Month: August 2011

Down to the swill in the teacup

by digby

Greg Sargent flags an interesting tid-bit from the NY Times poll:

[T]he Tea Party is rapidly shrinking before our very eyes, and is hemorraging supporters at a surprising rate:

Do you consider yourself to be a supporter of the Tea Party movement, or not?
Yes 18
No 73

The 18 percent who self-identify as Tea Party supporters is at its lowest point, tying the 18 percent who supported it way back in April of 2010, when it was first gaining steam as the Congressional races of last cycle began heating up. The trajectory is interesting: The Times poll shows the Tea Party has had some ups and downs, but it steadily gained supporters as the 2010 campaigns wore on, and peaked with 31 percent of the electorate saying they supported the movement at around the time that the GOP won its massive 2010 victory.

Then its support began to decline, and it then dropped a precipitous eight points from June until today — a period that roughly coincided with the debt ceiling debate, which showcased Tea Party intransigence and self-delusion at its finest. Not only that, but right now, the 73 percent who say they are not supporters is at its highest point ever.

He notes that even as they lose influence around the country they seemed to have become the most powerful players in Washington, drawing the GOP far to the right in the debt ceiling negotiations. But I wonder if that’s true. I’ve always been a little skeptical of the various “walk-outs”, temper tantrums and complaints about the stubborn Tea Partiers on the part of Boehner and Cantor. Indeed, I suspect they quite enjoyed deploying the Madman Theory on the White House and the eager beavers in the beltway press.

Obviously, I have no way of knowing exactly what their plan was, but looking back on it, it certainly was unfortunate that the President ended up publicly offering up the most sacred cows in the Democratic Party in his quest for a Grand Bargain while Boehner got out of those negotiations unscathed. All the talk about Cantor angling for his job must have given him a whole lot of clout in those discussions as well. When you think about it, does it seem even remotely likely that Boehner was really going to give the President his number one legacy desire in the year before the election?

Who knows? I am probably assuming much more cleverness on the part of these Republicans than they deserve. It may very well have come down exactly as the stories indicated. But let’s just say it wouldn’t surprise me if the “Tea Party” in congress was never quite as bold as they were portrayed. The good cop/bad cop routine isn’t all that obscure a tactic.

It’s good news that fewer people are identifying with these extremists. But it’s probably bad news for the Democrats going into the 2012 campaign. All evidence so far points to the fact that they are counting on wing nut lunacy to be the main rationale for people to vote for them.

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Worse than the codpiece

A Texan ponders the political brilliance of Rick Perry:

The governor of Texas holding a Christian prayer meeting is not an establishment of religion. It’s just a bad idea that isn’t going to work out very well. Attendance is going to fall far short of expectations and the noise generated by Perry’s critics is going to get as much media attention as the prayer rally itself. This is what happens when you think the rest of the country has the same civic and religious values as Texas.

This could have had a much different ending. Perry could have made the event nondenominational. He could have invited people and clergy of all faiths. But he elected to make it exclusionary–and not just exclusionary, but reflective of preachers who have expressed some of the most extreme religious views in Christiandom.

Another misjudgment was the public invitation to all of his fellow governors. The right way to do this was to feel out the other governors first and announce the acceptances later, when you know who is coming. Now, with only one acceptance–Sam Brownback, of Kansas, and he has said he is going on vacation this weekend–the event looks like an utter failure.

The whole world ponders the intellectual brilliance of Rick Perry:

While he later became a student leader, he had to get out of academic probation to do so. He rarely earned anything above a C in his courses — earning a C in U.S. History, a D in Shakespeare, and a D in the principles of economics. Perry got a C in gym.

Perry also did poorly on classes within his animal science major. In fall semester 1970, he received a D in veterinary anatomy, a F in a second course on organic chemistry and a C in animal breeding. He did get an A in world military systems and “Improv. of Learning” — his only two As while at A&M.

This is where he really excels:

Is America really ready for another one of these?

Useful primer

by digby

If you are confused about the outlines of the debt ceiling deal, and I imagine quite a few people are, this one page fact sheet by the social security works people is quite good. It’s designed to talk about how SS is affected but it ends up being a useful simple primer on the deal itself.

It’s the sort of thing you might send to Uncle Bubba if he’s ranting and raving about how the Republicans sold out the Tea Party.

I hadn’t heard about this:

The Budget Control Act of 2011 includes a program integrity initiative for the Social Security Administration (SSA) and three other agencies to reduce overpayment of federal benefits. Additional appropriations to SSA would be permitted so it could continue Disability Insurance (DI) and SSI reviews. CBO estimates these reviews could reduce benefits outlays for DI, SSI, Medicare and Medicaid by nearly $12 billion over 10 years

Looks like they’re going to be siccing the feds on people who are collecting benefits to ensure they really, truly deserve them. This might be a good idea if it meant that the money they saved would be used to allay the kind of cuts I wrote about in my previous post. But it won’t. It will be used to pay down the debt caused by Wall Street gambling, useless wars and tax cuts for rich people.

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Shared Sacrifice

by digby

This story from the LA Times a few days ago does something really unusual. It puts a human face on the “spending” that everyone in government believes is unaffordable:

Cynde Soto dreads the arrival of yet another benefit notice.

Her cash assistance has been cut four times in two years. State medical coverage is getting more expensive and no longer includes dental care or podiatry. And the in-home help she needs to take care of basics has been cut by about 20 minutes a day.

“That doesn’t sound like a lot to people but … I’m a quadriplegic,” said the 54-year-old Long Beach resident. “I can’t even scratch my own nose.”

Faced with years of recession-driven budget shortfalls, state lawmakers have made deep cuts to health and social services. The reductions, including a round that took effect this month, translate into sizable state savings but are sharply scaling back the safety net for California’s most vulnerable residents: the elderly, the disabled and the poor.

Since mid-2008, more than $3 billion has been sliced from CalWorks, the state’s welfare program for nearly 600,000 families with children, according to an analysis by the California Budget Project, a nonpartisan think tank. Another $3 billion has been cut from Medi-Cal, which provides health coverage to about 7.5 million Californians. And $4.6 billion has been cut from the Supplemental Security Income program, which supports nearly 1.3 million elderly and disabled people with little or no other income.
[…]
Programs that help the poor, the elderly and the disabled stay healthy and independent have also been hit, undercutting local, state and federal efforts to keep the needy away from high-cost emergency rooms and institutionalized care.

“You’ve got the most vulnerable people in society getting hit with multiple cuts,” said Frank Mecca, who heads the welfare directors association. “The same person gets hit over and over.”

Soto is paralyzed from the shoulders down but does not let that keep her from doing advocacy work for people with disabilities at a Los Angeles independent living center. Using her mouth, she can operate a computer trackball and type numbers into a phone with a Popsicle stick. Several times a week, an aide helps her into an electric wheelchair so she can take the train to work.

Most of the $800 she earns a month goes toward work expenses, including paying someone to feed her lunch. She has relied on $723 a month in SSI to cover rent and utilities. In July, the state reduced its portion of the grant for single beneficiaries like Soto to the federal minimum, shaving $15 from her income.

The same month, the state began charging Medi-Cal beneficiaries copayments of $5 for prescriptions, $50 for emergency room visits and up to $200 for hospital stays. Soto has five prescriptions and went to the hospital four times last year. “That can really add up,” she said.

But the cuts that worry her most are those to the In-Home Supportive Services program, which is paying for about nine hours of care a day. The two women who have been assisting Soto for more than a decade have told her they will have to look for other jobs if their hours are cut again. Without them, she fears she would have to go into a nursing home.

“Oh, my gosh. That’s no way to live,” she said. “I wouldn’t be able to continue working. I would lose my quality of life…. I think I would rather just die.”

I’m guessing that’s what the powers that be are hoping too. Or would be if they ever gave a thought to how this sort of thing affect real human beings instead of seeing the whole thing as a numerical abstraction.

This woman works. She is contributing all she’s got. But her whole salary goes toward supporting her job. That this wealthy country, this country where billionaires are making more and more money, where corporations blackmailing the government into destroying the welfare state, where ideologues have persuaded know nothings to do their dirty work for them, that this country would make this woman suffer even more to serve the rich and make a political point is almost more than I can take.

These are the people who are the first in line to be hurt in all this “austerity” –this “tough love.” And our leaders are either gleefully enjoying the suffering, throwing up their hands and calling it an act of God, or making excuses about how powerless they are to change anything. Corporations send jobs overseas, rake in huge profits and then complain that they can’t possibly hire Americans until regulations and taxes are slashed even further. Rich people whine about being victimized by insensitive critics who don’t understand that it’s hard out here fo’ a pimp. It is an epic moral failure.

This country has the money to pay for this woman and all people like her to live in dignity. Look at the amount of money we are talking about. It’s less than what the average wealthy person pays in gratuities in a month.

Remember this grotesque story?

Meanwhile:

Last month, Gov. Jerry Brown signed another “painful budget” with deep cuts to services after losing a bid to win enough Republican votes to extend temporary taxes. Republicans said the taxes were a drag on the struggling state economy.

Among the cuts taking effect this month is an 8% reduction to CalWorks grants for low-income families. A single mother with two children living in Los Angeles County now receives a maximum $638 a month. If the mother has been on the program for more than four years, her portion of the grant will expire Aug. 1, and the family will be left with $516 a month. Previously, adults could receive cash aid for five years.

Oh, and if you happen to be out of work, don’t hold your breath for that Unemployment Insurance extension:

CANTOR: Jim, the most important thing we can do for somebody who’s unemployed is to see if we can get them a job. I mean, that’s what needs to be the focus. For too long in Washington now we’ve been worried about pumping up the stimulus moneys and pumping up unemployment benefits and to a certain extent you have states for which you can get unemployment for almost two years and I think those people on unemployment benefits would rather have a job. So that’s where our focus needs to be.

Keep in mind that Eric Cantor — and apparently everyone else — wants the American public to believe that the more we slash government (also known as that woman’s lifeline) and cut taxes for the wealthy (also known as tribute to our liege lords) the more jobs we will have.

The idea seems to be that the suffering of the old, poor, sick and unemployed will magically lead to a good harvest. Who says the human species hasn’t progressed?

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Always look on the bright side of life
by David Atkins (“thereisnospoon”)

As we await the impact of the jobs report, it bears reminding that for some people at least, the good times keep rolling:

Nordstrom has a waiting list for a Chanel sequined tweed coat with a $9,010 price. Neiman Marcus has sold out in almost every size of Christian Louboutin “Bianca” platform pumps, at $775 a pair. Mercedes-Benz said it sold more cars last month in the United States than it had in any July in five years.

Even with the economy in a funk and many Americans pulling back on spending, the rich are again buying designer clothing, luxury cars and about anything that catches their fancy. Luxury goods stores, which fared much worse than other retailers in the recession, are more than recovering — they are zooming. Many high-end businesses are even able to mark up, rather than discount, items to attract customers who equate quality with price.

“If a designer shoe goes up from $800 to $860, who notices?” said Arnold Aronson, managing director of retail strategies at the consulting firm Kurt Salmon, and the former chairman and chief executive of Saks.

The rich do not spend quite as they did in the free-wheeling period before the recession, but they are closer to that level.

What’s $60 between good well-to-do friends? Seems to me that what these folks need is a bigger tax break so the nobility can employ all of us somehow. Has Washington considered adding Gucci and Prada factories stateside as part of the new “pivot to jobs” policy? It might do more good than some of the useless tax breaks they’re looking at.

The sad part is, I’m only halfway kidding.

2012 Talking Points

by digby

Basically, it boils down to this: “don’t worry your pretty little heads about anything”:

President Obama counseled supporters Wednesday evening “not to get too bogged down” in details when explaining his record to voters during the campaign.

The president, in a video conference with supporters Wednesday night from Chicago, encouraged his backers to focus on broad themes when it comes to his policies on taxes and war, instead of the specifics of individual policies. “I think the key is not to get too bogged down in detail,” the president said last night.

“If somebody asks about taxes, nobody is really interested in hearing what precise marginal tax rate change would you like to see in the tax code,” Obama said. “What they want to know is that our campaign stands for a fair, just approach to the tax code that says everybody has to chip in, and that it’s not right if a hedge fund manager is being taxed at a lower rate than his or her secretary.”

On Afghanistan and Iraq, Obama said: “If somebody asks about the war, whether it’s Iraq or Afghanistan — if it’s Iraq, you have a pretty simple answer, which is all our folks are going to be out of there by the end of the year. If it’s Afghanistan, you can talk about, look, we think it’s time for us to transition to Afghan lead and rebuild here at home. So, again, it’s a values issue: Where are we prioritizing our resources?”[…]
Obama said his campaign, led by Jeremy Bird, his national field director, would take the lead in ensuring that volunteers have good talking points to take out on the campaign trail. The president said his administration would also lay out new initiatives that would help his grassroots volunteers sell his record. The president, himself a past community organizer, also said it wasn’t so bad for volunteers to tell questioners that they don’t know the answer.

This is actually a reprise of the 2008 campaign’s quasi religious “how I came to Obama” strategy:

“He looked at me, and the look in his eyes was worth 1,000 words,” said Mack, now a regional field organizer. Obama hugged her and whispered something in her ear – she was so thrilled she doesn’t remember what it was.

Then Mack brought home the point of her story for the crowd of 100 or so eager volunteers, sipping coffee and watching a PowerPoint presentation in the Obama campaign office on a recent Saturday.

“Did that make more impact on you than if I had talked about his health care plan or his stance on the environment?” she asked.

On the verge of a hectic few weeks leading to Super Tuesday, the crucial Feb. 5 multistate primary including California’s, Mack wanted to drill home one of the campaign’s key strategies: telling potential voters personal stories of political conversion.

She urged volunteers to hone their own stories of how they came to Obama – something they could compress into 30 seconds on the phone.

“Work on that, refine that, say it in the mirror,” she said. “Get it down.”

She told the volunteers that potential voters would no doubt confront them with policy questions. Mack’s direction: Don’t go there. Refer them to Obama’s Web site, which includes enough material to sate any wonk.

The idea behind the personal narratives is to reclaim “values” politics from the Republican Party, said Marshall Ganz, a one-time labor organizer for Cesar Chavez and the United Farm Workers who developed “Camp Obama” training sessions for volunteers.

When people tell their stories of how they made choices and what motivates them, they communicate their values, Ganz said in an interview.

“Values are not just concepts, they’re feelings,” Ganz said. “That’s what dropped out of Democratic politics sometime in the ’70s or ’80s.”

[…]

“Just follow Barack’s lead and be honest with them,” the Web site advises. “You don’t need to debate policy or discuss the day’s headlines. You have a very personal reason for investing your time and energy in this campaign – that is the most compelling story you can tell.”

Indeed, participants in the Saturday morning precinct-captain training were already adept at telling their Obama-conversion stories.

Libbie Coleman, a 61-year-old microbiology teacher at McClatchy High School, read Obama’s books last spring.

“I’ve been a voter for 40 years,” she said. “I feel like I’ve been needing to hear these things for 40 years.”

Faced with a politician who spoke to her heart, Coleman said, she had no choice but to become involved, for the first time, in a political campaign.

The last I heard, Marshall Ganz was fairly disillusioned about what he had wrought.

That “don’t look at the details” thing always rubbed me the wrong way, but I’m a jaded political junkie so I thought perhaps what looked like purposeful misdirection to me was a sort of inspiration I could no longer feel. But after all that’s happened these past few years, I wouldn’t want to be a volunteer who tries to sell this to voters. I have a feeling they’re going to be a little less entranced by the “stories” and a little bit more hungry for real answers.

The Desert of the Surreal
by David Atkins (“thereisnospoon”)

Conspiracy theorists like to believe that the world is governed by incredibly smart, masterfully competent manipulators who pull all the strings for their own benefit and watch the world dance to their tune. That can be a comforting thought in the sense that it absolves the believer of the necessity to take action. After all, fighting the grand conspiracy is pointless, so why try?

But as one watches economic events unfold, it’s increasingly clear that the truth is nothing so convenient as all that. Rather, our lives are governed and dominated by a bunch of fools who aren’t much smarter than anyone else you see walking down the street.

That is ultimately the biggest lesson of today’s massive market drop, in which a number of factors converged to demonstrate the surreal dark comedy in which our policy makers, media moguls and financial wizards are the lead actors.

Why the big drop? Any number of factors are cited, from the weak position of the Japanese, Italian and Spanish economies, to political uncertainty in the U.S. and abroad, to continued sloth in the U.S. economy. But as multiple commentators were saying today all over the cable networks, it’s hardly a coincidence that this major selloff took place immediately after the passage of the big bipartisan austerity bill that every reasonable analyst agrees will kill jobs. This after a nearly uninterrupted string of losses leading up to the austerity vote, which have cumulatively led the markets to lose most of the value they have built up in recent years.

Clearly, the economies of industrialized nations are doing poorly the world over, but especially in America. The key question, though, that has many analysts stumped is why that matters to the stock market. Commentators on CNBC and CNN today were remarking that the drops in value seemed to be irrational, because after all, the corporations that make up the market indices like the Dow and S&P500 are still posting record profits, mostly due to cost-cutting (i.e., outsourcing to China and India) and overseas sales (i.e., selling products to China and India).

What was most amazing about this sort of commentary was that the talking heads were essentially unmasking the whole surreal free-market charade by asking the question most of us have been asking for a long time about the disconnect between Wall St. and Main St.: why does the American consumer matter at all? Why should multinational corporations care about the unemployment rate in the United States or Germany?

Well, the answer is basically that in the truly global free market FlatWorld of Thomas Friedman’s dreams, they wouldn’t. But investors are afraid enough of the lingering effect of us spoiled Americans not having any money to buy stuff, that they fear it might impact corporate bottom lines:

Wall Street firms had little appetite for holding stocks and other riskier investments on their books, and their traders dumped stocks into the closing bell. The Dow lost more than 155 points in the last hour of trading.

Some traders said the plunge put the market more in sync with the state of the U.S. economy. “The market sold off 500 points, it’s not a crash, it’s a small correction,” said Stephen Holden, a floor trader at the new York Stock Exchange. “It’s overdue…I think there’s more to go.”

“In this environment, no one wants to catch a falling knife,” said Ryan Larson, head of U.S. equity trading at RBC Global Asset Management.

Basically, economic policies demanded by Wall St. from Democrats and Republicans alike over the last 30 years have hollowed out Main St. and the American middle-class (smart old-schoolers like John Bogle would argue that they hollowed out Wall St. as well, but Wall St. got bailed out by the middle class. So there’s that.) Wall St. doesn’t really care about that, but they do care suddenly if it looks like the American consumer won’t have any money to spend after all. A fact which suddenly hits them like a ton of bricks the day after the same austerity measures Wall St. demanded were signed by President Obama, based on advice from their utterly incompetent and failed ratings agencies. So everyone is throwing away stock in companies that are actually doing just fabulously, mostly by laying off Americans and not bothering to even try to sell to them anymore.

Wall Street types can’t live with American consumers, but can’t live without us either. So they get fat at our expense, abuse us, and then wake up one day and suddenly realize we’re not quite as hot as we used to be. But we do still pay half the rent, so they can’t quite leave us yet, either. So we get schizophrenic jumps and declines in the market, as Wall St. variously ignores and then over-focuses on the American consumer. These people aren’t really any smarter than your average beer guzzling philanderer.

So in the midst of this giant selloff, where did the masters of the universe decide to put their money? Why, treasuries, of course:

Treasury bond yields are plunging to levels seen in the 1950s on concern the two-year recovery in the world’s largest economy is stalling.

Yields on benchmark 10-year U.S. notes are about 4.3 percentage points below the average over the past 49 years and almost where they were when President Dwight D. Eisenhower began his administration in 1953. The yield, which dropped to 2.40 percent today in New York, reached a record low of 2.04 percent in December 2008 during the global financial crisis…

“It’s signaling a flight to safety,” said Ethan Harris, head of developed-markets economic research at Bank of America Merrill Lynch in New York, on Bloomberg Television’s “Surveillance Midday” with Tom Keene. “Even with the Treasury market as a weakened safe-haven market, it still gets the safe haven money.”

The S&P 500 fell 4.8 percent, dropping more than 10 percent drop from its April 29 peak. The MSCI All-Country World Index slid 4.3 percent. Oil plunged 6.2 percent to $86.27 a barrel as all 24 commodities tracked by the S&P GSCI Index declined. Gold futures retreated from a record.

Yes, the same treasuries that were supposed to be in horrible trouble because the ratings agencies said America was too far in debt to keep the yield on our treasuries at healthy levels. The same treasuries concern that led to the austerity bill that led to the market drop that led everyone to run to the only safe place left: treasuries. Brilliant.

And tomorrow there’s a jobs report coming out, which will no doubt be worse than expected and lead to even more nonsensical selloffs, considering the strong bottom lines of the American companies that have made such a killing precisely by keeping that unemployment rate at high levels.

If this is all the work of genius master manipulators, someone will have to explain the evil scheme. What it really looks like is a bunch of greedy fools who can’t see past next quarter’s profit statement and next April’s tax return, and end up swerving all over the political and economic road like the world’s most shortsighted driver. Meanwhile, all the passengers get sick in the back wondering what the next swerve is going to be.

The only real question is: when do we take their hands off the wheel?

The White House has to be pretty stoked about this. From Greg Sargent:

The new New York Times poll finds a plurality blames Bush, not Obama, for the deficit, and 72 percent disapprove of the GOP’s handling of the debt ceiling fight, versus only 47 percent who disapprove of Obama’s handling of it.

* But: The poll also finds that only 15 percent think the spending cuts in the deal went too far, versus 44 percent who said they don’t go far enough.

Those numbers mirror Gallup’s findings and suggest yet again that the public has internalized key aspects of the conservative economic worldview.

26% also thought that the President compromised too much with the Republicans but it’s always possible that 10% of those believe that he should have held out for deeper cuts.

When I look at the numbers I’m honestly wondering why the president doesn’t have a higher approval rating. (In fact, his approval rating did tick up a bit.)The only ones who are kvetching about the deal are the Tea Partiers, who apparently believe that a government default would have wiped out the debt, cynical Republicans who require the dismantling of the safety net before they’ll be satisfied and a tiny contingent of liberals who are not to be taken seriously under any conditions.

Snow Jobs Program

by digby

Matthews had a Village roundtable this afternoon that was quite illuminating. If you wondered what the big upcoming jobs program is going to consist of, listen to this

Matthews: Let me go to Jim Vandehei. You know I’m pretty pro-Obama in terms of responsibility many ways. I certainly like the spirit of this administration the whole direction it’s taken in terms of this country’s history.

But I have to wonder about the jobs program. Right now, let’s talk jobs. The two toughest opponents he’ll probably face if he faces either one of them is Mitt Romney and Rick Perry of Texas, and al they talk about is jobs. The President can’t play that game. He can’t get on a bus and drive around like he’s Pawlenty saying ‘I’m going to create jobs.” He’s got to do it Jim. how can he say “I’m pivoting towards jobs” and get on a bus.

What’s going on? Has he got a program?

Vandehei: That’s his problem is he certainly doesn’t have one that people are buying into that business is buying into. Government’s not going to stimulate this economy. The economy doesn’t need a nudge, it needs a jolt. Soi untiil that 2.5 trillion dollars that you were talking about the businesses are sitting on, until that gets pumpoed into the economy we’re going to have this stagnation and that’s bad for him.

So he has to figure out a way to articulate a plan, a strategy for creating jobs.

Maybe that’s tax reform that lowers the corporate tax rate, getting these free trade deals through. He’s got to convince business that there’s some stability and some predictability in this market going forward. If he doesn’t do it, we’re going to continue to have this cycle. Business hates instability and what they saw in that default crisis was that congress might to something nuts and force the country into default or it might not do the right thing and get the balance sheets in order, so they’re nervous…

Matthews argued on this pretty forcefully suggesting that the President needs to at least propose a major government jobs program to repair and replace infrastructure and put a couple of million people to work — and dare the Republicans to deny it. John Heilman, the other guest, explained that Obama doesn’t do hand to hand combat.

Vandehei was obviously confused by this whole line of questioning and added that he thought the president’s only option was to come out with a big proposal but then said that everybody (well, except liberals) thinks it’s “bad politics and bad policy” to do any more spending, especially when Independents “recoil at the idea of more government.”

Matthews came back with this:

Well then he’s done Jim, then he’s done. If he has to be faux Republican, if he acts like his main goal is deficit cutting and debt cutting, then he’s just a watered down conservative. Doesn’t he have to be an activist Democrat to have a shot at being a leader in this country? Otherwise he’s following the Tea Party, not fighting it.

Vandehei: It would require a pretty radical switch from where he’s at right now. They made the decision that they’re going to the center, that they’re going to try to win back Independents and they’re going to try to navigate this countrywide move where they want less spending. You saw where his heart is at at the beginning of those negotiations on the debt ceiling. He wanted to do something big, get at entitlements and get to tax reform because lowering that corporate tax rate is something his administration believes that they could support that would get those businesses to start hiring. Once they start hiring the atmosphere changes politics changes and he can start to readjust. Until that happens he is a prisoner of this economy.He the prisoner of a congress that has no appetite for more spending.

Matthews pointed out that business is currently making tons of money by firing people and squeezing workers and asked the obvious question:

Why does anyone think that cutting corporate taxes and giving business more of a break is going to get them to do what they know doesn’t make money…?

Heilman: Chris there’s a logic to tax reform that says if you could cut taxes across the board after getting rid of loopholes that it would drive consumer demand and if you had consumer demand go up it would drive a greater demand for the products of corporations and they would therefore would be able to produce more and then hire more. I think that’s the logic. I’m not endorsing it but I think that’s the logic of those who believe that that kind of tax reform would lead to more and better jobs in America.

Matthews: Is that right?

Vandehai: If you’re right Chris, then we’re in a lot of trouble if you think these companies don’t want to do any hiring, because government’s not going to create the jobs. If we don’t get business to do I don’t know who else creates jobs.There’s only two places where they come from and one is not … it’s in gridlock and they’re not going to do it. There’s not going to be stimulus.

So there has to be some sort of compromise, some sort of concentrated effort by both parties to get business doing what needs to do which is help grow this economy.

Matthews: I think we disagree. I think the American people have to be confronted with a choice. Do you want the government to sit and do nothing or do you want it to go out and create jobs. I think they want it to create jobs the worst this number gets.

Matthews sounded pretty sane there, at least recognizing the basic tenets of liberalism. Vandehei, on the other hand, is a very dangerous, corporatist tool.

I don’t question his reporting on the administration — I’ve heard the same bilge about lowering corporate tax rates as a stimulus elsewhere — but he’s clearly a true believer as well. That jaded, Villager point of view is what’s driving the train and frankly, at this point, it scares the hell out of me. If he’s right about what the administration is counting on as a jobshttp://www.blogger.com/img/blank.gif program, not only are there not going to be any jobs created, but average Americans are about to be required to “sacrifice” yet again so that corporations can make even more profits. This “tax-reform” is going to be a Madoff level scam.

Update: Ahhh. I see that Harris and Vandehei had a big piece in Politico this morning spelling all this out. Just. Wow.

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RIP Confidence Fairy

by digby

I sure am glad they made that Big Deal because otherwise the markets might have tanked and then where would we be:

If you’re looking for a reason, you could listen to the “liberal network” MSNBC, where Dylan Ratigan and his favorite Randroid Bill Fleckenstein will explain that the reason the markets are tanking is because of entitlement spending, which we can’t afford and must be cut, cut, cut. The debt ceiling cuts were negligible — this “sovereign debt” problem must immediately be dealt with, and Washington must be so terrified that they will listen to Ron Paul, who tells them the truth.

Or you could look at the news from around the world and see that the Eurozone is blowing up and the US economy is moribund — and any number of other factors, including sheer animal panic that could explain this. It’s like they’re stuck on a feedback loop. But hey, that wouldn’t get the job done, would it?

Update: well, there’s this too:

Limbaugh Says Obama’s Economic “Role Model” Is Robert Mugabe, Who “Took The White People’s Farms”

Update II: Ok, I think we’ve found the culprits:

@badbanana: The Dow has lost nearly 1,000 points since the Smurfs rang the opening bell

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