Monday, June 6, 2011

FROTHY MIX IS IN

Rick "Frothy Mix" Santorum is in the race--for what? Who Knows? Can anyone tell anymore when and if someone is running for President? Santorum dropped his John Kerry motto and has now adopted Dan Rather's one word sign-off, "Courage". Rick says he is modelling his campaign after Mike Huckabee's 2008 run, which didn't succeed. The idea is to siphon off enough of the rabid Religious Right to make some run for it. So far in polling of Republicans, Rick registers about the same as Greg Johnson and Freddie Krueger.

Rudy took a long blast at Mitt Romney and has accelerated his attacks on Mitt's embrace of individual health mandates. The irony is that the people of Massachusetts overwhelmingly like their state's health care system. But Mitt won't own it even though it is probably the best thing he ever did in his life.

Rick Perry of Texas really is thinking of running for the nomination. He is consulting his financial bankers about the possibility. In th meantime, Rick is calling on all governor to come and pray with him for the safety of America.

Dana Milbank today wrote a perceptive op-ed concerning the Republican problem with the idea of freedom. Milbank took off on Romney's hyperbolic statement that our free market system is near the stage it will cease to exist. He also chides Romney about his exaggeration about the percent of our GDP which is government spending. Typically, Republicans have blown this figure way beyond recognition. But Dana's point is that there has existed for years in the United States a consensus that a vigorous and strong government is needed to preserve and enhance our freedom. Otherwise, we would end up like countries in the developing world. In essence, the Republican war against government has become a war against our freedom.

Nicholas Kristof wrote on a similar theme in the New York Times where he outlined the new Republican vision of society and found an exact parallel to it in Pakistan. Previously, others have noted Somalia as the paradise of choice for libertarians. But Milbank by zeroing in on Romney, who should know better, raises a critical issue that serious conservatives must start to think about. When does the private sector intrude on the freedom of private citizens and undermine a society's liberty? So far the discussion has been a one-way street.

John Boehner was amazing in his dismissal of the revival of the American auto industry, saying that it was nothing to brag about. He said the way it should have been done was in the case of Ford, which restructured itself without government assistance. The head of Ford then and now is on record as saying that only the government could have bailed out Chrysler and GM and noted that Ford benefitted from this because their suppliers were saved from bankruptcy.

For me, Boehner's statement was amazing because I just drove past the Lordstown GM plant in Ohio, which now has three shifts working for the first time in its history and the parking lots for workers are filled whenever you drive by. The same applies to the Chrysler plant in Toledo, also in Boehner's home state, where thousands of workers have been called back to work. I guess if you think they will all vote Democratic than there is no sense to "celebrate". But not even rooting for your home state is pretty cold.

The Washington Post for the past two days has discovered that Republicans are not concerned with cutting deficits but only in cutting taxes. With the tax-rates for people earning $250,000 and abovee one-half of what they were in the 1970s, tax revenues are at their lowest since the 1960s. Any serious effort to cut the deficit would demand tax hikes and program cuts. But Republicans have ruled any tax hikes off the table and refuse to compromise as the Post finally discovered.

But no one wants a real economist anymore. Peter Diamond withdrew his name from being considered to take a place on the Fed. Senator Shelby of Alabama filibustered his nomination because he was "unqualified". Mr. Diamond won the Nobel Prize for Economics. But as he said, "Nobel Prizes don't count." Diamond is the most egregious case of Republican obstructionism .

But there is a laundry list of vacancies both at the Fed and Treasury that have a very tangible effect on our economy and the effectiveness of our government. Part of this is caused by Republicans not wanting the Treasury to have the necessary manpower to enforce the new financial regulations bill past in 2009.

You would think that our ace reporters would begin to link Republican cuts to real world events. For instance, the recent E Coli outbreak in Germany should have alerted Americans to the issue of food security. The Obama Administration had passed--at the request of the food industry itself--the greatest reform to our food security system since the 1930s. The food industry was concerned about the financial cost of contamination scares on its bottom-line. It even proposed that the bill tax the industry--at their suggestion. Republicans not only didn't give the FDA the necessary funding to enforce the law, but they cut the taxes on the industry, and even cut the FDA's budget further.

Another example can be seen in the response to tornedoes in Alabama and the one in Joplin. Traditionally, the federal government automatically provides assistance to these natural disasters. This has been a bipartisan consensus for aeons. But every single congressperson from Alabama actually voted to cut such funding and little Ricky Cantor wanted the cost of assistance to be matched by cuts in other programs.

Even Haley Barbour, whose state has been wacked by hurricanes, floods and the BP oil disaster, came out strongly against Cantor on this. But the disease goes further down the line. Republicans even drastically cut funding for NOAA, which provides Americans with their information on weather.

This seems odd since no one has ever accused NOAA of being some boondoggle. But it's not as Frothy Mix can tell you. Rick Santorum actually proposed while being Senator that weather forecasting by "privatized". This was during the heydays of ENRON, who wanted to sell weather futures. I kid you not. You could actually buy shares in micro-climates. You could bet on global warming and make money.

Another story I would like reporters to actually cover as a substantive issue is what really happens to America if the debt ceiling isn't raised. Right now this story is treated like a political game on who will cave--Obama or the Republicans. But no one is writing about its effects on the economy, the rate of future American borrowing, the global effect, and that American dollar would cease to be the global reserve currency. You will only find this discussed in blogs at the websites of economic think tanks. But reporters actually have the responsibilty to inform the American public that this isn't a game.

Right now John Boehner has admitted to the Republican caucus that it is very dangerous to play with the debt ceiling but he asserted it was more dangerous for President Obama and he had to cave. In short, he was holding the entire economic fate of the American hostage to the Republican agenda. In the future, we may have to consider the possibility that an American President might not bow to hostage-taking and do a Dr. Strangelove launch economic war. Boehner is saying that Obama would destroy himself and the Democratic Party if he doesn't cave. Well, what if he doesn't?

Meanwhile, Republicans are saying that Obama is debasing the American dollar. This gets really funky. The most rapid decline in the dollar's value was between 2001 and 2007, when W was in power. As Paul Krugman writes, Republicans don't mention that but Krugman says he didn't mind because it actually was healthy. But can you imagine what would happen if the debt ceiling wasn't raised.

Thom Hartmann posited the idea that President Obama had a secret weapon in this negotiation which hasn't been discussed. Hartmann discussed how Senator Bob Packwood during a similar debate in the 1980s asked the Treasury whether it had the power to decide what debts would be paid first. Treasury responded that Treasury has the authority to order the government to pay its obligations according to its decisions.

What Hartmann proposes is that Obama alert Boehner that if he keeps playing games on the debt ceiling then the Treasury will withhold all federal payments to Ohio and other Republican states. Hartmann invoked the incident where LBJ picked up the Fed Chairman by his lapels and slammed him into the wall and told him what he was going to do as FED policy. I like the idea.

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