Sunday, July 31, 2011

Sell Out Complete

The core issue in this deal is the strategic vulnerability President Obama has exposed to progressive policies - delinking of entitlement reforms from revenue increase via tax reforms. As a result GOP is going to ‘strangle’ tax reforms for zero revenue increase whereas Dems would have already paid the price of entitlement reforms. With the success of debt ceiling increase through pure mindless spending cuts only, GOP will be nuts not to make it a clean slate by the end of 2012 to have tax reforms with zero increase in revenue. Talk about emboldening the very political forces which are ripping apart American fabric.

If there was a consensus in American Political system to use increase in tax revenues for investments like research, education and infrastructure; one could have accepted the entitlement reforms in itself. But in absence of any such consensus and GOP policy of willfully ‘starving America’ from her social investments; Dems had appropriate insistence in linking entitlement reforms with tax revenue increase. All that is gone and common Americans are holding now empty bags.

The issue is not that President and White House do not understand these problems. But their argument is they are not in a position to negotiate any of these things as they could barely make GOP accept the need to make two step process more sensible. It is true that avoiding two debt ceiling fights within few months is absolutely necessary, but at what ‘collateral damage’?

It seems that in the end, White House concluded that the price of playing hard ball with GOP - avoiding default but begin stopping Medicare and Social Security checks to increase the public pressure - is higher than making a stand at any time. This is because there is some thinking in this White House that; they would be still able to make some difference in lives of Americans in remaining months of this presidency. That is not true. For all practically purposes, this presidency is over in terms of an ability of White House to navigate anything meaningful through Congress. White House is delusional to think that GOP will help in anyways to do anything substantive for Americans.

Only when President and White House had understood, no matter what their ability to ‘make difference in lives of Americans’ has been fully nullified; it would have thought of putting a ‘break or make’ fight for revenue increase. Ezra Klein shows the optimism that if Dems remain united, they could take advantage of expiring Bush Tax Cuts. It is hard to believe that. Propensity of White House to ‘sale out progressive policies’ in order to make a deal with GOP makes it impossible to believe that this President would be tough and politically adroit enough in explaining to American public appropriateness of revenue increase. Given that, President Obama has completed the ‘sale out of progressive policies’. It is a sad end to the legacy of Ted Kennedy. Progressives will have to start picking up pieces of their policy agenda, in all probability discounting President Obama on their side. Time and again he has proven what is dispensable and what he prizes most - illusion of ‘political peace dividend’ by postponding the tough political debate with GOP. All these lofty speeches and impressive political game - those belie unwillingness to fight for well being of common Americans who had sent President Obama in White House in the first place.

In the end it is President Obama who has joined the ‘darker side’.

Friday, July 29, 2011

Motives of Centrism

I thought being Economists, Paul Krugman would see clear business motives for American Media in giving so called ‘balanced news coverage’. After all, if half of Americans are effectively voting Republicans and are sympathetic to craziness of Tea Party, why would Fox not make business out of that? Or why would not Associated Press posit itself as balanced new media? There is money to be made, hell with finding who is guilty. Just label both in the same brush and keep ringing the register.

Now with likes of Tom Friedman, who had his big call about some Internet based third party movement, it is the unwillingness to think through and to take blame from Republicans. After all Tom Friedman, David Brooks would like to have ‘their communication channels’ intact with so called saner elements of GOP least if 2012 throws GOP surprise and then these wise minds will speak to ‘GOP powers be’ on behalf of fallen Democrats.

Otherwise however, Krugman is waging a lone battle of immense importance. That is not new to him. It is always like that - in the seminal fights those enablers, active & willful stake holders who ignore conveniently those we are committing crimes; those are the people who make the maximum damage next to the party which is actually doing the crime. Krugman is calling them loud, clear and consistently.

Will American Media and intelligentsia correct the course here? Chances do not look bright today, but that is all the more reason to keep trying hard.

Wednesday, July 27, 2011

Debt Ceiling Drama Update

Here are my observations about the unfolding drama:

- Speaker Boehner is fighting back and in all probability will carry the day tomorrow. But if House Dems stick to the unity show, they can effectively argue about the lack of ‘bi-partisan’ support to the bill. In the national theatre, that is worth a point in favor of Dems.

- I hope Democratic Senators take it to their hearts some non-flattering description of them by Speaker Boehner - ‘will fold like a cheap suite’. Signs are encouraging, they have to keep this unity. Because if indeed Dems in House and Senate are able to show the unity, Speaker Boehner’s victory tomorrow would hardly change the reality on ground.

- Most probably, by tomorrow’s vote Speaker Boehner achieves two things: a) he keeps his job and b) he clears the deck for the eventual break of GOP votes in House wherein he passes a bill with House Dem and fewer GOP while Tea Party Members are then freed from the Boehner slavery to oppose everything.

- Tomorrow’s vote basically reminds the political drama at the time of passing of ObamaCare. Core liberals and progressives were upset for the ‘lack of public option’ and then Obama rallied them. We are in effect seeing the same phenomenon here. Nothing unusual (policy craziness of Tea Party - that is a different matter); that is how party politics work in America. As expected ‘hatred of Obama’ would overcome the disgruntling feeling against Speaker Boehner. But boy, if you read RedState, there are some seriously upset folks on ultra right.

- America losing triple A rating is almost given. American people and America as a whole are very likely to pay high price for this debacle. In short term it is all going to be pure collective pain. Assuming Americans give a clear verdict in 2012 election (if not even God cannot help them), things are not going to look up till then.

- President Obama will not have any other option than to become a party man. If Obama looses badly here, much higher probability in any case, Chief of Staff Daley will have to go. No wonder, like a clock work news about Ed Rendell is back.

Programming Note - I will be travelling to India and will be unable to keep up with developments. Oh yes, I would miss the drama here. I just hope that Dollar remains a legal tender by the time I come back by next weekend.

Monday, July 25, 2011

Out of Bullets

That is what Megan mentions and she is right.

For my taste, President Obama gave the speech bit earlier. I would have liked him to give the speech just before he ‘veto’s any proposal which forces 2 step process. As Chait, speculates, he sounded weak and is kind of setting himself for the eventual failure.

Other possibility, though not that likely, will be after passing Wednesday’s bill in House; Speaker Boehner offers to resign because Tea Party Caucus is not ready to bring in Reid proposal which may actually pass House with the full backing of Democrats and many in GOP; as GOP has achieved what they wanted so long. That will be a dramatic gesture and we need a game changer at this point. President resigning is not as per American Political Script unless of course you are Nixon. Whereas by offering to resign, Boehner would dramatically improve his profile and it will be hard for GOP lieutenants to take the blatantly power hungry course of accepting Boehner resignation from Speaker position.

But then, well; I am only speculating here. More than 50% chances are:
- Congress remains locked with each house passing non-reconcilable bill or
- President Obama simply folding the tent.

We will see. By this time next week, the drama will be in the closing state if not yet resolved. Hopefully, by then our politicians would have had enough fun of we common Americans.

Sunday, July 24, 2011

Getting Dem House in Order

David Dayen has a logical take on what Dems can do here:
- preempt Speaker Boehner plan of continuing this gridlock till next Nov 2012(because of his two step proposal); and
- put a plan of all expense cuts only so that ‘this crazy fight about taxes and entitlements’ is solved via elections in 2012.

Well done Nancy Pelosi and Harry Reid, if this is the script. Job for President Obama then will be to hold tight and veto the wrong proposal of GOP House to continue this drama till Nov 2012. American People want this to be finished and would be interested not to have this fracas again. Elections are there to clear out this mess.

Senate GOP and some in House GOP will strongly oppose to ‘wind down wars in distant places’ to save money. But national security is the business of White House only, President can help Speaker Boehner to understand the Constitution there and the guy who has nabbed OBL, would be knowing better how to do it. With Public Opinion across the board against continued wars of Afghanistan and even lingering Iraq war, it will be interesting to see how Tea Party Members of House are going to attack Reid-Pelosi proposal of counting saving off those disengagements.

True, issue of reforming longer term entitlement costs and revenue increase is postponed. This also means failing the rating agency requirement of putting at least $4Trillion package. But when those are not possible for political intransigence of GOP, this is a least worst option. House GOP wants Congressional Commission - let them have it for future so long as the current number of $2.5Trillion is covered. If GOP refuses to do anything - fine; Bush Tax Cuts would expire automatically bringing in $4Trillions to Federal coffers. Then whosoever wins the elections of 2012 would decide what to do with that money - to enact tax reforms coupled with entitlement reforms or whatever.

Going forward the key will be for Pelosi, Reid and Obama to march in ‘absolute lock steps’. So long as that is done, including if needed to pull off the plan of cutting Federal checks come deadline; House GOP stupidity can be circumvented and bypassed. Hopefully, ‘come home again / born again Progressive President’ would have had enough of his sojourn in the land of ‘triangulation’. One just wishes President Obama does not mess around this time what these old progressive war horses - Pelosi & Reid - have brought. There is no need for President Obama to re-learn the lesson of - to what an extent GOP can go to totally rip off Obama Presidency. The political war so far has left Obama Presidency literally in shambles. Here is an opportunity to collect those pieces and build something ‘difference making’ for American People. The allure of ‘bipartisanship fetish’ should die now and should get its decent burial in Obama White House.

Beyond this if Speaker Boehner wants to make a grand deal, Obama White House should conduct that business in much more open and public manner - declare before hand that for every 3 dollar savings, 1 dollar revenue increase must be there and both saving & revenue increases must move at the same pace with ‘trust but verify’ mechanism applied at every step. As Obama admitted some time back, the reason Public is sore on him is while saying he wanted to break Washington Culture, he resorted to same ‘back room’ negotiations with the false hope of clinching a deal. May be you could do that (again at very price though) when you had Democratic Majority during ObamaCare bill; but not when emboldened GOP is occupying House and behaving in clear ‘parliamentary opposition party mode’. So keep it open if Speaker wants to bring back any ‘grand bargain’ offer and tend to your flock which brought to you in White House in the first place.

Saturday, July 23, 2011

One More Place Less to Hide

White House demand of $1.2 Trillion revenue increase over a decade is hard for Speaker Boehner and GOP House to accept. Probably, it is more because it is emanating from White House. The questions are:

- would ‘not letting White House any political benefit’ be sufficient for House GOP to accept a deal with Congressional Democrats; and

- how far Congressional Democrats would hold the fort now that White House has lost the battle.

I believe, among Democrats it is the White House which is the weakest ‘progressive link’. Meaning, it will be an astounding victory to Speaker Boehner and House GOP, if they are able to ‘fold’ Congressional Democrats at lesser price than White House. I doubt that; indeed Obama brand is so tarnished from Progressive perspective that even Sen. Reid looks like the Progressive Rock of Gibraltar!

Of course, Speaker Boehner and Tea Party will be much more nastier than that. They would simply put forward some sham deal to Congressional Democrats to declare that they are done and it is all fault of Democrats not to accept that deal.

It is all easy to hit White House for not fighting enough for a Democratic cause. Time has come for Congressional Democrats to stand the ‘bulldozer’ of Tea Party. Ideally, Congressional Democrats and White House should have formed an impeccable unified front long back. No deal with White House should have meant no deal with Democrats. Period. What kind of ‘Democratic Leader’ President Obama is then? But President wanted to play ‘triangulation’ and progressives lost; they are now fragmented into weaker factions.

Leader Pelosi, pull out the picture of that ‘lone man standing in front of Tanks in Tienanmen Square’ and just copy him. Same for Sen. Reid too. If these Congressional Democrats can pull off next 48 hours, that will be ‘one more place less for Speaker Boehner and Tea Party to hide’ and then the moment of Truth would have arrived for Tea Party and there in lies America’s day light.

Times no different

It is the tragic end to a wonderful voice, similar to Janis Joplin both in destiny and in voice ...

... Winehouse joined not only Joplin but also Jimi Hendrix, Jim Morrison and Kurt Cobain -- who all died at the same age

....We have 40 years of Frank Sinatra records, it turns out we only have two Amy Winehouse records.

-- Reuters

I thought these talented singers in 21st century would be in positions to avoid tragic ends of past masters. But I guess human frailty has no bounds.

British singer born in a Jewish family with beautiful black hair, singing authentic Jazz and Motown music; wow that is some original combination.

Peace Amy Winehouse and we live by Amy’s nuggets to be scrapped on YouTube.

Friday, July 22, 2011

Split the Difference

That is what Obama and Boehner are waiting for Americans to say to solve the issue of $400Billion Dollar revenue increase on top of agreed $800 Billion increase. At that point revenue over 10 years will go up by $1Trillion whereas cuts will be more than twice that amount - in excess of $2.5Trillion, bringing the whole package more than $3.5Trillion but shy of $4Trillion over a decade.

If Progressives are ready to go as much near as of Simpson-Bowles commission recommendations, you are talking roughly 1 Dollar revenue increase for every 3 Dollars of spending cuts. Given that thumb rule, splitting the difference may not be that bad.

However, what is important is ‘triggers’ and execution of the deal. It is obvious that some immediate cuts are necessary as down payment to please Tea Party Gods and repentance for the chicanery in 2011 Budget Deal where White House sold Boehner cheap. How big that down payment is the question. Next, ridiculous demands of linking dropping of ‘mandate from ObamaCare’ should be completely stopped by GOP. That has nothing to do with this taxation issue.

Overall, it is imperative that pace of ‘budget cutting and revenue increase’ must be commensurate at any given time point (meaning keeping the ratio) along with ‘triggers’ to stop anyone side to bail out or for both sides to go into inaction. Otherwise it will be a loop sided deal.

Thursday, July 21, 2011

Obama Surrenders?

(Update 2 - Even Obama Surrender does not work based on latest developments. With his poll numbers in toilets and Tea Party in no mood to negotiate anything, it will be better for President to stop going on a road with ever increasing concessions. Once again it is an opportunity for President to be able to draw a line and hold on that. But this whole thing has enough of twists and turns, it will not be a surprise before things change again.)

As reports are going around that President Obama would be ready for a deal in which revenue increases sometime in future rather than now, few things come to mind:

1. Generally worst fears in such early leaks prove to be true, meaning the deal will be indeed a disaster for folks who have been insisting for concrete revenue increase.

2. But without concrete details out, it is hard to comment upon actors of such a hypothetical deal.

3. This could be some tactical move from White House, but all the advantage President has been building in cornering ‘anti-tax’ folks is essentially gone by this leak. Anytime you allow any such possibility even aired, it is clear that you are compromising on your core principles and desperate for a deal.

This also makes it clear that President has essentially made the call - he is ready to accept the ignominy of total surrender and is ready to abandon what is good for America’s longer term - concrete revenue increase - for the sake of immediate gratification. He has made the call that he is not ready to pay price for holding the line on revenue as well as demanding ‘fairness’.

Senate Democrats are total loser in this case. In next few days when Boehner and Obama declare this deal, instead of Tea Party being looked as obdurate party, it will be Senate Democrats who will be looked upon as the deal breaker. Essentially, Obama has thrown Senate Democrats under the bus as Pelosi at least has the easy option of opposing this deal in total without getting any blame for ‘default’.

Does Harry Reid have 40 Democratic Senators to stop Obama on this? I don’t know and chances are low.

This is going to be as important vote as like Bush’s Iraq War Resolution Senate vote. Those Democrats who supported it (only 21 or 22 Dems opposed) essentially contributed to down fall of America in the next decade. Same will be with this deal too. Fiscal sustainability and American welfare state as we know will be completely gone by any deal where only spending cuts are concrete but revenue increase is ‘iffy’.

Amazing that this would be led by a Democratic President. If all these fears come true, it will be hard to recognize Obama as a Democratic politician. The colossal ‘back stabbing’ Obama would have achieved by this deal would make lot of progressives to wish that indeed he becomes one termer!

Update 1 - Bernstein has a good take in a different angle. Today when President is conducting his Town Hall, hopefully he will be asked few direct questions which he will have to answer.

Wednesday, July 20, 2011

Debt Ceiling Update

Ezra Klein points to the paradox of presidency when quick presidential endorsement of Gang of Six plan ironically results in sinking that worthy solution.

I do not think so. So long as President Obama keeps eyes on the central aim of ‘negating the inherent noxious contradiction perpetuated by Tea Party - that you can keep current entitlements without increasing taxes’; everything else is dispensable.

For longer term viability of the current American Political System, couple of things need to happen:
- wholesale refutation of a claim that you can continue to have current levels of entitlements without taxation (because NY-26 special election and many other polls have shown that Americans are not ready for dramatic reduction in entitlements and how is that possible when anti-immigration GOP wants to ensure that proportion of senior population in USA continues to grow?)
- non-elected power brokers like Grover Norquist are cut to the size.

Latter may be happening.

Question is of the first one. So that should be the aim of President Obama - to make American Politics understand that Americans loath to give up their entitlements (except for legitimate adjustments) and for those perks plurality of Americans are ready with increased revenue.

This aim is achieved by President and Democrats when they continue to tighten up the nose around Eric Cantor and his Tea Party Gang which opposes McConnell-Reid Plan too.

President Obama has the luxury of choosing from 3 options to avoid the sovereign default:
- back McConnell-Reid escape hatch,
- 14th Amendment, Section 4; or
- keep cutting Social Security, Medicare and vast services of Federal Government so that Tea Party Frogs can start jumping out of the ‘boiling water of Public anger’.

My favorite is the third one. Given such luxury available to the president, there is no Presidential Paradox in essence. There is complete clarity in terms of what President Obama needs to do - hold his line for revenue increase and do not waiver even if Gang of Six proposal immolates in the resulting inferno.

Sunday, July 17, 2011

Are we there?

America has not raised its debt ceiling yet and for all we know, we may even default too! But here is what we know so far:

- There will be some sort of a deal. Pressure from business lobby, rating agencies & governors and realization of risk to GOP brand; all that is likely to make GOP to avoid ‘default somehow’ in the end.

- It is ‘whip count’ time in Congress. Main stumbling block is 80 to 85 Tea Party members of House. With Tuesday’s ‘red meat’ vote of balanced budget on the floor calendar, these members would have made their statement. Expectation is at that point, this group will go away from stopping a real deal. My understanding is majority of this group would not support any eventual deal. So Speaker Boehner has to make the calculations - propose a final deal which pleases this block but cost equally precious Democratic votes or bring a deal which has realistic chance of passing through Democratic Senate and While House. All deals discussed so far are so much to the ‘right’ of what even ultra-conservative Democrats like Ben Nelson or independent Joe Lieberman would ask, surprising ‘unity’ of Democratic side is easy and all inclusive. The danger on Dem side is from the left plank. But Pelosi would not loose a chance to have some influence on the final bill, meaning she and Obama will bring the Dem Left votes in the end.

- Rating agencies have made it clear that anything short of $4Trillion over 10 years would not be sufficient. Doing that deal - whichever format from all cuts to mix of cuts and taxes - would result in a undoubted victory for President Obama. So GOP is unlikely to hand that political victory to Obama. Besides Congress simply does not have the time, possibly on purpose, to discuss and agree gory details of $4Trillion amount. The number is so large and so consequential, that Congress taking time on this one is understandable and possibly good for Americans. All this means, there will have to be a stop gap arrangement. Enter McConnell proposal. My guess is Reid variation of that proposal will in the end pass - resulting in a Congressional Committee with confirmed ‘up or down’ vote for cuttings.

- 2011 Budget deal where in the end less than $1Billion were actual cuts despite the advertisement of cutting $60Billion by the GOP establishment has rubbed Tea Party and many Conservatives in a wrong way. Quite possibly that ‘last minute’ smartness is costing a lot to Administration. It is leaving a bad taste among Congressional Members and as a result it seems clear that ‘some upfront’ price of concrete cuts must be paid. Sen. McConnell is the driving force here and it seems that at least $50Billion in this year and another around $50Billion to $100Billion next year would be cut brutally no matter what. It has an added advantage of being consistent with McConnell goal of bringing down Obama Presidency as reduced government spending continues to derail already fragile American economy.

- That bring us to the last point. After winning early political cycles of the debate, President seems to have hit a wall with the influence of Tea Party block of Congress. So Speaker is saying President you have no way to go anywhere apart from where I point. Despite saying ‘don’t call my bluff’ it is clear that President is unlikely to go over the brink and stop Social Security or Medicare while demanding increased taxes. What all that means is, Obama will get some sort of deal; but expiring Bush Tax cuts for rich will be elusive, he will be forced to fight that battle again, he would have lost completely any ability to nudge American Economy and finally he would have lost a unique opportunity to portray himself as the ‘president with a spine who stands for something’. The result will be ‘compromiser-in-chief’ who would have capitulated to ultra-right-wing philosophy.

But America’s travails will not stop by this debt ceiling deal only. We know that GOP’s policy prescription of not increasing revenues at any cost is so blatantly contradictory with social spending commitments of Federal Government, that even if GOP takes WH and or Senate in 2012; whole sum of that policy prescription will keep American Economy mired in recession and low growth for years and years to come. With diminishing global Economic influence and quite possibly complete loss of Dollar as the reserve currency; attaining 3% growth rate on sustained basis is going to be very rare and hard. If GOP extremism expands further, you are talking complete unravelling of whatever safety net is provided by Social Security and Medicare. Because of the inability of Obama in the first term to deal intransigent GOP in utterly divided politics of this country; American Public would remain clueless about what is needed to fix all this. We don’t do social compacts between cash rich corporations and American Labor to provide any kind of job sustainability (like Germany), nor are we ready to face the contradiction of increasing entitlement costs while collecting lower taxes, nor are we ready to demand accountability from a political party which sustains all this non-sense. Hard to see, how anyone or anything else can save us from our ruinous path.

Japan - Women’s Soccer World Champions

Great game. Americans despite playing well, could not hold on to the leads and Hope Solo could not bring her magic. Very, very entertaining soccer.

Hopefully this would give some solace to the grief stricken Japan. If not Japanese men, who dominate their politics, win by Japanese Women’s Team would invigorate Japan. Hopefully. As far America - oh well, it is mourning time.

Thursday, July 14, 2011

Obama should go Nuclear

If tomorrow GOP does not agree for any revenue increase, time to go nuclear would have arrived for Obama.

There are couple of choices here for President:
- if Sen. McConnell proposal makes the Congress, President takes that or some negotiated variation of the same; or
- President invokes the Section 4 of 14th amendment.

But in either case President only increases the debt limit by $100 Billion and goes fully with 40 to 50% reduction in Federal spending. Social Security would stop, Medicare would stop, Veterans benefits would stop - only priorities will be Defense, Debt Servicing and mandatory Law & Order (likes of FBI, Federal and Supreme Court and so on). Congress and White House should preferably go without any salaries. Then why would President need those $100 Billion dollars? Only to create a special fund to disburse extra-ordinary help to Seniors - to provide necessary sustenance and medical assistance. He would appoint a panel to decide cases of these seniors qualifying to this special assistance. If Congressional Members want to sit on that, they would be allowed. Idea is you create the minimal fund to avoid the ‘human tragedy’ in USA. Everything else is dispensed while America does not default too. Idea is to fully expose ‘contradiction in Republican Economic lunacy’ - unwillingness to increase ‘just’ taxes while not telling Americans what would they loose in absence of this additional revenue.

Let us see Republicans can deal with this political no-nonsense winner. Point is, forget about winning elections; think about what is best for Americans in the given hand of ‘GOP intransigence’. Rest - leave it to posterity and to American People. If they are wise, they would appreciate what would be practiced in this scenario; else will learn the hard way.

Bottom line is the democratic system which needs ‘bi-partisan’ backing in absence of Parliamentary Majority Rules mechanism of UK or India (where majorities own and take responsibilities of what they enact); that system must function in this non-hostage manner. Else by allowing such a ‘hostage taking drama’; Obama would have essentially reneged on his sacred pledge to uphold American Constitution. Our system is unlike UK and India. This means minority in America cannot behave as extreme as like a parliamentarian Opposition Party. The ‘filibuster’ in Senate as well as Senate’s skewed make up do not make our system as truly representational democratic system. American System is what it is and President himself can not change that as he is the ‘very product’ of that System. All that means the job of a President is to uphold America’s constitution; meaning not to accept political behavior which threatens the very assumptions behind American Republic. That is the message President Obama needs to take to Americans - to ‘sale’ difference between ‘policy difference versus acts to subvert the very foundations of our system’. GOP is clearly doing the later and hence Obama must resist that.

Tuesday, July 12, 2011

Time for Dem Leaders to back President

First, WSJ editorial was to dare Obama for a grand bargain. Once he did, WSJ Editorial advised Boehner to yank the deal because they wanted tax reforms with a concrete final date. Then Obama did mention in the negotiations that he would open for that ‘final date too instead of simply keeping tax reforms open ended’. Next we have Senate Minority Leader saying that Obama cannot deliver entitlement reforms. So now that lot of bluffs have failed and GOP is still reluctant to raise taxes on wealthy, next trick is to claim ‘Obama cannot deliver’; implying throwing him out is necessary for any fiscal balance. This is a direct attack on President, it needs to be rebutted.

That is why it is time for Congressional Democractic Leaders to step up and clearly say that - Obama entitlement reform ideas are tough to accept but they would do so provided GOP is ready for more equitable distribution of sacrifice. Tell Eric Cantor that ‘shared sacrifice’ is not a phrase to make fun of Dems; but an attempt to avoid what happened in the ‘lost decade of 2001 to 2010’ - American lower and middle class did not see any increase in their income while top class continued to see healthy increases. Tell GOP that, Dems will be ready for 1 is to 3 ratio of revenue increase to spending cuts - regardless of what size the deal is. It would be for GOP decide the deal size so long as it covers obligations till Nov 2012.

Sunday, July 10, 2011

Evil Murdoch

No, I am not talking about the mess his son and his companies have done in UK. The only thing to be observed there is whether UK Politics kicks him out of the BSkyB deal or not. He deserves to get his ‘a** kicked’ there, but the Conservative Government of Cameron may not have the gumption to leave their ‘theology of free enterprise’. But we will see. My hope is UK PM Cameron has his political antenna’s fully tuned to UK Public Opinion so as his government gets some spine to cut short Murdoch and to show his true place.

I call him evil because how much damage his companies have done in USA. Without Fox TV, there would not have been the victory for Tea Party in 2010 November election. The Fox roaster is vertebral house of rabble-rousers at the cost of what is good for America. The senseless opposition to increasing Debt Ceiling, attempts to undermine gravity of American Default, mindless opposition to ObamaCare and even serious attempts to subvert Frank-Dodd Law to police Wall Street; all these are the fruits of Tea Party. The same party likes to blame Obama Stimulus as the root cause of this recession while conveniently forgetting how Bush War, Bush Tax Cuts and ‘ultra relaxed regulatory regime’ turned out ‘a lost decade for Americans’. The Stimulus had around one third as tax cuts, the other one third as help to all States - Red and Blue included for Medicade, Unemployment Insurance, Education and so on. The only one third (around $250B to $300) was ever spend on infrastructure and other related projects over a period of two years. How is that likely to contribute to America’s deep recession?

All this non-sense, Murdhoch’s Fox has been peddling for many years. But if you need to know concrete ‘evil actions’ - do not look any further than this WSJ Editorial which essentially pulled the rug under $4Trillion Debt. I understand that WSJ Editorial Board is different than Publisher. But the kind of senseless Conservative Philosophy this Paper has propounded; it is total negation of concept of ‘public good’ and Murdoch has allowed all along merrily. Amazing how destructive one single WSJ Editorial can be for common American People. As more and more news outlets understand that, hopefully Americans will realize the ‘evil doer role of Murdoch’; all because of some misguided conception of ‘competitiveness’ and the attitude of individual capitalistic gains at any cost, regardless of misery to rest of Americans.

Saturday, July 09, 2011

Paul Ryan’s Expensive Wine Bottle

If you read Ryan’s responses at the end of the report at TPM, you would actually think Ryan conducted himself well by admitting his stupidity in buying expensive wine. So I doubt there can be any ‘gas’ politically in this story.

But Matt’s take is the really right one. Rich inflating prices of ‘short supply’ items like wine and real estate is very, very common phenomenon. When Indian Economy hardly had 3% growth rate, prices at the high end real estate were always stratospheric. The same with ultra-unbalanced country like America where the post-WWII compact between Middle Class with stable jobs and lucrative opportunities to mint millions and billions for rich is unraveling fast. Under Ryan and Republican Philosophy, this inequality and wealth gap is going to increase further. For Republicans ‘inequality’ is never an issue to be bothered about.

No wonder you have economists like Tyson clearly speculating that America is on it’s way for a lost decade. I would say the ‘second lost decade’.

Tomorrow’s evening news about the budget deal will be one more manifestation of why we are here and how we are unlikely to alter our journey from this path towards more impoverishment to more Americans.

Friday, July 08, 2011

Cynicism Rules

Felix Salmon is very right to point out the cynicism of Speaker Boehner in reacting to a terrible job report.

Though nothing new, President Obama is in a fix now – Krugman argument of catastrophic consequences of ignoring ‘jobs problem in lieu of deficit’ is coming back with vengeance. President will basically have to give up some of the cutting – either in itself or compensated by additional government investments. Both are anathema to Republicans. With every terrible job report – Krugman nightmare is sounding truer that President has boxed himself by caving in to the Republican argument of austerity rather than employment generation.

Seems like America is on its way to the ‘double dip recession’ even though Warren Buffett denies that.

Wednesday, July 06, 2011

Holding off Revenue Increase

Eric Cantor says he is open for closing tax loop holes so long as incoming additional dollars are not used as revenue increase to reduce deficit but are used to reduce tax rates overall. Paul Ryan is saying same. This is all coming from this Wall Street Journal Editorial.

What is the point of ‘closing these tax loops’ then? Republicans do not want any increase in the revenue to address the deficit, period.

There can be one way out - President can say, why do we need ‘revenue increase’? We need it because we are short on Federal Receipts i.e. Tax Collection because of Recession. So the deal is as Tax Receipts increase in future certain portion of that increase can be used to reduce deficit further (or increased social investment) and remaining can be used to return back in ‘tax cut’ format as a compensation of ‘allowed tax loop hole closing’ in the deal in making. If our tax revenue does not increase, closure of these ‘loop holes’ will not be compensated. In a sense, revenue increase in closing tax loop holes is a kind of borrowed money by Fed ‘at present’ with no interest and contingent upon future Tax Receipt increase.

That is one way for Obama to bat this ‘curved ball from WSJ’.

Sunday, July 03, 2011

Independence from Extremism

Now that President Obama has charged into the political war with his own gun shots, the worst thing will be to back out when the time of ‘default comes’. He has logically two options:

1. Using 14th amendment (section 4), without worrying for Congress, Treasury to issue new debt arguing that it is Congress which has laid down it’s commitment (appropriation bills) without sufficient revenue and hence executive branch does not have any other option than fulfilling already laid down obligation; or

2. To cut back around 40 to 50% of Federal expenses by not paying almost of half of Fed bills. Obama White House would execute the unprecedented power in determining which bills to pay and which not to pay.

The first option may be feasible, but politically why would a president mess around with the Constitution and be open to criticism - ‘here he goes again, charging America’s Credit Card’? He cannot go unconstitutional and just simply override Congress. Americans do not expect that. Rather the second option is within limits and ultimately politically winning; though equally fraught with constitutional challenges.

President can plan to fund wars and sovereign debt obligations like interest payment as the principle commitments to honor in any case. Military salaries can be paid at 80%. Other law and police machinery as well as courts can be paid at these nearly full levels. White House can decide not to draw salary for a while and let Congress go without any pay too. It is for Social Security, Medicare and all other remaining discretionary spending where the ax will fall and so be the case. If one single weekend of a state government closure makes American People so mad, let Republicans bare the heat when these Social Security checks stop and Medical emergencies get postponed. We will see whether indeed People are able to console themselves with photos of their beloved ones when those beloved ones succumb to ‘no taxes’ fanatics.

What we need is a president who tells all this with a straight face to Americans. If Congress is the culprit which is holding this country to come out of recession or is holding hostage drama in increasing Debt Limit; President Obama’s job is to explain these ‘obstacles’ in his work to Americans. This week’s press conference was the first step, but he needs to remain on this message relentlessly until resolved. It is necessary for President Obama to tell Americans that:

1. Our Democracy is broken. In absence of majority based democratic system (Senate rules of filibuster have broken the system of basic mandate from people), American People expect that Bipartisanship should rule America. But when intransigent minority does not believe in it, what you get is a broken system. Tea Party and GOP are behaving as if Democratic franchise and it’s voters have no place in this country. Why have elections then? Let us have an autocratic rule of Republicans so they are free to do whatever they want with country.

2. And there are many members of Congress who have allegiance to ‘extra constitutional’ powers like Grover Norquist where ‘no tax increase pledge’ is far more important to these Congressional Members than Constitution of United States of America.

Because, unless President Obama makes it plain and get straight with Americans, American is not going to get ‘independence from the extremism’ which is ruling GOP. Neither do our ‘representational democracy’ is working (2 senators from Delaware with same powers as like 2 senators from California, go figure); nor politicians feel any shame in ramming down destructive politics which is bringing more misery to Americans. We are all prisoners of our own Politicians.

Happy Independence Day.

Saturday, July 02, 2011

Inside Baseball of International Cricket

He might not have got his politics right in domestic arena from where he came out to the world stage, but Sharad Pawar is right to allow more associate members to compete in World Cup 2015 in Australia.

There was a time when Indian National Cricket Team invariable used to lose it’s first Test Match outside of India. But look at the current India-West Indies Test Match Series. India won the first Test Match and only because of some serious cricketing by native folks, West Indies saved the second test match. But that was only after the Medium Pace bowling of Ishant Sharma stealing the show. It is hard to believe Indians dominating the art of pace bowling and that too in foreign land. And that is just a start. Look at the intense competition within Indian team to get included in the national team for upcoming England Tour starting July 3rd week. You cannot call this anything apart from 'embarrassment of riches'. When seniors like Sehwag, Tendulkar, Laxman and Dravid all playing second fiddle to the young batch led by Dhoni and Gambhir; you know that Indian Cricket is there to dominant the world of cricket for long, long time to come. Point is Ian Chappel needs to understand what he or his brother said - for long time to come, Indian domination of world of cricket is a fact of life - because of the Market size. That is how Capitalism works. Given that, Pawar’s instincts were right to allow more associate members, both for the reasons of :
- protecting Indian investment in Cricket which can work only if more countries are playing Cricket and
- for the sheer sense of egalitarianism by which it needs to be India who needs to lead cut short any sense of ‘elitism’ in Cricket and help propagate Cricket to more countries as much as possible.

If one looks at History of Cricket, it is all steeped in Elitism and the culture of ‘club of rich and whites’. When Nawab Patudi could become captain of India for titular reasons, Cricket was embodiment of Elitism in British Raj. Anything which breaks it down, that is a good thing for the Sport of Cricket. True, fortunately it is long gone era in Indian Cricket, but that needs to spread to rest of the world as well. Notwithstanding pedigree of Ian Chappel (I love these legendary Aussie Batsmen), it is great to see that Sharad Pawar’s instincts came our right in this matter.

Inside Baseball - what it means.