Common Sense Has Left The Building

The NY Times front-pages a story on the consequences of a government "default" so poorly researched and misleading that both sides will be unhappy. Bipartisan appeal!

Their lazy, hazy, crazy lead:

Many in G.O.P. Offer Theory: Default Wouldn’t Be That Bad

By JONATHAN WEISMAN

WASHINGTON — Senator Richard Burr, Republican of North Carolina, a reliable friend of business on Capitol Hill and no one’s idea of a bomb thrower, isn’t buying the apocalyptic warnings that a default on United States government debt would lead to a global economic cataclysm.

“We always have enough money to pay our debt service,” said Mr. Burr, who pointed to a stream of tax revenue flowing into the Treasury as he shrugged off fears of a cascading financial crisis. “You’ve had the federal government out of work for close to two weeks; that’s about $24 billion a month. Every month, you have enough saved in salaries alone that you’re covering three-fifths, four-fifths of the total debt service, about $35 billion a month. That’s manageable for some time.”

Now, it is crystal clear to anyone who has followed this that Sen. Burr is talking about the ability of the Treasury to *avoid* a default on US Government debt securities (i.e., the sort of debt covered by the debt ceiling) by using available cash to make interest payments. Is he saying, as per the headline, that "Default Wouldn't Be That Bad"? No. He is saying that a default on our publicly issued debt would not be necessary. That is a big difference, but it totally eludes the Times reporter. Let's help the Times out by quoting Reuters, a normally sympathetic left-wing source; they are using a Q&A format:

- The United States defaults when the money runs out, right?

It depends how you define default. Historically, default is when a country misses a payment to a creditor. The Obama administration says default would include any missed payment, such as payments for public health insurance. The first really big bill due after hitting the debt ceiling is a $12 billion Social Security payment on October 23.

- When would financial markets melt down?

Markets would be alarmed if it looked like bondholders would go unpaid for an extended period, and might even panic if any government checks were delayed. Many analysts think the administration would at least try to prioritize payments on the national debt, but Treasury officials say picking and choosing which bills to pay would be impossible.

That didn't look so hard, but it was too much for the Times editors. One might argue, as Obama supporters currently do, that any missed payment, whether it be to a state for Medicaid, a defense contractor for a satellite, or a bondholder for interest due, represents a '"default". But the breathless reporting describing the resulting financial apocalypse is based on the possible consequences of a default on a debt security, not a late payment to General Electric. That confusion benefits the fearmongerers, but I don't know why the Times is playing along on a front page story. Yes I do.

Of course, the Fearmongerer-in-Chief already told us the sky would fall with the sequester; the Times does manage to capture that point:

But the voices of denial are loud and persistent, with some Republicans saying that the fallout from the continuing shutdown and the automatic, across-the-board budget cuts known as sequestration has been less severe than predicted.

However, the gist of the Times story is that Republicans simply don't believe the many experts predicting global warming, oops, financial meltdown. No attempt is made to explain why the prioritization of payments (the Mad Hatter Sequester) may or may not be practical or legal. A snippet:

Both men were counting on the prospect of a global economic meltdown to help pull restive Republicans into line. On Wall Street, among business leaders and in a vast majority of university economics departments, the threat of significant instability resulting from a debt default is not in question. But a lot of Republicans simply do not believe it.

A surprisingly broad section of the Republican Party is convinced that a threat once taken as economic fact may not exist — or at least may not be so serious. Some question the Treasury’s drop-dead deadline of Oct. 17. Some government services might have to be curtailed, they concede. “But I think the real date, candidly, the date that’s highly problematic for our nation, is Nov. 1,” said Senator Bob Corker, Republican of Tennessee.

Others say there is no deadline at all — that daily tax receipts would be more than enough to pay off Treasury bonds as they come due.

I should unchain my Inner Pedant and note that no one claims that incoming tax receipts are enough to "pay off" bonds as they come due. Tax receipts will be enough to pay off the interest on the bonds; the principal amount can be re-issued under the current debt ceiling. Gee, its almost like the reporter doesn't understand this.

But to be fair and balanced, the Times also recycles nonsense from Rand Paul without criticism or comment:

“It really is irresponsible of the president to try to scare the markets,” said Senator Rand Paul, Republican of Kentucky. “If you don’t raise your debt ceiling, all you’re saying is, ‘We’re going to be balancing our budget.’ So if you put it in those terms, all these scary terms of, ‘Oh my goodness, the world’s going to end’ — if we balance the budget, the world’s going to end? Why don’t we spend what comes in?”

“If you propose it that way,” he said of not raising the debt limit, “the American public will say that sounds like a pretty reasonable idea.”

Well, yes and no. The budget will be in balance going forward, and the resulting fiscal drag will probably crush the economy. But set that nightmare aside - how, under the Paul cash-basis plan, do vendors get paid for their past work? My guess is that we have quite a few bills outstanding; unless Paul proposes to run a cash-basis surplus, there will never be funds to pay, e.g., GE for their hypothetical satellite.

Interestingly, and dare I say encouragingly, Obama seems to be aware of the difference himself, even if he is trying to confuse the rest of us:

“When I hear people trying to downplay the consequences of that, I think that’s really irresponsible, and I’m happy to talk to any of them individually and walk them through exactly why it’s irresponsible,” he said. “And it’s particularly funny coming from Republicans who claim to be champions of business. There’s no business person out here who thinks this wouldn’t be a big deal, not one. You go to anywhere from Wall Street to Main Street, and you ask a C.E.O. of a company or ask a small-business person whether it’d be a big deal if the United States government isn’t paying its bills on time. They’ll tell you it’s a big deal. It would hurt.”

"Paying its bills" is much broader than paying its publicly held debt. I have no doubt that if Obama asked Jeff Immelt whether it was important that GE got paid on time Mr. Immelt would say yes. But that doesn't mean GE lacks the cash management resources to handle a late payment from a customer. Now, if the payment is going to be late forever, as implied by the Paul approach, yes, that is a different matter.

I am strangely confident that the Times has reporters and editors who understand these nuances. They should have moved this effort from the front page to the op-ed section. Or they should offer their readers a subscription to the Washington Post and the fine work done by Brad Plumer, which includes a link to this CRS piece on Treasury cash management.

EXCELLENT SUCCINCTTITUDE: Kyle Hauptman of the AEI:

Today’s NY Times article on debt “default” is point-blank incorrect in headline and substance

Yup.

PLAYING ALONG: Imagine my non-surprise to see this 'analysis' at FireDoglake, which quotes the Times story and adds:

It’s all a hoax, you know, like global warming.

And in an interesting blend which misses the point while keeping hope alive we get this:

One point that seems to be getting left out of the mainstream/corporate media coverage is that an economic crisis that results from defaulting on US debt obligations will first and foremost wreck the 1%. The US treasury bond is the lynchpin to the global financial system, a default would first cause a panic attack in financial markets and the top 1% own almost 50% of all financial assets. And given that the Federal Reserve has already run out of tricks and is down to money printing it is unlikely they would be at all effective in stopping a financial crisis caused by default. In other words, default would be the end of the upper class as we know it.

I think we all agree - the Republicans cited in the Times do - that defaulting on Treasury bonds, notes and bills would be a dreadful experiment.

 

 

Comments

[NK(tryin'2.0)]

"I am strangely confident that the Times has reporters and editors who understand these nuances." WONDERFUL SNARK TomM. You remain a daily NYT reader, so you know that after 20 years of Pinchism (Leftist propagandism, anti-American powerism, monolithic Leftist thought patrol in all content, ending the distinction between reporting and editorialism and of course 'affirmative action' hiring and general dumbing down of staff) any understanding of such nuances is purely happenstance.They are hirely crdentialed dunces and soon Carlos Slim will own the lot-- unless Soros digs deep and puts his money where his mouthpiece is.

[GMax]

Put this one down in the category "The law is an @ss" example number 29,386:

http://www.thecourier.com/Issues/2013/Oct/08/ar_news_100813_story2.asp?d=100813_story2,2013,Oct,08&c=n

As far as the law is concerned, you are still dead.

[NK(tryin'2.0)]

'highly'

[MarkO]

And again, just in case:

Happy Birthday TK. Now I know why DoT left the country.

Have a great day. Surf's up.

[NK(tryin'2.0)]

Happy B-Day to TK in this thread as well.

[Threadkiller]

Thanks for the wishes!

Mamacita TK said she has a "special plan"* for me.

*(for those scoring at home)

Crossposting because it is my birthday.

[Jeff Dobbs]

TM puts up a thread right after my BD wish?

I smell a Conspiracy So Vast to bury the birth cert I dug up.

[NK(tryin'2.0)]

And thank you Hit for the many B-day alerts you post.

[jimmyk on iPhone]

I was just about to snark on this NYT article in the previous thread when I saw there was a new one and knew TM had jumped on it.

There's also an economix blog piece that gives a sort of 3rd grade level description of what the Fed does, like the economy is a car and the Fed just applies the gas or brake pedal.

[peter]

too funny hit

[NK(tryin'2.0)]

JimmyK-- '3rd grade level' that about maxes out the 'nuances' of Pinch's staffers at today's NYT.

[henry]

A little bird south of the (WI) border sent me this as an explanation of the Yellin appointment. Polling indicates the JEF is doing an excellent imitation of SMOD on final approach.

[MarkO]

And to add to the drumming discussion, while sticking with Birthday:

"Ringo's crackling and metrically ambiguous opening drum fill starts "on 3."

Read it all if you haven't discovered this site before. It is a joy.

http://www.icce.rug.nl/~soundscapes/DATABASES/AWP/b.shtml

[Jeff Dobbs]

jimmy:
like the economy is a car and the Fed just applies the gas or brake pedal.

So, who is sipping on slurpees in this scenario?

[Dublin Dave]

Good. Paul Ryan and the establishment Republicans have taken the Tea parties delaying of Obamacare off the table.

Now we can move forward and negotiate.

[Stephanie]

So, who is sipping on slurpees in this scenario?

Why did a clueless Ezra Klein sitting facing backwards in an old station wagon with a silly grin on his face and a slurpee in hand with the dog staring at him like he's a dumbass come to mind?

[Marlene]

Happy Birthday TK! My own little birdie told me that Jack Lew is testifying at the Senate Finance Committee tomorrow morning. It is scheduled for 8:30AM,which she says is unusual,but also before the market is open. Speaking of scaring the market. NK, jimmyk,anything unusual about the timing?

[OldTimer]

Out with the shut-down, in with the debt ceiling..

http://www.breitbart.com/Big-Government/2013/10/09/Wall-Street-Journal-Paul-Ryan

[NK(tryin'2.0)]

Marlene-- don't treat me as some kind of expert, I just look at what people do. And what the Obamaniacs are doing right now is the 'debt hike doomsday' play. Obummer did his 'presser' yesterday, the NYT reports on it today, and Lew testifies tomorrow-- all screaming to the LiVs that DOOMSDAY comes without more debt. IMO, it's Obummer's last ditch effort to minimize the spending cuts he has to give to get more debt, by getting LiVs to push for MOAR DEBT WITH NO SPENDING CUTs. I think the repubs tomorrow shouldn't bicker with Lew, just make the point that the debt isn't free and moar debt just puts us one step closer to national bankruptcy because we are borrowing for 10 years to pay TODAY's bills. That's why MOAR DEBT NEEDS COLLARs. Persuadable LiVs already agree with that.

[OldTimer]

Maybe a 37% approval number will nudge those negotiating genes...

http://www.breitbart.com/Big-Journalism/2013/10/09/media-fail-obama-approval-drops-to37

[Dublin Dave]

Uh oh-spoke too soon. Redstate's Erick Erickson has ripped Ryan's crisis ending strategy apart for not including a repeal/defund/delay assault on Obamacare-wait wait wait..... now Ralph Reid has moved to the top of the cue screaming that any deal to end the assault on the wives of fallen service men should include some serious anti-choice legislation. Before we pay these widows enough money to collect the bodies of their dead husbands-wait wait wait wait, the Oil lobby has pushed past all these folks and has said before world war 2 vets can visit various Washington memorials we must approve the keystone pipeline.

You think I'm kidding but this is what's happening within your party this morning. You don't know what you want because all of you want something different.

Destroying America in return for some goodies.

[NK(tryin'2.0)]

Ryan is just repeating what he and Cantor have said for weeks. Use the Debt Ceiling to start cutting Entitlements (Other than ObummerCare) and conditioning further Debt on further reforms. That has always made sense to me. Want to repeal ObummerCare?-- good so do I-- elect a Repub Congress in '14 and they will repeal ObummerCare by budget reconciliation.

[DebinNC]

BOzo's response to his '08 campaign debts:

http://nevadajournal.com/2012/07/12/four-years-late-obama-campaign-pays-its-bill-cash-strapped-nv-school-district/

[Dave (in MA)]

Clarice shared this on FB:

http://i.imgur.com/z7u2F43.jpg

It's far too big to fit inline, hence the mere URL.

[rich@gmu]

***There's also an economix blog piece that gives a sort of 3rd grade level description of what the Fed does, like the economy is a car and the Fed just applies the gas or brake pedal.***

given how bad my econ grades are I think I can only handle 3rd grade descriptions. Yikes.

Happy birthday TK and many more!

[Ignatz]

Happy Birtherday, TK.
I'm presuming you were naturally born. :)

[Danube on iPad]

Happy birthday, TK.

I think the individual mandate is doing a pretty good job of delaying itself without any help from the GOP. I just want it to unfold before the eyes of the entire nation so one and all can fully and finally see what a cuckoo scheme it really is.

[DebinNC]

http://twitchy.com/2013/10/08/ha-check-out-whats-plastered-over-closed-sign-in-dc-barrycades-youre-doing-it-wrong-pics/

Love to see intrepid breachers slap a BOzo "Yes We Can" pic over Barrycade signs as a sort of "Kilroy was here" message.

[C.R.]

I volunteer at a small non-profit youth arts organization in my area & received an email this morning with the following:

"Tell Your Story
The White House has asked CNM [Center for NonProfit Management] to find out how the current government shutdown is affecting Southern California nonprofits and/or their clients.
Click Here To Tell Your Story Today"

Gross. I'm sure the IRS won't bother any of these 501(c)3 orgs about their political activity.

[Extraneus]

That level of analysis almost hurts the song, MarkO. (Just kidding. Cool site. Thanks for the link.)

[Dublin Dave]

"Ryan is just repeating what he and Cantor have said for weeks. Use the Debt Ceiling to start cutting Entitlements (Other than ObummerCare) and conditioning further Debt on further reforms. That has always made sense to me. Want to repeal ObummerCare?-- good so do I-- elect a Repub Congress in '14 and they will repeal ObummerCare by budget reconciliation"

You've used the sheer balls of the Tea party to get you to this point, now you're kicking them over the edge and negotiating your own separate deal?

You guys are cold.

[jimmyk]

I posted this late on the previous thread, but it's worth reposting:

http://www.coyoteblog.com/coyote_blog/2013/10/forest-service-closing-only-small-private-campground-operators-not-closing-large-ski-corporations-or-state-parks-that-operate-on-forest-service-land.html

Barry and Dems are of course for the little guy. Presumably the big corporations have paid their dues to the DNC, or will very soon.

[Dave (in MA)]

I uploaded a smaller version.

[rich@gmu]

ha, maybe Ocare can get the passwords straightened out. It's roll out has been all the delay it needs.

The Pentagon could have paid those death benefits. It was out of spite that Hagel has not.

The National Park Service (represented by the same union that represents the IRS, NTEU) is in the executive branch and they could have just called in sick instead of going Stasi.

[jimmyk]

given how bad my econ grades are I think I can only handle 3rd grade descriptions. Yikes.

Rich, I doubt that, based on your contributions here, but econ classes can be as bad as that NYT piece.

Trying to think of a better metaphor for the Fed. I keep thinking of those guys with the brooms in curling matches, with the kettle moving along on its own momentum, and they are desperately trying to influence it with only limited impact. But even that doesn't quite capture the long-term damage.

Happy Birtherday, TK.

[rich@gmu]

jimmyk-

maybe that was the message Obama delivered to the assembled bankers he summoned (and I'm still seeing article about the business friendly GOP). journalturds.

[rse]

HB TK!

Miss Marple-good to read that about Tanzania. Part of the tragedy there was Julius Nyerere's determination that there would be no middle class in the post-colonial country. It is one of the essays in Josh Muravchik's fine book on socialism that was a bit premature in viewing its demise.

Apparently many in the military and retired will never forget the death benefits diss. It was a turning point just like what is going on in the national parks. The tangible proof of petulance towards good Americans.

[Miss Marple]

henry, You will please thank your little bird for me!

Buried down in the poll I see that Obama has personally unfavorable ratings ten point HIGHER than Ted Cruz.

This must be why they switched from acting like Cruz was orchestrating this to going after Boehner, whose unfavorables are about equal to Obama's. (I don't think those will stay that high, as Boehner has been doing a pretty good job appearing calm and statesmanlike while Obama is increasingly acting like a crazy person.)

[NK(tryin'2.0)]

rich@11:25-- spot on. The death benefits, the BarryCades, all done for spite and a cheap headline. Any surprise?, fuck no. This Cretin, this Thing --Obama-- stood in front of flag draped coffins at Andrews AFB and lied his ass off about filmakers and not doing what could have been done to save at least 2 of the KIAs. he's a bastard.

[rich@gmu]

thanks jimmyk. my above was for your 1124 if it isn't clear. I'm doing awesome in my ece classes (have a 97% in one of them). econ not so much but still have about 3/4th of the grade on the table.

an analogy for the fed...maybe a rail switch (especially if it isn't set right train wreck).

[Jim Eagle]

Test

[rich@gmu]

NK (tryin'2.0)

***Any surprise?, f*** no.***

it has to be martini hour somewhere. yikes, let us know how you really feel. me, I have a bit of a hangover and a meeting at 1.

[OldTimer]

Yes, NK, it's true, all of your 11:35, and you say it better than I've dared to type in comments.

[rse]

jimmy-

http://www.eesc.europa.eu/?i=portal.en.events-and-activities-participative-consumption-21st

Apparently the EU is now holding hearings on this collaborative consumption/shareable economy I first noted at (co)lab. When you follow the docs you run into the New Economics Institute and Neva Goodwin's alternative view of economics. A textbook that has apparently been translated into Vietnamese and Russian which I found interesting.

[Jim Eagle]

Its come to this.

Man has taken it upon himself to mow the lawn in front of The Lincoln Memorial.

[GMax]

Ponder this:

if the debt ceiling must always be raised every time it is asked for, what's the point of having Congress vote on it at all? The argument that it must be raised seems strange on that level alone, it it is absolutely necessary to have automatic approval.

Its hard being a community organizer, when the community does not want to be Organized.

[DrJ]

WSJ:

A federal jury on Monday convicted former Detroit Mayor Kwame Kilpatrick of racketeering conspiracy, capping years of investigation into an administration described by prosecutors as deeply corrupt.

Including the ex-mayor, 35 defendants associated with the Kilpatrick administration have been found guilty of crimes.

...

The case likely ends the federal government's prosecution of Mr. Kilpatrick, a Democrat, but other cases remain open, including alleged corruption inside the city's pension board, public-school district and public library.

...

Mr. Kilpatrick a 42-year-old who moved to the Dallas area after serving jail time on separate state charges, was convicted on 24 of 30 counts of extortion, mail fraud and tax violations related to using the power of his office to enrich himself and his associates. The most serious charge carries as much as 20 years in prison. Asked for comment afterward, Mr. Kilpatrick said, "not at this time."

[NK(tryin'2.0)]

sorry for the swearing, happens sometimes as I typically type and then hit Post without reading. But of all his faults as a man and POTUS, nothing infuriates me more than the distain, hatred even, he has for what's good and decent about the USA and Americans. Specificaly, the KIAs of benghazi. His lies about Benghazi, especially the ones he and HildaBeast told to the families in front of those flag draped coffins, were monstrous and disgusting. Unforgivable.

[Ignatz]

Even if Barry's actions don't educate a single doorknob-headed LIV, his actions have punctuated for the rest of us just how thin the veneer is that hides the totalitarian temptation on the left.

It would be convenient to dismiss it not as a feature of leftism but rather a product of his apparent pathological narcissism except that his entire party has gone along with and egged on this gangster inspired, anti democratic behavior.
This isn't political hardball, it's nascent tyranny, and not the metaphorical kind.
Their near rabid desire to legalize illegals and convicts and the dead don't demonstrate a desire to keep winning contested elections. The ultimate aim is a one party state which every True Believer knows should be the natural order of things anyway.

[Dublin Dave]

Hilarious. Republicans orchestrate a government shutdown then act surprised when it actually shuts down?

They start reverting to their old ways of using conspiracy theories to present a more comfortable version of reality. "Oh no, Mitt Romney isn't behind in the polls-that's just the left trying to suppress Republican turnout. Oh the President killed diplomats in Benghazi and the IRS targets tea party groups for political purposes. And and and the President is shutting down specific parts of the government to hurt us in the polls."

Dear lord.

[Extraneus]

DublinDave's heroes.

Tourist harassed by Park Rangers at Yellowstone: They patrolled in front of Old Faithful to keep people away whenever it was about to erupt

[GMax]

Rich its called the dismal science for a very good reason.

These guys ( economists in the teaching field ) were still pushing a theory that said unemployment and inflation were contra indicators. And then Jimmy Carter managed to get both into double digits, and I went to see my academic counselor and changed majors...

[NK(tryin'2.0)]

JiB-- god bless mowing man (looks like he's using a Honda though)

Ignatz-- all true. The Left must be confronted and defeated. They are not Americans, they reject and are trying to end a Constitutional Federal Republic with checks and balances that protect the fundemntal rights of all factions and individuals. They sre State Fascists, heck Obummer is a dead ringer for Mussolini.

[Jim Eagle]

If, as Obama said yesterday, that raising the debt ceiling doesn't contribute "one dime to the national debt", then why raise it?

[jimmyk]

And then Jimmy Carter managed to get both into double digits, and I went to see my academic counselor and changed majors...

GMax, that was one of many shining moments for Milton Friedman. Not only did he explain it, but he had already anticipated it and predicted it by 1968.

But they still teach that unemployment-inflation c**p in intro classes.

[jimmyk]

And the "it" in my second sentence at 12:00 refers to Carter's accomplishment, not GMax's change of majors :).

[Thomas Collins]

"one party state"

The progs' dream. One party state (a two party state in form with squishes in the "opposition" party also works), one party disburser of health expenditures (it's single disburser, not single payer, because everyone pays in one way or another), the oligarchs get their fancy golf courses and vacations and cars, the middle class gets crushed between the oligarchs and the dependent class, and the academics and media toe the party line. Leftist bliss.

[Extraneus]

Leftist bliss.

[Ignatz]

Nice article at AmSpec pointing out the absurdity of the newest status symbol for the marching morons; the preposterous Tesla.

[AliceH]

The WAPO in early 2013: "The debt limit was originally conceived as a way to make things easier for Congress, because lawmakers were tired of having to issue bonds for specific purposes."

So how about eliminating the debt limit IN RETURN FOR a return for requiring bonds for specific purposes? I could live with that.

[jimmyk]

raising the debt ceiling doesn't contribute "one dime to the national debt"

Did he really say that? Unbelievable. I guess by that logic, not policing our borders doesn't contribute to the illegal alien population. And not checking voter IDs contributes nothing to vote fraud.

[Extraneus]

Isn't that their logic?

[Annoying Old Guy]

Dave;

We need one that has

2008               2013

Yes we can!   No you can't!

The left should have an Obama campaign sticker, the right a picture of Obama golfing with a little tag "but I can".

[Charlie Sheen]

Obama = WINNING!!

[GMax]

He may have explained my change of majors too, but I missed that one!

never looked back, but I did sign up for some senior level economics classes after the major change, the econ profs were nothing if not colorful and generally quite entertaining to listen to!

[NK(tryin'2.0)]

Ah the Phillips Curve, the hardcore Keynesians still keep it on life support even though it died almost 40 years ago. Ironically, the PC's greatest success destroyed it; Congress basically institutionalized the PC by ordering the Fed to consider unemployment in rate setting. That law and carter's appointment of nitwit G william Miller as fed Chairman sparked brutal STAGFLATION. Carter and the fed Board fired Miller and put Volcker in, and the PC was discredited. But it lives on today in the Cargo Cult of Krugman/Obamanomics.

[NK(tryin'2.0)]

AliceH@1205: smart lady you.

JimmyK-- he just says whatever is posted on the TOTUS, no matter how moronic.

[GMax]

Yes indeed the Phillips Curve. I had forgotten the name, just not the stupidity.

[Miss Marple]

According to Twitter, Boehner and Cantor are meeting with Pelosi and Hoyer right now. Dems requested the meeting.

"Help us, John! He's absolutely nuts!"

[NK(tryin'2.0)]

BTW-- Miller's 18 months at the Fed were a heck of alot like BenB's QE. The difference in effects is basicaly due to the more globalized and securitized economy today IMO. The inflation was spread out to developing economies and limited to the food and fuel portions of the USA economy. Terrible for USA consumers but not as drastic as 1978-1979.

[NK(tryin'2.0)]

Somehow I doubt that's what Cruella de Pelosi and Empty Suit Hoyer are saying. They are just continuing Obummer's threats IMO.

[GMax]

Reps. Pelosi and Hoyer asked for the meeting, and as we’ve stated publicly, we’re willing to meet with any Democratic leader who is willing to talk,” says Michael Steel, Boehner’s spokesman, via e-mail.

How many times can you call a meeting to announce that you wont negotiate? LOL

[Extraneus]

Liberals tell Obama to bring the pain

[GMax]

Absolutely nuts would aptly apply to San Fran Nan as well...

[Manuel Transmission]

Per last night's discussion on Ginger Baker, I may have seen the last performance of Cream. It was in Phx and I think they cut the tour short around that time.

Given the very dense second hand smoke in the auditorium (heh) the only thing I 'think' I recall was GB having two ginormous bass drums on either side of him that he banged on to the wild cheers of the stoned fans. They must have been 5-6 ft in diameter and tipped away at the top like huge Princess Leah hair buns.

[AliceH]

St. Louis metro area story (TV news) Shutdown story - 5 Crazy Things About The Government Shutdown

The "make it hurt as much as possible" stories are getting through, though not yet with coverage of how these actions are a consequence of decisions made by the Executive Branch (and that it is unprecedented). Still. Breaking through!

[NK(tryin'2.0)]

Ignatz-- the Tesla is definitely a status symbol of the Greenwich/New Canaan/Darien crony banker corridor. The roads of those towns are lousy with Teslas (The posh Greenwich lux car dealer had a Fisker franchise, but Fisker went bust b/c the car doesn't work) It's odd when a Tesla goes by, at speed it makes road noise from the tires, but when it comes to a stop, it's silent, and stays that way until it picks up enough road spend to make tire noise-- pedestrians beware.

[centralcal]

The Boehner/Cantor/Pelosi/Hoyer meeting lasted only 40 minutes per Chad Pergram FNC.

[rich@gmu]

***Rich its called the dismal science for a very good reason.***

I'll keep it in mind! Starting to cheer me up already.

off to my meeting.

[matt]

The secret to Tesla seems to be that they are making large numbers of EV's for municipalities, utilities, etc at very high profit margins paid for by our tax dollars and exorbitant electric bills.

[Jim Eagle]

Our Peevish President

A Charles C. W. Cooke special. He ends it this way:

"Progressives who thrill to shrill accusations that their ideological opponents are “spoiled children” should be ashamed of the way in which their supposedly adult leaders have elected to respond. “Reality has a liberal bias,” one of my less original Twitter stalkers told me nervously earlier in the week in the course of manfully pretending that nothing was awry. No, not really. Reality has a truth bias. Blame Republicans for the wider impasse if you wish — or blame Obama, or Harry Reid, or the whole damn lot of them. But don’t pretend that the news popping up around the country is consistent with the “first-class temperament” that the president is supposed to possess. It is nothing of the sort — and people are beginning to notice."

[sbwaters]

The goal of the community instigator is to provoke reasonable people beyond reason so he can feed on that.

Ain't going to happen. All our objections should be verbal and visual.

No reason for the federal swat teams to be launched.

[Ignatz]

--The inflation was spread out to developing economies and limited to the food and fuel portions of the USA economy.--

The primary point of the inflation has been to inflate Treasuries in the forlorn, Nipponese-like hope of floating the economy on near zero interest rates. The actual effect of course has been to enrich Wall Street and DC at our expense while depressing the economy in the long run.

What does it matter if a few million people are brought to the brink of starvation so long as Georgetown and Hampton parties can continue unaffected?
Starving Congolese and Mauritanians can't serve canapes and Dom Perignon. A destitute middle class can, though.

[maryrose]

Happy Birthday TK!
Hoyer ans Pelosi -like one-armed paper hangers-completely useless.
Boehner has the right stategy of cool, calm and collected. Make Obama look like the crazy, unreasonable one. with his harsh rhetoric.

[Dave (in MA)]

ManT,

http://gpatt.customer.netspace.net.au/cream/giglist68.htm

After this they broke up, but they did 7 shows in 2005 at Royal Albert Hall and Madison Square Garden. The DVD of RAH footage is quite good despite brief shots of Christine Amanpour and Sean Penn in the crowd.

[NK(tryin'2.0)]

Ignatz-- your description of the real effects of Helicopter Ben's QE & Obamanomics is inarguable.

[Extraneus]

No reason for the federal swat teams to be launched.

I disagree. I think they should be provoked.

[jimmyk on iPad]

" Terrible for USA consumers but not as drastic as 1978-1979."

I think you're jumping the gun, the final chapters haven't been written yet, Gentle Ben is more like Arthur Burns, the consequences of whose actions were felt more after he left. Yellen will be the Miller of this administration, though Barry won't have the sense that even Carter showed of trying to undo his mistake before the end of his term.

[NK(tryin'2.0)]

jimmyk@12:49-- I'm afraid you're correct-- Miller's Leftism was the spark that exploded the inflationary dynamite Arthur Burns spread around. Leftist Yellen very well could be the detonator this cycle. Things could get much, much worse.

[Miss Marple]

jimmyk,

That would first require Obama to admit he had made a mistake, which he will never do.

The mistakes he has made are papered over by the press or quietly fixed behind the scenes with a resignation for other opportunities. These people then disappear from public life, only occasionally resurfacing.

[Trevor Saccucci]

raising the debt ceiling doesn't contribute "one dime to the national debt"

...the PC was discredited. But it lives on today in the Cargo Cult of Krugman/Obamanomics.

Obama = WINNING!!

Reality is another hobgoblin of small minds; for the rest of us, it's just what we have to exist with and within. I think an absence of anyone playing a Shakespearean fool to Obama and company has left them - I'll say it again - unmoored from reality.

Only in a bearded-Spock universe does stiffing military families their death benefits, or displacing a group of veterans with a crowd of illegales on the National Mall, or harassing old ladies trying to take pictures of a wide expanse of public land through a bus window look like good public relations. Obama is going out of his way to do these things, doubtless with the assent of Reid, Pelosi, Hoyer, and associates.

This active campaign of character self-immolation on the part of a US President and his allies in government reads more like an Ed Wood novel than an Ed Wood novel does.

[AliceH]

Some commenters yesterday were hypothesizing a 3000 to 5000 pt drop in the Dow once all the QEs being to be unwound (Or should that be rewound?). I think that's what they said anyway.

Is that considered probable? Plausible? Or just possible? Or (::shudder::) Is that "best case scenario"?

[jimmyk on iPad]

"Only in a bearded-Spock universe"

True, but does anyone outside of the small minority who ignore the DeMSM know about these outrages?

[jimmyk on iPad]

Alice, that sounds plausible to me, but a lot hinges on the outcome of the political fights over the next year. I've lost a bit of money waiting for the Treasury market to tank, so I hesitate to get out of equities just yet. Trying to time these things is prettying hard.

[Ignatz]

--Is that considered probable? Plausible? Or just possible? Or (::shudder::) Is that "best case scenario"?-

All of the above. It's amazing how often the impossible occurs and the inevitable never does.
If anyone is certain the Dow is poised for a 5000 point drop I'd first ask how short they were the market. If the answer is < all of their disposable assets, take it with a grain of salt.

[Account Deleted]

Happy Natural Born Citizen Day, TK.

AliceH,

A 3-5K drop would bring the Dow back in line with historical PE ratios. This will be a 2% growth decade at best and the markets are still discounting a 5%+ growth rate. Reality will intrude at some point, just as it will for the pension funds using 8%+ rear view mirror ROIs to determine liability.

[Appalled on IPhone]

There is such a thing as an Ed wood novel? Yikes!

[James D.]

No reason for the federal swat teams to be launched.

They don't really need a reason. Isn't that part of the point of the massive expansion of federal criminal statutes, so many of which are strict liability crimes with no mens rea requirement (or even awareness that you did whatever it is that the statute prohibits) at all?

[NK(tryin'2.0)]

As I pay someone to mind our securities I'll give an uniformed opinion. As REAL Bond yields rise, Equities will fall by definition as investors were forced into equities by Ben B's ZIRP. But the $64T question is will REAL Bond rates rise, or will inflation overtake the nominal rate rises??? I think I'll email my money guy.

[jimmyk on iPad]

"prettying hard"? Sheesh, I curse thee autocorrect!