Memo to Tea Baggers: You've Been Had!

For months, I've been trying to point out to my Tea Party supporting friends just how stupid their self-delusions truly are.

And not just how their fundamental principles & philosophies are inherently incoherent, inconsistent and fundamentally flawed (e.g., see much of my blog). Indeed, I have tried to illuminate the utter gullibility of hitching their stars to the Republicon wagon, arguing that they are being co-opted into supporting a Corporatist plutocracy, a conspiracy that is diametrically opposed to - and entirely uncaring for - their supposed grass roots movement championing individual liberty.

Undeterred by scientific evidence that their entire worldview is a mild form of insanity, and cinching their reality-stifling ear muffs ever tighter around their already constricted craniums, Tea Baggers and disaffected centrist independents march on boldly like lemmings into the abyss. Blithely voting against their own self-interest.out of blind, unthinking anger, they have been played as suckers.

Let the Sell Out begin!

Now, less than 48 hours after sweeping to electoral victory in the mid-terms, propelled like detritus on the storm surge of the Tea Party tsunami, Republicons are showing their true colors... and betraying virtually every Tea Party priority promulgated over the last 18 months:

First, while election tallies are still coming in, Rep. Marsha Blackburn (R - Tennessee) adamantly asserts that tax cuts (NOT deficit reduction) will be priority one:


[Never mind the fact that even Rep. Erid Cantor's (R - Virginia) admitted weeks ago on national TV that extending Bush tax cuts for the rich WILL increase the deficit:
]


Next, within the next 24 hours Sen. Jim DeMint (R - So. Carolina) stipulates that, of course he's going to vote to raise the debt limit. Wait a minute... weren't these Tea Party scions supposed to be reducing government debt?

But the real clincher that ties it all together comes just this morning with Rep. Spencer Bachus' (R - Alabama) stunning, unabashed demand e-mailed to Treasury Sec'y Geithner & SEC regulators to NOT enforce the Volcker Rule, so that Goldman Sachs & JP Morgan Stanley can continue the exact same rapacious, speculative casino gambling for which we had to bail out Wall Street. But, I thought the whole Tea Bagger movement originated out of disgust for the bailouts & anger over Wall Street bonuses?


I [almost] don't want to say "I told you so!", but... "I told you so!"

"The ground for taking ignorance to be restrictive of freedom is that it causes people to make choices which they would not have made if they had seen what the realization of their choices involved."

Sir Alfred Jules Ayer, The Concept of Freedom, The Meaning of Life and Other Essays (1990)

 And so, rousing themselves from bed after a drunken one night stand with some fat, ugly chick who looked better the night before when the haze of alcohol was in full effect, Tea Baggers are slowly awakening to the strange bedfellow they have been spooning in their sleep.

How long until until the fog clears and they begin asking themselves frantically: "What the hell did I just do?"

Economist's View: "US Elections: The Deficit Hawks Have Already Won"

Economist's View: "US Elections: The Deficit Hawks Have Already Won":

Mark Thoma cites:

"Jeff Madrick at Triple Crisis: US Elections: The Deficit Hawks Have Already Won, by Jeff Madrick:
Austerity economics has won in Europe. But there is a mythology ... that the U.S., at least, has retained the Keynesian orientation... Not so. The deficit hawks have also largely won in the U.S. The announcement last week that GDP grew at an annual rate of 2 percent only brings the point home: the U.S. needs a serious fiscal injection quickly. But it is not going to get it. ...

Unemployment stands at 9.6 percent and underemployment above 17 percent. The Congressional Budget Office figures GDP could be six percentage points higher before the economy reaches full capacity—that is, before inflation is any real threat. ... With such weakness, a substantial fiscal stimulus will likely have a high multiplier if it is designed correctly– aid to the states, unemployment insurance, some serious investment in infrastructure, and federal employment of idle workers.

But the deficit hawks, backed by many millions of dollars from powerful interests, will hear none of this. ... The fear-mongering has suppressed serious discourse about the need for stimulus now.

President Obama has himself joined the deficit hawks by endorsing a fiscal commission to find ways to reduce the future deficit. ... The administration is also endorsing a three-year freeze on discretionary spending.

With no strong sponsors for stimulus in Washington, the likelihood that the American economy will muddle along at high unemployment rates is now great. Quantitative easing by the Fed won’t do the trick alone. Lower rates are only one side of the equation, demand for loans and investment in a growing economy is the critical other side. Oh, that’s, right, that’s Keynesianism. ...

The deficit hawks now have their sights on bigger game, however. The main cause of the sudden deficit surge is the recession, and after that, the Bush tax cuts and war spending. But the deficit hawks are targeting Social Security, Medicare and Medicaid, which have had nothing to do with the sudden deficit increase.

Their advocacy is based on a disinformation campaign, one so effective they seem to fool themselves. They talk mostly about how an aging population will place an impossible burden on American children when they reach adulthood. And then they focus on Social Security, I suppose because it is the biggest social program out there—so far, that is.

As the CBO notes time and again, however, Social Security payments will only rise from 5 percent to 6 percent of GDP in the 2030s or so and then stay there. Medicare and Medicaid payments will rise from 5 percent of GDP to 10 percent in 2035 and 13 percent in 2050.

Why all the talk about reducing Social Security benefits, then? ... Medicare and Medicaid are going up much faster, not due to aging but mostly because health care costs in general in the U.S. will rise so rapidly. ...

Let’s get Social Security off the table. Let’s put back on the table serious health care reform and then serious increases in taxes to close the looming fiscal gap. We can get the long-term budget deficit down to 3 percent of GDP and not cut social programs, which are among America’s greatest achievements."

Yep.

- Sent using Google Toolbar"

Bozat agrees. 'Nuff said.

Thomas Frank: Bring Back Glass-Steagall

Thomas Frank: Bring Back Glass-Steagall: "- Sent using Google Toolbar"

Glass-Steagall, the 1933 Depression Era act that erected barriers between commercial banks and investment banks, was one of the tools that earlier generations relied upon to prevent "too big to fail". Its repeal in 1999 by the Gramm-Leach-Blilley Act (GLBA) removed those barriers and deregulated swap derivatives. These two factors contributed to the creation of the out-sized, overly-leveraged & systemically-risky financial enterprises that ultimately were either:

• bailed out via TARP, the Fed and [to a lesser extent] the Recovery Act (a/k/a the stimulus); or,

• merged into even larger, more concentrated institutions that are now even more "too big to fail".

Democraps - in this case, then Pres. Clinton and the then minority House - and the Republicon Congress were both responsible.

Clinton signed it. House Dems intiially supported it by roughly a 2-to- 1, while Senate Dems initially voted 43 - 1 against it.

Republicons both sponsored the legislation (all three primary named sponsors are Reps) and overwhelmingly voted for it in both houses of Congress by a margin of roughly 22-to-1.

The repeal of Glass-Steagall was the long-held desire of a particular business special interest, the financial industry (widely, since at least the early '80s; more narrowly even earlier). Accordingly, it had been a target for conservative, free market, big business-favoring Republicons for virtually as long. Democraps eventually came to compromise on its passage in exchange for enhanced Community Reinvestment Act (CRA) provisions aimed at minority access to credit and some privacy concerns. In hindsight, they bargained to cheaply.

Much more should have been required in compensation for the risk - which was actualized - of financial system meltdown & the ensuing Great Recession + high joblessness.

Besides Thomas Frank's critique headlined above, a number of other commentators have remarked on this:

• Ekelund, Robert; Thornton, Mark (2008-09-04). "More Awful Truths About Republicans". Ludwig von Mises Institute. http://mises.org/story/3098.

• The Gramm connection. Paul Krugman. The New York Times.

• Who's Whining Now? Gramm Slammed By Economists. ABC News.

• John McCain: Crisis Enabler. The Nation.

The last three critics are dismissed as 'lamestream' media with a liberal bias; that does not mean, however, their criticisms are not valid.

The first is from the Ludwig von Mises Institute, the last bastion of one wing of the Austrian School of economics, a conservative libertarian free market school of thought that is often cited & highly regarded by Tea Baggers and Club for Growth types (i.e., Friends of the Koch Bros.). Including the Maine Tea Party, who wrote the Maine Republican Party platform for the 2010 elections. You should read it sometime; borderline Glenn Beckian in its worldview. Yikes.

Of course, there have been defenders, including the original sponsors and ex-Pres. Clinton:

• Gramm-Leach-Bliley at Ten: Financial Reform or Fuel for the Crisis.

• Calabria, Mark A. (July/August 2009). "Did Deregulation Cause the Financial Crisis?". Cato Institute. http://www.cato.org/pubs/policy_report/v31n4/cpr31n4.pdf.

• Bartiromo, Maria (2008-09-24). "Bill Clinton on the Banking Crisis, McCain, and Hillary". BusinessWeek

• Phil Gramm, "Deregulation and the Financial Panic", opinion pages of The Wall Street Journal.

• Hindsight regulation. Megan McArdle. Atlantic Monthly.

• Villain Phil. National Review.

The last five defenders are all identifiably conservative sources. The first, a panel discussion hosted by Suffolk University, is neutral, and includes criticisms, not just excuses.

There are no liberal/progressive defenders.

Clearly, GLBA did not all by itself cause the housing bubble and is only a contributor to the financial crisis.

But, overall, on the question of whether repeal of Glass-Steagall was a mistake, I have to come down on the side of Stiglitz, Krugman et al. The conservative naysayers are not convincing. Maybe in some future post I'll delve into why I am not convinced? For now, I leave it to you to take a look for yourself...