Dec 22 2012

Schadenfreude: Fiscal Cliff Edition

Posted by Steve Ross in National Politics, Policy, shenanigans, snark

schadenfreude: pleasure derived by someone from another person’s misfortune.

You’d cry too if you had to herd feral cats

So I know just about everyone is talking about the NRA’s crazy town response to the Newtown shootings. I think all that needs to be said about the speech delivered Friday is nicely summed up here.

Quite frankly, I’m shocked that anyone was shocked by that announcement. LaPierre has been spouting crazy for the NRA since 1991. Same song and dance, over and over again. It ain’t about gun ownership…its about gun sales. Manufacturers pay the bills at the NRA. Don’t forget it.

So aside from providing a distraction, the NRA event was irrelevant. Unfortunately for everyone, a distraction was needed, in the wake of the massive failure to herd feral cats, some called the display “a clown show”.

How We Got Here

It’s important to remember is how we got here, where it started and who is responsible.

November, 2010 – A wave of of GOP wins in Congressional races, led by 40 candidates claiming “Tea Party” affiliations, leads to the composition of the US House of Representatives flipping from 255 Democrats to 242 Republicans.

August 2, 2011 – In the wake of a contentious battle over the debt ceiling limit, the Budget Control Act of 2011 was passed with bipartisan support. The bill raised the debt ceiling and put in place a series of deep budget cuts and tax increases if the Congress could not reach an agreement.

66 Republicans voted against the deal, which would not have passed without Democratic support.

August 5, 2011 – In the wake of the vote on the Budget Control Act, Standard & Poor’s downgraded the US Credit rating stating concerns with the current state of political affairs in the Congress.

February 2012 – Fed Chairman Ben Bernake coins the term “fiscal cliff”.

July/August 2012 – On July 25th the US Senate passed a proposal that would have avoided the tax increase portion of the fiscal cliff. The proposal was rejected by the House on August 1st.

November 2012 – Elections result in more GOP moderates losing. Democrats gain 8 seats in House. Incoming makeup of the House: 201D – 234R. Incoming makeup of the Senate: 55D – 45R

December 2012 – Negotiations between Speaker Boehner and President Obama net a compromise. Said compromise not brought before the House. Boehner’s bill pulled for lack of support. The House did pass a bill dealing with spending cuts, however that bill has little chance of passage in the Senate and faces a Presidential veto.

This list is hardly exhaustive, but mentions most of the highlights. Had Republicans not tried to make political hay over increasing the debt ceiling, we wouldn’t be where we are today.

The Failure Option

Now I want to be very clear here: while I do get some pleasure from the outright #FAIL that was the Speaker’s effort to pass a watered down version of what he and the President were negotiating, I also understand that a failure to act by the end of the year will have some serious consequences for regular folks. Those consequences will be immediate for all of us, though many of them will have a limited impact.

If they fail to act, the payroll tax cut will disappear, the Bush era tax cuts will disappear, and some pretty stiff spending cuts that no one seems to want will be enacted.

What does this mean to you? Well based on the median household income you will see about $1000/yr less as a result of the payroll tax hike, about $1500 less as a result of the income tax hike, and a whole lot fewer services.

Interestingly, if the Obama proposal were to pass, a household making the median income would see a tax DECREASE of about $225/yr (payroll and income) rather than the increase of $2500 House Republicans seem to favor in the wake of their inaction. You can see how the fiscal cliff and the Obama proposals would impact your income here.

(Note: The tax calculator is provided by the anti-Keynsian, pro-business group The Tax Foundation. They bear responsibility for any inaccuracies.)

The Failure Option – Part II Electric Boogaloo

The financial impact of failure for household incomes is pretty dire. Considering that inflation adjusted incomes have been flat since 1967 for 80% of the population, losing $2500 for a median income represents a nearly 5% hit in real purchasing power. That’s not going to be good for an economy that is just really starting to emerge from weakness. Add to that increased instability from a potential market panic and Joe 6-pack is going to take a huge hit.

Investors know this. They make lots of money knowing this. And while we haven’t seen an increase in incomes to rival the increase in markets (1967 Dow was 825, 2012 Dow was 13190.84 as of the closing bell on Friday, a nearly 1600% increase), the panic that will ensue due to uncertainty if the fiscal cliff is not avoided will hurt average Americans more than investors, who will certainly lose wealth, but not much standing.

Investors have more ways to make money in the face of a market panic that regular folks don’t, including betting on failure. This kind of risky bet is usually only played by the wealthiest individuals and huge investment houses. It may seem counter-intuitive and to fly in the face of what we consider to be patriotic, but remember, in the church of the almighty dollar, anything goes that makes you rich.

Plenty of folks profited from the pain of the Great Depression and the more recent “Great Recession”. There will be winners if a huge market panic ensues come Jan. 2 as well.

Joe 6-pack won’t be one of them, so don’t even think about it.

I feel confident that a solution won’t be found before the end of the year. The House Republicans don’t seem to have the will to give any ground, and in their disarray they have given their Democratic counterparts some resolve to stand their ground. With 201 incoming votes, it will take just 17 Republicans to pass a Democratic measure…should it reach the floor. That seems like a possible scenario now that people are starting to point to conservative recalcitrance as the problem.

The Senate has already passed a bill, which was rejected by the Tea Party led House in August. The House could take the measure back up if they chose to. I can’t imagine that happening before the end of the year. I just don’t think the votes are there before the end of the year.

This means that a market panic is almost a certainty come Jan. 2. The next Congress convenes the next day. We’ll see what they do, but I’m putting my money on passing something like the Senate proposal and dealing with the spending side later…probably right before the next debt ceiling vote which will need to happen before February of 2013.

In the current climate, I just can’t see this leadership actually…you know…leading.

May 06 2011

From Booker T. Washington

Posted by Steve Ross in City of Memphis

via Ellyn

May 03 2011

Flood or No Flood, The World Keeps Turning

Posted by Steve Ross in Shelby County, State Politics

Mud Island shot from Riverside Dr., 2pm May 2, 2011

This may sound a bit callous or cold, but it is a harsh reality: The world doesn’t stop just because we’re staring down the barrel of a disaster.

Lots of things are going on across the state and the nation, and even though it’s hard to keep up with everything with all the flood information, but it is important.

On the bright side:

Memphis’ own Booker T. Washington High School has been selected as a finalist in the President’s Commencement Challenge. Congratulations to #BTW and here’s hoping they win it all.

The has effectively killed many bad bills for this year including State Sen. Stacey Campfield’s ridiculous “Don’t Say Gay” bill. Thank goodness.

Speaking of “Don’t Say Gay”, here’s an interesting exchange between Sen. Campfield and a blogger.

On the Not so bright side:

The Tennessee Senate voted last night to approve a bill that would end collective bargaining. I’m not sure how removing a check from the system of checks and balances is going to help student achievement, and neither are several state legislators. Here’s a video from State Sen. Eric Stewart.

Speaking Out

Sen. Lowe Finney and Rep. Craig Fitzhugh ask in the Commercial Appeal why the Haslam Administration is abandoning successful policy.

The CA editorial board also had something to say about the Anti-Shariah bill before the TNGA.

Mediation

Here in Shelby County, the mediation on the Schools issue has been taken back over by the Judge. We’ll just have to see what shakes out from that development.

City Council Meeting

This afternoon the Memphis City Council meets and will discuss several items of interest. You can see the agenda here.

No mention of redistricting, which was deferred until the May 17th meeting. Maybe someone needs to go and ask them about the need for public scrutiny. Maybe I will.

The meeting starts at 3:30.

I’ll have more flood information later this afternoon. Until then, stay safe.

Jan 29 2009

“Post-Partisanship” or “Can’t Buy Me Love”?

Posted by Steve Ross in Uncategorized

Partisan:a strong supporter of a party, cause, or person.

So what is “Post-Partisanship”? Is it a coming together? Is it an attempt to blur the traditional lines or roles of our current two-party system?

What is the effect of pursuing “Post-Partisanship”? Is it compromise? Is it holding the hand of the opposition party to appear less partisan?

Apparently, it’s all of those things.

I don’t want to jump out of the gate too soon and call President Obama’s attempt to heal some of the divisions in our country a failure, but certainly he must realize that for this “Post-Partisanship” to work, both sides must be willing to give something, and right now it appears that the only side giving anything is the President.

This puts the President in a position far weaker than the one his landslide victory should afford him. Take a look at this video from The Rachel Maddow Show


For all the Republican attacks on infrastructure spending, in order for our nation to compete globally and protect its citizen’s vital interests, our infrastructure, much of it built in the 60’s and 70’s, must be updated to meet the needs of the 21st century. Further, this infrastructure spending creates jobs, that puts that money right back into the hands of the people who most desperately need it, the American worker.

As Maddow rightly points out, the President gave Republicans just about everything they wanted in an effort to win some votes from their side. This did not happen. In fact, the President couldn’t even keep some of his own party members (12, including Jim Cooper (TN-05)) from voting against the bill.

So what has President Obama gained from this exercise? Nothing, in fact he may have lost quite a bit.

By spending the majority of his time courting Republicans, he has ignored his own party, much to their chagrin, and gained nothing.

The question has to be asked; does courting an unwilling partner really gain you anything? I’m all for dialogue, but not at the expense of party unity.

President Obama is starting down the path of some bizarre, upended Can’t Buy Me Love scenario. It is a fine and noble cause to try and bring as many people as possible into the solution, but there has to be some willingness on their part to be a part of the solution. If you’re just bribing them, they’re not your friends they’re using you. And if you’re forgetting about your REAL FRIENDS in the process, you may find that you have fewer REAL FRIENDS in the long run.

Post-Partisanship is fine, collaboration is fine, but not at the expense of the ideas and values that we elected you to represent. President Obama, don’t give away the farm so soon. You have a lot of political capitol at your disposal, but perhaps, not quite as much as you think you do.

Update:TPM has the Republican definition of Bi-Partisanship