Month: August 2011

Talk About Damning With Faint Praise…

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One of the memes about Barack Obama is that his constant capitulation and negotiating with himself is some sort of eleven dimensional chess.

I think that this is unmitigated bullsh%$, and I think that James Fallows does too, but one of his readers buys into it seriously, but turns what he considers to be a compliment into an insult by comparing Barack Obama to Chess master Bobby Fischer.

For those of you who are unfamiliar with Fischer, he is a classic example of someone who by hubris and temperament destroyed himself, and whatever skills he might have had in chess, they never translated to anything useful, even before his descent into paranoia, mental illness, and bigotry.

He was a man so unpleasant, that much of the American public was rooting for the Russian when he won his Chess championship.

The reader states that, “From a political and a policy standpoint, he’s pushed the Republicans so far to the right that they are called terrorists without humor by the national media.” is so lost the alternate reality of the Obama fanboi it beggars belief.

I rather think that Fallows found this provocative, and published this even though he is dubious of this theory; he is no way a fanboi.

In any case, I look forward to reading his readers responses.

S&P Downgrades the US, Well, Isn’t That Special

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Well, Isn’t that Special!!

Standard and Poors has just downgraded the United States from AAA to AA+.

I think that Jane Hamsher and Scarecrow have nailed what is going on here. This is a shakedown by the credit ratings agencies:

On July 21, 2010 President Obama signs Dodd-Frank into law. Prior to Dodd-Frank, the courts found that credit ratings are expressions of opinion that were protected under the first amendment, subject to a demonstration of actual malice:

The Dodd-Frank Financial Reform Act stripped away those protections, so that CRA’s were now subject to the same expert liability as an auditor or securities analyst, and required only a “knowing” or “reckless” state of mind for liability, rather than proof of scienter. It also repealed Section 436 of the Securities Act of 1933, which granted “safe harbor” for ratings, which were part of a prospectus.

Which, for obvious reasons, made the ratings agencies extremely nervous.

In October 2010 S&P issued its first threat to downgrade US debt: “If the U.S. government maintains its current policies for the next 40 years in the face of rising health care and pension spending pressure, it is unlikely that Standard & Poor’s Ratings Services would maintain its ‘AAA’ rating on the U.S.” The report paints a target on the back of Social Security and Medicare, says nothing about the wars, the Bush tax cuts, private health care costs or the absurdity of 40 year projections.

………

It’s becoming more and more obvious that Standard and Poor’s has a political agenda riding on the notion that the US is at risk of default on its debt based on some arbitrary limit to the debt-to-GDP ratio. There is no sound basis for that limit, or for S&P’s insistence on at least a $4 trillion down payment on debt reduction, any more than there is for the crackpot notion that a non-crazy US can be forced to default on its debt.

Whatever S&P’s agenda, it has nothing to do with avoiding default risks or putting the US on sound fiscal footing. It appears to be intertwined with their attempts to absolve themselves from responsibility for their role in the 2008 financial crisis, and they are willing to manipulate not only the 2012 election but the world economy to escape the SEC’s attempts to regulate them.

It’s time the media and Congress started asking Standard and Poors what their political agenda is and whom it serves.

Note that Dodd-Frank also lifted some statutory requirements mandating the use of  ratings from accredited agencies as well, so the big 3 (S&P, Moodys, Fitch’s) have even more reason to hate the bill, and are trying to sabotage them at the rule-making stage.

Note that this was written a week ago, and a quick read of the S&P statement (first link) sounds like a hit job, some to the effect of, “That Dodd-Frank thing displeases us, it would be a shame for anything to happen to your credit rating.”

ECB Concludes that Gasoline is not the Best Way to Put Out a Fire

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David Bowie Says the Same

The European Central Bank has caught a clue, and realized, for this month at least, that there is no threat of inflation, so they are buying bonds and not raising their interest rates.

So, after pointless and stupid rate hikes in the teeth of a recession, they have decided that perhaps they were being stupid with their focus on non-existent inflation.

Seriously, if there has been a central bank that a greater record of rank incompetence on dealing with a recession, I’d be hard pressed to name it.

In all fairness, I would note that ECB is very limited in its charter.  Unlike the Federal Reserve, for example, is has no duty to maintain stable employment, just to forestall inflation, and so it’s all that they look for.

Please God Let This Stand on Appeal

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For the second time, a court has allowed a suit to proceed against Donald Rumsfeld for ordering the torture of an American citrizen:

A federal judge has ruled that former Defense Secretary Donald H. Rumsfeld can be sued personally for damages by a former U.S. military contractor who says he was tortured during a nine-month imprisonment in Iraq.

The lawsuit lays out a dramatic tale of the disappearance of the then-civilian contractor, an Army veteran in his 50s whose identity is being withheld from court filings for fear of retaliation. Attorneys for the man, who speaks five languages and worked as a translator for Marines collecting intelligence in Iraq, say he was preparing to come home to the United States on annual leave when he was abducted by the U.S. military and held without justification while his family knew nothing about his whereabouts or even whether he was still alive.

The government says he was suspected of helping pass classified information to the enemy and helping anti-coalition forces get into Iraq. But he was never charged with a crime, and he says he never broke the law and was risking his life to help his country.

Court papers filed on his behalf say he was repeatedly abused while being held at Camp Cropper, a U.S. military facility near the Baghdad airport dedicated to holding “high-value” detainees, then suddenly released without explanation in August 2006. Two years later, he filed suit in U.S. District Court in Washington arguing that Rumsfeld personally approved torturous interrogation techniques on a case-by-case basis and controlled his detention without access to courts in violation of his constitutional rights.

Chicago attorney Mike Kanovitz, who is representing the plaintiff, says it appears the military wanted to keep his client behind bars so he couldn’t tell anyone about an important contact he made with a leading sheik while helping collect intelligence in Iraq.

“The U.S. government wasn’t ready for the rest of the world to know about it, so they basically put him on ice,” Kanovitz said in a telephone interview. “If you’ve got unchecked power over the citizens, why not use it?”

The Obama administration has represented Rumsfeld through the Justice Department and argued that the former defense secretary cannot be sued personally for official conduct. The Justice Department also argued that a judge cannot review wartime decisions that are the constitutional responsibility of Congress and the president. And the department said the case could disclose sensitive information and distract from the war effort and that the threat of liability would impede future military decisions.

But U.S. District Judge James Gwin rejected those arguments and said U.S. citizens are protected by the Constitution at home or abroad during wartime.

“The court finds no convincing reason that United States citizens in Iraq should or must lose previously-declared substantive due process protections during prolonged detention in a conflict zone abroad,” Gwin wrote in a ruling issued Tuesday.

…………

In many other cases brought by foreign detainees, judges have dismissed torture claims made against U.S. officials for their personal involvement in decisions over prisoner treatment. But this is the second time a federal judge has allowed U.S. citizens to sue Rumsfeld personally.

U.S. District Judge Wayne R. Andersen in Illinois last year said two other Americans who worked in Iraq as contractors and were held at Camp Cropper, Donald Vance and Nathan Ertel, can pursue claims that they were tortured using Rumsfeld-approved methods after they alleged illegal activities by their company. Rumsfeld is appealing that ruling, which Gwin cited.

In a just world, Rumsfeld should be under criminal investigation, actually, by this point, he should be in jail, but the best that we can expect right now is that a private citizen might get a civil judgement, because Barack Obama decided to be complicit in the cover-up.

Can you say accessory after the fact?  Good, I knew you could.

Signs of the Apocalypse: I think That Larry Summers is Right

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He is saying that we are in danger of having a double dip recession:

On the current policy path, it would be surprising if growth were rapid enough to reduce unemployment even to 8.5 percent by the end of 2012. A substantial withdrawal of fiscal stimulus will occur when the payroll tax cuts expire at the end of the year. With growth at less than 1 percent in the first half of this year, the economy is effectively at a stall and facing the prospects of shocks from a European financial crisis that is decidedly not under control, spikes in oil prices and declines in business and household confidence. The indicators suggest that the economy has at least a 1-in-3 chance of falling back into recession if nothing new is done to raise demand and spur growth.

Considering Larry Summers’ record, I would put this to a stopped clock being right twice a day, but I agree with him.

Guess What, The ADP Employment Numbers Suck

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Their report on job activity in the service sector is the weakest it has been in over a year:

The pace of growth in the services sector ticked down unexpectedly in July to the lowest level since February 2010 and the number of jobs created by the private sector also slowed, reports showed on Wednesday.

Taken alongside disappointing data on the manufacturing sector earlier in the week, the services data showed an economy that was frustrating hopes for a rebound in the second half of the year after a very weak first half.

“It looks like this confirms that we are in a bit of a soft patch here,” said Rudy Narvas, senior economist at Societe Generale in New York.

Gee Rudy, you think?

It’s getting to be a habit:  The economy looks a little bit better, Washington declares victory on the recession, backs off, and we slide back into the abyss.

It’s 1937 over, and over, and over, and over, again.

I Agree With Matt Taibbi

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His thesis is that Obama’s capitulation is by design, not by timidity and cowardice:

But to a bunch of hired stooges put in office to lend an air of democratic legitimacy to what has essentially become a bureaucratic-oligarchic state, what good does such advice do? Would it have made sense to send the Supreme Soviet under Andropov or Brezhnyev a list of policy ideas for enhancing the civil liberties of Soviet citizens?

The Democrats aren’t failing to stand up to Republicans and failing to enact sensible reforms that benefit the middle class because they genuinely believe there’s political hay to be made moving to the right. They’re doing it because they do not represent any actual voters. I know I’ve said this before, but they are not a progressive political party, not even secretly, deep inside. They just play one on television.

For evidence, all you have to do is look at this latest fiasco.

………

We probably need to start wondering why this keeps happening. Also, this: if the Democrats suck so bad at political combat, then how come they continue to be rewarded with such massive quantities of campaign contributions? When the final tally comes in for the 2012 presidential race, who among us wouldn’t bet that Barack Obama is going to beat his Republican opponent in the fundraising column very handily? At the very least, he won’t be out-funded, I can almost guarantee that.

And what does that mean? Who spends hundreds of millions of dollars for what looks, on the outside, like rank incompetence?

It strains the imagination to think that the country’s smartest businessmen keep paying top dollar for such lousy performance. Is it possible that by “surrendering” at the 11th hour and signing off on a deal that presages deep cuts in spending for the middle class, but avoids tax increases for the rich, Obama is doing exactly what was expected of him?

It’s a much simpler thesis than all encompassing incompetence juxtaposed with a messianic complex.

I’ve used the term “Manchurian Democrat,” but Tiabbi is a much better writer.

Quote of the Day

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I just realised that plenty of mainstream US Democrats, having spent the last however long castigating people to the left of them for perceiving some progressive tendencies in the government of Fidel Castro, are now reduced to supporting the re-election of a President who imprisons people without human rights in Cuba, but who has made excellent advances in the field of bringing healthcare to the poor.

—D-Squared Digest

It’s like reading The Onion.  I don’t know whether to laugh or to cry, though I think that any improvements on bringing healthcare to the poor is over stated.

F%$# You Barry

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As you may or not be aware, the Obama administration has regular meetings with liberal groups, it’s called “Common Purpose”, but it’s better known as the “Veal Pen”.

It’s basically used to ensure that they don’t do anything of value, ever, because the Obama staffers are control freaks, and because they are too busy pandering to reactionaries.

Well, things got a bit stroppy at the last veal pen, and so a senior administration official blamed liberals for Obama’s craven surrender:

Yesterday, Sperling faced a series of questions about the White House’s concessions on the debt ceiling fight and its inability to move in the direction of new taxes or revenues. Progressive consultant Mike Lux, the sources said, summed up the liberal concern, producing what a participant described as an “extremely defensive” response from Sperling.

Sperling, a person involved said, pointed his finger at liberal groups, which he said hadn’t done enough to highlight what he saw as the positive side of the debt package — a message that didn’t go over well with participants.

There is always the excuse that it’s just one person it’s not representative of the administration attitudes, but you hear this sort of crap over, and over, and over again from members of the administration, including one Barack Hussein Obama.

Basically, it’s always liberals fault, and they hate those uncouth hippies, and they know that if they punch them hard enough, that everything till turn out well.

H/t Americablog.

Holy Sh%$ (Economics Edition)

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Remember the recession? Well it turns out it was much worse than we were led to believe at the time:

Two days after that, Americans received grim news about the economy: in the fourth quarter of 2008, GDP contracted at a 3.8% annual pace—the worst quarterly performance since the deep recession of 1982. More bad news hit on February 6th, when the BLS released new labour market figures. It reported an employment decline of 598,000 in January, following on revised drops in employment of 577,000 in December and 597,000 in November—a three-month drop of 1.8m jobs. On February 10th, the Senate passed its version of the stimulus, worth $838 billion. In conference committee, the bill shrank to $787. On February 17th, Mr Obama signed the bill into law.

In the months and years that followed, Washington provided additional support to the economy, perhaps ultimately contributing approximately $1 trillion in total stimulus. But that first bill was the big bite at the apple. The White House looked at the economic situation, sized up Congress, and took its shot. Unfortunately, the situation was far more dire than anyone in the administration or in Congress supposed.

Output in the third and fourth quarters fell by 3.7% and 8.9%, respectively, not at 0.5% and 3.8% as believed at the time. Employment was also falling much faster than estimated. Some 820,000 jobs were lost in January, rather than the 598,000 then reported. In the three months prior to the passage of stimulus, the economy cut loose 2.2m workers, not 1.8m. In January, total employment was already 1m workers below the level shown in the official data.

OMFG!

That’s depression level of contraction.

So, not only was the this recession the worst since the Great Depression, but it was even worse than first reported.

And so the stimulus in 2009 was even more inadequate than was previously reported.

This is why moderation in such situations is so disastrous.

Not Good At All

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The economy, and I don’t mean the furshlugginer debt bill, just showed us that if we aren’t headed for a double we aren’t in for a recovery either, as consumer spending has just fallen for the first time in two years, probably because scared consumers are scared, and so paying down their credit cards instead of spending money.

And today, the Obama administration is announcing that they are pivoting to jobs, after going full out for a debt reduction deal that will slow the economy and cost jobs.

This isn’t closing the barn door after the cow has gotten out, this is closing the barn door after you let the cow out, and shot it dead.

And the Debt Deal Keeps On Giving

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There are now serious concerns that Obama’s debt capitulation, which is rather similar to much of the Republican agenda passed in Wisconsin in the last two months, is likely to demoralize potential voters and volunteers.

It’s bad enough that the Republicans are once again corruptly trying to misinform voters and suppress voting, but now the we’ve got Obama’s cave to further discourage the Democratic party grass roots.

He’s the Manchurian Democrat.  Cuel Tom Tomorrow:

More Foreign Worker Visa Fraud

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It turns out that notorious software off shoring operation Infosys decided at some point that cheating H1b visa fraud was too damn much time and money so they have become more inventive:

In a case that threatens to scald Infosys in the North American market, from where it gets over 60% of its revenues, and intensify the debate on outsourcing in the US, Jack Palmer said the company was circumventing H-1B visa rules by sending low-level and unskilled employees to the US on B1 visas instead.

H-1B visas, which are needed to send employees to work in the US, have become more expensive and harder to get than B1 visas that are only meant for meeting, conferences and business negotiations. Palmer, who has been working with the company since 2008, further said that Infosys managers in the US were intentionally committing fraud to avoid paying taxes locally and that the company mistreated him when he filed a complaint as part of the whistleblower policy.

Outsourcing has been an inflammable issue in the US as it continues to struggle with high unemployment. The Indian IT services have often been accused of taking away American jobs to cheaper destinations. This anti-outsourcing sentiment has also resulted in visa norms becoming more stringent in the past few years.

This raises an interesting point.

My solution to H1b visa abuse, it’s largely used to bring in cheap labor and depress wages, is to raise the cost of the application and permitting process, but obviously this would tend to drive exactly this sort of fraud.

I’m beginning to think a bounty program, with people who rat out their employers getting 3 to 5 year work permits, might be the most effective way to deal with enforcing the laws.

H/t Naked Capitalism.

Quote of the Day

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I feel about this the way I feel about people who keep grizzly bears and gorillas and tigers as pets. They keep animals that outweigh them as pampered houseguests, feeding them raw salmon and steak and putting cute little collars on them and sh%$, and then are ABSOLUTELY SHOCKED when their “best friends” get bored one day and eat their faces.

—Athenae from First Draft

(%$ mine)

She was noting that David Frum is shocked, absolutely shocked, that the modern Republican party has been taken over by the insane fringe that they have pandered to for decades.

The question was never “if” but when the inmates would seize the asylum.

Note that Frum is what passes for a deep thinker from the ‘Phants.