In Bad Times

Two observations about economic Bad Times.  The first is that for a lot of employers, bad times are good times.  When it comes to paying workers very little, and other forms of exploitation, they can get away with almost anything without worrying too much that either employees or government will object.  Maybe a union would, which is another reason that employers would like to destroy them all.  But employers can get around unions pretty easily, by employing part-time and freelance labor not covered by union contracts, and who don't get benefits.

This freedom to do what they want when people with any kind of job are afraid to lose it can easily lead to sadism in the workplace, as well as virtual slavery.  Especially since it cuts costs and adds to profits.  Even when employers must hire to replace workers who can't take it anymore, they get to cut more corners.  They are able to discriminate according to age, race, gender, or just arbitrarily in order to winnow down the pool and cut recruitment costs, and nobody is likely to do much about it.

On a more macro level,  Bad Times add a lot of loose emotion and power to the usual projections, denial etc. with more pressure from the unconscious, as anxieties, fears, resentments,etc. bubble up.  So you get violence, as in England now (although there are other factors involved.)  Or you get politics that's violently split.  That was clearly the situation in the Great Depression era.  There was a lot of support and agitation for real socialism and communism, on local and state levels as well as national.  FDR was to the right of all that, but he wasn't far enough to the right to satisfy a lot of other people.  American fascism was on the rise, especially among the corporate and monied elite.  Some were openly pro-Hitler and anti-Semitic.  There is even evidence of a high level conspiracy to stage a coup against President Roosevelt and take over the U.S. government, which involved a direct ancestor to the current Bushes.  So in Bad Times, a President doesn't have to be black to be hated by the Rabid Right.  And the extremes we're experiencing now aren't unprecedented. 

The Great Disruption

It was the melting of Arctic sea ice--much faster than predicted--that seemed to begin the change in what the writers on the Climate Crisis were saying, and how they were saying it.  The sense of urgency--we've only got 15 years, or 10 years, or 5 years left to act or a catastrophic Climate Crisis will be upon us!--faded, and was replaced by a more somber and careful tone.  Not because the predictions had been alarmist or wrong.  But because they had come true, a little faster than they hoped.

Probably the first signals came from one of the oldest and most eminent of the elders, James Lovelock in his 2009 book, The Vanishing Face of Gaia: A Final Warning, which said the Climate Crisis was inevitably escalating to such a proportion that human civilization was finished.  The only hope was reconstituting it from remnant populations huddled in the Arctic.  The book was mostly ignored as mad prophesy, though informed observers like Bill McKibben critiqued it carefully, and seemed relieved to find some of its assertions based on faulty or not provable science.

But it wasn't long before analyzes with almost as dour outcomes were becoming more typical than not.  Though couched in more careful language, inevitable catastrophe and challenge to the very existence of human civilization were the themes in David W. Orr's Down to the Wire (2009) and McKibben's own Eaarth (2010.)

Now this year there's The Great Disruption by Paul Gilding (Bloomsbury Press.) His point of view is similar: Our first truly human evolutionary test was whether we could anticipate the future catastrophe we were blindly causing, and act effectively in time to prevent it. Well, we flunked that one. Like other recent books on the climate crisis, this one asserts that the global catastrophe is unstoppable.

Gilding, an Australian former human rights and environmental activist as well as a businessman and corporate advisor, is forthright on the irrefutable factors besides the climate crisis that are converging: unsustainable population and economic growth outrunning and crashing resources. He says straight out what others have avoided for years: “I expect we’ll tragically lose a few billion people.”

Yet the buzz about this book is that it’s optimistic.

Gilding asserts that there will come a point, perhaps an event, when the crisis will be really obvious, and humanity will respond in its characteristic “slow but not stupid, late but dramatic” way, as for example when the West geared up to defeat Hitler.

There will be what he calls the Great Awakening: “an exciting and ultimately positive transformation, with great innovation and change in technology, business and economic models alongside a parallel shift in human development. It could well be, in a nonbiological sense, a move to a higher state of evolution and consciousness.” (Presumably that’s if you’re not one of the lost billions.) It’s humanity’s second evolutionary test—and if we blow this one, it’s pretty much over for civilization, because we will have kept on doing what will make the farther future even worse. This event and this transformation, he writes, could begin in this decade.

At least half the book is devoted to Gilding’s ideas of what must be done over the next 40 years to create a sustainable no-growth economy and the values that go with it--ideas tested so far in his speeches and peer-reviewed papers, but now available for wider scrutiny and participation. Though he uses big labels and inspirational generalities, he’s practical and subtle on the process and on as many details as he musters.

Gilding acknowledges the emotional impact of a future of earthquake-like disruptions, and a transition that “will shake us to the core, forcing a substantial rearrangement of human values, political systems, and our physical lives.” This has happened before, but perhaps never so intentionally. He writes that “Grieving is an appropriate response” for the world we’ve destroyed and the resulting pain, “but sustained despair is not.” Any chance for civilization surviving depends on “active, engaged and strategic hope.” Hope is not a response but a commitment. Optimism is “the most important and political choice an individual can make.”

This hope must be enacted partly by working to define the plans necessary to meet this crisis, so when society demands them, they’ll be ready. That makes this a book to keep. It takes awhile to absorb its information and the emotions it evokes. But there’s getting to be a consensus that the catastrophe “that will shake us to the core” is coming. It’s time to choose this way to be human, face the grief and think hard about the future.

Combining a brief sketch of the depth and extent of catastrophe with a brief sketch of a program to get through it and make things better seems a proper enterprise, but it makes for a very weird book. The implications of living through the death of millions--as we're seeing right now in the climate-related starvation in the Horn of Africa--as well as the chaos, the fear, uncertainty (is this intractable recession the beginning of the permanent economic growth collapse?) and denial--seem to need more than a simple acknowledgement they are coming. A little reflection makes the rest of the book seem like whistling in the dark, and the occasional inspirational self-help book tone doesn't help. That's not to say that his program isn't a useful one, or that it won't work. It just makes for a schizoid reading experience. Also, its subtitle is so silly I can't even bring myself to use it. But all of that just has to be acknowledged--then the content of the book worked with and absorbed.

How far we are from engaging with these issues, let alone accepting and confronting them, can be gauged by how little influence on the public dialogue these books are having.  But for the relative few who are engaged, this book should remain of considerable interest for some time to come.

(By the way, the latest studies--despite some of the media reports--support and extend the notion that Arctic ice is melting very rapidly--and may be virtually gone by 2050 or sooner.)

The Will to Act

President Obama spoke about the S&P credit rating downgrade, and what needs to be done to get the U.S. fiscal house in order and to create jobs and economic growth.  After describing again the steps Congress can take immediately, he concluded: "Markets will rise and fall, but this is the United States of America. No matter what some agency may say, we’ve always been and always will be a AAA country... What sets us apart is that we’ve always not just had the capacity, but also the will to act -- the determination to shape our future; the willingness in our democracy to work out our differences in a sensible way and to move forward, not just for this generation but for the next generation.

And we’re going to need to summon that spirit today. The American people have been through so much over the last few years, dealing with the worst recession, the biggest financial crisis since the 1930s, and they’ve done it with grace. And they’re working so hard to raise their families, and all they ask is that we work just as hard, here in this town, to make their lives a little easier. That’s not too much to ask. And ultimately, the reason I am so hopeful about our future -- the reason I have faith in these United States of America -- is because of the American people. It’s because of their perseverance, and their courage, and their willingness to shoulder the burdens we face -– together, as one nation."

I might mention here that there's also been a flurry of political punditry about what President Obama must do immediately.  One prominent oped revived the oldest cry in the book: that President Obama has to make impassioned speeches promoting a new political narrative.  Maybe so.  But the same was said of President Kennedy (he needed to make "fireside chats") and President Clinton.  But here's the deal: the media spends more prominent time and space complaining about what President Obama doesn't say that presenting what he actually does say--which is one important reason that the strategy they demand probably wouldn't work as easily as they seem to believe.  The remarks above are a good example--covered live in the afternoon, but never heard from again.   Plus good proportion of stuff these bloviators complain that Obama isn't saying is stuff that he actually has said, but they weren't listening.  They were too busy listening to themselves, and each other.

Blue Monday

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Rachel gave a graphic portrait of Monday's stock market meltdown.  She pointed out that while S&P downgraded the U.S. as a credit risk, most of the money in the market fled private companies and went into U.S. government securities, the very T-bills that were downgraded, because they are the safest investment in the world.  She also pointed out that the S&P action was roundly criticized, and based on political, not financial considerations.  But she made the case that this political punditry had some basis in reality--that not only had the Tea Party insisted they were ready and eager to default, but all the R presidential candidates save one are saying the same thing, and the GOPer Senate leader promised that holding the debt ceiling as hostage (which were his words) created a "new template" for future debt ceiling debates.  So the Republican establishment as well as its radical faction has promised to do what S&P said they feared would happen.  Rachel's analogy was that the U.S. must pay more for its fire insurance because it has an arsonist in the family.  That arsonist is the GOP. She closes this opening segment with the reason the market sold off private companies stock as fear that nobody seems capable of reviving the U.S. economy, of creating jobs for Americans.    

Earlier on MSNBC, Lawrence O'Donnell gave a spirited analysis of why the S&P action was wrong, the product of a "Confederacy of Dunces that is S&P," and was proven wrong by the market moving to Treasury bills as the safest investment.  Unfortunately, the complete video of this opening isn't posted at MSNBC and the transcript isn't available yet.  But it's worth a look and/or a read when it is available.

The Dreaming Up Daily Quote

"Fantasy is the dominant force in a life."
James Hillman

The Tea Party Downgrade

How Hot Was It?

From NOAA: "How hot was the month of July in 2011? So hot that just by plotting the location of each daily heat record that was broken, a nearly complete image of the contiguous United States is visible. Almost 9,000 daily records were broken or tied last month, including 2,755 highest maximum temperatures and 6,171 highest minimum temperatures (i.e., nighttime records). It should be noted that the tally of records collected so far is not complete – more are expected to come in as station data from across the U.S. is mailed to the National Climatic Data Center. The statistics reported here only include weather stations with real-time electronic reporting, which accounts for about two-thirds of the locations. Final numbers should be available later in August.

This image plots how many times a heat record was broken or tied in a given location. Some cities reached daily high temperatures 19 out of the 31 days in the month. The largest concentration of these records occur in the southern Plains, Midwest, and Northeast U.S., which were gripped by a series of heat waves pushing heat indices well into the 100’s (Fahrenheit) for many days at a time."

The Dreaming Up Daily Quote

“Madness in individuals is something rare—but in groups, parties, nations, and epochs it is the rule.”

Nietzsche

The Shadow

One quickly emerging element following the debt ceiling debate and the resulting GOPer triumphalism--which always ends up screeching in obvious hatred--is the flat-out recognition of the worst GOPer extremism become mainstream, especially in its attitude toward the President of the United States.

This piece in salon and especially the accompanying video from Hardball is remarkably forthright in stating what's been going on consistently: the very personal attacks on President Obama, reflecting the furious response to his election.  Lies are not exactly rare in partisan politics, but the virulence of these lies--even more vicious than they were when applied to Bill Clinton or John Kerry--has been and continues to be more extreme.

The extra anger--reflecting the extra fear--is not that hard to trace: it's racism.   The recent braying loosening of the tongue by a GOPer member of Congress who likened President Obama to a tar baby is just the most recent in a long line of just the obvious tells of a pervasive attitude among GOPer officeholders and both their big money and TPer supporters.  Wrote a staff writer for the Christian Science Monitor: "The specter of two national Republican figures apologizing for calling President Obama, the first African-American president, alternately a "tar baby" and "boy" gave new fuel to speculation on the left that, underneath much of the criticism of the president and his policies, lurks the shadow of racism."

The piece concludes: Nevertheless, to some critics, the gaffes are illuminating bits of evidence to underscore what many believe is an essentially racist view of Obama by some in America's conservative circles.

Given that language is the primary purveyor of our deepest thoughts, as well as the fact that language use is often unconscious, "even a slip of the tongue can reflect the kind of prevalence of racism that still exists within our culture," says Shawn Parry-Giles, director of the Center for Political Communication and Civic Leadership at the University of Maryland in College Park. "Progressives would say it's part of a larger conspiracy to target voters to use Obama's race as a means to help defeat him."

I don't think this racist dog whistle stuff is even always unconscious.  It's deliberate.  You say it, it gets covered.  You "apologize," and it gets repeated again. 

But such forthright analysis is rare.  How else excuse a media environment that could not make this consistently obvious, so that the rhetoric and actions of GOPer members of Congress--the very people who gave G.W. Bush his blank check--could get away with attacking President Obama for their deficit:

 "By any rational accounting, Bush and the GOP Congress that gave him everything he wanted from 2001 to 2007 should be held responsible for the entire $10.6 trillion national debt -- along with the $1.3 trillion yearly deficit they handed to Obama, as well as the Wall Street crisis and bank bailouts.

It's that simple: With no Bush income tax cuts, no unfunded Medicare drug benefit, and no off-budget Iraq and Afghanistan wars, the U.S. balance sheet would have been in fine shape for his successor. Then government investment needed to rescue the economy from the doldrums wouldn't have seemed so alarming."

More Hostages

It's part pivot to jobs, part a delayed response to the GOPer created debt ceiling crisis: President Obama came out strongly in criticizing Congress for not funding the FAA, outlining the consequences, including thousands of furloughed workers, tens of thousands of idled workers on airport projects, and $1 billion in lost revenues just by Labor Day (when Congress is due back.) 

But it was other Democrats who said what some felt they could not say during delicate negotiations with the nation's economy at stake during the debt ceiling nonsense.  Sen. Chuck Schumer (D-NY) told reporters Wednesday. "... they are holding these aviation workers hostage until they get everything they want."
What GOPers are specifically demanding is to make unionizing harder.  They've gone about it in even a more cynical way than usual.  But Democrats are expressing frustration that goes beyond this debate, including back to the debt ceiling debacle.   For as Senate Leader Harry Reid said,  "The way we have America going today there is no penalty for outrageous conduct."

Ghost of the Mountains

A story about the fabulous snow leopard that has some good news: there may be more of them,  a "healthier population," than previously believed.

But previous estimates could be the product of simple ignorance.  This research from their home range in the Himalayas adds to the scant knowledge about these majestic cats that blend into their environment so well that, according to a researcher, they can't be seen unless they want to be seen.  It's why the snow leopard is called the Ghost of the Mountain.  So a lot said about them is legend and supposition.

Except that, even though humans kill them, a snow leopard has never been known to attack a human.

"Electronic eavesdropping" led to this discovery: Evidence of two cats sitting together to eat dinner “was quite a shock to us,” Dr. McCarthy said. Beyond mating and mother-cub relationships, he said, “snow leopards are supposed to be solitary.”

Nadir

With the debt ceiling crisis and resulting deal tarnishing everyone, and the weak economy making everyone nervous, President Obama's poll numbers have been falling, especially in questions involving his reelection a year and a half from now.  Nobody knows how this latest epic travesty will play out, and Obama has been unusually resilient in the polls for the economy being where it is.  You can also count on GOPers to overreach when they're feeling good.  But for the moment, it's nadir time, and I don't mean Ralph.

Before the last act however, there was this interesting article, entitled The big lie that Obama can't lead is crumbling; Prizing bravado, we’ve undervalued President Obama's brand of quiet competence.  It adds to the list we all forget of his substantial accomplishments.

Along the same lines, I came across comments by psychologist James Hillman, with a surprisingly strong endorsement of this leadership: "Obama's temperament is a tremendous virtue. At last we have somebody who is cool-headed, who tries to think things through, who can take the pressure, and who can even concede having made a mistake." 

Besides, for all the real and symbolic hair-pulling the left does, there's this research indicating that suicides and homicides go down when a Democrat is President, but go up with a GOPer.

Pivot

After announcing that he'd signed the bill that lifted the debt ceiling, and reinterating why revenues, especially from the wealthiest taxpayers and corporations, were essential in the next round of deficit reduction, President Obama talked about jobs.

In a Rose Garden statement, the President renewed his call for Congress to pass pending legislation that will stimulate job creation, including an infrastructure bank.  He urged that middle class tax cuts be continued, and unemployment insurance be extended.  He said he would have more proposals for Congress when they return from recess.

After repeating that the manufactured crisis caused by Republicans was entirely unnecessary and itself hurt the economy, he ended his statement with this blunt assessment:

"So, we’ve seen in the past few days that Washington has the ability to focus when there’s a timer ticking down, and when there’s a looming disaster. It shouldn’t take the risk of default -– the risk of economic catastrophe -– to get folks in this town to work together and do their jobs. Because there’s already a quiet crisis going on in the lives of a lot of families, in a lot of communities, all across the country. They’re looking for work, and they have been for a while; or they’re making do with fewer hours or fewer customers; or they’re just trying to make ends meet. That ought to compel Washington to cooperate. That ought to compel Washington to compromise, and it ought to compel Washington to act. That ought to be enough to get all of us in this town to do the jobs we were sent here to do. We’ve got to do everything in our power to grow this economy and put America back to work."

You've Got A Friend

I saw James Taylor and Carole King perform together in the Boston area in the early 70s.  I don't remember where it was, except it was a small venue and I was in the balcony looking pretty directly down at the stage.  This was back before JT learned to smile.  More recently, the two toured again.  This video is from that tour.  It's not the most polished available on YouTube, but I like it because of the audience participation, and their singing is the best. (It's worth mentioning that on every live performance on YouTube, when they come to the lines "they'll kill your soul if you let them--don't you let them," the crowd cheers.)  This video starts and stops abruptly, but it also has the feel of being there, since it's evidently shot from the crowd.  Anyway, this is for Mike, who saw them on this tour.  Happy birthday, friend.

One Moment of Redemption

It was hard not to see this as a moment of redemption in an otherwise sordid situation in Washington.  Gabriel Giffords returned to the House floor for the first time since she was shot in an attempted political assassination, in order to vote for the avoid apocalypse for now deal.  It was a complete surprise, especially since the latest reporting on her condition held out not much promise that she would be up to this for a long time, if ever.  But there she was, a surprise to everyone except for a few congressional friends such as Debbie Wasserman Schultz and Nancy Pelosi.  One of those unpredictable moments of emotion that redeems in an inexplicable way.

No Deal or Bad Deal

The House has voted for the avoid apocalypse deal, the Senate is expected to do the same tomorrow.  Default has been averted until at least 2013.

There are two operative metaphors in this situation, apart from the barely metaphorical extortion, hostage-taking, ransom, etc.  The first is Joe Biden's--it's Solomon's Choice.  Faced with the prospect of having the baby cut in two, the real mother saves its life by withdrawing her claim for its custody.  GOPers, led by their TPer masters, seemed all too willing to kill the world economy if they didn't get their way.  Democrats were not willing, and as Barney Franks notes, basic game theory tells you that the side that is willing to destroy everything usually gets to dictate terms.

So with this metaphor, President Obama and the Democrats got what seems to be not the worst deal, short of default.  It protects Social Security, Medicare, Medicaid and unemployment insurance.  It cuts more towards the end of the ten year period, rather than now when large cuts would be catastrophic to the recovering economy (if that's what it's doing).  So maybe it's not as bad as it could have been. Or, another view is that it's no big deal--about as close to a clean debt ceiling bill as was possible.  

But apart from that, it seems like an ugly bad deal.  It looks bad for the country and bad politically.  Though revenue is supposedly on the table for consideration by the select committee, Speaker Banal has already announced that no GOPers will be appointed who will consider raising revenue.  Though there seems some out on the Bush tax cuts, it's not clear it's a meaningful possibility that even the top brackets will be raised, which seemed until now to be the only way out of a tanking economy.

And though this circus is over for now, there will be barely a pause before it starts up again: with the budget in September [update: this may be part of this deal, so maybe there won't be a budget fight after all] , with this committee from now until (literally) Christmas.  If it dominates with discussions of cuts and taxes, the lack of attention to the realities of the current economy, including and especially jobs, will remain unaddressed.  It's true that default or a drop in the U.S. credit rating would have hit the poor and middle class the hardest.  But there is reason to fear these cuts and this inattention will as well.  Most of all, if it cripples the future: both the resources to "win the future" and the ability to respond to the needs of the future--which aren't even in the future anymore.  They're here right now.  A significant chunk of the U.S. is in very bad drought!  Some of it is still underwater!  Meanwhile century's old water mains in Manhattan are breaking apart, bridges and roads are in disrepair--while millions are unemployed.

The truth is that cutting federal spending is directly cutting jobs--of people employed by the government or by companies with government contracts--and those cuts have a ripple effect on the economy.  It is precisely the cuts in government spending that was the direct cause of the weak GDP just reported.  It is the primary drag on economic recovery.

The other operative metaphor is The Shock Doctrine.  Of the book The Shock Doctrine, I wrote that it may have revealed "the master narrative of our time"--words that are quoted on the paperback book cover. Once again we have proof that it has been adopted as the main strategy of the Rabid Right and the Republican party in general, no longer in other countries but right here.  This is by far the most obvious, most outrageous and probably most successful example: a manufactured crisis of potentially huge proportions, extended by seemingly bizarre political maneuvers until major decisions are forced at the last possible moment to avert the imminent catastrophe that wasn't remotely necessary in the first place.

I look back on recent posts here, and see how consumed even this blog was with this invented crisis, that has gone away, leaving behind a deal that ensures even more ugliness that must be dealt with in the coming months, distracting attention from real issues and present dangers.  So in a sense I've been suckered too.  The difference is that people in Washington are employed to deal with all of that, and I am not. 

The Secret Of Life

Lots of birthdays to remember this summer, and this song is for all of us.  This rendition is quite recent, and is found on the "One Man Band" CD/DVD which I've been watching and listening to lately, prompting my YouTube searches, and resulting in this little collection.  The secret of life is enjoying the passage of time, and what better way to enjoy the passage of these few minutes than listening to a great song and a great singer.

Grim Solutions

On Sunday evening, President Obama announced a deal agreed to by congressional leaders that raises the debt ceiling until 2013, makes a trillion in cuts that don't begin to take effect until then, and mandates a process that gives Congress the responsibility for agreeing on a package of cuts and revenue by the end of the year. Good luck with that. Neither GOPer conservatives nor progressive Dems were jumping with joy immediately, so it won't be until later Monday that it becomes clear whether there are votes to pass this in time.

As for the package, the White House summary makes it sound not catastrophic, though Paul Krugman makes it seem exactly that.  Who knows.  Ditto for the politics of it all.  The lefty response has been brutal: "surrender" is the first watchword.  Only Ezra Klein so far is sanguine, with hope for Dem priorities.  I just hope that the President at least verbally nails the GOPers for extortion and exacting ransom--which are words that the NYT and WA Post used.   I'm just worn out by it all.

Sunday Afternoon with J.T.

This version of J.T.'s song, "Shower the People" comes from the 1980s or earlier.  I remember seeing him performing beside the tape machine as backup, which had to be in Washington, when this song was a hit single.

This moment may be hard to remember these days--the festivities surrounding the Inauguration of Barack Obama.  This version of "Shower the People" has less of J.T. and more of these musical guests,  and the sound isn't as good, but it's worth recalling this sweet moment.

Saturday Night with J.T.

We need a little J.T. right about now.  This is his song "Never Die Young" when it was new.  In a more recent video he said that he wrote this ten years ago and still doesn't know what it means.  A great song anyway.  Never give up.  Never grow old.  And never never die young.

Have A Great Weekend

Update early Saturday: On the most fateful weekend for this country in quite some time, the New York Times chose to print a story lauding the House TPers for their political victory in turning a simple act of legislative housekeeping into an international crisis, in order to hack away at the federal government they hate, but that so much of this country and so many of its people absolutely need.  But these people are not operating as politicians, let alone governing partners.  They are extortionists, holding a gun to the head of the entire world economy.  Their philosophy of government is theocratic dictatorship.  Their actions are in any other context criminal.  In this context, their actions are even worse crimes.  They shouldn't be lauded.  They should be arrested.  And that goes for John Banal, Eric Cant and now Mitch McConnell.      

This blog is supposed to be about dreaming up the future.  And while that process is still happening out there (as in the three books I highlight at Books in Heat), the drama going on in Washington is emphasizing the nightmare side--"it's not dark yet, but it's getting there."

Some of what we're facing is being repeated often enough that it's sinking in.  On Friday, this will probably become even clearer as federal officials talk more about what really will happen should the debt ceiling not be raised by Tuesday.  For instance, if the federal government chooses to pay interest on the debt plus Social Security, Medicare and Medicaid for August, it will have no money left over for anything else.  It can't pay soldiers and sailors overseas, or for the fuel and technology they use, and can't even pay to bring them back.  It can't pay federal employees--and we profoundly hope that would start with members of Congress.  Even scarier for some folks, it can't pay federal contractors.  The FAA is already dealing with this, thanks again to GOPer zealots.  How about food inspectors?  Air traffic controllers?  The federal government would be paralyzed, which soon would paralyze state governments, and on down.  

The economic ripple effects would be immediate.  The amount of money withdrawn from the economy just in August will likely be enough to plunge the country into recession.  Unemployment will rise in September, as people are layed off by contractors who aren't getting paid by the federal government, etc.  And that's before the downgrade in the credit rating--leading to instant losses to pension funds, home mortgages, etc.  The spiral quickly continues and may encompass the world in the first elective Depression in recorded history.

Meanwhile, Capitol Hill is an utter mess.  John Banal couldn't pass his plan with members of his own party on Thursday, and as the sun slowly rises in DC, it's uncertain whether he will try again on Friday.  Instead of worrying about the country, he has to worry about his job as Speaker.  This failure was caused by some TPers actually acting rationally in a political sense: everyone knew that even if the Banal plan passed, it would be instantly voted down in the Senate.  So why should they go on record voting for a plan they didn't believe in?  They'd be damn primaried!  So forget about the country there too.

So besides dire and detailed warnings from Treasury and perhaps the White House, what exactly happens Friday is uncertain.  But what seems likely is that the result will be still no solution in sight.  No plan.  Which leaves Saturday.

A plan to hike the debt ceiling and cut the deficit without hurting the economy right now, which Democrats and enough Republicans could support--not a bad year's work, but they have to polish it off on a hot summer Saturday.  And if no plan emerges, then President Obama will have to ask directly: do you all have the votes for a simple raising of the debt ceiling?  And if the answer is no, he is going to face a big decision, which (many voices were saying Thursday) might involve something like the scenario I outlined for last Sunday: President Obama directs the Treasury to pay the nation's bills and ignore the debt ceiling.   Unless there is real progress by Saturday night or Sunday morning on a viable legislative way out, the 14th amendment option may turn out to be the only option.  For the drops in the stock market all this past week could very well turn into a panic on Monday.

Expect to hear the President at least once this weekend, and probably twice.  Once to say clearly that the Republicans in Congress are about to plunge the world into Depression.  He gave the ball to Congress and so far they've tripped over it, and are sitting dazed in the mud.  Beyond that everything's a guess.  The country may be going down big time early next week. And even the least destructive scenarios will be terrible for the economy and the country.   But in the meantime, have a great weekend, and enjoy what's left of the high tide.

More Up to the Minute News on the Default Crisis

I'm tempted to again leave the Grim Spending Cutter as the total comment on the day's non-events, but I do have an observation.  The only commentary I watched Wednesday was Lawrence O'Donnell, who hasn't changed his basic take for weeks: Obama is not really sincere about big budget cuts, all of the plans are political, none will pass or else be signed, and at the eleventh hour Congress will pass a one-page clean debt ceiling bill.  I do depend on Lawrence for the sardonic truth, but I disagree on several points. 

First of all I believe that President Obama is sincere in wanting a big package, especially in view of this story (even though it originated in Politico, not exactly my most trusted name in news), which I find persuasive: he really wants to avoid a drop in the U.S. credit rating, and at least one of the agencies is explicitly calling for a big package. (I wouldn't say he fears it more than default, though, as the headline says.)

Second I'm not at all sure the Congress is capable of passing anything that President Obama can sign, even at the 11th hour.  There's talk of the White House crafting yet another bill, and the likelihood of a very short extension on Tuesday.  I take heart in O'Donnell's suggestion that ultimately an up or down vote in the House won't require a single TPer vote to pass, if Dems are on board.  But I'm starting to go through the Climate Crisis process now.  Just like the effects of the Climate Crisis, I knew that serious economic hardship is likely to eventually hit this country, as the need for growth outruns resources and a depleted environment.  But like the CC effects, I hoped it was some time in the future, and present actions might address it and forestall it.  But like the CC effects, I'm mournfully becoming used to the idea that there is no confident daylight between now and that future.  The big difference is that our society unknowingly caused the Climate Crisis (even if it is now willfully making it worse), and the consequences come from nature--from the physics and chemistry of what's been done.  But this time we are knowingly and unnecessarily electing to cripple our economy, for no real reason.  And once it starts (or arguably, continues, but on steroids) I'm not sure that economy will ever recover.

Another Tragic Gap

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Melissa Harris-Perry made her debut as a substitute host for Rachel with a stunning segment, exactly what is missing from the dominant news media.  As a woman of color, Professor Harris-Perry had the chops to analyze the Pew study released Tuesday that calculated the dimensions of the "wealth gap," with median white wealth at about 20 times that of median black and Latino families.  The above video is that segment, and the transcript is here.  Two points stand out: the wealth gap was seeded a few generations ago when federal programs (especially in housing) that paid for the basis of the white middle class, discriminated against black and Latino families and mostly did not include them.  And that, with America set to be a non-white majority country by mid-century, if the weath gap were closed, there would be plenty of new tax and other revenue sources from people of color, as well as greater economic activity, to erase deficits in the federal budget.

Apart from what this portends for public policy and the public debate (which is mostly depressing), this debut more than suggests that there is a place for Melissa Harris-Perry (or "Melissa" as she will be called) on MSNBC--and that there is a crying need for such a presence in the media.  It may be that Melissa's academic responsibilities preclude a nightly gig, but at least a weekend program.   

Up to the Minute News on the National Default Crisis

The Entire World is Watching

He spoke softly, looked into the camera.  He started with explanations, and then delivered his message, about compromise being at the heart of the American system of government, about coming together as one nation. He was eloquent at times.   It's perhaps only when you read the transcript that you realize how hard President Obama's message was:

" So defaulting on our obligations is a reckless and irresponsible outcome to this debate...
This is no way to run the greatest country on Earth. It’s a dangerous game that we’ve never played before, and we can’t afford to play it now. Not when the jobs and livelihoods of so many families are at stake. We can’t allow the American people to become collateral damage to Washington’s political warfare.

But do you know what people are fed up with most of all? They’re fed up with a town where compromise has become a dirty word.

The entire world is watching. So let’s seize this moment to show why the United States of America is still the greatest nation on Earth –- not just because we can still keep our word and meet our obligations, but because we can still come together as one nation."
 
Compare this "pitch-perfect" speech with the hostile, sarcastic and devious screech by John Banal, beginning with his odd and absurd claim that he is the Speaker of the whole House, not just the GOPer House--no, the whole House.
 
In one sense, President Obama's speech was puzzling for containing nothing new--except perhaps for one element.  Until now there have been three voices in this contention--the President's (and Democrats), the GOPers and the markets.  President Obama asked to hear from the fourth voice: the American people. With a prime time address, he reached more people directly on this issue--a new issue, as he said, because raising the debt ceiling has always been a bit of congressional housekeeping before.  He explained what it's about: 
 
"Understand –- raising the debt ceiling does not allow Congress to spend more money. It simply gives our country the ability to pay the bills that Congress has already racked up. In the past, raising the debt ceiling was routine. Since the 1950s, Congress has always passed it, and every President has signed it. President Reagan did it 18 times. George W. Bush did it seven times. And we have to do it by next Tuesday, August 2nd, or else we won’t be able to pay all of our bills.

Unfortunately, for the past several weeks, Republican House members have essentially said that the only way they’ll vote to prevent America’s first-ever default is if the rest of us agree to their deep, spending cuts-only approach.

If that happens, and we default, we would not have enough money to pay all of our bills -– bills that include monthly Social Security checks, veterans’ benefits, and the government contracts we’ve signed with thousands of businesses.

For the first time in history, our country’s AAA credit rating would be downgraded, leaving investors around the world to wonder whether the United States is still a good bet. Interest rates would skyrocket on credit cards, on mortgages and on car loans, which amounts to a huge tax hike on the American people. We would risk sparking a deep economic crisis -– this one caused almost entirely by Washington."

 President Obama could call for voters' voices, confidently knowing that according to polls upwards of 2/3 of the electorate supports his position of a budget solution that mixes cuts and revenue, that calls for sacrifice from the very wealthy as well as those with the least resources.  The initial report was that, while Banal was talking, congressional webpages were crashing from the volume.
 
As I observed yesterday, the voice of the markets speak urgently but ambiguously in terms of solution. Since the two sides seem far apart with the clock ticking, I can't see the markets being reassured by either speech. But the voices of voters speak their minds.   
 
What happens now?  The Harry Reid Senate plan calls the GOPers bluff: it provides exactly what GOPers said they wanted as late as a week ago: cuts totaling more than the amount of the debt ceiling rise, which raises the ceiling to get the country into 2013.  But among other things, the new Banal plan fulfills none of those demands that Banal himself was making just a few days ago.  From his own words, it's clear that the intent of his plan is to make this another political circus in six months, on the theory that it would hurt President Obama.  (A theory that is questionable.)
 
As President Obama pointed out, a six month rise may not be enough to satisfy the ratings agencies, who will downgrade the U.S. credit rating, which will send interest rates soaring and the economy downward.  And  signals from one of the agencies itself support the contention that a six month deal on Banal's terms could  trigger a drop in the U.S. credit rating.
 
During the day on Monday, the reporting from Washington indicated a lack of enthusiasm for the Reid plan, but positive hostility towards Banals--not only from Democrats, but from TP GOPers.  It's not clear now that Banal has the votes to pass it in the House--you know, the whole House he is Speaker of.  It could be that President Obama's intent with his speech was to get quickly beyond these two competing but probably equally doomed plans to a compromise this week.  Because if both plans go to votes, it will take until the weekend for that to play out, and next Sunday we'll be in the same deadlocked situation with the first U.S. default in modern history becoming official on Tuesday.   After the market crash on Monday (if not sooner.)

Beyond Banal

Introducing his detailed breakdown of the latest GOPer proposal on the deficit and the debt ceiling, the President of the Center on Budget and Policy Priorities wrote:

"House Speaker John Boehner’s new budget proposal would require deep cuts in the years immediately ahead in Social Security and Medicare benefits for current retirees, the repeal of health reform’s coverage expansions, or wholesale evisceration of basic assistance programs for vulnerable Americans.

The plan is, thus, tantamount to a form of “class warfare.” If enacted, it could well produce the greatest increase in poverty and hardship produced by any law in modern U.S. history.

This may sound hyperbolic, but it is not. The mathematics are inexorable."

The Dreaming Up Daily Quote

“The guilty one is not he who commits the sin, but the one who causes the darkness.”

Victor Hugo

F Day II.5

 After congressional members of both parties spent Sunday talking to themselves, the ultimate chicken game is emerging.  House GOPers will presumably pass a bill authorizing the debt ceiling to be raised by a trillion accompanied by a trillion in cuts.  That debt ceiling level means that they go through this whole thing again in the middle of the 2012 campaign season.  Senate majority leader Dem Harry Reid has said the Senate won't pass it, and President Obama said he won't sign it. With that in mind, it's not certain that the GOPers can even pass this in the House. But if they do, Banal is apparently betting that the Democrats and the President will blink before he does, to avoid default.  It is an overtly partisan political move.

Meanwhile, the story is going around that Harry Reid will introduce a separate bill in the Senate, raising the debt ceiling by the $2.4 trillion necessary to get the country through 2012, accompanied by the same amount in cuts (the Nancy Pelosi plan) without tax increases.  This is essentially what the GOPers claim they have been asking for.  Depending on the cuts, it's not certain that this will pass the Senate.  But if it does, the Dems are betting that the GOPers will blink, and why shouldn't they?  This is what they said they wanted.

If it plays out like this, an objective view would have to be that the Dems have bent over backwards to accomodate the GOPers unreasonable demands.  But there's no objective view of any consequence here.  It's all about how this plays out on Capitol Hill, with the world economy held hostage.

The wild card some observers are pointing to is the behavior of the markets.  The Asian markets and the first hours of the European markets were broadly down, and investors were shedding dollars for other currencies. (U.S. stock market is hours from opening.)   If and when--and it's probably when--markets show greater alarm, it puts pressure on the process, but I don't see how it helps one side or the other.  It's a game of chicken while the drivers also play Russian Roulette.    

F Day II

Meetings in Washington on Saturday failed to make apparent progress on avoiding U.S. default.  Delusional John Banal apparently believes that if he can announce a plan (not a deal) on Sunday, the first Asian markets to open won't register dismay on Sunday afternoon, followed by other overseas markets Sunday night, and the U.S. markets on Monday.  Meanwhile, Democratic congressional leaders are firmly behind President Obama's bottom line demand that the debt ceiling must be raised sufficiently to take the country through the 2012 elections.  Otherwise credit agencies are apt to downgrade the U.S. credit rating, which in itself will be sufficient to cause ripples of financial chaos, from virtually every American's own finances to unknown implications around the world.  Among the many ripple effects of all of this--increases in the national debt and deficit.

Sunday night television may be unusually compelling.