Tag Archives: Politics

Wildcat Debt Strike in Autumn of 2011

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At rock bottom, the interlocking political and financial structures of the U.S. are based on trust. Recently, a string of financial failures has shaken the credibility of the U.S. political-financial-industrial complex, resulting in a rapidly spreading failure of trust.

PRESIDENT BARACK OBAMA, Wikimedia Commons photo

Trust is frayed to the point where, at the end of this week, Speaker John Boehner severed negotiations with President Barack Obama on raising the U.S. debt ceiling and averting financial crisis. At this point, you really couldn’t call the Tea Party a party of “loyal opposition.”

Question:  What do you think will happen when the government is forced, starting August 2, to choose which bills to pay and which bills to default on — which promises to keep and which promises to break?

Answer:  I wouldn’t be surprised if a Wildcat Debt Strike sweeps across the U.S. like a prairie fire in the fall.

Consider the events that brought us to this convergence:

SPEAKER JOHN BOEHNER, Wikimedia Commons photo

  • Strike One — The financial bubble burst, and Wall Street persuaded the pillars of the U.S. government — the Treasury Department, the President, the Congress — that the world economy would collapse without a sudden government bailout. (Presidential candidates of both parties endorsed the bailout in 2008.) Wall Street extorted billions under TARP, but continued to pay bonuses as usual to Wall Street executives.  In 2009, billions more were spent in a giant stimulus package, propping up the profits and cash reserves of corporations and the compensation packages for CEOs.
  • Strike Two — The real estate bubble burst, and banks throughout the U.S. foreclosed on mortgages, further driving down the value of houses. As people found their mortgages underwater (that is, the mortgage is worth more than the house), they considered whether or not to continue making the monthly payment. Some homeowners lost jobs and were unable to pay; some calculated that it made no sense to throw good money after a bad house. It is now widely accepted that people can and will walk away from a mortgage.  Banks are not willing to modify impossible mortgages, and debtors are not willing to pay impossible mortgages.
  • Strike Three — The debt bubble bursts. That comes in August, if the U.S. government decides not to pay its bills, especially its obligations to individual American citizens.

It’s all reciprocal, isn’t it? I’ll play fair with you as long as you play fair with me. As long as my house has value, I’ll continue to pay my mortgage. As long as you pay me, I’ll pay my debts.

Everything depends on our belief in the myths that George Washington will own up to cutting down the cherry tree; and that Abe Lincoln will walk six miles to return a penny.

The entire system could come undone in a cascade of individual decisions to hoard cash and ignore debts. When the government refuses to pay someone — whether it be a Social Security beneficiary, a veteran, a bureaucrat, a soldier, or a Medicare bill to a hospital — that someone will in turn refuse to pay an obligation.

The autumn of 2011 might deteriorate into a general Wildcat Debt  Strike, with individuals following the government into spontaneous default on taxes, mortgages, car payments, and most of all, credit card bills.

— John Hayden

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American Debt Crisis: The Black Swan Is Circling Washington

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Another update on the Debt Crisis of 2011.

An ominous Black Swan is circling Washington, D.C., like a vulture, watching and waiting as the wise men and women of Congress argue over whether to resolve the Debt Crisis of 2011. Or not.

This is the most dangerous situation in Washington since the Cuban Missile Crisis of 1962. I was in Washington on the weekend of the Cuban Missile Crisis, and I remember it well. We didn’t know how close we came to the brink, until it was all over.

This Debt Crisis is surreal. The Cuban Missile Crisis was loaded with live ammunition. The Debt Crisis is loaded with stocks and bonds and hundred-dollar bills. No one knows what will happen if we pile up a lot of stocks and bonds and bills, and set off an uncontrollable chain reaction of unpaid debt. Never been done before. But we are about to go there.

There are three major schools of thought regarding the resolution of this debt crisis. You have your big fix, valued at around $4 trillions, and your little fix, $1.5 trillions to $2 trillions, give or take. (Or is it billions? I can never remember.)

And defying all logic, there is the “no fix” option, supported by the gentlemen and gentleladies from the Tea Party. (What kind of tea are they smoking at that party? Can I get some?)

Translation: Some folks want to fix the debt crisis for the long-term, so Congress can get on to other business.  Some folks will settle for a short-term solution. And some want to commit economic suicide on Aug. 2, rather than risk the chance of possibly serious complications down the road.

Hoo-boy! You think the rich and powerful are anxious about a little economic uncertainty? How are they going to respond to total economic chaos?

Remember the Black Swan? It’s a highly improbable disaster, resulting in unpredictable consequences of a catastrophic nature.  Have a nice weekend.

— John Hayden

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American Debt Crisis: Children Playing With Dynamite

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The words and events of the past few days give me the gut feeling that too many of America’s current political and business leaders are not mature adults, not capable of being serious or working responsibly.

Too many members of Congress seem to think the U.S. government is all a big game, and the winners are the ones who get the most political contributions, and the ones re-elected the most times. They don’t act as if they understand that the government and the economy of the United States are matters of real importance. Instead, they act as if they’re in a reality show on a fictional island, where there are no serious consequences, and the only goal is forming alliances, talking with bravado, and gaining fame.

Too many politicians appear childish, not mature, focusing only on themselves, like a two-year-old would, and on the interest groups that pull their strings. They don’t appear to have developed the capacity to care about the needs of  others, and by others I mean the millions of real people scratching every day to earn a living, support their families, cope with illnesses.

Too many politicians seem always to put themselves and their special interests first; the needs of the larger community are of no interest to them. The needs of others be damned, the needs of the nation be damned. It’s all a game. It’s all about me and my little circle of friends.

Who Speaks For The People?

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Today, Dispatches from ConsterNation publishes a guest post by Judy Davis:

Since the election of Woodrow Wilson in 1912, the Democratic Party has used our government to make laws which have improved working conditions, provided elderly support, promoted racial equality, protected the environment and addressed other social concerns. Wilson established the Federal Reserve Board, making banking safer and monitoring financial markets. The Clayton Antitrust Act allowed workers to petition for better working conditions, shortened work days and initiated child labor laws.

Franklin Delano Roosevelt’s “New Deal” programs provided relief, recovery and reform to ease the Great Depression. FDR is responsible for initiating Social Security, which provides Old Age, Survivors and Disability insurance. Through FDR’s efforts, the U.S. Bureau of Reclamation increased water development facilities in the U.S. and provided work for the unemployed.

What do these two leaders have in common? They were Democrats!

John Fitzgerald Kennedy established the Peace Corps and negotiated a ban on nuclear weapons testing with the United Kingdom and Soviet Union.

His successor, Lyndon B. Johnson, passed numerous socially significant programs, including the Civil Rights Act of 1964 and “The War on Poverty” – Medicare, Medicaid, Head Start, Work Study and food stamps.

Jimmy Carter is a human rights advocate and has worked to promote peace in the Middle East and limit the number of nuclear weapons. He encouraged energy conservation to ensure an energy-secure nation.

Bill Clinton passed the Omnibus Budget Act, which cut taxes for 15 million low-income families, made tax cuts available to 90 percent of small businesses, and raised taxes on the wealthiest 1.2 percent of taxpayers.

President Barack Obama has regulated banking and credit cards, extended health and unemployment benefits, implemented hate crime legislation, passed an economic stimulus package spurring job creation, modified bankruptcy terms, reinforced Iran sanctions, and reformed health care. No small feat for less than 2.5 years!

“Each time a man stands up for an ideal, or acts to improve the lot of others, or strikes out against injustice, he sends forth a tiny ripple of hope.” — ROBERT F. KENNEDY,  from www.democrats.org/issues.

Democrats speak for the people! We are responsible for each other and should provide the safety nets needed to ensure basic rights for all.

— Judy Davis

And They Call Themselves ‘Patriots’

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The western front of the United States Capitol...

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No. 4 in a series on the Debt Crisis of 2011.

Here’s an American paradox, or maybe it’s a morality story. You work to pay your bills. I work to pay my bills, thereby maintaining the fiction that I’m solvent and creditworthy.

While you and I are working to pay our bills, right-wing zealots are conspiring to prevent the government of the United States of America from paying its bills. They even pretend that it would be right and good for the U.S. to ignore its debts.

The premeditated intent of these patriot-politicians is to subvert Congress and sabotage the U.S. Treasury, force financial default, and destroy America’s credit rating. With malice aforethought, they plan to run the U.S. government straight into bankruptcy and shut it down.

By bankrupting the Treasury, these people — the Tea Party, the Libertarians, the Anarchists, the tax protestors — hope to smash and destroy the government, and kill its hated programs and taxes. Then they will wave the American flag and celebrate.

Isn’t it sedition and treason to destroy from within the government of your own country?

Believers in this Tea Party and Libertarian conspiracy call themselves “Patriots.”  But aren’t they really traitors and turncoats?

— John Hayden

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American Debt Crisis: Rich and Powerful Demand Total Victory over Middle Class and Poor

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No. 3 in a series on the Debt Crisis of 2011.

President Barack Obama floated a trial balloon on the front page of the Washington Post on Thursday, in a long story that said the President is prepared to discuss cuts to both Medicare and Social Security. As the headline put it, Medicare and Social Security are “on the table,” otherwise known as the chopping block. No one quoted in the story was willing to have their name attached to the information.

In the whole, long newspaper story, the words “defense” and “defense cuts” were never mentioned. Not once. What? You mean Medicare and Social Security are on the table, but the elephantine defense budget is not? It’s not credible, not believable.

As Obama was supposedly preparing to sacrifice Medicare and Social Security, Republicans repeated their long-stated position: Tax increases for the rich are NOT “on the table.” Republicans allowed as how they might be willing to wheel and deal on tax breaks and loopholes, so long as the net effect is no increase in taxes on the rich.

Also yesterday, AARP, the largest organization representing senior citizens, made its position clear: The AARP opposes any cuts in Medicare and Social Security.

So, the lines are clearly drawn in the class war to divide up what’s left of the American Dream. The rich and powerful have made clear they will accept nothing less than total victory over the middle class and poor. President Obama hints he might be a willing accomplice in the cashing out of Medicare and Social Security. If so, it would be a presidential betrayal of the American people on a historic scale.

(If you cringe at the words class war, don’t forget that class warfare will probably be followed by generational warfare, pitting mother against daughter and grandfather against grandson. See “Divide And Conquer: The New Plan To End Social Security by Dividing America at 55.”)

Could President Obama possibly be serious about caving in to the rich and powerful on both Medicare and Social Security? Plus a player to be named later, Medicaid?

I hope the President is not serious. To balance the budget by cutting Medicare and Social Security for the middle class and the poor, while at the same time refusing to raise taxes on the rich by a single penny, would be a craven injustice. Remember, the rich are paying tiny taxes, compared to what they have paid historically, and their wealth continues to expand, in a continuing social transfer of assets from bottom to top.

In my opinion, there is nothing wrong with the American budget that could not be remedied by modest tax increases on the wealthy, accompanied by modest spending cuts in the defense budget. That’s what should be “on the table.”

I hope Obama floated this balloon simply to highlight how outrageous it would be to force the middle class and the poor to pay for the financial crisis created by the rich and powerful. In any event, the trial balloon provided an easy target for Democrats in Congress to shoot down.

Do you suppose that anyone is negotiating in good faith as the clock ticks down to financial default by the U.S. government?  If U.S. leaders fail to behave responsibly, the hard times ahead could test the fabric of American society like never before.

— John Hayden

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America’s Can’t-Do Attitude

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Here’s a glimpse of government in America, as reported in my hometown newspaper.

The City Council is concerned about the large crowds waiting at bus stops, often watching three or four buses pass without stopping because the buses are already jam-packed standing-room-only.

The transportation administrator (we’ll call him H.A.) assured the City Council that his department is “doing the best they can.” He explained:

“The problem is just like the  _____ Steakhouse, you can’t build it big enough, you can’t staff it enough to meet the people, you can’t do it and you can’t afford to do it.”

Four can’t-do-its in one miserable sentence by a high-ranking public bureaucrat! And he’s the boss! Can you imagine how demoralized his employees must feel? It’s enough to make you cry. But wait. H.A. is only getting started. As the newspaper reported:

H.A. added that it is also difficult to fill bus shifts because driving a bus in   _______ City isn’t a fit for everybody. He said currently the department does not have full staffing and there are 32 vacant eight-hour shifts.

“As of today, we are not fully staffed . . . you can’t walk in the door and get in the seat of that bus,” H.A. said.

H.A. explained that if a driver does not have a CDL license (commercial driver’s  license) it would take an additional 30 days to train and acquire a passenger license.

Let me see if I understand this. Unemployment is over 9 percent in America — and higher in our local area — and yet the administrator is unable to hire sufficient bus drivers? The required 30 days training is too high an obstacle to overcome?

A City Council member assured H.A., “There are no problems in us giving you the money you need to have to do the job.” H.A. proudly acknowledged that money is NOT the problem. Money is not going to change his can’t-do attitude.

“If you hand me a bazillion dollars, it doesn’t mean I have all the drivers and all the vehicles,” H.A. said. “It’s an octopus with a lot of tentacles, you make it work.”

(H.A. also affirmed that the supply of buses is not the problem. He has 14 brand new buses waiting to go into service.)

If anyone remained unconvinced that HA can’t do the job, he went on to confirm his determined futility with the following:

“I don’t want anybody in this room to think we will be in a position to deploy a sufficient number of buses every time you’re waiting at the bus stop during a peak hour, on a peak night, on a beautiful hot, sunny evening in June, July and August and that we will be able to pick you up every 10 minutes.” H.A. said. “It’s utopia and it just can’t be done.”

Case closed. Ladies and gentlemen, when any bureaucrat, government agency, corporation, or business becomes so thoroughly demoralized and convinced that it can’t do its job, don’t you think it’s past time for a change?

American workers, businesses, and government used to proudly flaunt a CAN-DO attitude. No More. H.A.’s defeatist can’t-do attitude has become the new standard in America. Can’t-do permeates American government, politics, and business.

America seems immobilized by a deadly epidemic of passive-aggressive sickness. We can’t do it. Even if we could do it, we won’t do it, and nobody can make us do it. You can’t complain about it, because we won’t even answer the phone.

  • “Hello. We value your business.
  • Please press One for Lies.
  • Press Two for Dysfunction.
  • Press Three for Disrespect.
  • Press Four for Excuses.
  • Press Five to be Disconnected.
  • Have a nice day.”

Add up all the can’t-do attitudes like H.A.’s from every corner of this once-great nation, and you get the following:

American workers can’t compete with other workers around the world.

American businesses can’t stop moving factories and jobs overseas.

America can’t maintain its bridges and highways and water and sewer systems.

America can’t afford Medicare and Social Security. (Although every other advanced Western nation can.)

American business is sitting on billions in idle capital, but American business can’t put the money to work because of uncertainty. (Life is uncertain. Starting a business or investing capital is always fraught with uncertainty, by definition. Uncertainty is the nature of capitalism. Profits and stock prices routinely climb a wall of fear.)

The U.S. Senate can’t pass a budget because it can’t get 60 votes. On anything. You name it, the U.S. Senate can’t do it.

Congress can’t follow and the President can’t lead. Democrats and Republicans can’t work together. What did you expect?

We, the voters, can’t be serious. We’re surrounded by momentous problems, begging to be solved; but we can’t pay attention to anything, except sex scandals.

Ladies and gentlemen, our can’t-do attitude is killing whatever is left of the American Dream.

— John Hayden

American Debt Crisis: Whatever Happened to Jobs, Jobs, Jobs?

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No. 2 in a series of quick-takes on the Debt Crisis of 2011. 

Today’s question: Whatever happened to the first and foremost issue of the 2010 election, JOBS?

Remember when every politician was chanting in unison: “Jobs, jobs, jobs!” That’s what they said, because that’s what the voters cared about. Jobs. But “Jobs, jobs, jobs!” was more a prayer than a promise.

All politics is local, remember, but the job market is now global. It is not within the power of locally elected politicians to create jobs in a global job market.

It is, however, within the power of politicians to kill jobs. Soon as the class of 2010 took residence in the governor’s mansions and state legislatures, they set about writing austerity budgets focused on two goals: Reduce spending and cut taxes. The way to reduce spending is to eliminate as many state programs and state jobs as possible. Wisconsin got the lion’s share of publicity for austerity, but nearly every state has joined the movement.

Now the focus has turned to Washington, where they’re busy cutting jobs on a larger scale. The debate is not over whether to cut the federal budget, but how deeply to cut. And where to cut.

The Republican Party is determined to cut the budget by gutting the hated “Entitlement Programs.”  They use the words, “Entitlement Programs” because they fear to say, “Medicare, Medicaid, and Social Security.”  The main budget target this year is Medicare for the elderly. Republicans hope, as soon as possible, to move on to cutting Medicaid and the most popular “Entitlement,” Social Security.

Keep your eye on the goal. Forget about Jobs, jobs, jobs! The attention span is short. Jobs, Jobs, Jobs! is over. That was last year’s goal.

The goal for 2011 is reducing the national debt. So they say. Spending cuts are the means to that end.

But the real goal is to reduce taxes for wealthy individuals and for corporations. Republicans plan to hand over to the wealthy and corporations, all the money saved by spending cuts. In a few years, presumably, Congress would begin to use some of the savings to actually reduce the debt. Possibly.

When pressed, Republicans say that the way to create Jobs, jobs, jobs! is by gifting large amounts of money to the wealthy and corporations, who would invest the money. Eventually, it might trickle down to the masses in the form of jobs.

Remember that wealthy people invest their money in corporations. As in,  “International Corporation” Or “Global Corporation.” So, even if you believe in trickle down, exactly where in the world do you suppose new jobs would be created?

In my opinion, any jobs resulting from U.S. spending and tax cuts would go to some developing  country offering cheap labor, far from the U.S.

America with no jobs and no Medicare will be a sad and dreary place.

The first post in this series on the American Debt Crisis is here. The next installment will be “Starve The Beast.”

— John Hayden

(Does a 525-word post qualify as a short-take?)

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American Debt Crisis: A Cinder-Block Wall, Or A Screen Door?

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No. 1 in a series on the Debt Crisis of 2011.

The American political deadlock over debt and taxes is an enigma. It’s a monster with too many heads. Starting today, I’m doing a series of blogging quick takes, each post only a few sentences, zeroing in on one question. No more windy dissertations.

Today’s question: Is the world as we know it about to end, if Democrats and Republicans can’t agree to raise the debt ceiling?

The sovereign debts of the U.S. and other countries are huge beyond comprehension. But what is their real import? In the 1980s, when “fiscally responsible” Republicans were digging the debt hole, they decreed that deficits no longer matter. Could that possibly be true?

Is the debt crisis being trumped-up for ideological purposes, to kill Medicare, or Social Security?

To be sure, debt exists on paper, as bonds and notes and bookkeeping entries. But what, if anything, does the paper represent? Is national debt a tangible reality, like wood; or an abstract concept, light as air?

Better check under the bed. Is anyone hiding there?

Remember Y2K? End of the world. Planes were going to fall from the sky. Approaching Y2K, it looked like a cinder-block wall, into which civilization was going to crash and burn.

Arriving at Y2K, we passed through it like air through a screen door.

— John Hayden

(Quick-take rating for this post: 215 words.)

Government Shutdown Feels Like Beginning Of The End For America

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Human beings have created many empires in recorded history. Every one of them, from the Roman Empire, to the Ottoman Empire, to the British Empire, on which the sun never set — every great empire has failed.

And here we have the U.S. House of Representatives and the U.S. Senate on the brink of shutting down the government of the United States of America — ON PURPOSE!  If there were any logic, any sense in the world, closing the U.S. government would be treason.

Last time politicians shut down the government, in 1995, it was able to reopen in a few days with no more serious consequence than closing a few national parks.

However, there is no guarantee for the future.  The law of unintended consequences is in effect. We live in the 21st century, the century of the “Black Swan.” Major events, or chains of events, that are unpredictable and highly improbable can happen. You can learn more about the “Black Swan” here.

Politicians who would shut the U.S. government — on purpose! — are tempting fate. Our ancestors fought a Revolutionary War to establish this government. We fought a Civil War to hold the Union together. American soldiers died in foreign wars. And now modern politicians are willing risk throwing it all away over a budgetary dispute? Whatever the unintended consequences, Republicans and Democrats will share the dishonor equally.

We live in perilous times. The U.S. is embroiled in three foreign wars. We recently survived the worst worldwide financial crisis since the Great Depression, but many countries continue to struggle with economic and debt problems of dangerous proportions. Portugal is begging for a bailout by the European Union and the International Monetary Fund. Portugal is the third European nation to require financial rescue. Japan, after two lost decades of economic stagnation, has been driven to its knees by an epic earthquake. Its nuclear power plants spew radiation, poisoning Japan’s food and water.

Enemies wish to destroy us. We’re threatened by terrorists from abroad, and by homegrown terrorists. War might be unleashed at any time, in Yemen, or the Ivory Coast, or an attack from North Korea or Iran. India and Pakistan are always on the verge of war. So are the Israelis and Palestinians.

What’s my point? Events like a government shutdown can spin out of control. One unexpected consequence cascades into others, until the entire edifice trembles. Who could have predicted that a World Trade Center building might collapse? Both towers disappeared into rubble before lunch on a single day.

On top of all the dangers in the world, U.S. politicians are going to shut down the U.S. Government? For a few days? If politicians cannot agree to keep the government open this week, will they agree to reopen it next week? What if two weeks go by? Three? The longer the crisis continues, the more difficult it will be to end. Be afraid of the “Black Swan.”

Some remnant remains after an empire fails. Rome exists as a city to this day. The British islands remain a functioning nation, with shrunken power. The Mayan civilization left ruins. Descendants of the Mayan people live today throughout Central America.

North America will remain, and millions of people will live in the historical United States. Modern civilization will continue, probably. Beyond that, there are no guarantees for the U.S. as a nation. A federal shutdown  for more than a few weeks would force the states to fend for themselves. A shutdown could lead to default on the sovereign debt, or weakening of U.S. armed forces.

Once started, a process of devolution and decay may accelerate out of control, and who has power to stop the chaos?

— John Hayden

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