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And then there are the reported terms of the deal, which amount to an abject surrender on the part of the president. First, there will be big spending cuts, with no increase in revenue. Then a panel will make recommendations for further deficit reduction — and if these recommendations aren’t accepted, there will be more spending cuts.
Republicans will supposedly have an incentive to make concessions the next time around, because defense spending will be among the areas cut. But the G.O.P. has just demonstrated its willingness to risk financial collapse unless it gets everything its most extreme members want. Why expect it to be more reasonable in the next round?
In fact, Republicans will surely be emboldened by the way Mr. Obama keeps folding in the face of their threats. He surrendered last December, extending all the Bush tax cuts; he surrendered in the spring when they threatened to shut down the government; and he has now surrendered on a grand scale to raw extortion over the debt ceiling. Maybe it’s just me, but I see a pattern here.
Did the president have any alternative this time around? Yes.
Paul Krugman, The President Surrenders - NYTimes
“Huge win for Obama: Across the board spending cuts in trigger would not take effect until 2013 — when Bush tax cuts expire.” - @StevenTDennis
Krugman writes that Obama “surrendered last December.” But as I wrote here, Obama was the clear winner during that lame duck session. And it took some time for that to become the consensus. Steven Dennis’ tweet might be an early indication that the negative reaction to Obama’s seeming capitulation could be overstated. It might be a good idea to wait a day, week or probably much longer to lay judgment.
Barring a huge upset, Republicans will take control of at least one house of Congress next week. How worried should we be by that prospect?
Not very, say some pundits. After all, the last time Republicans controlled Congress while a Democrat lived in the White House was the period from the beginning of 1995 to the end of 2000. And people remember that era as a good time, a time of rapid job creation and responsible budgets. Can we hope for a similar experience now?
No, we can’t. This is going to be terrible. In fact, future historians will probably look back at the 2010 election as a catastrophe for America, one that condemned the nation to years of political chaos and economic weakness.
Paul Krugman - Divided We Fail
Continue reading… NYTimes
Paul Krugman - The Iraq-Austerity Connection
…If you really want to know what’s going on, watch the corporations.
How can you do that? Follow the money — donations by corporate political action committees.
Look, for example, at the campaign contributions of commercial banks — traditionally Republican-leaning, but only mildly so. So far this year, according to The Washington Post, 63 percent of spending by banks’ corporate PACs has gone to Republicans, up from 53 percent last year. Securities and investment firms, traditionally Democratic-leaning, are now giving more money to Republicans. And oil and gas companies, always Republican-leaning, have gone all out, bestowing 76 percent of their largess on the G.O.P.
These are extraordinary numbers given the normal tendency of corporate money to flow to the party in power. Corporate America, however, really, truly hates the current administration. Wall Street, for example, is in “a state of bitter, seething, hysterical fury” toward the president, writes John Heilemann of New York magazine…
…The mood on the right may be populist, but it’s a kind of populism that’s remarkably sympathetic to big corporations…
…[Pres. Obama] finds himself very much in the position Franklin Roosevelt described in a famous 1936 speech, struggling with “the old enemies of peace — business and financial monopoly, speculation, reckless banking, class antagonism, sectionalism, war profiteering.”
And that’s not necessarily a bad thing. Roosevelt turned corporate opposition into a badge of honor: “I welcome their hatred,” he declared. It’s time for President Obama to find his inner F.D.R., and do the same.
Thinking about BP and the Gulf: in this old interview, Milton Friedman says that there’s no need for product safety regulation, because corporations know that if they do harm they’ll be sued.
Interviewer: So tort law takes care of a lot of this ..
Friedman: Absolutely, absolutely.
Paul Krugman - Why Libertarianism Doesn’t Work, Part N
continue reading… NYTimes
…But that’s not how Republicans see it. Here’s what Senator Jon Kyl of Arizona, the second-ranking Republican in the Senate, had to say when defending Mr. Bunning’s position (although not joining his blockade): unemployment relief “doesn’t create new jobs. In fact, if anything, continuing to pay people unemployment compensation is a disincentive for them to seek new work.”
In Mr. Kyl’s view, then, what we really need to worry about right now — with more than five unemployed workers for every job opening, and long-term unemployment at its highest level since the Great Depression — is whether we’re reducing the incentive of the unemployed to find jobs. To me, that’s a bizarre point of view — but then, I don’t live in Mr. Kyl’s universe.
And the difference between the two universes isn’t just intellectual, it’s also moral.
Paul Krugman, on “This Week with Whoever”