’m not kidding. Stop. Now. Thump!

For everyone who did not stop I am going to go forward with the assumption that you fully understand the following things:

  • The budget of the Federal government is in no way, shape or form like that of your family or of any business and likening the Federal budget to the budget of a small business is the same as likening kittens to helicopters. (Ok, both look pretty funny when they are flying through the air but other than that….)
  • The Federal government is not balancing a budget, it is balancing an economy and the delimiters of that balance are unemployment, exchange rates and inflation. Period. End of story.
  • Deficits mean NOTHING. Debt means very, VERY little.
  • The US economy has nothing what-so-ever in common with any country which uses the Euro so comparisons to Spain or Greece or Italy are, again, kittens to helicopters.

Again, if there are any of the above which are unclear to you, go back to the older post. I mean it. *glare*

What has to be thrilling the MMT community to the tips of their pointy little heads is the fact that the platinum coin is breaking into consciousness at all because they have been talking about it for a long time for a whole different reason.

Zeroing Out the US Debt

News Flash: the platinum coin could be used to zero out the entire US debt held by the Fed. Done. Gone. I’m going to nibble on some hay while you think about that. … … … … … … Done? I didn’t think so but no one has ever credited me with patience.

There are, of course, two things to know about this approach and the most important is that it is totally unnecessary because given the current (stronger than you realize) position of the US economy and the fact that we have a fiat currency, debt actually means very, VERY little. It is, essentially, a matter of an internal balance sheet adjustment and if someone wants to make a pretty little coin or two or fifty to make it more real, well isn’t that just precious. What this would do instead is allow the funds which are being spent in service of our current debt to be pumped back into the private sector, in a controlled fashion, until we have reached full employment, at which point the spigot would be reduced to a normal flow.

What’s that? I can hear the anguished screams all the way from here. No, inflation is not a factor. Inflation is caused when demand exceeds supply and our economy is no where close to that margin. There is huge room for growth and capacity utilization rates remain exceedingly low. There, there. *pat, pat* I know. It’s a shock because those GOP bullies have been pushing the Debt-bad/Inflation-nigh meme for so long and you actually had started to believe it. If you need more solace on this issue, go to Bill Mitchell’s Billy Blog, for an excellent explanation.

Snipe Hunting

The real truth is that debt isn’t bad. At least, not at our current levels and in our current financial position. Still, we have listened to the GOP and the Tea-baggers rail on it for so long that it is as if we, as a nation, have been on a snipe hunt and we actually believe there are real snipes out there. Let me do you this favor and smack you upside the head, *SMACK!* Wake up!!!

There are not now and there never were actual snipes and because it does not serve our nation and economy for the private sector (all US individuals and businesses) to be in the red and because we will absolutely have a trade deficit for the foreseeable future (which is the international sector), the laws of accounting (if confused, refer to both my previous post on MMT and my previous *glare*) say that the public sector (the Federal budget) MUST be running a deficit . If we just can’t make ourselves comfortable with that than let’s pretend otherwise by zeroing out the debt with a magical coin. Here’s the bottom line. The debt means NOTHING and the coin means NOTHING and using them to cancel each other out so that we feel better is silly but not necessarily a bad thing. Plus, of course, it frees up all the money necessary to get everyone who wants to work back to work… oh, and to invest in the changes necessary to address climate change, invest in education, rebuild our national infrastructure, solve the long-term healthcare crisis…among a few other little things.

The IMF’s Giant Facepalm

…and then there’s the International Monetary Fund (IMF.) These genius’ have been at the head of the austerity bandwagon for years as they have dutifully strong-armed (and worse) economy after economy into the ground with their iron-clad commitment to austerity. …except they were wrong. Totally and completely, absolutely and irrevocably (in some cases) wrong. Now, it’s one thing for me to say this. What is one rabbit against the all-powerful genius of the IMF? So I had to laugh (and cry a little) when they finally acknowledged that they have been wrong all along. As it turns out, when an economy is struggling and it implements austerity, things get worse. Conversely, when countries, like Germany, Austria and the US (thank you, President Obama), use stimulus, they experience improvement. Why? Because (and here I apologize for repeating myself) a country is not balancing a budget, it is balancing an economy. WHO CARES what a ledger says! What matters is that people are working, the temperature of inflation is cold and the exchange rate is reasonable. Those are the only three things that matter. Everything else is just a snipe no matter what the Tea Party or the GOP or the IMF has to say.

In Closing

The Giant Platinum Coin IS an interesting concept. It IS worth thinking about but it is wasted on an imaginary “problem” like the debt ceiling. Oh, it’s not that it can’t or shouldn’t be used there. It’s just that if we really want to get the GOP to shut the thump up and we really want to change the future of our country and the lives of our citizens, we won’t just stop there. But that is, of course, just one rabbit’s opinion.

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You should chisel this moment into stone. In fact you should probably sit down because the shock of my admission may just be too much for some of you.

I was wrong.

Oh, I was not wrong about what I said about Mitt Romney, who will now be consigned to the litterbox of history for failing in a manner so cataclysmic that the entire GOP will be forced to take time away from blaming the black guy to blaming each other for not being able to do arithmetic. I was not wrong about what I said, more than two years ago, about John Bohener having an irreconcilable (and hilarious) problem with the ever-widening solar system of a gap between the Tea Party and reality. I was also not wrong about what I said about about the last fiscal cliff as it applies to the coming so-called “fiscal cliff.” (Personally, I agree with David Waldman, KagroX, that the term “fiscal curb” is more correct.) What I was wrong about was thinking that the GOP would wake the hell up once they had gone splat on the windshield of the Democratic party express.

Republican FAIL

Sure, there are a smattering of GOP pundits talking about substantive changes in message but they are being drowned out both by those who have been unable to get past loudly blaming Mitt Romney for being a candidate who daily demonstrated all the backbone of a windsock and the rest who are madly zeroing in on a few surface issues. Have faith, none of them will get to the core of their problem for three BIG and PAINFULLY OBVIOUS reasons which, of course, the entire bubble-based GOP will overlook and into which Dick Morris will likely do another faceplant.

I will summarize here:

1. If you don’t respect differences and people in general, your policy will reflect that and those people will (eventually) notice.

2. They built it, a base of angry, terrified, white, bigoted, evangelicals who aren’t going to change…ever. It’s going to be impossible to work these folks into a “big tent” platform and waiting for them to die will take a while.

3. Citizens United isn’t really a friend of the GOP. Corporations are their own friend, first, last and always. Corporations will spend accordingly. The demo has now made a huge swing in the direction of the Democrats. Corporations have made a note. They won’t be betting exclusively on the GOP to win from here on out.

The GOP did build a “nuclear option” but they aimed it at themselves because these guys really weren’t kidding, they believed their own spin. Karl Rove’s melt down on FOX News, which will live on in infamy, or, my personal favorite, Mary Matalin’s epic FAIL on CNN, wherein she spends the entire time looking like she just swallowed a fly, are both perfect examples of a simple truth. The GOP had no idea that their message was not landing. They have been locked in their own echo chamber for too long (too long, too long, too long…). As it turns out, only eternally pissed-off white men and a narrow majority of married white women think that a platform of “I’m entitled and the rest of you can go screw yourselves,” is an appropriate way to run a country. The rest of the electorate thinks that things like having a strong and well-coordinated FEMA during a major national crisis, as opposed to a few people handing out canned goods here and there, is essential to maintaining a strong and vibrant nation.

Dems Fail

Still, there are things the Dems should be learning from all of this. (Though, given the fact that we have had Karl Rove, the Dark Lord and Master of the first two items noted below, on our ass for multiple elections and still have not managed to learn these lessons, I am somewhat lacking in hope.)

1. Narrative matters. Yes, our kith and ken all worship at the alter of reality-based information but we tell our story terribly – really, really terribly. President Obama had a strong first term and even now almost no one knows that. Hello! Short, simple, glossy, heartwarming narrative. I mean seriously, people, the very best narratives of this election were provided by the other guy including Big Bird, the pre-1917 Navy and, the corker of them all, the 47% video. Y’all have a year and a half to figure this thing out. If you do, we have a shot at taking back the House and then running the tables for two years.

2. Naming Shit Stuff. WOW. We are so very, very bad at this. The “Affordable Care Act”  – really! Who thought of that? The GOP is a superstar at naming stuff. “Pro-life,” “Obamacare” and “Defense of Marriage Act” these are works of art. Can we please hire one damn Mad Man from Madison Avenue to handle this for us? Where is Don Draper when you need him?!?!?!

3. Self Doubt. During the weeks leading up to the election Republicans were sure they were going to win and Democrats were sure they were going to lose. Dems are genuinely bad at knowing when they have the upper paw and then taking advantage of that fact. Dems are also bad at being who they really are. For years the party has been moving to the right while the country, the electorate, has been moving left on issues while still voting right because *facepalm.* Democrats need to be Democrats.

Democrats have allowed the GOP to run away with the individual freedoms narrative but the fact is that individual freedom is exactly what Democrats support and Republicans oppose on almost every level. Democrats also support the strength of community. These things are not mutually exclusive. Republicans want the world to be either this or that. Democrats understand that there can be a balance where both exist together. (Though, I have to say, in a tip of the hat to BlueGal and DriftGlass, there are not two sides to facts and presenting so-called “balance” on matters of fact is when the media needs to be taken out to the Internet Kitty litterbox and firmly rolled in the material therein.)

On election night all the networks showed coverage of the crowds at the Obama and Romney headquarters. The Obama crowd was all ages, ethnicities and socioeconomic groups. It was all of us. The Romney crowd was white and, based upon the outfits seen on the women, sorely in need of fashion advice. I also think that removing the sticks from up their posteriors would be helpful but that’s really a personal decision.

The Last Word(s)

And finally, that moment for which you have all been waiting, the gloating. These are my favorite thoughts on the subject.

• If you are one of those thinking is that God is involved in each and every little thing that happens to us than His choice is pretty obvious – the black, Kenyan, anti-colonialist, Muslim, socialist, communist, WON. Hahahahahahahaha!

• I’m sending a special “thank you” out to those on the Team Romney who designed Orca, their beached-whale-fail of a get out the vote app . I’m glad those bottles of tequila I sent over while you were in the programming stages proved to be effective. You are welcome.

• Speaking of voting, Florida doesn’t get to vote anymore. They must now turn in their electoral college votes and move to the back of the line, behind Wyoming.

• And this compliments of Second City…

 Through election night God himself was hitting refresh on FiveThirtyEight. He just made the universe, (Nate Silver) turned it into a graph. 

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