Month: August 2011

Amazon And The London Riots

Just check out the movers and shakers on Amazon's UK site in the sports section. The purchase of regular wooden baseball bats is up 3,263 percent in the last day. I don't think baseball has suddenly had a boom in Britain. Top of the list: the Rucanor aluminum version, up 6,500 percent. 7 of the top ten sports increased sales are for weapons.

How Obama Can Win The Fall

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I rather liked this tart assessment by the Economist's Lexington columnist on what has just happened in American politics:

The president, it is true, did not lose the fight because he lost the argument. He lost because he was not willing to be as reckless as the Republicans.

And yet s/he notes that the appearance of losing even a skirmish is still damaging. The far right is busy piling on insult after insult, and blaming Obama for the downgrade and other idiocies. They sense blood in the water. But that they wielded the stability of the entire global economy for a petty, short-term adrenaline shot tells you all you need to know about their fitness to govern. They are unfit to run a lemonade stand.

But it seems also clear to me that the crucial fight – presaged by the debt ceiling nonsense – is still to be had in the next few months. This was a skirmish on which the president's ideological opponents exhausted their heaviest leverage. Now, both sides are equal, and my worry is that Obama, advised by the same people who thought it was wise to duck the debt issue head on in the SOTU and budget, will let the Congress take (or not take) the lead again. Yes, the Congress needs to do this. But there is also an obvious way for Obama to use his bully pulpit to push the Super-Committee toward success. There's a way to fuse his core messages: that he wants long-term fiscal reform that is balanced; that we can get past the red-blue culture war through pragmatism; and that we can and must restore confidence in the economy now.

The answer is tax reform. It's clear that the GOP is resistant to any raising of taxes of the sort that is scheduled to occur in December 2012. And Obama, for reasons to do with keeping demand alive at all in this period, has conceded the logic that raising anyone's tax rates in a de facto recession is risky. So change the subject to a positive proposal: Reagan-style tax reform that is revenue positive.

In my view, Obama should focus on this in stump speech after stump speech in the fall. Let the country know where he stands with a specific position that is good for all of us and very resonant with Independent voters and Obamacons. Here's the gist:

We all know we have to tackle this deficit and this debt or it will keep on tackling us. But we need a balanced approach of more revenue and less spending to make anything like the progress we need. At the same time, we have a tax code of grotesque complexity, riddled with loopholes that allow the rich to get away with evasion, while working families struggle to make ends meet.

I propose a solution that slashes the debt, lowers tax rates, and sends the corporate lobbyists back under the rocks whence they came. By ending or phasing out all the loopholes and economic micro-management, we can reduce rates while we increase revenues. Reagan's Grand Bargain is the model. I implore the GOP to come together, to keep tax rates low, while raising the revenues necessary to balance the budget. I am prepared to put entitlements on the table; the GOP must be prepared to put defense on the table; but together we can agree on tax reform in the great bipartisan tradition of Ronald Reagan.

Keep it simple; make it look like the deus ex machina that really does square our ideological circles (because it does!); frame it as a natural outcrop of your core 2008 message that we need both right and left to succeed as a country and this crisis demands shared sacrifice and compromise on both sides. Explain that there are some things we cannot avoid: the catastrophic legacy of Bush, the European sovereign debt crisis, the Fukushima disaster. But note what we can also now do. Decline is not a fate; it's a choice. and radical reform of taxes will reduce the debt, undermine the lobbyist culture in DC, and level the taxation playing field between rich and poor. All the while reducing tax rates to improve the incentives for hard work that will create jobs. Cite Krauthammer in the red states.

Don't muddy the issue. And keep it simple and repeat it again and again: tax reform, not tax rate hikes. In my view, that should have been the core of the last SOTU. In the greatest error of his presidency (apart from Libya), Obama played the Washington game. He was elected not to play that game. He was elected to tackle the profound challenges we face with practical solutions.

And to those who believe we can never break this cycle of partisan warfare and political gridlock, raise the banner once more, and repeat after me: Yes. We. Can.

(Photo: U.S. President Barack Obama pauses as he makes a statement at the State Dining Room of the White House August 8, 2011 in Washington, DC. Obama spoke on the economy, S&P downgrade and the loss of Navy SEAL members in Afghanistan. By Alex Wong/Getty Images.)

Where Congressmen Really Go In The Recess

20 percent of the US House of Representatives will be on tours of Israel in the next three weeks. Staggering. Of all the countries salient to US foreign policy, it's clear who calls the shots. A tiny country of six million with barely any strategic advantage for the US since the Cold War. But to note the fact that there is an Israel lobby that has unparalleled influence in Washington is de facto anti-Semitic.

Thugs In London

Prepare to be disgusted:

Mark Leon Goldberg echoes others in denying a legitimate racial element here:

Aside from the sheer  spectacle of London being beset by looters and rioters, it is interesting to see that there does not seem to be too much of a racial or ethnic dimension to the riots. Hoodlums from all ethnicities and backgrounds seem to be taking advantage of the breakdown of authority to vent frustration, anger, and of course behave like crass thieves.

This is a departure from the typical dynamics of other youth-riots in the UK and western Europe in recent years, which tends to be outpouring of rage by socially disadvantaged children of immigrants and ethnic minority youth

Kenan Malik has related thoughts (via Norm Geras).

Perry’s Opening Gambit

Politico claims that the Texas governor is set to announce his presidential run this Saturday, as the Iowa straw poll winner is declared. Seth Mandel guesses the reasoning:

GT_PERRY_110808 Perry is not trying to make the public forget about the winner of the straw poll. In fact, to have the intended effect, Perry wants the Iowa straw poll to be magnified in the public’s mind. The goal of his competing announcement is to highlight the winner of the straw poll at the same time he makes a (sure to be) well-covered speech. 

Perry wants to say: Look–here are your two choices. The reason is because his chief rival, Mitt Romney​, is unlikely to win the straw poll. That means an effective Perry campaign ploy will elevate the winner (most likely Bachmann) to a space that should be occupied by Romney. The news cycle will pit Perry against the Not Romney candidate.

And this happens as the Obamaites launch a pre-emptive strike on the Mormon from Massachusetts. Money quote from a Smith-Martin insidery, anonymously sourced classic:

The second aspect of the campaign to define Romney is his record as CEO of Bain Capital, a venture capital firm that was responsible for both creating and eliminating jobs. Obama officials intend to frame Romney as the very picture of greed in the Great Recession — a sort of political Gordon Gekko. “He was very, very good at making a profit for himself and his partners but not nearly as good at saving jobs for communities,” said David Axelrod, the president’s chief strategist. “His is very much the profile of what we’ve seen in the last decade on Wall Street. He was about making money. And that’s fine. But often times he made it at the expense of jobs in communities.”

Of the current GOP candidates, I see only Huntsman and Romney as truly dangerous for Obama. American amnesia is deep and wide but another gun-totin' Texan is not, it seems to me, what the public is looking for.

(Photo: Texas Governor Rick Perry speaks to an estimated 30,000 attendees at the non-denominational prayer and fasting event, 'The Response,' on August 6, 2011 in Houston, Texas. Thousands attended the event organized by Gov. Rick Perry in order to pray for God to help save 'a nation in crisis' referring to America. By Brandon Thibodeaux/Getty Images)

On S&P’s Chutzpah

They told us so many investments were safe that were anything but. Now they tell us the US economy is worth less this week than before the recent deal to cut spending. Bill Miller notes how they are wrong and reckless again:

There was no need for S&P to rush to judgment just days after a bruising political battle had secured a bipartisan agreement to raise the debt ceiling through the next election cycle and which initiated a process to begin to cut spending and address the nation’s long-term fiscal imbalances. Neither Fitch nor Moody’s saw any need to do so, indeed, Moody’s indicated that it saw the agreement as “a turning point in fiscal policy” and declared that a downgrade would be “premature”. The market says S&P is wrong. The US enjoys among the lowest interest rates in its history coincident with the highest deficits and a daunting long-term fiscal outlook. Yet when investors are looking for safe assets, they buy Treasuries. The US is borrowing at lower long-term rates than it did when it was running a budget surplus. In the 2008 crisis, investors flocked to Treasuries and the dollar because they sought the safest, most creditworthy assets in the world. S&P seems not to have noticed this.

But Miller misses something important, I think.

Maybe the timing was off, but the downgrade makes sense to me. The justification is that the GOP, by ruling any revenue increase out of consideration, has made the real Grand Bargain we need much, much harder to reach. That matters. At the same time, they have played their most reckless card – the debt ceiling – and cannot do so again until after the next election. I’d also say that the crisis has had one good effect. It has illustrated that the Grand Bargain needs to come sooner rather than later. Over to you, Super-Committee.