Children With Matches, Playing in the Powder Magazine.

…That would be your present-day Republican party.

The just concluded budget skirmish was a mere amuse bouche to the gluttons-for-(other people’s)- punishment that is your modern GOP.   The New York Times reports today on what looks to be the mother of all budget battles to come over the vote to raise the debt limit.

I’m waiting for the chorus of the swaddled commentariat to tell us just how principled are Republican moves like these:

…they will again demand fundamental changes in policy on health care, the environment, abortion rights and more, as the price of their support for raising the debt ceiling

If they don’t get what they want, and actually block the Treasury from raising more obligations, then this is how the Grey Lady (no longer) of 43rd St. rather demurely describes the consequences:

Once the limit is reached, the Treasury Department would not be able to borrow as it does routinely to finance federal operations and roll over existing debt; ultimately it would be unable to pay off maturing debt, putting the United States government — the global standard-setter for creditworthiness — into default.

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The repercussions in that event would be as much economic as political, rippling from the bond market into the lives of ordinary citizens through higher interest rates and financial uncertainty of the sort that the economy is only now overcoming, more than three years after the onset of the last recession.

That is:  with still achingly high unemployment; wage stagnation; food and energy cost hikes; the rise (again) of the financial sector’s share of corporate profits nation wide; the increasingly worn safety net and all that, the GOP is threatening to make life worse on just about every economic and social axis imaginable.

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The irony is that it may be our last, best hope that the monied class will be able to tame the beast they’ve unleashed.  Here’s Jamie Damon, head of JP Morgan Chase and someone often seen as one of the non-monstrous Wall St. types:

“If anyone wants to push that button, which I think would be catastrophic and unpredictable, I think they’re crazy,” Mr. Dimon said recently at the United States Chamber of Commerce.

But the problem is that this is what he — and the rest of us — have to contend with:

Representative Mick Mulvaney… dismissed warnings about default as “just posturing,” and said Democrats should bear the responsibility for passing any measure to increase the borrowing limit.

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“It’s their debt,” he said. “Make them do it. That’s my attitude.”

Except, of course, this “Democrats did it” nonsense is simply false.   Here’s the key part of the Times piece, an all too rare fact-based description of where our current debt comes from:

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They’re Not Even That Consistent

I like the general theme of Sullivan’s bit about the meaninglessness of labels with respect to modern Republicans. However, this is simply wrong.

Income tax rates are now lower than they were under Ronald Reagan and far lower than they were under Eisenhower. And yet it has become a Norquistian non-negotiable that no taxes can be raised at all on anyone[…]

Republicans will gladly increase taxes on poor people. Republicans will annul tax credits that favor the poor even faster.

You cannot predict Republican behavior with any single principle. Full stop. For one example, take Newt Gingrich (please). Or look at the Affordable Care Act. Orrin Hatch cosponsored essentially the same bill in the 90’s and defended it until the week when Obama embraced it as a compromise plan. Now he says it is worse than Hitler. Mitt Romney implemented the plan in Massachussetts, and it’s working great! Just don’t ask Mitt to defend his greatest achievement. He won’t. As another example, take any issue that Mitt Romney ever spoke about more than once.

True, virtually everything they fight for will make the rich more secure or subdue the not-rich, but not always, and certainly not if it means that they agree with something that a Democrat proposed first.

And there, my friends, is the main difference between Republicans today and the people Sullivan used to know and love. Once upon a time the GOP would gladly cross the aisle and work with Democrats to screw the poor. Now even that exalted goal must take a backseat to petty displays of spite by loud, stupid bigots like Richard Shelby, John Kyl and Jim DeMint. What was once a genteel agreement to slowly throttle the working class has devolved into a naked gibbering scramble for the bundle of fasces, and that just won’t do.








Reality Has A Well-Known Liberal Bias, Wisconsin Edition

I know that probably everything below is obvious to this audience and/or already presented better by someone else here, but anyway:  following up John’s post on the deliberate deception behind the “contribute more” demand of public service workers in Wisconsin, here’s some inconvenient data.

The shorter:  public service workers are not overpaid.  Not even a little bit.*

Let me turn it over to an MIT colleague (one vastly more accomplished than I), Thomas Kochan,

Kochan is a Wisconsin native and a University of Wisconsin graduate.  He’s recently been involved in some creative and effective labor negotiations in Massachusetts.  In his day job, he studies industrial relations and labor policy at MIT in both the Engineering Systems Division and the Sloan School of Management (i.e. not habitats exactly  overpopulated with DFH’s).

Here’s what he had to say to his home state:

It has to start by getting the facts right. Wisconsin’s public service employees are not overpaid relative to their private sector counterparts. Rutgers University professor Jeffrey Keefe has done the analysis. (See his complete study on our Employment Policy Research Network website: www.employmentpolicy.org.) Controlling for education and other standard human capital variables he found that Wisconsin’s public sector workers earn 8.2 percent less than their private sector counterparts in wages and salaries. Taking fringe benefits into account shrinks the difference to 4.2 percent. Thus, public sector workers have lower wages and higher fringe benefits (yes, pensions and health care benefits are the two standouts). But overall, they are not overpaid compared to the private sector. No easy scapegoat here.

That is:  Wisconsin state workers are living exactly the way their fellow citizens  should want them to:  they are deferring present consumption for  income security in retirement.  This is what every financial counselor begs their clients to do.  It is what as a society we want to happen — better by far that our citizens anticipate and prepare for life after work than to hit the bricks with a grin and a sawbuck in their pockets.

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And  Wisconsin civil service is exercising such prudence at a cost to the taxpayer lower than that of private sector workers.  You can argue whether or not that 4% figure is a sufficient price to pay for the (at least partly) notional job security public employees possess, but the basic point is clear:  Wisconsin state workers are hardly bilking the tax payer to enjoy lives of sloth and opulence.

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But Serious People Know This Doesn’t Count

The New York Times report about Dennis Montgomery, who allegedly defrauded the Pentagon and CIA out of $20 million over almost a decade, and whose software caused multiple false alarms while doing nothing to fight terrorism, contains this interesting fact:

Hints of fraud by Mr. Montgomery, previously raised by Bloomberg Markets and Playboy, provide a cautionary tale about the pitfalls of government contracting. A Pentagon study in January found that it had paid $285 billion in three years to more than 120 contractors accused of fraud or wrongdoing.

That’s $285 billion of spend on contractors who have committed real fraud, versus $1 billion of imaginary fraud. Perhaps some serious DC player will explain why the “math demands” we cut entitlements, yet we’re not even discussing shaving a few hundred billion dollars of waste from the Pentagon budget. And maybe when they’re done telling us why those dollars don’t count, they can also explain why we can’t just let the Bush tax cuts expire, which would cut the deficit to 3% of GDP in one fell swoop.








More on fiscal austerity and Iraq

So Digby noticed the Iraq/fiscal austerity parallels 7 months ago (h/t Elia). At any rate, it is quite striking. Here’s Orrin Hatch (h/t AK):

Hatch (Utah), the ranking Republican on the Senate Finance Committee, accused Obama of surrendering on the budget like Chamberlain surrendered Czechoslovakia to Germany.

“The United States is demanding a Churchill on the issue of deficits and debt, but the administration has delivered us a Chamberlain,” Hatch said on the floor Monday, in a clear reference to Chamberlain’s foreign policy of “appeasement.”

I want to be clear, budgetary problems are complicated, just as Iraq is. I do not support running huge budget deficits forever, just as I did not support Saddam Hussein. However, I do not support spending cuts in the middle of the worst recession in 70 years, just as I did not support an ill-planned unilateral invasion of Iraq. And whenever someone starts talking about Chamberlain and Churchill in the context of some situation that bears no resemblance to the appeasement of Nazi Germany, I reach for my revolver.