Why won’t Obama invoke the Constitutional option? In part because it would show that Congress can’t function, and the consequences of that alone could be severe.
Notable contributions to real GDP growth in the second quarter included net exports (0.6 percentage points) and fixed investment (0.7 p.p.). Defense spending added 0.4 p.p. to GDP, but this gain was offset by declines in state and local government (-0.4 p.p.) and nondefense spending (-0.2 p.p.). Consumer spending rose just 0.1 percent at an annual rate, with a steep decline (23 percent) in motor vehicle consumption accounting for the weakness. The downward revision to first quarter GDP from 1.9 percent to 0.4 percent reflects lower contributions from inventory investment and imports.
Yet many people in the news media apparently can’t bring themselves to acknowledge this simple reality. News reports portray the parties as equally intransigent; pundits fantasize about some kind of “centrist” uprising, as if the problem was too much partisanship on both sides.
Some of us have long complained about the cult of “balance,” the insistence on portraying both parties as equally wrong and equally at fault on any issue, never mind the facts. I joked long ago that if one party declared that the earth was flat, the headlines would read “Views Differ on Shape of Planet.” But would that cult still rule in a situation as stark as the one we now face, in which one party is clearly engaged in blackmail and the other is dickering over the size of the ransom?
The answer, it turns out, is yes. And this is no laughing matter: The cult of balance has played an important role in bringing us to the edge of disaster. For when reporting on political disputes always implies that both sides are to blame, there is no penalty for extremism. Voters won’t punish you for outrageous behavior if all they ever hear is that both sides are at fault.
[...]
But making nebulous calls for centrism, like writing news reports that always place equal blame on both parties, is a big cop-out — a cop-out that only encourages more bad behavior. The problem with American politics right now is Republican extremism, and if you’re not willing to say that, you’re helping make that problem worse.
When you strip away all the noise, and the posturing from both Democrats and Republicans, sources on both sides, including in the White House, acknowledge that there’s really only one way out of the impasse.
Both sides have to agree on a way of separating the debt ceiling hike, or hikes, from the process by which spending gets cut — in essence putting an end to a situation in which the debt ceiling is being used as a Sword of Damocles hanging over the spending process. Accomplishing this overall policy goal in a way that can pass both Houses of Congress is the only real way out of the trap right now. The cuts have to be deep enough to pass the House, but the proposal to hike the debt ceiling has to simultaneously satisfy the White House and Democrats.
According to a source close to the talks, Vice President Joe Biden has been in discussions with multiple officials on the Hill from both parties, about ways of realizing this aim.
One idea being floated in multiple private discussions would in effect be a fusion of the Boehner plan and the original McConnell plan to transer control of the debt ceiling to the President.
The idea would be to preserve the joint commission that Boehner’s plan sets up, and also preserve the spending cut targets in Boehner’s plan. But rather than have those tied to two debt ceiling hikes, the President would have the power to hike the debt ceiling unilaterally in keeping with McConnell’s plan, unless a two-thirds veto-proof Congressional supermajority disapproved of it (which wouldn’t happen). The spending cuts in Boehner’s plan would instead be enforced by some kind of trigger — if the committee didn’t reach the goals, automatic cuts of some kind would be triggered automatically.
Following McDonald's decision to offer "more nutritionally-balanced" Happy Meals and First Lady Michelle Obama's praise of its move, the right-wing media jumped to attack McDonald's for supposedly bending to the will of the "fat police" and making Happy Meals "less happy." However, numerous studies show that childhood obesity leads to significant health problems, and moreover, McDonald's reportedly made their decision in part so that parents could feel "less guilty" about buying their kids Happy Meals.
The dictionary defines a “haboob” as a thick dust storm that blows in deserts. Arizonans, however, define a “haboob” as a jihadist harbringer of Muslim infiltration. Hearing local weathermen call Arizona’s recent massive dust storms by a term they’ve used “for decades,” one Arizona resident said, “I am insulted that local TV news crews are now calling this kind of storm a haboob. [...] How do they think our soldiers feel coming back to Arizona and hearing some Middle Eastern term.”
British Business Secretary Vince Cable presented the “irony of the situation at the moment.” A former economist, Cable told BBC television yesterday that “the biggest threat to the world financial system comes from a few right-wing nutters in the American congress rather than the euro zone."
WASHINGTON—Members of the U.S. Congress reported Wednesday they were continuing to carefully debate the issue of whether or not they should allow the country to descend into a roiling economic meltdown of historically dire proportions. "It is a question that, I think, is worthy of serious consideration: Should we take steps to avoid a crippling, decades-long depression that would lead to disastrous consequences on a worldwide scale? Or should we not do that?" asked House Majority Leader Eric Cantor (R-VA), adding that arguments could be made for both sides, and that the debate over ensuring America’s financial solvency versus allowing the nation to default on its debt—which would torpedo stock markets, cause mortgage and interests rates to skyrocket, and decimate the value of the U.S. dollar—is “certainly a conversation worth having.” "Obviously, we don't want to rush to consensus on whether it is or isn't a good idea to save the American economy and all our respective livelihoods from certain peril until we've examined this thorny dilemma from every angle. And if we’re still discussing this matter on Aug. 2, well, then, so be it.” At press time, President Obama said he personally believed the country should not be economically ruined.
A Congressional aide briefed on ongoing negotiations between House Speaker John Boehner and President Obama says the two principals may be nearing a "grand bargain" on to raise the debt limit which would contain large, set-in-stone spending cuts but only the possibility of future revenue increases.
"All cuts," the aide said. "Maybe revenues some time in the future."
[...]
A White House spokesman called the claims from aides "not credible" -- the result of having a "3rd hand version of the facts."
However two aides and a third source, close to the principals confirmed that Obama has been emphatic with Democratic negotiators that his preference is to negotiate a big deal with Boehner and squeeze it through Congress.
Lacking still, including among Democratic sources, is any sense of what's in the still-forming plan -- vis a vis both spending and revenue. And Democrats, particularly in the House, will have a lot to say over whether the deal is acceptable -- their votes will be necessary for Boehner to pull off a grand bargain.
The names have become synonymous with corporate wrongdoing — and forceful prosecution: Not just Enron, but also WorldCom, Tyco, Adelphia, Rite Aid and ImClone. In the early part of the last decade, senior executives at all these companies were convicted and imprisoned.
But by 2005, a debate was growing over aggressive prosecutions, as some business leaders had been criticizing the approach as perhaps too zealous.
That May, Justice Department officials met ahead of a session with a cross-agency group called the Corporate Fraud Task Force. It was weeks after Justice Department lawyers had presented to the Supreme Court their case against Arthur Andersen, which was seeking — successfully, it would turn out — to overturn its criminal fraud conviction in a prominent case.
In the meeting, the deputy attorney general at the time, James B. Comey, posed questions that surprised some attendees, according to two people there who asked to remain anonymous because they were not supposed to discuss private meetings.
Was American business being hurt by the Justice Department’s investigations?, Mr. Comey asked, according to these two people, who said they thought the message had come from others. He cautioned colleagues to be responsible. “It was a total retrenchment,” one of the people said. “It was like we were going backwards.”
Ugh. That was a seriously ugly jobs report (pdf). Almost no job creation, with slow private-sector growth offset by falling public-sector employment; a falling employment-population ratio; and (I don’t know how many people have picked this up), an actual decline in wages, albeit a small one.
Let me emphasize that last point. My bottom line on the inflation-deflation issue has always been to look at wages; you can’t have a wage-price spiral if wages ain’t spiraling. And they aren’t, to say the least.
It’s important to realize, by the way, that stagnant wages are NOT good for recovery; all they do is ensure that the burden of debt relative to income remains high, keeping demand and employment down.
The situation cries out for aggressively expansionary monetary and fiscal policy. Instead, however, all the political push is in the opposite direction.
SEC Enforcement Director and former Deustche Bank general counsel Robert Khuzami boasting about the latest slap on the wrist directed at a major bank, this time a $228 million fine of JP Morgan Chase for a bid-rigging scheme involving municipal bonds. The Chase ruling is the latest to come down in a series of fines involving a number of banks, including Bank of America and UBS.
This is one of the best examples we’ve had yet of the profound difference in the style of criminal justice enforcement for the very rich and connected, versus the style of justice for everyone else. This scam that Chase, Bank of America and UBS were involved with was no different in any way, really, from old-school mafia-style bid-rigging scams.
What these banks did is they got together and carved up territory between them, arranging things so that they wouldn’t be bidding against each other in municipal debt auctions. That means the 18 different states involved in these 93-odd deals all got screwed out of the best prices, leaving the taxpayers in those places severely overcharged for their public borrowing.
This is absolutely no different from what mafia groups in New York used to (and probably still do) do for public contracts – the proverbial five families would get together, divide up the boroughs and neighborhoods between them, and each family would individually buy or intimidate their way into the bidding process, corrupting the game so that the public had to overpay for their garbage collection or their construction labor or whatever. The only difference here is that we’re talking about debt, not garbage. But the concept is exactly the same; it’s the same crime.
If Khuzami’s defendants had been a bunch of Italians from Howard Beach, they would be facing RICO charges and would be looking at years in prison, plus seizure of all their ill-gotten gains, in addition to civil suits and penalties...But if the defendants are a bunch of Ivy-League educated bankers from Wall Street, what we end up getting is a negligible fine (officials will brag about this $228 million, but it’s a drop in the bucket compared to what the banks make scamming communities and governments) and, as always, no admission of guilt. This is how the SEC’s own press release reads:
Without admitting or denying the allegations in the SEC’s complaint, JPMS has consented to the entry of a final judgment enjoining it from future violations of Section 15(c)(1)(A) of the Securities Exchange Act of 1934 …
As it is, as my friend Eric points out, the endgame for banks like Chase is, “Admit nothing, pay two hours of revenue and all good!”
For the second month in a row, employers added barely any jobs in June, showing that the economic recovery has hit a serious speed bump.
With all levels of government laying off workers, the Labor Department reported that employers eked out just 18,000 new nonfarm payroll jobs in June. The already low number created in May was also revised downward to a dismally small 25,000 new jobs, less than half of what was originally reported last month.
Although the government’s survey of employers showed them adding jobs, a separate survey of households showed that more people were out of work than in the previous month, causing the unemployment rate to rise to 9.2 percent.
[...]
The economy needs to add at least 150,000 jobs a month just to keep up with normal population growth. The protracted stretch of weak-to-moderate job creation over the last two years has left many of the people who lost jobs during the recession increasingly desperate. There are now 14.1 million unemployed, with 6.3 million of them having searched for work for six months or longer. Including those who are working part-time because they can’t find full-time work and those who have stopped looking, the broader unemployment rate is now 16.2 percent, its highest level since December 2010.
An Egyptian criminal court on Tuesday acquitted three former government ministers of corruption while convicting a fourth in absentia, verdicts most likely to further inflame public anger over the pace of efforts to hold former officials accountable for killing more than 800 people during the country’s 18-day revolution.
The acquittals were seen as especially provocative because they followed by one day a separate Cairo court decision to release on bail seven police officers charged with killing 17 protesters and wounding 350 in the city of Suez during the revolution. That decision set off a riot at the courthouse and led protesters to block a major highway for hours.
The decisions have aggravated growing anger at the military council now running the country. It has faced mounting criticism from protesters who say it is too slow to prosecute former officials, yet has moved quickly and aggressively to prosecute hundreds of civilians before military courts in connection with pro-democracy activities.
“People see more and more that nothing is changing,” said Lilian Wagdy, who is helping to organize a large protest in Tahrir Square on Friday. “Those who have been robbing this country for 30 years get acquitted, while protesters are found guilty before military courts.”
The final figures show that the median pay for top executives at 200 big companies last year was $10.8 million. That works out to a 23 percent gain from 2009. The earlier study had put the median pay at a none-too-shabby $9.6 million, up 12 percent.
Total C.E.O. pay hasn’t quite returned to its heady, prerecession levels — but it certainly seems headed there. Despite the soft economy, weak home prices and persistently high unemployment, some top executives are already making more than they were before the economy soured.
Pay skyrocketed last year because many companies brought back cash bonuses, says Aaron Boyd, head of research at Equilar. Cash bonuses, as opposed to those awarded in stock options, jumped by an astounding 38 percent, the final numbers show.
Granted, many American corporations did well last year. Profits were up substantially. As a result, many companies are sharing the wealth, at least with their executives. “We’re seeing a lot of that reflected in the pay,” Mr. Boyd says.
The preliminary and final studies put Philippe P. Dauman, the chief executive of Viacom, at the top of the list. Mr. Dauman made $84.5 million last year, after signing a new long-term contract that included one-time stock awards.
Leslie Moonves, of the CBS Corporation, got a 32 percent raise and reaped $56.9 million. Michael White of DirecTV was paid $32.9 million, while Brian L. Roberts of the Comcast Corporation and Robert A. Iger of the Walt Disney Company each received pay packages valued at $28 million.
“Media firms seemed to be paying a lot,” said Carol Bowie, head of compensation policy development at ISS Governance, which advises large investors on corporate governance issues like proxy votes. “Media companies in general tend to be high-payers, and they tend to feed off each other.”
Other big payers included oil and commodities companies like Exxon Mobil and a few technology giants like Oracle and I.B.M.
Some of the other highly paid executives on the new list who were not in the April survey are Gregg W. Steinhafel of Target, who had a $23.5 million pay package; Michael E. Szymanczyk of Altria, $20.77 million; and Richard C. Adkerson of Freeport-McMoRan Copper & Gold, $35.3 million.Republicans want to abolish your Medicare, your Social Security, even your roads, all so these guys can keep their 6 or 8 (or more, who knows) vacation homes with Lambos parked in front of each of them.
Rennie Gibbs is accused of murder, but the crime she is alleged to have committed does not sound like an ordinary killing. Yet she faces life in prison in Mississippi over the death of her unborn child.
Gibbs became pregnant aged 15, but lost the baby in December 2006 in a stillbirth when she was 36 weeks into the pregnancy. When prosecutors discovered that she had a cocaine habit – though there is no evidence that drug abuse had anything to do with the baby's death – they charged her with the "depraved-heart murder" of her child, which carries a mandatory life sentence.
Gibbs is the first woman in Mississippi to be charged with murder relating to the loss of her unborn baby. But her case is by no means isolated. Across the US more and more prosecutions are being brought that seek to turn pregnant women into criminals.
[...]
Bei Bei Shuai, 34, has spent the past three months in a prison cell in Indianapolis charged with murdering her baby. On 23 December she tried to commit suicide by taking rat poison after her boyfriend abandoned her.
Shuai was rushed to hospital and survived, but she was 33 weeks pregnant and her baby, to whom she gave birth a week after the suicide attempt and whom she called Angel, died after four days. In March Shuai was charged with murder and attempted foeticide and she has been in custody since without the offer of bail.
In Alabama at least 40 cases have been brought under the state's "chemical endangerment" law. Introduced in 2006, the statute was designed to protectchildren whose parents were cooking methamphetamine in the home and thus putting their children at risk from inhaling the fumes.
Amanda Kimbrough is one of the women who have been ensnared as a result of the law being applied in a wholly different way. During her pregnancy her foetus was diagnosed with possible Down's syndrome and doctors suggested she consider a termination, which Kimbrough declined as she is not in favour of abortion.
The baby was delivered by caesarean section prematurely in April 2008 and died 19 minutes after birth.
Six months later Kimbrough was arrested at home and charged with "chemical endangerment" of her unborn child on the grounds that she had taken drugs during the pregnancy – a claim she has denied.
"That shocked me, it really did," Kimbrough said. "I had lost a child, that was enough."
But then, for about the thousandth time, my mind wanders over the past ten years. Republicans got the tax cuts they wanted. They got the financial deregulation they wanted. They got the wars they wanted. They got the unfunded spending increases they wanted. And the results were completely, unrelentingly disastrous. A decade of sluggish growth and near-zero wage increases. A massive housing bubble. Trillions of dollars in war spending and thousands of American lives lost. A financial collapse. A soaring long-term deficit. Sky-high unemployment. All on their watch and all due to policies they eagerly supported. And worse: ever since the predictable results of their recklessness came crashing down, they've rabidly and nearly unanimously opposed every single attempt to dig ourselves out of the hole they created for us.
But despite the fact that this is all recent history, it's treated like some kind of dreamscape. No one talks about it. Republicans pretend it never happened.
Fox's Bolling: Focusing On Corporate Tax Breaks Was "Not Fair" And "Was A Class Warfare."
Dobbs: Obama's Speech Was "Straightforward Class Warfare"
Limbaugh: "Obama Once Again Cranking Up The Class Warfare."
Beck: Obama "Launched An Unprecedented Class Warfare" On The "Private Jet Class."
Drudge: "Obama Launches Class Warfare."
RedState: Obama Went "Straight For The Class Warfare Jugular."
Then there are the more subtle subsidies and protections. Take regulatory forbearance. In 2009, regulators gave banks a gift on their commercial real estate loans. They allowed banks to look primarily at whether the loans were current, rather than at whether the underlying value of the property had declined. Of course, given the commercial real estate collapse, this had the effect of protecting banks from write-downs.
Banks and regulators say this is justified because an underwater borrower isn’t necessarily going to default. True, but it’s hard to see how those borrowers — and therefore the banks — are better off for the crash in their collateral.
[...]
Another way taxpayers coddle the biggest banks is by implicitly guaranteeing their derivatives business. JPMorgan, widely viewed as safe and well managed, is a huge beneficiary here. It had $79 billion worth of derivatives on its books in the first quarter. Even if it’s hedged, prudent and has thin margins, it’s still going to throw off a nice chunk of profits.
Institutions on the other side of these trades wouldn’t enter contracts without believing that they have some underlying protection — protection that comes from the government.
“No sensible person would put a nickel on deposit in the normal course given the enormity and opacity of the derivatives portfolios,” said Amar Bhidé, a former trader and business professor at the Fletcher School. “It’s entirely a function of deposit insurance and the implicit guarantee that the JPMorgan counterparties have.”
The government’s actions in the financial crisis only cemented that certainty. Counterparties and investors that were previously not guaranteed, like holders of money market funds, were protected at every turn.
This bailout never ended. “In effect, we nationalized the biggest banks years ago,” Mr. Allison said. “We implicitly guaranteed them. The taxpayers are still the ultimate owners of the risk in those banks — they just don’t get equity returns for that ownership.”
