Tuesday, August 30, 2011

Navigating American Politics

Ezra is right to high light the importance considering Republican 'need' to 'oppose Obama' (even if it means pulling down Americans further). I am not sure 'bone headed' Daley and White House Political Team including Obama realize how 'toxic' they have become and as a corollary how beneficial it is for GOP to oppose Obama at all cost. But really if this White House wants anything to be done on ground, it must accord 'GOP reaction/reception' the higher priority than trying to portray Obama as a reasonable politician by starting with 'stale bi-partisan' policy prescriptions.

For sure when Obama proposes 'big ideas' as Ezra advocate; GOP would pounce on as 'here comes uncontrollable spender with yet another stimulus'. But after listening to GOP, downgrade still comes and we get pushed to another recession - that is what Americans have seen. So there is 're-examination of Tea Party policies' in air for Americans. With that background - propose big, get pounced, but in the end get something actually moved; that may not be a bad politics (while covering bases with Base).

This all requires throwing the Daley play-book of 'posing a reasonable' politician. I am not sure to what an extent Obama is ready for that. Until then 38% approval may look like a 'high bar'!

Sunday, August 28, 2011

NeoCon Praise

"By far the most important decision any world leader made in this affair was when President Obama decided that the world could not stand by and see the people of Benghazi massacred. That turned the tide."

Rare is an occasion when a true and smart neo-con would praise President Obama. The Liberal instincts exactly made President Obama to act here. President Clinton's regrets about Rawanda are still resonating with Americans Progressives and these smart ladies (Hillary and Susan Rice) were not about to repeat that.

I also like Kagan's warning at the end:

"Those experiences teach that failure to manage the transition can rapidly turn success into disaster. Presumably the president and his advisers know this. Yet the temptation to pocket the president’s “win” and run away from Libya as fast as possible will be great. Obama needs to resist it."

That is about as smart an advice as what President can utilize from this sage on Right. But then we are never far away from the calculations of 'balance sheet'. In the case, the question is will this help President Obama and USA defuse the 'tinder box' about to explode on UN floor - recognition of Palestinian State? With ongoing Syrian turmoil and Israel itself in the middle of their own internal political vagaries, it is a critical time for this mother of all contentious issue - Arab-Israel conflict. President Obama must be thinking the Libyan goodwill will come handy to him. At least that motivation should keep USA fully engaged in Libya.

Thursday, August 25, 2011

Why would a political system matter?

Fareed Zakaria argues that a parliamentary system of Democracy may be an answer for America's woes. It is surprising that this is coming from someone who has been brought up in Mumbai and who must be studying Indian Politics with equal attention. In India we have the largest parliamentary democracy in the world which is trying to put essentially non-democratic czar to supervise corruption in the country and in a sense undermine whole of Loksabha. That much level of disgust is widespread in India about their own system.

I support Anna Hazare's resistance for completely different reasons - it is forcing Indian Political System to face the issue of Corruption. It is not to undermine what Hazare has achieved here, but really it is the total failure of Leadership on part of Rahul Gandhi and Dr. Singh, especially when Sonia Gandhi is not in the picture. A straight forward and meaningful way for Congress Party to tackle Anna's challenge was to 'up the ante against Corruption' - to point out the root cause of corruption in India as break down of court and police system at local and state level. When Congress Party would have raised this true issue sufficiently high with a credible plan to fix this root cause, Lokpal and bringing PM under that ambit; all that would be bit irrelevant. In a way political incompetence of Rahul Gandhi & Dr. Singh is at par with political incompetence of President Obama. This again firmly indicates that no matter what system you have, political incompetence can equally retard the progress of a nation.

Coming back to Zakaria's assertions, what he seems to have forgotten is whether a political system has mechanics to throw out political representatives who do not perform or deliver. Clearly that option is there in American System - Americans can simply throw out all the bums (i.e. Tea Party and Hard line GOP) who caused the 'debt problem' and who continue to advocate ideology instead of solving our problems. No one is stopping American Public to make this wise choice and also hold Democrats equally accountable. If Americans refuse to heed to those who are advocating rational and sane solutions to our problems, not even God can cure us. Whether it is parliamentary system or presidential system, it will be the same mess. Faulty populism (state treasury bankrupting schemes like Rs. 2 kilo rice by late NT Ramarao or free electricity to farmers in Haryana and Punjab), misguided and ideologically driven policy prescriptions (Mandal by VP Singh and RSS backed efforts to change India's History) and total legislative grid lock (exhibit A - read how Indian Opposition Parties have stymied completely second term of Dr. Singh); all these are equally possible in a parliamentary system.

I really do not want to compare British Parliamentary System here because UK is a small and very compact nation whereas USA resembles really to the mother of all diversity - Indian nation.

Wednesday, August 24, 2011

Perfect Crossing

No, living in Cupertino I do not see 'gold paved' roads financed by Apple Wealth and I am not complaining either. I only see Apple Employees crossing roads in a normal manner when I commute to my work place.

Such 'underwhelming tone' - that is the Apple class.

Indeed many, many thanks Steve Jobs!

Monday, August 22, 2011

4 - 0 Whitewash

I do not recall any such humiliating 4 - 0 defeat by the Indian Test Cricket Team. What a shameless and irresponsible cricket by Indians. Here is the travesty by Indian Cricket Team, these multi-million dollar players are simply made up of clay for 5 days contest. The devastation in numbers:

- All 4 Tests won by England in this series at following margins:
1st Test - 196 runs
2nd Test - 319 runs
3rd Test - Inning and 242 runs
4th Test - Inning and 8 runs

- There has been only one 2 hours session where Indians did not loose a wicket - morning to lunch session on the last day of the fourth test match.

- Indians could manage only 49 English wickets in 4 Test matches to 80 wickets of their own.

- English batsmen had 3 double centuries (Cook almost to triple, Bell and Pieterson); 2 150+ run centuries (Bell and Pieterson) and 2 centuries (Prior and Morgan) in this series. Only Rahul Dravid from India managed 3 centuries show casing his class over all Tendulkar's of the world.

- There has been only one inning where Indians managed to reach 300 runs. All other innings were below that mark.

Total and abject surrender by Indian Test Cricket Team.

As Avjit Ghosh says in TOI, future as well does not look good for Indian Test Cricket. In the end it is all about interests of Indians who are totally enamored by One Day and T20. Test Cricket simply does not command that much respect in India and it shows in these results.

What about Syria?

Now that Obama strategy of paying only 'leading from behind' - i.e. no boots on ground and let NATO take the lead in air support - has been sufficient to topple Gaddafi; question is: is there any realistic possibility of throwing out Assad regime in Syria?

Answer to the question is not encouraging. Neither any ground intervention in Syria by West makes sense nor even air support for Assad Opposition is possible. For one thing, Assad Opposition is still in the form of 'civilian resistence' rather than any armed uprising. How would Assad Regime crack - that is an unanswered question at this point. Apart from providing behind the screen moral and material support, there is much less what West can do here. It is only that fall of Gaddafi in Libya would embolden Assad Opposition, but which may result in further brutality by Assad. Assad has been pretty bad a** already, but there are no bounds to human cruelty and Bashar Assad would not hesitate to escalate it as far as he deems fit. After all his father had already paved this path of brutality.

Saturday, August 20, 2011


"We had all these productivity improvements and all this outsourcing in the economy, but we still managed to employ those people. That was the critical thing that happened. Instead of outsourcing and productivity improvements creating an instantaneous employment or wage problem, those people managed to find employment in the non-tradable side of the economy. A lot of them were employed in government, in health care, and many of them were employed in industries, like construction and retail, fueled by a consumption bubble. But we were just delaying the adjustment. Some things looked wrong during this period: The middle incomes were stagnating and the jobs didn’t look very challenging. But these are big industries, so when they’re humming along, they employ a lot of people."

-- Michael Spence, Nobel laureate in Economics, Professor of Economics, New York University while talking to Ezra Klein

Infosys chairman Narayana Murthy calls it a day

Shares of IT companies take maximum brunt as investors sweat over US and EU crisis

My take - the whole story of outsourcing is complex with multi-dimensional effects. One thing seems clear, days of vertical pure outsourcing companies in India making money for share holders are over as every major Western company is having their own captive outsourced unit along with their own business units chasing Indian market. In a sense Murthy era is truly over while West is only waking up now how to deal with what has happened in last two decades of outsourcing.

Friday, August 19, 2011

Classic Journalism

This is what you expect from a seasoned, true reporter - not to hesitate in exposing public fallacy. Joe Nocera does a great job in hammering American Mentality of glorifying everything associated with 9/11 even when it does not make much sense and common Americans would have to pay the price.

Tea Party - Nocera has called their bluff. Will they do anything about the boondangle which is under construction in the name of Patriotism? Doubtful, because hypocrisy is the middle name of Tea Party.

Blues of Right

I thought hammering Left incessantly and sabotaging any 'grand bargain' by seeding insidious Op-Eds to encourage GOP intransigence in rejecting any compromise have been the only occupation for high priests of Right - WSJ Editors and Opinion Writers. But looks like lately realization of how far Right GOP has gone so that 2012 does not look any more of lock, is dawning on this Ivory Tower. Very entertaining. My advise to WSJ - don't give up your original game; our guy - the one who leads from behind - is brittle too and he may drop the ball at any time.

But you know what, the larger point is not whether Team Right may loose or Obama wins. It is whether WSJ is open to consider what is good for America and is ready to show trash place to non-sense peddled by Laffer.

Come on guys, the world should not be so bankrupt that Ebenezer Scrooge of the world only changes his mind in Dickens novel and we accept meekly Laffer nonsense of 'taxing poor is better and that is the way the world works'.

Why Daniel, why? Do we not want to change this world? Or do you enjoy your 'blues with a glass of martini' so much that something different than 'tax orthodoxy' never comes to your mind?

Thursday, August 18, 2011

Obama Play Book

Ezra Klein is right to state that 'he is least interested in yet one more plan from President Obama for jobs'. What he is interested to know is what 'stakes' President Obama is ready to put down for any such plan. Clearly without defending any such bold plans, it ain't going anywhere and Obama descend in American Politics will continue.

We know that to a degree, any of these plans can address our core issues. The question is whether President Obama and Democrats are ready to 'wage the political war' for the same. So far the first instinct by Obama has been 'put the tail between legs and run' all under the guise of claiming 'otherwise things would be very bad'. Meaning Obama is saying if 'he fights for rights of common Americans' things are going to go worse because the other side is 'crazy'! Ok, we hear that.

However, now that the threat of default is gone and downgrade has anyways occurred; contention is can we expect Democrats to insist a 'serious job creation' plan as a part of Super Committee proposal? If GOP opposes that, not only Obama and Democrats should go to American Public pointing out who is withholding America's Recovery; they should be fully prepared for 'automatic cuts' to start applying. GOP would blame Democrats for moving goal posts from the original agreement as it did not talk about jobs. But why can't Democrats retort that - yes as circumstances change and Americans continue to face head winds of painful employment; they want to respond to these changed circumstances. Is that so bad?

GOP would also portray jobs program as the same 'tried and failed Obama Stimulus'. Obama needs to reply - but otherwise also we have been trying GOP austerity program for a while with no results. Besides proposed new job programs does not have to be deficit funded, it can be funded by new revenue. And when GOP says that this 'job-killing' new revenue is not acceptable; point them to Bush years where there was no such 'job-killing' revenue but neither it gave lasting jobs nor it avoided deficits.

Question is how bad are these automatic cuts in absence of a deal from Super Committee. My suspicion was that it would not be that bad as more than half of cuts are coming from bloated Defense and Security budgets and as far as Medicare goes, it is about 'provider fee reduction'. This much is vindicated by Cohn. If we get further credible numbers from CBO or other equivalent agency about realistic impact of these cuts on 'jobs' and if that impact is manageable; then you have a clear workable 'play book' for Obama and Democrats. It will be also a litmus test for Obama whether he is willing to do something concrete about our problems, or is simply interested in letting steam go. So far he has failed miserably.

Wednesday, August 17, 2011

Mean Perry

The guy is not even for a week on stage and here we have:

- Next, American military does not have respect for Obama - the guy who got OBL - because he did not serve in military. (What about Dubya and Cheney then, those famous cowards who did not serve in military but still made Army of million Americans toil in needless wars?)

Wow, this is quite a Texan march of this cow boy! Indeed, how is America to sustain this barrage and philosophy that anyone who does not agree with Perry is not worth living?

Tuesday, August 16, 2011

QE3 Coming

With German growth story hitting the bump, Euro's 'default' moment is finally approaching fast. European policy makers across the board are coming to the conclusion that either they would have a tighter and coherent Fiscal Union (backed by Euro bond) or dissolution of Euro by year end is certain. UK and Italy have already joined the chorus.

With realization that China alone cannot provide the impetus for global growth, downing of twin engines of global economy - USA and EU - would rightly construct the background of 'G20 noise'. What can they do? Last time, globally 2 solutions were used - coordinated collective quantitative easing by central banks and stimulus. QE was used to provide liquidity to banks (which European banks would need now along with few American banks like BofA) as well as buy government debt. Same will be needed now.

For Obama Administration, considering the bombast by GOP, the best bet is globally coordinated action. That is what would provide it the needed insulation from political attacks. Bernanke indeed would embark upon QE3 as needed. Even Obama Administration can push some stimulus/government action through Congress as global pressure rises. When two Conservative Governments of UK and Germany come on board, likes of Wall Street Journal will be pushed back.

It is true that, while Economy is slowing; it will be hard for Merkel to push the final frontier - closer fiscal union. But there is no choice now and no more hiding. She can learn few tricks from Tea Party - how to take a national & global economy to the brink so as finally German People and law makers 'see the abyass' of broken Euro. Equally, global backdrop will help Merkel to sell the deal to German people.

In a way, hope of the world economy rests on Angela Merkel singularly. Meanwhile the leader of free world, by necessity and by his choice / style; as usual will be 'leading from behind'. Obama would have to 'fire shots' in this case by a gun on Merkel's shoulders.

Update - Zoellick is putting a caveat for G20 action, but I think we are invariably moving in that direction.

Sunday, August 14, 2011

Pawlenty, GOP Race and Broken Politics

One of the simplest criteria to judge a politician is when does that politician calls it ‘quit’. In all walks of life, this sense of knowing when the time is up, is very important but most miss that. It is good to see that Pawlenty showed this sense and has bowed out of the presidential race at right time. It is a right call. He gave an honest shot and he has senses to fold the bid when time has come. He has not endorsed anyone nor it is clear that he would rule out the vice-presidential bid (like Joe Biden).

Next ‘zombies’ which need to end their own misery are - Newt Gingrich, Rick Santorum, Herman Cain and Thaddeus McCotter. Entertainment value of Gingrich has gone to zero too, hence there is no real value addition for Americans here. The remaining folks like front-runner Bachmann, Perry and Romney would define the serious GOP playing field. Ron Paul is ‘sui generis’, eventually he will not make it too. Meanwhile we Americans will have to put up with ‘political prostitution’ of Sarah Palin - just keep milking her popularity for her financial gains, just keep dabbling in GOP presidential nomination context so as to keep her speculation warm and ‘juice’ that public interest to make more money.

Problem with remaining GOP field is all these folks are vying to be ultra-rightist. Each one is trying to out-right another one. I do not need to go over depressing details of how all these GOP candidates are simply double downing on the discredited economic policy of tax cuts all the time and small government at any cost. And that is one more aspect of America’s ‘broken politics’. There is simply no choice spectrum across the politics. Either you have a bunch of 8 folks scrambling desperately for a nod from Tea Party or you have a singular progressive candidate - the incumbent who has failed to conduct ‘proper politics’ and make & win authentic Progressive vision with Americans. So much for our Democracy. I guess that is where AmericaSelect and Democracy21 type of nascent civil movements would play the role. In the end, clearly it is common Americans who have do what is needed instead of looking up at our politicians all the time who are kind of time wrapped.

Saturday, August 13, 2011

Imperial English Cricket Team

I guess Indian Team was missing the act of playing a British Colony minnow trying to scrap through an English Cricket Season. In days before India's Independence, rag-tag team of impoverished, physically unfit subcontinent Indian players would hardly get the billing of playing in the peak of English Summer. That was the honor reserved for Down Under Team. But having accorded the top billing to MS Dhoni's World Cup Winner Team, Indians came a cropper in this English season. Totally disproportionate show to what these guys claim as their cricketing pedigree. So much for Greg Chapell's claim of Indian dominance of Cricket in all forms. As Gavasker has already commented, indeed Dhoni's Team has been a team of school boys which cannot even make as many runs as made by a single English player - Cook - in an inning. This Indian team has been hardly able to make 300 runs in any of the six innings of this series so far. Scalpels will be out and many in India would hold team's feet to fire.

Meanwhile English Cricket Team continues to scale new heights and is indeed looking like a true all time world class cricketing team.

The only question left for Indian Team in the last match will be whether they can avoid 4-0 white wash or not.

Thursday, August 11, 2011

Is System Reboot Needed?

I am sympathetic to Ezra’s argument that structure of American Politics and State is essentially hindering our ability to make any progress. The single most consequential factory is the decision of Mitch McConnell to run GOP as ‘parliamentary opposition party’ in Senate - meaning opposing anything which Obama and Dems propose. After becoming the House Speaker Boehner has adopted the same strategy in House too. The mechanism used by McConnell is ‘filibuster’ and abuse of that parliamentary manoeuvre is well known by now.

But if one thinks further, there are number of issues which come to mind if ever we want American System to work like parliamentary majorities - you get the mandate, you run with it and in the next election voters pass a judgement on your governance. UK system is template here but equally worthy templates are the German way, Indian System and interestingly Turkish Democracy too in Erdogon Era.

House in Congress clearly works like that. What is better, House gets re-elected every two years and in that sense is most ‘sensitive chamber’ to public opinion compared to all other parliamentary modes. But most of other political systems are practically unicameral. In India Rajya Sabha has rendered itself totally useless. Apart from bringing unelected politicians in government it has no use. Compared to that Senate in USA is practically equal power chamber with more emphasis on Foreign Policy and checks on Executive Power. During Bush-Singh Nuclear Accord, Indians bemoaned that Union Cabinet could simply approve terms of the accord without bringing it to Loksabha. Indira Gandhi famously ran Foreign Policy without any parliamentary approval.

George Bush did the same for Iraq war is true. But you can never forget 70+ senators across both parties backed that policy. Question is why? Basically because ‘politically’ it was impossible for Congress to go against the wind Bush had then. It works other way too - GOP House balked at Bush plan of Social Security privatization and GOP joined Dems in stopping that initiative despite the thumping victory Bush got in 2004. What this means is - majorities do not matter in American Politics, but it is ‘politics’ or ‘backing of people’s will’ for a particular issue; that matters. The flip side of this is, if a leader (invariable it is in President in most cases except when you have true legislative giants like Tip O’Neill in House and LBJ in Senate) wants something to be done, the leader has to bring some reasonable votes of opposing party. That is the dreaded word - bipartisan support.

Clearly failure in case of Obama is inability to bring in at least some members of GOP on board for his policy agenda. Even before McConnell started the ‘total opposition’ approach; it was the lack of GOP participation in health care reform and stimulus which sowed the seeds of destruction. Instead of a single big bang Health Care Reform bill, Obama could have gone for series of health care reform bills so that at least few of those had GOP buy-in.
Interestingly ‘bi-partisan’ support does not have to come by being completely conciliatory all the time. Making a firm stand and by that increasing credibility with Public while taking ‘fights on certain issues’; it is all part of the process to make oneself stronger in other bi-partisan resolutions. Obama is simply failing in this respect as there is no visible fight which can project his ‘resolute leadership’ to public.

I suppose one can adopt FDR or Truman approach of ‘bull by horns with Congress’. That model is possible too. This means, so long as the leader is able to shape public opinion towards his/her policy positions; results to American Public are perfectly possible in the current American System. Problem is Leadership, not the System.

Besides, if we were to make our system more like parliamentary mechanism, what would it mean: reduce power of Senate? How can that be different than ‘unicameralism’? Are we going to get all Senators elected at the same time instead of the current staggered schedule? Without staggered time table, how do we ensure that a richer mix of public will is expressed in a chamber of Congress? It is true that, such a complex rhythm of public will sets the bar higher for any particular policy proposal to be passed. But if leadership is adept and capable, the outcome is far more lasting and entrenched.

And finally how can you tamper Congressional powers without impacting executive powers? ‘Executive as Commander-in-chief’ is at the heart of American System and that is why it is the most effective ‘military power’ in human history. That is how American State got founded in the first place when George Washington delivered the crucial victories as commander-in-chief. Any change in the current system would alter that unique power with grave consequences.

Bottom line - any effective leader in American System has to ‘win’ the argument with Public; the system in itself would then not pose any hindrance.

Wednesday, August 10, 2011

Wisconsin and Beyond

"But let me just say, if tonight was a loss, I hope we have many more such "losses" in 2012."

He has got it right. Even if Dems keep marching like this, all will not be lost for them.

Meanwhile, Andrew has a proposal for President to follow on. It makes sense along with insisting Tax increase on rich. I would like President to go further and veto any proposal which does not address the longer term issues; meaning which is not $4 Trillion in size. While President fights, why not fight for what is best for Americans? How the rally cry of 'restore America's Credit Worthiness' cannot be the winning ticket? Americans are looking for Leadership which will make a decent down payment in restoring our financial worthiness. That is what America's next leader has to go for. This one is for President to lose.

Tuesday, August 09, 2011

Problem of Tea Party

"In a broader sense, Scott’s bill gets at what has long troubled me about the Tea Party movement: It is fueled by populist anger, but it has been hijacked by plutocrats. Well-intentioned Tea Party foot soldiers demand that power be returned to the people, but then their clout is used to support tax cuts for millionaires. They rally for tougher immigration laws, but then their guy [Rep. Austin Scott of Georgia] in Washington helps corporations to fire U.S. workers and hire foreign nationals."

This is a terrific piece of reporting from a top notch journalist. Job for Media is to continue to expose this problematic aspect of Tea Party. A Tea Party movement without such hypocrats would be a net addition to American Politics.

Lunacy of Tax Opposition

" The Dow Jones Industrial Average plunged 634.76 points as approximately $2.5 trillion was erased from global equities."

Speaker Boehner rejected Obama proposal of increasing Tax Revenue from $0.8 Trillions to $1.2 Trillions and the $4 Trillion Deal collapsed prompting S&P to downgrade USA.

So GOP is ready to loose $2.5 Trillions collectively in a single day but would not be ready to add $0.4 Trillion more in taxes over a period of decade.

Do the math. Those 'rich' patrons of GOP - how is this compact with 'tax jihadists' working out?

Why are Obama and Dems quiet and not making this case to Americans, including well to do Americans as well?

Resolute Cantor

Let the world burn, let the second recession come; but God's work on this planet must be continued - to protect 'rich' from tax increases. That is Eric Cantor on the day when Trillions of dollars are wiped across the globe for the misguided policy of GOP. Well done.

I just hope, shocks in Israeli Stock Market would make Jewish Puppet Masters of Cantor to pull him back from the madness on which he has embarked.

When all this craziness is well intact in Congress, neither erudite repudiation of S&P matters nor calls to better angles.

Our reality is Congress is occupied by folks who are gleefully pulling down the whole world while an effete politician is occupying the White House. This means, the period of pain is still long from over.

Sunday, August 07, 2011

S&P Downgrade - Some Thoughts

1. This downgrade was very much expected. In the interview of S&P Sovereign Debt Rating Division director with Ezra Klein, it was clear that unless there was a credible deal of $4Trillion; down grade was inevitable. Hence, this is not a surprise.

2. Any expectations that this downgrade will jolt dysfunctional Washington are completely misplaced too.

“Any student of sovereign default knows that it is born of precisely the kind of failures of governance that we saw during the debt-ceiling debate. That is why the US cannot hold a triple-A rating from S&P: the chance of having a dysfunctional Congress in future is 100%, and a dysfunctional Congress, armed with a statutory debt ceiling, is an extremely dangerous thing, and very far from risk-free.”

-- Felix Salmon, Reuters

That is why this is a beginning of further, deeper downfall of USA rather than a point where America got her house in order.

3. Blaming S&P is exactly ‘shooting the messenger’ mentality from Washington. As Ezra rightly points here, S&P got it correct in this case. Responses from Washington politicians (including Republicans who are demanding resignation of Tim Geithner as if this down grade was avoidable so long as he had shouted loudly while Congress continued the mess), remind responses from Europeans who always blame rating agencies whenever a downgrade is declared. These very American politicians who would lecture Europeans to get their house in order, need to heed to that advice rather than blaming S&P. Of course, Washington is beyond being able to get it’s house in order. But at least it can spare public of it’s hypocrisy while they are busy destructing American Economy.

4. The first real question is - is the downgrade done for real reasons? I do not share assessment of Chait at TNR and do think that S&P is right to downgrade for the dysfunction of Washington. ‘That is how democracy works and all that’; those are nice arguments in theory but in the practical world, Finance and Businesses have to make real decisions about the given hand and hence this indictment of American System is correct. If American System can accept tax increases from a Republican President only, then ‘fairness’ is not the problem of Businesses.

5. Next, S&P is very clear that it no longer assumes that Bush Tax cuts on rich will expire and by that it assumes that the additional $1Trillion revenue increase will not materialize by end of 2012. Chait thinks it will happen. But as Douthat says clearly, Democrats have never been able to hold the line on taxes on rich and there is no reason that it will happen in December 2012 too. The Daly-Obama playbook is ‘spread the legs, drop the pants and let GOP do the rest...’ as far as Dems are concerned.

“Obama gave in to hostage-takers. You should never negotiate with such people. You stand your ground, at any cost. Let them wreck the economy: then, maybe, people will see what they are dealing with.”

-- Clive Crook, The Atlantic

Since none of this has happened, in the end S&P is right to assume that Bush Tax Cuts ‘will not expire’ and there will be never any revenue increase.

6. That brings us to the final question - if revenue increase is very unlikely to materialize so long as Obama is at the helm of Democrats, are we saying Obama is in the end ‘detrimental’ to the well-being of American Economy? There is no other conclusion than that. It is simply the question of ‘competence and ability to govern’. For Obama, governance means sticking to Daley Playbook and hence not to point out ‘intransigence of GOP’ in matters of fiscal and revenue policy. For example, Obama could have said that S&P downgrade for ‘dysfunctional Washington’ commits the same mistake for which America is paying the price - we refuse to point out who is the real culprit. S&P in its analysis blames equally to both parties and refuses to point the true culprit. It is the epitome of ‘equivalence in blame’ tendency of American Elite and refusal to put blame where it belongs. As a result, American Public continues to fail to hold concerned ‘American Politicians’ accountable. Despite knowing who does what policy-wise, America continues to make wrong choices in her elections. There is no escape from this vicious cycle and Washington dysfunction continues to get entrenched.

7. Competence of Obama as a politician to wage a political war against those who are leading America on wrong road, is exposed. Obama and his presidency is simply ‘incompetent one’ though it might have been successful in early years to handle things better. That much is becoming clearer by every passing day. GOP has tactically waged a brilliant political battle to expose these vulnerabilities of Obama. All this means, Americans are pretty soon going to come to a conclusion - anyone but Obama in 2012. The guy is, for whatever reasons, simply unable to deliver; then who cares if he has been more conciliatory or not? (My cousin commented - he is to America what Dr. Singh is to India; personally impeccable but unable to govern and deliver.) True, this is achieved by folks who are not necessarily prescribing a right policy. But policy issue of those people comes later when they are in power; not before when they are waging victorious political battles. That is the precise lacuna of the American System - it is not an accountable parliamentary system, but it’s politics has been poisoned so much so that much needed and much assumed bipartisan policy approach of what Founders intended is lost. One player is a perfect Parliamentary Opposition without paying any price - that is why I do not agree with Matt - while the other one is unable to adapt for equally forceful plays.

8. President Obama refuses to accept that he is very likely to be one termer unless he changes his ways.

“He goes to fund-raisers to tell people to stick with him, but he seems to be trying to reassure himself.

“I have to admit,” the president said in Chicago, “I didn’t know how steep the climb was going to be.”

At the large fund-raiser in his hometown, he tried to reassure disillusioned liberals about “unfinished business” to help those in need. Later, at a smaller $35,800-a-head dinner, he defended the unpopular debt package like a proud fiscal conservative.”

With such a ‘looser mentality’ why would Americans need a president who is a ‘spent force’ and becoming radioactive by every passing day? Unless Obama fires Daley, revamps his team and fights everything to get ‘tax revenue’ in the Congressional Super Committee along with solid concrete pieces in place for longer term $4Trillion debt reduction plan; there is no road to his re-election. For all the talk, indeed he seems to be a second coming of Carter and pretty soon America will need to move on from the short Obama era.

Update - If you want to read some of the most devastating commentary on Obama frailties, you need to read Drew Westen's article in NYT. Seems like a mile post for Liberal and Progressive opinions to look beyond Obama, especially the last part where the author offers some hypotheses for failed presidency.

Update II - How long would it take for America to regain it's credit worthiness? S&P says a decade or more. Clearly this S&P move, howsoever it is discredited, is setting the stage for American Political Discourse for a decade or so. Quite a longer term seismic event.

Update III - One of the reasons I am inclined to think beyond Obama is I conclude that we do not need Obama or Democrats to 'protect core American entitlements - Social Security and Medicare'. Congressional GOP help in defeating privatization of Social Security immediately after Bush reelection and defeat of Ryan plan during NY-26 in 2011; all that points clearly to the total political commitment of Americans in protecting these two programs. It is not that Americans will not accept changes in these programs, but protecting these two programs is 'truly third rail' of American Politics and there is no real danger of GOP targeting it in political sense or would succeed in that. Also, what has Obama done really to protect these entitlements? He was out to 'sale the house' anyways during recent deals. So we really do not need Obama or Democrats to protect these entitlement programs in sensible ways and there goes the fundamental USP of Obama/Dems. In a way, Democrats and Obama are getting a 'free ride' here as protectors of these entitlement programs while hiding their incompetence in bringing Economic/Fiscal stability to America. That will be the thinking Americans will coalesce in coming days unless things change dramatically.