August 7, 2011
ALAN GREENSPAN: No Chance Of Default: US Can Always Print More Money. Well, okay then.
ALAN GREENSPAN: No Chance Of Default: US Can Always Print More Money. Well, okay then.
ED DRISCOLL: The Rock’em Sock’em Populist…Washington Post? “As the quotes above from the JournoList illustrate, whatever rock’em, sock’em slugfest the Post thinks it’s in, the paper has been on the receiving end of most of the blows in recent years, as it increasingly loses its fight with reality, who tends to be a rather unmerciful sparring partner.”
AND IT’S A POSSIBLE SOURCE OF SPACECRAFT FUEL: Antimatter belt discovered around Earth.
DANIEL PIPES: Why Chris Christie Will Never Be President.
FORMER OBAMA BUDGET CHIEF PETER ORSZAG SAYS WHITE HOUSE PROJECTIONS ARE TOO OPTIMISTIC.
POINTS AND FIGURES: The Market is Crashing Tonight, What Should You Do? 6 Definitive Steps for Your Money. “This post is designed for the average Joe Six Pack citizen sitting at home and wondering if his mattress is better than the market to build wealth.”
Plus this: “A lot of folks out there will say this whole thing is politics. Some of it is. But most of it is simple math. By the way, 70% of the political donations at S&P went to Democrats. Well over 60% at the other ratings agencies went to the donkeys. Politics wasn’t the major piece in the downgrade.”
A BRUSHBACK PITCH FOR THE REGULATORS? Italian Police Raid Moody’s and Standard & Poors. Yeah, that’ll inspire confidence.
JOHN STEELE GORDON: The U.S. Is Downgraded And Obama Will Be Too.
DEBT DOWNGRADE: TIME FOR AN OBAMA APOLOGY.
He should say he’s sorry for his failure of leadership. Sorry for his utopian economic illiteracy. Sorry for putting ideology above political wisdom.
That would be the manly, the honorable thing to do. Admit he was wrong about what needed to be done to fix the U.S. economy.
What will he do? He will blame Standard & Poor’s. Or George W. Bush. Or the Tea Party. Or all three.
Pretty safe bet.
IRONY METER EXPLODES: Geithner Says European Nations Must Get ‘Fiscal House’ in Order.
LONDON: Police Let Gangs Run Riot And Loot. “Britain’s biggest police force is facing criticism after it let looters run riot in north London for almost 12 hours, in some of the worst scenes of street disturbances seen in recent years.” Well, it’s not like they’re smuggling incandescent bulbs or something, you know, serious.
HOW TO LOOK LIKE THINGS ARE GREAT: “Job hunting is an insane way to live. You are a depressed, scared, unemployed person and the key to getting out of it is to make yourself into a happy, confident, go-getter.”
But the really interesting stuff is in the comments.
UPDATE: A Wall Street reader emails:
For me, it’s Sunday night, DRINK. Like thousands of my colleagues around the world, I am sitting in front of markets screens when I should be with my family.
Is there a disaster? Not yet…a 2% drop in US stocks, interest rates twitching less than a tenth of a percent, and a tiny move
in the dollar, are nothing compared to the scenarios we’ve all wargamed over the weekend.
The ritual insults, er statements, by various monetary and govt authorities are parsed for anything non-obvious. Nothing there.
Time to pour a tall vodka, and chill out. There’ll be plenty of time to panic later.
There usually is.
OF THE NON-GOVERNMENTAL VARIETY: Extreme Debtors.
SO THE CURRENT DEMOCRATIC TALKING POINT IS THAT THE TEA PARTY IS SOMEHOW RESPONSIBLE FOR THE DEBT DOWNGRADE — because everyone knows that when you’re using your MasterCard to pay your Visa bill, it’s the person who doesn’t want the limit raised who’s the real source of the problem. But Canadian reader Kate MacMillan notes this story on how the Canadian province of Saskatchewan has gone from a “fiscal mess” to a debt upgrade by following Tea Party-like policies:
Rather than quickly spending its newly-earned wealth, the provincial government has put its tax revenue toward paying the bills. S&P gave special credit to Saskatchewan for its “low-and-declining debt burden.” As of March 31, the province’s fiscal year-end, Saskatchewan’s debt totalled $4.6-billion, representing 38 per cent of this year’s projected operating revenues and only 8 per cent of its gross domestic product. Canada’s federal debt-to-GDP ratio sits at around 35 per cent.
Low debt burden. She adds:
Saskatchewan is governed by the right-of-center “Saskatchewan Party”, with tax reduction, low resource royalty policies that encouraged potash development, and enticed energy industry investment away from neighboring Alberta.
So, I guess we can call that a “tea party upgrade”.
UPDATE: Reader Sean-David Hubbard emails: “There were folks calling for us to follow Canada’s example during the healthcare debate. How come those same people aren’t calling for us to follow Canada’s example during the debt debate?” Because this example doesn’t lead to more political-class control.
DEBT DOWNGRADE: Blame LBJ?
Those (many) who are rubbishing the eminently rubbishable S&P tonight are generally not grappling with something we’ve been talking about for years around these parts: The current fiscal trajectory of the United States is not just deteriorating rapidly, it’s definitionally unsustainable. That’s not crazy libertarians talking, that’s Barack Obama and Ben Bernanke. . . .
I eagerly look forward to this being blamed on libertarians, but even more than that I truly look forward to the day when the political class in this doddering country recognizes that you can’t just wave away a spending spiral by pretending that it doesn’t exist.
SUSANNAH BRESLIN: “Like many other women, I feel I am a poor negotiator. This is not a good time to be bad at negotiating. Because I would like to be a better negotiator, and because men make more than women, I thought I would observe how men negotiate. This is what I learned.”
From the comments: “I take it you’ve never been to Asia.”
THE GUILD STRIKES BACK: “A Senate bill that would encourage the growth of alternative training programs for teachers and principals, some of which would not be based at colleges or universities but would have the authority to give certificates considered the equivalent of master’s degrees, has come under fire from higher education organizations that argue Congress should focus on higher education institutions in efforts to improve teacher quality. . . . The academies would be exempt from restrictions the bill describes as “unnecessary”: teacher and principal academies would not be required to hire faculty with advanced degrees, faculty members would not be expected to conduct research, and the academies would not need to be accredited.”
AT AMAZON, discounts on textbooks, new and used. Plus, Kindle textbook rental.
HOW A VIDEO GOES VIRAL. Here it is:
JOE PAPPALARDO: 3 Questions About the SEAL Team Six Helicopter Crash.
A REVIEW OF THE Ruger LCP. I’ve fired one of these quite a bit, and found it to be very accurate, even out to 15 or 20 yards, which is surprising in such a small pistol.
ANSWERING SUCH GOOGLE SEARCH QUESTIONS AS “Is it bad to have sex with your aunt?”
AS PEOPLE ARE TALKING ABOUT THE HIROSHIMA/NAGASAKI ANNIVERSARIES, here’s a Bill Whittle Afterburner flashback: Jon Stewart, War Criminals & The True Story of the Atomic Bombs.
JOHN MCCAIN: Don’t Blame The Tea Party: “The fact is that the President never came forward with a plan.”
WANT TO LIVE TO 100? Just do whatever you want, and hope for the best.
THOUSANDS OF JOB OPENINGS unfilled in Japan.
IN THE MAIL: From A. Bertram Chandler, First Command. I’m glad they’re keeping these books in print. I enjoyed them, and by all accounts Chandler himself was quite a fellow.
THOUGHTS ON THE DEBT DOWNGRADE from the “little people.”
PROF. JOSEPH CAMPBELL: No ‘rock-em,’ no ‘sock-em’: What ails WaPo. “The ombudsman of the Washington Post, Patrick Pexton, weighs in today with platitudes and hang-wringing about the newspaper. He mostly misses the mark. . . . In his five or so months as ombudsman, Pexton hasn’t dared touch the electrified third rail about the Post, which one of his predecessors, Deborah Howell, gamely if belatedly addressed. That’s a decided lack of intellectual diversity in the Post’s newsroom.”
WHEN IT COMES TO CARS, Korea Is The New Japan.
CAN WASHINGTON DO ANYTHING ABOUT JOBS? They’re better at destroying them than at creating them.
TODAY ONLY: More than 85% off Tommy Bahama luggage.
GIVE IT TO HIM: My Sunday Washington Examiner column: Why The GOP Should Give Obama The Higher Taxes He Wants. Well, sort of . . . .
GOOD ADVICE: If You’re Going to Falsely Tell Cops a Guy Sexually Assaulted You, Don’t Get Caught on Camera Announcing Your Plans. Hey, I keep telling you about the importance of ubiquitous video.
And we sure are seeing a lot of false rape charges nowadays, after decades of being told that women don’t lie about rape.
Standard & Poor’s downgrade of the nation’s credit rating gives House Budget Committee Chairman Paul Ryan every right to say “I told you so.”
Even earlier this week when President Obama was taking his victory lap for the debt-ceiling compromise, Ryan was disclosing the cold, hard truths of the economic troubles that lie ahead — truths that a jittery Wall Street has been more than aware of.
In an oped column in Wednesday’s Wall Street Journal, the Wisconsin Republican reiterated, of course, that the president really has no budget plan. . . . The president knew then and knows now that his health care and welfare state agenda demand new and higher taxes, that the costs of Medicare and Medicaid will continue to rise at unsustainable levels and that he has no plan for dealing with that.
In fact, when presented with options by his own debt commission appointees, Obama continued to be in denial.
How can you talk about priorities when you can’t even present a budget?
UPDATE: For whom the downgrade tolls. “The first reaction of the administration was not to blame the GOP, but to attack S&P’s math, as though a couple of trillion makes the difference in this context. My initial hypothesis was that the administration took this tack to try to scare the Moody’s and Fitch — the other major credit ratings agencies — away from following S&P into issuing downgrades. Certainly, there are real-world effects off a downgrade on interest rates, economic growth, and employment that would motivate the administration to this end. Upon further consideration, I would suggest the reactions against S&P have deeper ideological roots. . . . Perhaps in the future, community organizers will bus hoboes to chant outside the houses of credit agency employees. Or perhaps Big Labor will organize rallies on Wall Street to rail against the evil bond market. But such efforts will be largely futile. Moreover, the DNC and AARP are not going to waste money running issue advocacy ads against our creditors, even though it would be vaguely amusing to see them roll out actors dressed as aristocratic bond vigilantes for demonization. It might be easier to run ads attacking our largest creditor, China, but it is a fair bet that the PRC would not care all that much, either.”
JANET DALEY: If we are to survive the looming catastrophe, we need to face the truth. “The idea that a capitalist economy can support a socialist welfare state is collapsing before our eyes. . . . That is the problem. So profound is its challenge to the received wisdom of postwar Western democratic life that it is unutterable in the EU circles in which the crucial decisions are being made – or rather, not being made.”
FINANCIAL MELTDOWN: In this grave crisis, the world’s leaders are terrifyingly out of their depth.
Certain years have gone down in history as great global turning points, after which nothing was remotely the same: 1914, 1929, 1939, 1989. Now it looks horribly plausible that 2011 will join their number. The very grave financial crisis that has hung over Europe ever since the banking collapse of three years ago has taken a sinister turn, with the most dreadful and sobering consequences for those of us who live in European democracies.
The events of the past few days have been momentous: the eurozone sovereign debt crisis has escaped from the peripheries and spread to Italy and Spain; parts of the European banking system have frozen up; US Treasuries have been stripped of their AAA rating, which may be the beginning of a process that leads to the loss of the dollar’s vital status as the world’s reserve currency.
There have been warnings that we may be in for a repeat of the calamitous events of 2008. The truth, however, is that the situation is potentially much bleaker even than in those desperate days after the closure of Lehman Brothers. Back then, policy-makers had at their disposal a whole range of powerful tools to remedy the situation which are simply not available today.
Out of bullets.
POLL: 67% Say Economy Causing Family Stress. “The latest Rasmussen Reports national telephone survey finds that 67% of American Adults say the state of the economy is causing more stress on their family. That finding is up 10 points from this time last year.”
INVESTOR’S BUSINESS DAILY: Confidence Crashes Through Lows Set In 2008 Meltdown.
The IBD/TIPP Economic Optimism Index — usually a precursor to confidence gauges released later in the month — has plunged 13.5% to 35.8 with subcomponents off sharply.
These include readings on six-month outlook, personal finances and faith in federal policies. A reading above 50 signals optimism, below 50 pessimism.
The main index’s 35.8 reading was the lowest since the poll began in 2001. It took out even the low of 37.4 set during the summer of 2008, when the financial crisis exploded into the nation’s headlines.
It also stands well below the 44.4 level that marked the onset of the last recession. Since the start of this year, the index has cratered 31%. . . . In the past, strongly positive readings among Democratic respondents to the IBD/TIPP Poll have kept the index from falling sharply in recent months, even as the economy soured and the nation’s problem with its soaring debt became an issue to average Americans.
But that ended in August.
For the first time since President Obama was elected in November 2008, Democrats grew pessimistic about the economy, with their optimism dropping 17% from 54.7 to 45.3.
MORE ON the U.N. gun treaty.
ANDREW MCCARTHY: Christie’s “Crazies.”
Maybe Governor Christie ought to ask S.D. if sharia law concerns are “just crap.” We know “S.D.” only by her initials to protect her from further indignity. She is a Muslim woman from Morocco who was serially raped and beaten in New Jersey by the Muslim man to whom she was wed as a teenager — one of those arranged marriages common in Islamic cultures. A New Jersey judge declined to give her a protective order, though. Under sharia, a man cannot rape his wife: “A woman cannot carry out the right of her Lord til she carries out the right of her husband,” declares one relevant hadith (Ibn Majah 1854). “If he asks her to surrender herself she should not refuse him even if she is on a camel’s saddle.” Or, as S.D.’s husband translated this sharia tenet as he forced himself on her, “This is according to our religion. You are my wife, I [can] do anything to you. The woman, she should submit and do anything I ask her to do.”
Based on this, the judge (who, thankfully, was later reversed) reasoned that the husband couldn’t be criminally culpable.
Read the whole thing.
SHUT UP, HE EXPLAINED (CONT’D): Wisconsin Democratic Party flak threatens to sic union bullies on independent news group.
Zeilinski’s email could easily be read as a threat to organize union demonstrators against Wisconsin newspapers that publish reporting provided to them by WisconsinReporter.com’s staff. And his vow to go after WisconsinReporter.com’s capitol media credentials is an obvious effort to silence a news organization with which he disagrees.
When WisconsinReporter.com asked Beth Bennett, executive director of the Wisconsin Newspapers Association, for comment on Zeilinski’s threats, she characterized them as “out there” and unlike anything she’s seen previously during her career in Wisconsin government and media.
With their power-base threatened, Wisconsin’s political establishment is cracking up. Expect to see the same sort of thing on the national level, as matters progress.
UPDATE: Moe Lane mocks: “Zielinski went, to be charitable about it, a little crazy at this point. After castigating the author of the piece and complaining that the original article made him and his party ‘look even smaller’ in the process, Graeme Zielinski went on to demonstrate that he was capable of making him and his party look smaller all on his own, via a direct threat. . . . Good job getting this story out into wider circulation, Zielinski. Particularly since people outside of Republican circles are lining up to politely ask you what the heck your party thought that it was trying to accomplish, here.”
It’s hard to get good goons nowadays.
ANOTHER UPDATE: Clarice Feldman on the crackup. “I have come to believe that the reactions I received represented a rage at the dying of all that which these men had embraced in the absolute certainty of the righteousness and soundness of their views, and their right to have them automatically accepted as the approved model for all right thinking people. . . . the elite liberal of a certain age is experiencing a major life crisis as the march of history leaves them as but rather laughable footnotes — believers hanging on to 20th century versions of phlogiston and spontaneous generation.”
DAVE PRICE: The Downgrade And Its Discontents.
AT AMAZON, markdowns on bestselling knives.
STEVE HAYWARD ACCEPTS JOE NOCERA’S APOLOGY AND OBSERVES: “Since Reuters and other establishment media types embrace the moral relativism of the ‘one man’s terrorist is another man’s freedom fighter’ nonsense, why not hoist them with their own petard, and start referring to ‘Tea Party freedom fighters’? It will enable Krugman and Dowd to phone in yet another column.” Wait, is that supposed to be a selling point?
MICKEY KAUS: “Psst. Despite recent reported profits, GM stock is trading at around $26–below its IPO price of $33 and about half what it would take for the government to break even on its investment. Is the Obama administration really going to dump its GM stake at such an embarrassingly low price? Wouldn’t that provoke a lot of stories, not about how the government is finally out of GM’s hair as promised but about how poorly the bailed-out company is doing? … P.S.: Yes, the entire market is down. But GM has done worse than the overall market, trailing the major stock indexes by a significant margin. …”
THAT SEAL HELICOPTER CRASH: “This is just an extraordinarily bad day for America.”
THE MATHEMATICS of lawn-mowing.
PHILIP KLEIN: Obama Won’t Escape Blame For Credit Downgrade.
When Obama came into office, he argued that we needed deficit spending to boost the economy, so he passed a $800 billion stimulus package. Then, in one of his first supposed pivots to the deficit, he convened a ‘fiscal responsibility summit’ in February 2009. But that actually turned out to be part of a different pivot altogether. It was during that summit that then White House Budget Director Peter Orszag declared, “health care reform is entitlement reform.”
And so, for the next 13 months, Obama spent all of his energies trying to get health care legislation across the finish line. The end product was a plan that, according to both the Congressional Budget Office and actuary for the Centers for Medicare and Medicaid Services, did not bend the health care cost curve down. Let’s even set aside the argument over the accounting gimmicks that were employed to obtain a CBO score that showed modest deficit reduction. The reality is this: the law used money raised through tax hikes and Medicare cuts that otherwise would have been available for deficit reduction, to instead expand Medicaid by 18 million beneficiaries and create a massive new health care entitlement.
Of course, there’s more. After health care passed last March, Obama punted on the debt for the rest of the year as he awaited a report from his fiscal commission. He then ignored its recommendations and released a budget so ludicrous that within two months, it failed 0 to 97 in the Senate and he himself rejected it. He instead delivered a speech about his deficit reduction vision, which didn’t have enough details for the CBO to score. And then he spent the last few months arguing that he was prepared to offer Republicans a “grand bargain,” but to this day he hasn’t released details of this supposedly awesome deal that Republicans refused, beyond calculated leaks to favored reporters.
GO AHEAD, EAT CHOCOLATE FOR BREAKFAST: Why the lawsuit against Nutella is bunk.
AFTER THE REVOLUTION, ARAB WOMEN SEEK MORE RIGHTS: “Images of women marching alongside men in countries like Egypt, Tunisia, Bahrain and Jordan led to predictions that women’s rights would also make huge strides forward.” Not so much, as it turns out.
OBAMA ON THE DEBT DOWNGRADE: The Man Who Voted Present Now Says “I Told You So.”
But while it’s hypocritical of Obama to say that, J.W. Verret has the right.
THE NARCISSISM OF BIG DIFFERENCES: “He becomes visibly agitated. . . . He does not like to be challenged on policy grounds.”
FRANK J. FLEMING: What’s Wrong With Making Future Generations Pay For Our Debt?
GLOBAL WARMING UPDATE: Arctic “Tipping Point” May Not Be Reached. “Scientists say current concerns over a tipping point in the disappearance of Arctic sea ice may be misplaced.”
AT AMAZON, bestsellers in Automotive.
I THOUGHT THEY’D CALL THEM “FIRST AMEND-MINTS.” Company Makes Breath Mints In Honor Of Tennessee Lawmaker. “A Tennessee lawmaker now has a package of breath mints in his honor, after he complained about some satirical mints sold at the University of Tennessee bookstore. . . . The company has created a mint in Representative Armstrong’s honor, naming them ‘Joe Armstrong’s Strong Arm Censored’ mints.”
UPDATE: More here, including a picture of the can.
COOL PICTURE: The Layers of Rock in Mars’s Gale Crater.
THIS MAY SPUR EMIGRATION: For Many Chinese Women, Mr. Right Is Bald, Fat & Faithful.
STEPHEN GREEN: The Man Of Steel Appears Quite Steely.
RYAN CALO: Will Drones Save Privacy Law? “The introduction of government and private drones into our cities will feel very different to the public and perhaps to the courts. What data there is suggests that Americans are nervous around robots. They may associate drones in particular with violence and the theater of war. The proliferation of drones in our skies could lead to a new, Warren and Brandeis moment—all of our amorphous fears about new technology watching us suddenly reified and immediate.”
Related: DIY Flying Spy Drone Hacks Wi-Fi, GSM. “Hobbyist hackers have built a DIY flying spy drone that’s capable of intercepting communications over remote Wi-Fi and cellular networks and beaming them to snoops located half a world away. Short for wireless aerial surveillance platform, the WASP is equipped with a battery of off-the-shelf hacking tools that can secretly hover over unsuspecting targets and infiltrate their networks. A 4G cellular connection links it to a back-end server that allows operators to control its operations and monitor its sensors in realtime.”
WANT TO CUT THE DEFICIT YOURSELF? You can make the changes here. One thing this calculator will do is demonstrate just how much cutting it takes.
IN THE MAIL: From Andrew Klavan, The Final Hour.
LEGAL EDUCATION UPDATE: Widener Law School Goes Soviet, Demands Law Professor Undergo Psychiatric Evaluation. “Widener’s requirement of a psychiatric evaluation under these circumstances clearly is intended to further damage Connell even though the committee found no conduct which reflected any alleged psychiatric or anger management issues. Connell simply defended himself. Widener Law School Dean Linda Ammons has done further damage to her law school and her own reputation by using psychiatry as a vindictive tool against a law professor whose worst crime was defending himself against false accusations of racism and sexism.”
UPDATE: David Bernstein: “Dean Ammons has recommended that Connell be suspended for a year without pay and be forced to undergo a psychiatric evaluation. Widener’s administration, apparently oblivious to the long-term damage this is doing to the law school’s and university’s reputation, agreed. I hope Connell sues, and I hope he wins big. Meanwhile, if any of our readers are considering attending Widener, I recommend looking elsewhere–-anywhere else. If Connell can be abused in this way, so can you.”
I suspect that advice would go double for faculty candidates.
MORE: Bernstein adds this to his post: “I had agreed to participate in a Widener-sponsored project after the committee report was released, which I thought would be the end of the matter. I’ve now sent an email to my contact at Widener, withdrawing. I can’t in good conscience have my reputation associated in any way with Widener Law School.” I wonder if others will feel the same way.
MIKE RIGGS ON THE HIGHER EDUCATION BUBBLE:
A growing chorus of economists and educators think that the higher education industry will be America’s next bubble. Easy credit, high tuition, and poor job prospects have resulted in growing delinquency and default rates on nearly $1 trillion worth of private and federally subsidized loans. Now the ratings agency Moody’s has weighed in with a chilling diagnosis: “Unless students limit their debt burdens, choose fields of study that are in demand, and successfully complete their degrees on time, they will find themselves in worse financial positions and unable to earn the projected income that justified taking out their loans in the first place.”
PETER WEHNER: The Public’s Complicity In Its Own Outrage.
I understand fierce criticism of our political class is sometimes in order. (I’ve even engaged in such criticism myself from time to time.) Often, and understandably, it’s driven by objective circumstances. And the American public is not inclined to deify its (living) politicians, which is a healthy thing.
But we need to recognize this as well: if the public’s animus for our system of government is unrelenting and unceasing, it eventually undermines self-government itself. A democracy relies on widespread respect for the authority of government and compliance with its laws, including (and even especially) from those who are on the losing end of elections. Beyond that, it’s difficult to maintain one’s love of country if one harbors, over a sustained period of time, utter disdain for its governing institutions, for its lawmakers and for its laws.
That’s true, but we also need a governing class that makes at least some effort not to be contemptible. As I’ve suggested before, the current crowd not only underappreciates the role of financial capital, but seriously underappreciates the importance of moral capital. Related thoughts here.
APPARENTLY THE TEA PARTY TERRORISTS HAVE TAKEN OVER CHINA: China demands U.S. ‘live within its means’: The largest foreign holder of U.S. treasuries responds to the S&P downgrading by calling for decreases in U.S. military outlays and social spending.
AUTO NOT ON “AUTO:” Google Blames Human Driver For Self-Driving Car Accident.
RICH MAN, POOR MAN: A new Afterburner from Bill Whittle.
CHANGE: You know the economy is in bad shape when customers can’t afford to shop at dollar stores anymore. “Chalk it up as one more sign of weakness in consumer spending. Wal-Mart visits are down 3 percent, with some customers complaining that prices are too high there.”
Related: Consumer Credit Card Balances Surge. “Across the board, prices are rising.”
More: “Are Americans hoarding cash and taking out more consumer loans while boosting their credit card balances? There’s no good explanation for why this might be happening.” If you expect economic disaster, running up your credit card balances while hoarding cash might make sense.
UPDATE: A reader emails: “Regarding David Inviglio’s contention that there is no explanation for why Americans would be running up credit while hoarding cash, I can offer one: negative real interest rates on some consumer credit. I have a significant amount of debt I’m carrying, and I have enough cash and liquid investments on hand to wipe it out right now. Why don’t I do that? Because the debt is at zero interest. With inflation getting in gear, why should I pay it off now when Ben Bernanke is devaluing it for me? So long as I’m working (knock on wood), real carrying costs remain negative, and my investments beat 5% (and they do) there’s no reason why I would do otherwise. Economic disaster doesn’t factor into my calculations, simply because my credit score would be the least of my worries by that point.”
THE HILL: Boehner Blames Democrats For Debt Downgrade. “It is my hope this wake-up call will convince Washington Democrats that they can no longer afford to tinker around the edges of our long-term debt problem.”
PETER BERKOWITZ: The Debt Deal And The Progressive Crackup.
PROFESSOR BAINBRIDGE ON the Chicago Law Review’s new faculty peer-review system. “Either the student-edited format makes sense or it doesn’t. The whole purpose of peer review is to get students OUT of the process, not to supplement a decision that would remain in the hands of second and third year law students.” I’ve reviewed articles for the Stanford Law Review in the past — I didn’t mind because they sent stuff I would have read anyway — but I thought the same thing when they asked.
Meanwhile, I have to say that I care less and less about law reviews. Increasingly it feels to me like the article is published when it’s posted on SSRN, and the actual publication in a law review later seems kind of anticlimactic. Based on casual conversation, I’d say that a lot of other legal academics feel the same way. I still submit to law reviews, but I wonder if that will be true in five years.
INTERESTED IN WAR ON TERROR NEWS? Check out Fred Pruitt’s Rantburg.
DAVID FREDDOSO: Downgrade Shows DeMint Was Right.
The bond-rating houses kept saying all along that they weren’t worried about the debt ceiling not being increased. Rather, they were worried about the long-term prospects of the U.S. government paying back $15-plus trillion, which is where our national debt (both publicly held and obligated to trust funds) will be shortly.
Because last weekend’s deal didn’t cut spending deeply enough, S&P has just downgraded us. We’ll see just how disastrous this becomes — some are arguing it’s not such a big deal — but consider this the market’s revenge for TARP and the stimulus package. You run up the debt, Mr. President, you lose your good credit.
ED MORRISSEY: HYPOCRISY, IRONY, AND THE NEW CIVILITY. “After getting an avalanche of criticism, Harrop deleted all of the comments and closed the post for any future comments.”
AMERICA’S NEWEST SHOOTING SPORT: Rifle Golf!
PEGGY NOONAN: The Power of Bad Ideas: What we’ve got here is far worse than a failure to communicate. “There was drama at the White House this week when a man tried to hurl himself over the fence. But the Secret Service intervened and talked the president into going back inside and finishing his term. That’s from Conan O’Brien’s monologue the other night. It captures the moment pretty well.”
THIS HEADLINE’S PRETTY MUCH EVERGREEN: Byron York: Obama Partisans Ignore Facts When Bashing Bush.
After beginning with a Clinton-era surplus in 2001, the Bush administration ran up deficits of $158 billion in 2002; $378 billion in 2003; and $413 billion in 2004. Then, with revenues pouring in, the deficits began to fall: $318 billion in 2005; $248 billion in 2006; and $161 billion in 2007. That 2007 deficit, with the tax cuts in effect, was one-tenth of today’s $1.6 trillion deficit.
Deficits went up in 2008 with the beginning of the economic downturn — and, not coincidentally, with the first full year of a Democratic House and Senate.
People complained about Bush’s spending, but if we could get back to the Bush-era spending and deficits now it would look like a triumph of fiscal responsibility — and Democrats would complain of “austerity.”
SOLAR BLASTS SLAM INTO EARTH: “Two blasts of energy from the sun hit the Earth’s magnetic field Friday and could disrupt one or more electrical grids, global-positioning systems or other satellite-communications systems, scientists at the National Oceanic and Atmospheric Administration said Friday. . . . Scientists expect the frequency of these kinds of events to increase over the next two to three years.”
ROGER KIMBALL: Thank You, President Obama: “Just a couple of years in that big house in Washington and you and your spendthrift colleagues have managed to blight the most productive economy the world has ever seen. Thank you Mr. President! . . . In the space of two years, you have done more damage to this economy — which means the future not only of this country but the rest of what you would disdain to call the civilized world — than any President in history. You are a poor man’s Jimmy Carter, a midget Herbert Hoover, a disaster for this country and the world.”
NEW ORLEANS COPS GUILTY OF CONSPIRACY in Katrina bridge shooting case. “A federal jury in New Orleans on Friday handed down all guilty verdicts on 25 counts in the infamous Danziger Bridge shooting case, in which current and former New Orleans police officers were charged with civil rights violations, conspiracy charges, and weapons charges in the shooting deaths of unarmed civilians following Hurricane Katrina. In the infamous debacle in the chaotic days after the 2005 storm, police allegedly opened fire on a group that was crossing the bridge out of town, then lied after the fact, saying they had been fired upon and planting a gun on one of the victims. A 40-year-old man and 17-year-old boy were killed, and four others were injured.”
PROF. JACOBSON: S&P Drops U.S. Credit Rating to AA+ // Obama and Reid’s Crowning Achievement. “Democrats own the downgrade. They fought Republicans and Tea Party supporters every step of they way, and forced a deal which was insufficient. They played class warfare and race politics against arguments that we needed to drastically change our spending habits.”
But you can bet they’ll blame the Tea Party.
BRYAN PRESTON: Now That S&P Has Downgraded U.S. Credit, Tim Geithner Should Resign. “Under Geithner’s watch, the United States has not had a national budget at all, and that includes two years when the party of his president controlled the White House and both houses of Congress. As Treasury Secretary, it was Geithner’s job to make the case that living without a national budget was reckless. The fact is, Geithner has offered no leadership at all. He should resign.”
AFTER YESTERDAY’S MOB VIOLENCE a new “youth policy” at the Wisconsin State Fair: “On Friday afternoon, Mayor Tom Barrett announced an increase in police presence at community events planned for the week. He said there would be no tolerance for violence at festivals and that perpetrators will be prosecuted — regardless of race.” Well, that’s how it’s supposed to work, right?
IS THE OBAMA ECONOMY making people ruder?
CHANGE: Another Historic First for Obama: S&P Downgrades US Credit Rating From AAA. “Heckuva job, Bammy.”
But is there a math error? And if so, does it matter?
UPDATE: A reader emails: “Obama lied, our credit rating died.”
Plus, via Drudge, a reminder that just a few months ago Tim Geithner said there was “no risk” of a downgrade. Heckuva job, Timmy!
ANOTHER UPDATE: A reader writes: “When Black Friday falls you know it’s got to be — Don’t let it fall on me.” Sorry, got to go catch the gray men. . . .
A MODEST PROPOSAL for addressing poverty. “I have no issue with a social safety net. I just think the beneficiaries of this net should be grateful and embarrassed.” His efforts seem directed mostly toward ensuring the latter.
AT AMAZON, it’s the Friday Sale!