“Risky Business”: Corporate Leaders Bemoan Tea Party Default Crisis Created By Their Own Donations
America’s great minds of business and finance have reached a consensus on the government shutdown and worse, the prospect of a debt default: While the latter is worse, both are bad. Those same great minds are well aware how the shutdown came to pass and why default still looms on the horizon, whether next week, next month, or next year.
Yes, the frightened corporate leaders surely know how this happened — because their money funded the Tea Party candidates and organizations responsible for the crisis.
Consider Rep. Ted Yoho (R-FL), a Tea Party freshman whose outspoken stupidity on a default’s potential benefits, such as an improved U.S. credit rating, has provided a bit of dark humor in these dark days. Yoho, a large-animal veterinarian, announced months ago that he would never vote to raise the debt ceiling.
Like most Republican candidates, he had no problem raising contributions from business interests, notably including contractors, insurance companies, manufacturers and agricultural processors — all of which presumably share the horror of default expressed by the U.S. Chamber of Commerce. But no doubt Yoho parroted the usual right-wing clichés about taxes, regulation, labor, and health care, so all the business guys wrote a check without caring that Yoho is an ignorant yobbo.
Or consider Rep. Marlin Stutzman (R-IN), who came to embody the idiocy of the shutdown when he declared “we’re not going to be disrespected” by the White House, but couldn’t articulate precisely what Republicans needed in order to reopen the government and avoid default. Another low-wattage Tea Party newcomer, Stutzman likewise raised plenty of money from commercial banks, real estate firms, insurance companies, and various manufacturers. Why do these executives write checks to elect someone like him?
Then there are the Tea Party leaders in the upper chamber, including such adornments of democracy as Sen. Ron Johnson (R-WI) and of course Sen. Ted Cruz (R-TX). Johnson says there need be no debt default, no matter what Congress does, while Cruz, the “Defund Obamacare” mastermind, is more culpable than any other single legislator for the paralysis gripping Washington and the country. Johnson’s top donors include an investment firm called Fiduciary Management, Inc., ironically enough, as well as Northwestern Mutual, Blue Cross/Blue Shield, Mass Mutual Life Insurance, and naturally, Koch Industries (which now claims, disingenuously, that it doesn’t favor the Cruz shutdown strategy or a debt default).
As for Cruz, guess who paid for his campaign? Very close to the top of the list of donors for the despised Texan is none other than Goldman Sachs — whose chairman Lloyd Blankfein showed up at the White House a few days ago to bemoan the catastrophic threat of default. Not only did Blankfein and his fellow bankers warn of what might happen if America breaches its full faith and credit, but he even hinted that the fault lies with Republican hostage takers. Which is only partially right, because Blankfein and his fellow financiers need to look in the mirror, too. Cruz also got a big check from Berkshire Hathaway, corporate home of the venerated Wall Street sage Warren Buffett, who just compared the impact of default to “a nuclear bomb.” If that nuke wipes out the markets, Berkshire’s investment in Cruz will have lit the fuse.
If any of these business leaders honestly cared about fiscal responsibility and economic growth – let alone the constant threat of shutdowns and defaults – they could step up to warn the Republicans that the money won’t be there anymore unless they cease and desist from such assaults on democracy. They have more than enough money and power to end this crisis – and make sure it never happens again – but they seem to lack the necessary character and courage.
By: Joe Conason, Featured Post, The National Memo, October 11, 2013
“The Double Play Game”: Do Republicans Believe In Their Own Crisis?
You would think Republicans would be the ones trying to scare the country about the imminent expiration of the Treasury’s borrowing authority. After all, they’re the ones trying to use the debt ceiling (and the government shutdown) as leverage to get their way on policies that would be laughed out of Washington at any other moment.
The leverage only works if the country is really worried about the potential economic catastrophe that would result from a failure to lift the ceiling. In the Republican fantasy, that would pressure Democrats to end health care reform, cut spending on entitlements and say farewell to all their liberal dreams.
But instead, the reverse is happening. It’s Democrats who are warning the country about the unimaginable consequences of default, and many Republicans who are minimizing it.
This phenomenon could be seen last week at the beginning of the shutdown, when right-wing lawmakers started pooh-poohing the effects of a closed government. Fox News called it a “slimdown,” and several House members said less government might be good for the country. Now, 10 days before (a potential) Default Day, several House members are deriding the notion that it would be a very big deal.
Senator Tom Coburn, flatly contradicting the clear explanation from the Treasury, said the country would continue to pay its interest and redeem bonds, so why worry? Mick Mulvaney, a congressman from South Carolina, repeated the well-known canard that the Treasury could prioritize its payments and that there would be no default.
And Ted Yoho of Florida, who is quickly replacing Steve King and Louie Gohmert as the congressman to whom reporters flock for the jaw-dropping quotes so beloved by Twitter, said that not raising the debt ceiling would actually be beneficial.
“I think we need to have that moment where we realize [we’re] going broke,” Mr. Yoho told the Washington Post. “I think, personally, it would bring stability to the world markets.”
If you think that remark is not only detached from reality but also utterly aberrant, take a look at the Pew Research poll that came out today. It shows that 54 percent of all Republicans (and 64 percent of Tea Partiers) believe the country can go past the debt-limit deadline without causing major problems. In that sense, Mr. Yoho better represents his party than Speaker John Boehner, who claims to believe that default would be terrible, but is nonetheless demanding concessions in exchange for preventing it.
That the very people who are causing the crisis are dismissing it shows the double game that’s being played here. Republicans don’t want the country to understand how big a threat they are posing to its well-being. A growing number of Americans already blame them for the whole mess, as the same poll shows. If people truly understood how bad a default would be — if they understood credit markets and interest rates, and how they would be affected by the global loss of faith in Treasury bonds — the anger would be much greater, and Republican control of the House would be threatened.
In the cynical game of spin and messaging that this crisis has become, the goal is to scare Washington Democrats while keeping ordinary people calm. It’s not working, though — Democrats have correctly refused to be intimidated, while businesses and average Americans are growing increasingly nervous. As they should be.
By: David Firestone, Op-Ed Columnist, The New York Times, October 7, 2013
“A Slow-Moving Disaster”: Republicans Remain Ignorant Of Disastrous Sequester Effects
Both the New York Times and Politico have reports out today on the debt-ceiling-denial caucus, the Republican lawmakers who believe that defaulting on America’s obligations by failing to raise the debt ceiling in a timely fashion would be no big thing. “I think it’s a lot of hype that gets spun in the media,” said Florida Republican Rep. Ted Yoho. Pronouncements of a debt ceiling disaster are part of “a false narrative that’s been perpetuated by this administration,” adds Rep. Steve King, R-Iowa.
But the Times also noted that some unnamed GOPers believe that breaching the debt ceiling won’t be a catastrophe because, they say, the government shutdown and the budget cuts under the so-called sequester were both supposed to be bad, but so far haven’t been:
But the voices of denial are loud and persistent, with some Republicans saying that the fallout from the continuing shutdown and the automatic, across-the-board budget cuts known as sequestration has been less severe than predicted.
Perhaps these unnamed representatives haven’t been paying attention, as they’ve been too busy trying to deny people health insurance, but the personal and economic effects of both the shutdown and, perhaps more importantly, the sequester, have been serious and extremely detrimental to the country.
For starters, the shutdown is costing the U.S. economy some $300 million per day in economic output. Thousands of children were thrown out of Head Start, mine safety inspections have been cut back and a national computer network that helps track food-borne illnesses was closed down during a salmonella outbreak that, so far, has sickened 278 people in 18 states.
But those effects pale in comparison to those caused by the sequester, the across-the-board automatic spending cuts that came into effect due to the Budget Control Act, which was the piece of legislation that arose out of the last debt ceiling debacle. Here are just some of the problems that have resulted from the abysmally low spending levels under the sequester:
- Federal employment is plummeting; 100,000 federal jobs will disappear over the next few quarters.
- Overall the economy will lose up to 1.6 million jobs through the end of fiscal year 2014, according to the Congressional Budget Office.
- Government watchdogs have far less money to do their jobs.
- The public defender system is being gutted.
- The National Institutes of Health are being forced to cut hundreds, and perhaps thousands, of research grants. “God help us if we get a worldwide pandemic that emerges in the next five years, which takes a long time to prepare a vaccine for,” says NIH Director Dr. Francis Collins.
- Programs aimed at helping low-income, first-generation students get to college are being slashed.
- Head Start spots for tens of thousands of children are being eliminated.
- Thousands of meals from Meals on Wheels, which provides food to low-income seniors, have been eliminated.
And that’s only the tip of the iceberg. Just because Republican lawmakers in D.C. haven’t noticed these things, doesn’t mean they aren’t happening. (And matters aren’t helped by a media with little patience for slow-moving disasters, which is how the sequester has played out.)
Remember, the sequester was never supposed to actually come into effect. But the sad fact of the current state of play when it comes to the shutdown is that the sequester seems here to stay. Even the Congressional Progressive Caucus, which has railed against the deleterious effects of the sequester, is willing to reopen the government at sequester levels of spending; Democrats have already swallowed a bill that would re-open the government with most of the sequester intact.
In that sense, Republicans have already won when it comes to government spending, which is what a shutdown is traditionally about (though Republicans do have an on-again, off-again love affair with the sequester, which for a time they dubbed the “Obamaquester“).
But make no mistake: Funding the government at the level outlined in the sequester means crippling cuts to programs upon which people depend and foregoing crucial investments in the coming years. Continuing the sequester is by no means as bad as defaulting on the national debt, but it’s still a self-inflicted catastrophe. The debt ceiling deniers, then, are doubly ignorant: ignorant of the mess they’re trying to cause and ignorant of the mess that’s already here.
By: Pat Garofalo, U. S. News and World Report, October 9, 2013
“Woefully Ignorant”: Congressional Republican Lawmakers Who Struggle With Basic Concepts
Rep. Ted Yoho (R-Fla.) knows exactly how he plans to deal with the debt ceiling and the full faith and credit of the United States.
“I think we need to have that moment where we realize [we’re] going broke,” Yoho said. If the debt ceiling isn’t raised, that will sure as heck be a moment. “I think, personally, it would bring stability to the world markets,” since they would be assured that the United States had moved decisively to curb its debt.
Now, Ted Yoho isn’t some random guy who called into a talk-radio show, or some troll in online comments thread. He’s a member of Congress. This elected federal lawmaker believes world markets would be more stable if the United States chose default on purpose.
While every day brings new evidence of policymakers saying foolish things about important issues, I feel like there are more examples than usual crossing the radar right now.
* Rep. Darrell Issa (R-Calif.) wants to replace “Obamacare” with a federal benefits program that’s eerily similar to the Affordable Care Act.
* Rep. Jack Kingston (R-Ga.) demanded to know why a reporter with health care insurance didn’t enter an exchange marketplace designed for people with no health care insurance.
* Sen. Tom Coburn (R-Okla.) argued this morning that there’s “no such thing as a debt ceiling in this country,” and we won’t “default” on our debt by failing to raise the debt limit.
* Rep. Mike Pompeo (R-Kan.) is convinced the government shutdown is about entitlement spending.
The list goes on (and on), but the larger point is, the country is in a difficult spot right now. The government is shut down, a debt-ceiling crisis is underway, and there’s no clear way out of the ongoing, self-imposed fiascos. The nation would benefit from sensible, knowledgeable policymakers showing sound judgment.
Instead we have these guys.
By: Steve Benen, The Maddow Blog, October 7, 2013
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