The Commentariat -- August 8

We are now in our fourth day with no comments facility, and I have moved past anger to despair. Poor, pitiful us. On a grander scale, speaking poor pitiful us ...

Paul Krugman: "... there is no reason to take Friday’s downgrade of America seriously. These are the last people whose judgment we should trust. And yet America does have big problems." ...

... John Cassidy of the New Yorker looks at both sides & disagrees with Krugman: "In focussing attention on the dysfunction in Washington and making the participants pay a price, S. & P. was performing a valuable public service." ...

... The Tea Party Bites the Hand that Feeds It. James Surowiecki of the New Yorker: "Once games of chicken become the accepted way to resolve budget issues, the U.S. economy will become a much riskier place." But the deficit deal "hurts business in more concrete ways." ...

... "Bleak Prospects." Krugman: "The economics team at Goldman Sachs, whom I’ve always found very good, now say ... 'We have lowered our growth forecast further and now expect real GDP to increase just 2%-2½% (annualized) through the end of 2012.'" ...

... ** Bill Saporito of Time: why Congress & S&P deserve each other: Congress gave S&P its power, refused to rein in S&P after its irresponsibility played a huge role in the 2008 financial collapse. The kicker, of course, is that the taxpayer pays for both S&P's & Congress's misdeeds: "... a jump of a single percentage point in the interest rate the federal government pays [which is likely because of the S&P downgrade] will more than wipe out the savings anticipated by the current debt deal."

... Charlotte Rampell of the New York Times: "If the economy falls back into recession, as many economists are now warning, the bloodletting could be a lot more painful than the last time around.... The economy is much weaker than it was at the outset of the last recession in December 2007, with most major measures of economic health — including jobs, incomes, output and industrial production — worse today than they were back then. And growth has been so weak that almost no ground has been recouped, even though a recovery technically started in June 2009."

CW: Why does Not-President Kerry have more guts that President Obama? Heather of Crooks & Liars has the transcript.

Worst Ever. Steve Benen on the Republicans' hostage-taking of the U.S.'s "full faith and credit": "If we stick to domestic politics since the Civil War, can any other major-party scandal match this? Nothing comes to mind."

John Cassidy: "A substantive jobs bill is what’s called for, and the White House should send one to Congress as soon as possible after it returns from the summer recess.... The real barrier to a meaningful jobs program is not the markets or the ratings agencies but the G.O.P. If the Republicans were to vote down a jobs bill, however, it would hurt not only the economy but also, potentially, their own prospects. Meanwhile, for a Democratic President, especially one who has disappointed many of his supporters, campaigning as someone who fought to create jobs, rather than as a copycat budget cutter, would seem a winning strategy."

** U.S. Companies to U.S.: "Buh-Bye." Don Lee of the Los Angeles Times: "Many major U.S. companies are making big plans to expand overseas even as some of them announce new layoffs at home, and there's a chilling reason why: They're beginning to give up on the American consumer as a source of future growth.... In effect, as many corporate executives look ahead, the United States has a diminishing place in their thinking.... That shifting focus is one reason new job growth here has slowed to a trickle in recent months.... Big multinational firms are adding droves of sales and marketing employees in countries such as China, India and Brazil — even as many cut back or hold the line on employment and other spending at home." CW: this helps explain why American banksters & other corporate leaders continue to ask for & get tax breaks that worsen the American economy & increase income disparity. They don't give a flying fuck about the health of the U.S. economy or the U.S. consumer because they have new opportunities elsewhere. Let's ask GE CEO Jeff Immelt, the head of Obama's so-called jobs council, what to do.

CW: I missed Karen Garcia's analysis of President Obama's weekly address, but it's still worth a read, not the least because of the remarks by Dennis Kucinich, whom Garcia quotes at length.

David Carr of the New York Times: "... a News Corporation [Murdoch, et al.] division has twice come under significant civil and criminal investigations in the United States, but neither inquiry went anywhere.... Both cases involve News America Marketing, an obscure but lucrative division of the News Corporation that is a big player in the business of retail marketing, including newspaper coupon inserts and in-store promotions. The company has come under scrutiny for a pattern of conduct that includes below-cost pricing, paying customers not to do business with competitors and accusations of computer hacking."

Junior. Sheryl Gay Stolberg of the New York Times on how Utah billionaire & philanthropist Jon Huntsman, Sr. gave his able son a political career.

Right Wing World *

Ryan Lizza of the New Yorker profiles Michele Bachmann: "Bachmann belongs to a generation of Christian conservatives whose views have been shaped by institutions, tracts, and leaders not commonly known to secular Americans, or even to most Christians. Her campaign is going to be a conversation about a set of beliefs more extreme than those of any American politician of her stature...." CW: It's a long article. Enjoy. Here's a fun bit about Bachmann's I.R.S. career:

Bachmann usually describes herself vaguely as a 'former federal tax litigation attorney.' ... but ... she didn’t do much litigating.... Two of Bachmann’s five children were born while she worked for the I.R.S., and ... Bachmann ... spent a good portion of her time on maternity leave — the I.R.S. had a fairly generous policy — and that caused resentment.... A colleague said, 'She was an attorney here, but she was never here.' ...

Definition of Chutzpah. This president has destroyed the credit rating of the United States through his failed economic policies and his inability to control government spending by raising the debt ceiling. President Obama is destroying the foundations of the U.S. economy one beam at a time. -- Rep. Michele Bachmann (R-Minn.) on S&P's lowering the U.S. credit rating. Bachmann refused to vote for any hike in the debt limit & said default would be no big deal. ...

... How to Get Good Press: Doh! Buy the Press. Maggie Haberman of Politico: New Hampshire radio host Jeff Chidester (or Chidestar) interviewed presidential contenders, including Michele Bachmann. You can bet it was a softball "interview" of Bachmann, since she was paying him as a consultant & shortly thereafter hired him as her New Hampshire campaign manager.

* Where every stupid thing you do is somebody else's fault & "ethics" is not in the dictionary.

Local News

Rob O'Dell of the (Tucson) Arizona Daily Star: " Banks that took bailout money were supposed to use part of the taxpayer-provided cash infusion to help customers avoid foreclosure, but instead, many of them are buying up struggling homeowners' tax debt. The tax liens earn banks up to 16 percent interest, and if homeowners don't repay their debt within three years the banks can foreclose on their homes. Since the bailout in 2008, major banks have bought nearly 6,000 tax liens in Pima County that total at least $15.8 million." There's a related item here. Thanks to Fred D. for the link. CW: if they're doing it Arizona, you can bet they're doing it in all 50 states.

News Ledes

Reuters: "Stock index futures tracked a sharp drop in global equity markets on Monday after rating agency Standard & Poor's cut the top-tier AAA credit rating of the United States, rattling already-jittery investors." ...

     ... New York Times Update: "Wall Street stocks plummeted on Monday as skittish investors, already concerned about the economy, struggled to work out the implications of an unprecedented downgrade of the United States government’s credit rating and sought safer places to put their money."

AP: "A besieged Syrian city came under fresh artillery fire early Monday as a deadly military assault left President Bashar Assad's regime increasingly isolated, with Arab nations forcefully joining the international chorus of condemnation for the first time. The renewed violence in the eastern city of Deir el-Zour comes a day after at least 42 people were killed there in an intensifying government crackdown on protesters." Here's Al Jazeera's liveblog.

New York Times: "Mark O. Hatfield, a liberal Republican who challenged his party’s positions on the Vietnam War and on a balanced-budget amendment to the Constitution during his 30 years as a Senator from Oregon, died on Sunday in Portland, Ore. He was 89." The Oregonian's obituary is here.

The Commentariat -- August 7

Still no Off Times Square, but I did finally get word that the techs are back working on it. Must be a complex problem!

** Prof. Drew Westen, in a New York Times op-ed, on the failed Obama presidency:

... the arc of history does not bend toward justice through capitulation cast as compromise. It does not bend when 400 people control more of the wealth than 150 million of their fellow Americans. It does not bend when the average middle-class family has seen its income stagnate over the last 30 years while the richest 1 percent has seen its income rise astronomically. It does not bend when we cut the fixed incomes of our parents and grandparents so hedge fund managers can keep their 15 percent tax rates. It does not bend when only one side in negotiations between workers and their bosses is allowed representation. And it does not bend when, as political scientists have shown, it is not public opinion but the opinions of the wealthy that predict the votes of the Senate. The arc of history can bend only so far before it breaks. ...

... Maureen Dowd on the failed Obama presidency: "'Yes, we can!' has devolved into 'Hey, we might.' ... The dissonance of his promise and his reality is jarring.” ...

... "The Madman Theory." Kurt Andersen of NPR: "... it's a pity Barack Obama isn't more like Richard Nixon." And another thing: Nixon was more liberal than Obama.

The political brinksmanship of recent months highlights what we see as America’s governance and policymaking becoming less stable, less effective, and less predictable than what we previously believed. -- Standard & Poors (full report here [pdf]) ...

... Blame the Tea Party. Felix Salmon of Reuters: Treasury takes a shot at Standard & Poors, but oops! they missed the mark. "Whatever else S&P is doing here, it isn’t repeating its mistakes of the subprime bubble.... Any student of sovereign default knows that it is born of precisely the kind of failures of governance that we saw during the debt-ceiling debate. That is why the US cannot hold a triple-A rating from S&P: the chance of having a dysfunctional Congress in future is 100%, and a dysfunctional Congress, armed with a statutory debt ceiling, is an extremely dangerous thing, and very far from risk-free." ...

     ... Here's the Treasury shot at S&P Salmon discusses. ...

... Edmund Andrews of the National Journal agrees with Salmon: "The big new element on Friday was an official outside recognition that U.S. creditworthiness is being undermined by a new factor: political insanity. S&P didn’t base its downgrade on a change in the U.S. fiscal and economic outlook. It based it on the political game of chicken over the debt ceiling, a game that Republicans initiated and pushed to the limit, and on a growing gloom about the partisan deadlock. Part of S&P’s gloom, moreover, stemmed explicitly from what a new assessment of the GOP’s ability to block any and all tax increases." ...

... Ezra Klein: "... the credit-rating agency model is broken and, at times, dangerous, and investors need to pay less attention to their pronouncements. But that doesn’t make Standard Poor’s wrong in this particular case.

... Jamie Klatell of The Hill: So then Jay Carney, John Boehner & Harry Reid take their positions in a triangular firing squad with dueling statements. ...

... Alexander Bolton of The Hill: "Liberals are growing frustrated with President Obama’s soft response to the Tea Party after fractious negotiations over the debt limit led to the loss of nation’s AAA credit rating on Friday. 'It’s hard to see how we avoid a Tea-Party recession if the president who has the biggest megaphone in the country is not willing to speak clearly on the issue,' Justin Ruben, executive director of MoveOn.org, told The Hill." ...

... How Fucked Are We? Pretty Darned Fucked -- Christina Romer:

... The Cantor Coup. Lori Montgomery, et al., of the Washington Post: "The frantic showdown that followed, bringing the nation to the brink of default, looked like the haphazard escalation of a typical partisan standoff. It wasn’t." ...

... ** Southern Saboteurs. Michael Lind in Salon: "Today's Tea Party movement is merely the latest of a series of attacks on American democracy by the white Southern minority, which for more than two centuries has not hesitated to paralyze, sabotage or, in the case of the Civil War, destroy American democracy in order to get their way." CW: still think the Civil War was a good idea? P.S. If you don't think there's a new flavor of racism in Republican Tea Party attacks on Obama Administration policies, then you don't know the South. Thanks to a reader for the link.

Paul Starobin in a New York Times op-ed: Whatever happened to Harold Koh? As dean of the Yale Law School, he was "one of the country’s foremost defenders of the notion that the president of the United States can’t wage wars without the approval of Congress." But as legal advisor to Hillary Clinton, Koh "has become the administration’s defender of the right to stay engaged in a conflict against Libya without Congressional approval."

Right Wing World

Mystery Solved, Legal Case Pending. Alexander Bolton of The Hill: "Edward Conrad, a former executive at Bain Capital, has revealed himself as the mystery donor who gave a $1 million corporate contribution to a special political action committee supporting Mitt Romney.... Campaign finance groups say the donation may have violated the law, which prohibits the use of straw donors to evade disclosure requirements."

News Ledes

Not Necessarily Good News. New York Times: "The Treasury secretary, Timothy F. Geithner, has told President Obama that he will remain in his position for the time being, the department announced on Sunday, ending speculation that he might step down soon."

New York Times: "Hugh L. Carey, the governor who helped rescue New York from the brink of financial collapse in the 1970s and tamed a culture of ever-growing spending, died Sunday at his summer home on Shelter Island. He was 92."

New York Times: "The day after Standard & Poor’s took the unprecedented step of stripping the United States government of its top credit rating, the ratings agency offered a full-throated defense of its decision, calling the bitter stand-off between President Obama and Congress over raising the debt ceiling a 'debacle.'”

Guardian: "World leaders are battling to prevent panic from spreading across financial markets as the sudden downgrading of the US credit rating triggered fears of global turmoil when stock exchanges open. Finance ministers from the G7 leading industrial countries -- many of them away on summer holiday -- agreed to a series of urgent weekend telephone talks to try to prevent a loss of confidence in the world's biggest economy. But the uncertainty grew when the Saudi market dropped by a massive 5.5%." ...

     ... Desperately Seeking Something. New York Times Update: "As the shock of Friday’s downgrade of United States debt reverberated dangerously with anxiety about European liabilities, central bankers and national leaders were under pressure to try to do something to restore confidence before Asian markets opened, and to prevent an extension of the rout that began last week. As Group of 20 leaders conferred by phone, the governing council of the European Central Bank was holding an emergency conference call late Sunday." ...

     ... New York Times story has been updated with this new lede: "The European Central Bank signaled late Sunday it would intervene more aggressively in bond markets to protect Spain and Italy, part of an increasingly forceful campaign by policymakers around the world to prevent deteriorating public finances and slower growth from provoking another financial crisis."

Al Jazeera: "The Syrian army has launched fresh assaults, reportedly killing dozens of people, as international condemnation of the violence against protesters continues to mount. Activists said troops stormed parts of the eastern city of Deir ez-Zor before dawn on Sunday, killing at least 20 people." Al Jazeera has a liveblog here.

AP: "One police officer was hospitalized and seven others were injured during riots in the Tottenham area of London, police said Sunday, after a demonstration against the death of a local man turned violent and cars and shops were set ablaze. The area in London's north exploded in anger Saturday night after a gathering to protest the Thursday shooting by police of the 29-year-old." Guardian liveblog here.

Stagecoach Economics

What's Good for the Banks Is Good for the Country.
-- Henry Gatewood

AND now, for something completely different. I never saw John Ford's 1939 film "Stagecoach." I thought it was "just a Western." Well, no, it's a morality play masquerading as a Western. I come to it via Krugman here, who comes to it by Digby here, & blogger Jerry Kutner here.

What struck them all was the character of the banker Henry Gatewood. He appears early in the film when he declares, "What's good for the banks is good for the country." Not much later, Gatewood steals $50,000 -- the payroll for the local mining company, which arrives in a Wells Fargo strongbox on the Wells Fargo stagecoach. (Sounds familiar already, doesn't it?) Gatewood stuffs the payroll money in a valise & takes the stagecoach out of town. Along the way, Gatewood says of the soldiers: "Always gives me great pride in my country when I see such fighting men in the U.S. Army." He later complains they're not doing enough to protect him.

What caught the attention of Krugman, Digby & Kutner is, as Krugman puts it, a "speech by Jamie Dimon the corrupt, embezzling banker who is the real villain of the piece," a speech Gatewood delivers with the valise full of stolen money on his lap:

I don’t know what the government is coming to. Instead of protecting businessmen, it pokes its nose into business! Why, they’re even talking now about having bank examiners. As if we bankers don’t know how to run our own banks! Why, at home I have a letter from a popinjay official saying they were going to inspect my books.

I have a slogan that should be blazoned on every newspaper in this country: America for the Americans! The government must not interfere with business! Reduce taxes! Our national debt is something shocking. Over one billion dollars a year! What this country needs is a businessman for president!

The speech begins at 33:57 into the video. You might want to watch the entire film (if you do, supersize it), which presents stock Western characters in a nuanced, complex light -- all except the banker Gatewood, that is. As Kutner says,

All of the characters riding inside Ford’s STAGECOACH are transformed by the experience – class prejudices are dissolved, the prostitute recovers her innocence, the doctor recovers his dignity, the meek man discovers his courage.  All of the characters change, that is, except for one - banker Gatewood who remains as obnoxious, hypocritical, and self-serving at the end of his journey as he was at the beginning.