Mitch McConnell Punts on the Debt Limit

Apparently the Congressional Republicans don't want the responsibility of governing after all.  Hoocoodanode?

I think I'll outsource my comments to Monty Python:

When danger reared its ugly head, he bravely turned his tail and fled...

 

Consider this an open thread.

Comments

[low-tech cyclist]

I almost went with Al Yankovic's "Dare to be Stupid," but decided Mitch's chickening out, caving in, etc. was the essential thing here.

[oddjob]

When danger reared its ugly head, he bravely turned his tail and fled...

LOL!

[Paula B]

I don't know about anyone else, but yesterday drained me. All that jousting and saber rattling but no goals reached, other than the Republicans' goal of rendering this president impotent. I've never observed anything like this, even during the LBJ and Nixon years, which must lie high on the list of the 10 Most Tumultuous US Presidential Administrations, at least in my lifetime.
I watched the CBS interview Scott (what a tool!) Pelley did yesterday morning, and was pleased to see Obama has not lost dignity or focus. He must be thinking, however, that he probably WILL be a one-term president. Unless there's a counter movement that erupts over night to quash the anti-Obama, anti-Democrat, anti-everything else insanity that has seeped into the very fabric of almost every media outlet in this country, what chance does he have? Not even W endured this much abuse, but perhaps that was because Cheney was his attack dog.

[kathy a.]

i'm not really understanding what mcconnell's proposal is. it sounds like the idea is to just back out now and let the debt ceiling be raised so much, then make obama come back and justify further raises to the limit on two occasions before the presidential election. weird.

maybe paula's on the right track, that it is all about discrediting obama. do we really need to have these stupid showdowns again and again?

[Paula B]

According to a wire story in today's paper, McConnell will back out allowing Obama to raise the debt ceiling as long as Obama makes a proposal to cut more in spending than the amount of the increased debt, then the GOP will vote down Obama's proposal. That hangs the debt-ceiling squarely on Obama and sets him up to never pass a budget, so he can be blamed for the resulting shutdowns.
Obama wants to finish the process the GOP started in order to avoid future shuts, especially in 2012, obviously. As far as I can tell, the GOP has him cornered, but I hope Sir C et alia can set me straight, if that's not the case.

[Prup (aka Jim Benton)]

First, Paula, we just can't let that happen. If we were merely turning the government over to a new Bush -- either one -- or a new Reagan, even if we were rerunning 2008 and electing McCain (without Palin) it might be bearable, but as horrible as it is to say this, there is no one that sane visible in the Republican field. In the same way as it is a moral necessity to support Obama over any of the Republicans -- no matter how disappointing he has been -- it is almost becoming necessary to support Mitch McConnell -- my fingers almost went of strike rather than typing that -- in his battles with Jim DeMint and Eric Cantor.

Because the most important thing about McConnell's 'fold' is that his party is almost universally repudiating it. it has, I'm afraid, made default far more likely. (In fact, judging from Steve Benen's report on Boehner's 'pause' I wonder if any deal made could get even the handful of House Republicans needed if the entire Democratic contingent voted for it. The few adults who see what could happen in a default also see what happened to Bob inglis, to Bob Bennett and to Mike Castle. Even the ones who have announced their retirement are unwilling to create this sort of firestorm.)

I can't help thinking of the bar-fight scene in THE GREAT RACE and the repetition of the Mayor standing up, starting to cry "Citizens of Borracho..." and WHAM! getting hit with another chair. And everytime an 'adult Republican' -- I'll even include Brooks -- opens his mouth to protest, here comes another bottle or chair.

[Prup (aka Jim Benton)]

My reply was tied to Paula's first comment, and I hope people will read it along with my comment on the Monday thread about the NAR and The Response because putting these two together is vital. We all use the term 'insane' or 'crzy' referring to Republicans. At some point in the last three years it ceased being 'rhetorical exaggeration' and became simple, factual reporting.

[low-tech cyclist]

i'm not really understanding what mcconnell's proposal is. it sounds like the idea is to just back out now and let the debt ceiling be raised so much, then make obama come back and justify further raises to the limit on two occasions before the presidential election. weird.

kathy, I think that's pretty much it. As I understand it, Obama would have to ask for the money on three separate occasions, getting roughly 1/3 of it each time. But even though Congress would have to vote each time, it would be treated as if the debt ceiling had already been raised, and Congress were trying to pass a bill repealing the increase, so the anti-increase side would have to win by a veto-proof majority in both houses to block any part of the increase.

So the effect would be a clean debt limit increase that everyone would have to go through a silly kabuki ritual repeatedly on account of.

maybe paula's on the right track, that it is all about discrediting obama. do we really need to have these stupid showdowns again and again?

We certainly don't need them, but the clown show known as the GOP is going to force them on us anyway. Plus there'll be the usual battle over appropriating money to keep the government running in FY12, which starts on October 1.

[low-tech cyclist]

Paula, I don't see where McConnell's plan corners Obama or the Dems. I think the idea was that the Dems would have to make some theoretically embarrassing votes to pass the debt ceiling, and would wind up taking ownership of it in the public mind, with each vote becoming a Really Big Deal, just like the shutdown threat and the debt ceiling hostage ploy have been.

I could be wrong, but what I think is that the series of votes will quickly be regarded by the media (excepting Fox, Drudge, Rush, etc.) as kabuki worthy of essentially no attention, since that will not only be the truth, but unlike with the shutdown and the debt ceiling, the outcome will be as predictable as the sunrise. It will have no news value.

[kathy a.]

seems to me that obama and the dems have offered a whole lot in the way of spending cuts. the republicans had pushed that as essential, but the "we're out for blood" faction of the party says it's not enough.

if the temporary bush tax cuts had been allowed to expire, there would not be this conversation about the debt ceiling. this was a perfectly safe and rational way to increase revenue without "new" taxes. rational is not where they want to go.

ltc -- viewing the future showdowns as bills against an already-approved increase makes sense. i suppose it gives political cover to the people who decided to play chicken with the credit rating of the nation. but talk about pure theater...

it is pretty amusing -- aside from the potentially awful consequences -- that mcconnell is being repudiated by his own team. boehner sure got quiet lately.

[Sir Charles]

My sense of this is that Obama will not have to make any cuts at all. That this will be for proactical purposes like passing three separate clean debt ceiling increases.

It just gives the GOP the ability to complain that Obama is a big spender who is not cutting anything. It's very strange given that appropriating money and setting a budget is Congress's role.

I would consider this to be total capitualtion on McConnell's part.

Two things strike me: one, like oddjob, I feel like there is something vaguely unconstitutional about this, but I haven't really had time to think it through. It is certainly a major abdication of Congress's power to the Executive. (This is probably mostly interesting from an academic point of view -- I don't think the courts would intervene to bing about a default.)

The second question is whether this thing can get 218 votes in the House. I really question that.

[Morzer]

For my money, McConnell's strikingly silly proposal is a desperate attempt by the slightly less crazy part of the crazy clown posse to avoid admitting defeat. Big business is making it very clear that they expect the GOP to raise the debt ceiling, and Obama's turned up the heat by pointing out that August's social security payments are now in jeopardy. I would think that, if Obama is calm and rides out the storm in the next 48 hours, the GOP will have to fold. Whether it can get a clean debt ceiling through without Democratic help is the crucial question. I think the answer is clearly negative - which gives Obama and the Democrats the leverage they need. Give it a couple of days and watch the GOP panic big-time.

[Mandos]

In the meantime, Euro-brains are now saying that a Greek default is inevitable.

Of course it was.

[low-tech cyclist]

Here's Ezra's take on McConnell's plan.

In essence, McConnell is proposing to permanently disarm the bomb that is the debt ceiling. He’d formalize the informal arrangement the parties have had in recent years, which is that the debt ceiling is used to embarrass the party in power, but it’s not allowed to threaten the American economy. If his plan passed, it’d become easier for the minority party to embarrass the majority party, but harder for them to threaten the economy. It’s win-win.

I generally agree with him. My one question for Ezra is that I don't see how this permanently defuses the debt ceiling bomb, though I'd be quite happy if that were the case.

[Prup (aka Jim Benton)]

And don't forget the possibility of a filibuster. Even those [few] Republicans in the Senate who might vote for it would be far more reluctant to vote to break a DeMint-Paul-Kyl filibuster. (Especially if they were actually smart enough to make it a classic "Mr. Smith" live filibuster.)

The McConnell plan, I'm afraid, is one thing that has made the likelihood of default (which I already put at over 50%) 5% more likely. Amd the other almost certain result will be to strengthen the true believers over the (less dangerous) unprincipled cynics.

[Morzer]

Interestingly, the Obama campaign is currently telling all who wish to hear that they have 260,000 new donors. I might be wrong, but this doesn't sound like good news for John McCain.

I still can't see big business and Wall Street allowing the GOP to take us into default, not to mention the old folks who have suddenly realized that they may not get their social security checks in August. The latter have apparently begun yelling at their GOP Congress critters. The GOP are desperately trying to shift responsibility for the debt ceiling vote to the Democrats, which says to me that they know the vote must happen and the debt ceiling raise must be approved, and are squirming frantically to avoid taking the hard votes that will enrage the endlessly pyromaniac teabaggers. Obama should stay the course, let the pressure build and wait for the GOP to develop a more realistic attitude. I think enough of them will come around to get this done.

[Sir Charles]

Jim,

There won't be a filibuster. If McConnell is on board there will be at least seven Republicans who vote for sanity -- I would think that you could count on Snowe, Collins, Brown, Murkowski, Lugar, Graham, McConnell, and McCain, and I expect that some of the business types -- Chambliss, Cochran, and a few others would be on board. Default is really not acceptable to anyone who is sane and anyone who wants business to be their benefactor.

Again, though, the issue comes down to 218 House votes. I am more worried about that than anything else.

Mozer,

I think you're right -- Obama should just stand firm and he will have a good chance of getting a total win.

Mandos,

Greece is indeed going to have to default. They should probably leave the Euro. Several other countries should consider doing the same. Not being able to control a central bank and a currency in these kinds of times is a huge disadvantage to a country and, I would argue, fundamentally undemocratic.
I' with

[nancy]

Here's Robert Reich with a straightforward outline which I wish the President would consult. With the debt ceiling morass and the SS scare headlines, maybe the timing is right to go all-out and add this to the WH message too. Change the channel and get back to the economy and jobs--make the GOP claim otherwise. Copies of this letter from another President should be circulated in abundance. Mr. and Mrs. Tea Party need some stronger medicine and a dose of reality. Why not give it to them?

[Crissa]

I can't imagine handing the keys over to the President wont be seen as capitulating, but with the right-wing noise machine, the unimaginable is plausible.

[Crissa]

PS, when I post a comment, the captcha is always off the bottom of the screen. It's been a long time since it loaded without the captcha, but I think it needs to go to an #anchor or something.

The longer the comment, the more it is thrown off the bottom. And even with a simple comment - like mine above - the captcha is right off the bottom.

[Prup (aka Jim Benton)]

Sorry, Sir C., but I don't see Lugar, Snowe or Brown -- all of whom are up for reelection and all of whom are facing strong primary opposition -- breaking the filibuster unless they are willing to declare they are resigning after 2012. Graham and Shelby are already considered ultra-liberal RINOs -- as ridiculous as that sounds -- and may not want to stir things up more. McCain is highly unlikely as what was once a third-rate mind that could occasionally do the righ thing by accident is being eaten up by bile. And the little I know of Chabliss, he'll ask who can be of more use to him, and I think he'd choose DeMint over a seriously wounded McConnell.

This vote -- assuming the 218 votes are there, and I doubt as well that they will be -- could resemble the "Profile in Courage" of the Johnson Impeachment vote, with a search for 7 Republicans willing to commit political suicide to do the right thing. It might happen, but I wouldn't count on it. (McConnell, Murkowski, Cochran, maybe Grassley, but finding three more will be a lot harder.)

[oddjob]

Scott Brown (de facto) voting for default would be a politically suicidal thing for him to do. His challenges on his right are minimal at best. I'm not aware that Scott Brown faces any primary challenge to speak of.

(Yes, the out of state $$ support he got from out of state Tea Partiers he won't get this time around, but he no longer needs their money, and that's all the leverage they had with him.)

[Sir Charles]

Jim,

I think you are really off on your Senate math. People are not going to filibuster to cause a default. It's a bridge too far for enough of these folks that it won't happen.

I believe that McCain is already on record supporting McConnell on this. Graham has also spoken in favor of raising additional revenue.

http://blogs.abcnews.com/thenote/2011/07/republican-senator-warns-of-a-disaster-if-congress-cant-find-middle-ground-on-debt-ceiling-.html

I disagree with you strongly on Brown -- who is doing an amazingly adpt job of walking the fine line on these matters -- Snowe, and Collins. None of them has any chance of making the claim to be a true conservative. They are going to have to hope that the Republican eletorate in both states will continue to support them as they are. And I think they are probably fine as that goes. I don't think there is a Republican in Massachusetts who can lay a glove on Brown. He's the most popular politician in the state. This vote would be a total no-brainer for him.

[Sir Charles]

Jim,

The Wall Street Journal editorial page endorses McConnell's plan. As does the Chamber of Commerce.

For a number of Republican Senators, that pretty much decides the matter.

[Morzer]

I think Snowe and Collins are much more likely to break a filibuster than Jim believes. This article suggests that they are much more open to reality than most of the GOP caucus:

PresidentSnowe

[Morzer]

And apparently McConnell is now is full-on desperation mode:

MitchMcConnellsRINOBlues

The Senate Republican leader, Mitch McConnell of Kentucky, warned Wednesday that allowing a federal default could have disastrous political consequences for his party and “destroy” the Republican brand.

With increasing numbers of House Republicans digging in against an increase in the debt limit and dismissing the potential economic consequences from a default, Mr. McConnell used a radio interview to defend his proposal to allow a three-stage increase and predicted that Republicans would be punished if they did not allow the debt ceiling to be raised. Recounting how the 1995 government shutdown helped President Bill Clinton win re-election the next year, Mr. McConnell said any impasse that hurt the nation’s credit and led to government checks being delayed could have the same result for President Obama.

[Mandos]

It's important to note that literal US-default advocacy is already pretty entrenched in right-wing grassroots discourse. I just perused a popular-consumption book by a Mises fellow in the bookstore which is quite explicit in advocating for a USA default.

Not merely as a political lever, but as an end.

By the way, as in the case of Greece, I do think that sovereign defaults have their place and can think of circumstances where I would think it would be a good idea for the USA as well.

[nancy]

Maybe one of you could translate Pelosi and Reid here , via p.m. carpenter. It looks like the usual "snatching defeat from the jaws of victory" which we Dems do so well. What?

I suppose this must be Hillspeak at work--"a step in the right direction," according to Pelosi and Reid, while McConnell proudly tells talk radio there will be no votes to raise the debt ceiling. Call me puzzled.

[Morzer]

Nancy, I would translate it as:

"Well, ok then...". I don't think it means much more than Pelosi and Reid politely acknowledging a slight sign of sanity from one of the GOP, while refusing to commit to anything without a much more substantial offer.

[beckya57]

I think Obama's painted the GOP into a corner (largely of their own making), and McConnell and Boehner know it. McConnell's not an ideological Tea Party guy, he's a completely cynical, corrupt politician who is all about maintaining the GOP gravy train from big business. Those guys are screaming because they know a default could crash the world economy. Greece would just be the first in series of dominoes: Portugal, Italy, Spain, Ireland. (BTW, Sir C, I agree with you that those countries should pull out of the euro.) The GOP leadership doesn't want to be blamed for that, or for seniors (one of their most important constituencies) not getting their SS checks, or for soldiers not getting paid. They and the GOP leadership are belatedly realizing the House Republicans are crazy people who think ignorance of basic economical (and other) facts is a sign of purity, and who don't know and don't care that they could run the economy off a cliff, and take down the Republican party with them. They should have taken Obama's 85:15 deal when they had the chance. The spectacle would be entertaining if the risks weren't so effing high.

[Corvus]

Hey all. Sorry I missed the last couple days of debate on what the hell is going on with the debt limit. I live in Chicagoland, and due to the massive thunderstorm was without internet this past few days.

Anyways, let me take this moment to make two points about the debt limit:

1. A debt limit default has always been unlikely because Wall Street would/will come down like a ten ton hammer on whatever party stands in the way of a debt limit increase, and Wall Street owns both parties.

2. The party that seems less willing to make a deal, any deal, on the debt limit will get blamed for the coming default by the press.

Therefore, the party that seems less accommodating would end up getting hammered by Wall Street. This is what Obama's rhetoric about Medicare and Social Security that everyone was worrying about amounts too. He didn't really mean any of those things. Really, he didn't. It was all just code for "I am more accommodating than my opponents." And it worked! McConnell's cheese-eating surrender monkey proposal is a sign that Wall Street is now just hammering Republicans to get something passed to end the threat of default. They are getting blamed, not Obama.

I find this all encouraging, not just for the debt limit, but for Obama's negotiating tactics overall. I feel like he has finally realized that the way to deal with these people is to treat them like raving loons that will have to be tricked into doing something, not as people can can come to doing honest business with. I feel like this whole debt limit game of chicken is a rather reckless, but shrewd way to drive a wedge between the Corporate and Tea Party wings of the GOP. I am glad he is getting conniving.

[beckya57]

Hi Corvus, I also applaud the conniving. However, I do think the conniving is more effective now because Obama has spent so much time and energy on showing that's he's willing to do business with the GOP. As for the debt ceiling being a reckless place to do this, it is, but it's the GOP that forced this fight, not him or the other Dems. The Dems are the party that actually understands reality, including the reality that defaulting on one's debts is a really, really, really bad idea. The modern GOP is the party that never lets facts get in the way of ideology. The amazing thing is that it's taken so long for business and the media to figure this out.

[nancy]

Morzer--not so sure. Why give them running room when they've earned nothing but opprobrium? Why not snatch the narrative away 'a la Reich's suggestions which I linked to above?

I guess it's at moments like this I wish Dems would recalibrate and refine the expected SOP manners of our " American-style minuet" because the GOP has long since dispensed with them. Polite gets us to the next counter-manufactured crisis. Reset. And then the GOP "takes it away" once again. Tougher is better with these people. Much tougher.

[oddjob]

I think Obama's painted the GOP into a corner (largely of their own making), and McConnell and Boehner know it.

Unfortunately too many more junior Republicans don't know it (possibly including Majority Leader Cantor)!

This evening's talks ended poorly, and Moody's has put the USA's credit rating on its watch list.

If this was only about the business as usual political tactics, I'd agree with you Corvus, but the debt limit isn't politics as usual. If the political impasse is so large that it legitimately threatens the trustworthiness of the full faith and credit of the US government it will cause damage and repercussions we haven't ever experienced before, including the very real possibility that the dollar will lose its place as the preferred currency of international commerce. We enjoy benefits from that status we aren't even conscious of. Other countries' economies are unusually swayed by what's happening in the US economy because what's happening here affects the value of the dollar, and since the dollar is the currency of international commerce a strong dollar and a weak dollar both have unusually strong impacts on other countries. We've never lived in an economic environment where some other currency than ours was that preferred currency. If that ever happens then we will be subject to the vagaries of some other country's economic fortunes in ways we are not now.

The one with the money gets to make the rules. We haven't ever lived in an environment where the USA wasn't the one with the money because during our lifetimes we've always had the biggest economy and we've always been good on our promises to pay our debts.

This present insanity may call that into question. Calling that into question isn't a good idea if you want to remain a country with maximum international clout.

At least, that's how it looks to me.

:(

(I suppose the flip side would be to remember that Obama's style is to not swing into strongest action until the 59th second of the 59th minute of the 11th hour. That is probably what's happening here insofar as the political tactics go. I think Obama's natural temperament is placid, but I also think it's clear by now that underneath his usual placid temperament is a core of steel. When placid doesn't work the steel shows up. Whether that will be enough to keep the bond masters from downgrading the ratings of US bonds for the first time in history or not I don't know.

That sucks.)

[oddjob]

TPM's take on this evening's debt negotiations.

[Morzer]

Nancy, I don't quarrel with Reich's suggestions in terms of policy. I simply don't see how most of his ideas get through Congress, or how, failing that, they can be put into practice. I suspect we would see a few days of Obama speaking up, the Blue Dogs selling out, and the Republicans claiming that Obama wants to introduce a Bolshevik society. How Democrats get the message out, having previously failed to do so, I honestly don't know.

[big bad wolf]

it annoys me that moody's still exists to make pronouncements. they were/are wither incompetnet or corrupt. either way, why are they here to pontificate? close'em down and start the rating game over

[nancy]

Morzer--right. But these ideas have to be conveyed immediately to those people trying to pay some attention, but who are flummoxed; they do end up mattering at the polls. Starting now-- wash, rinse, repeat. That's how we work in this country. My husband, the academic, has a tried and true classroom mantra which comes into play here: tell them what you're going to tell them, tell them, tell them what you told them.

The Reich message (or a version thereof) should become a friendly and unthreatening riposte to all of the GOP henny-pennying.

[nancy]

Oops--forgot to say how tedious that "classroom mantra" can be. But useful, in the right circumstances. :)

[Corvus]

I think it's best to just view Moody's threats as one more aspect of the Wall Street push to get something done.

Oddjob, I get what you are saying about how this isn't politics as usual. But playing chicken on something this big is probably the only way to convince the money party and the media that the base of the Republican party is crazy, and that needs to happen for the future health of the country.

Also, I think the more closer you get to the deadline, the more likely a clean bill becomes, likely passed with minimal GOP support, since as time goes on the need to pass something increases but the possibility of a grand bargain shrinks. (McConnell's proposal is halfway there). Since this is our preferred outcome (and Obama's) I think pushing this to the limit might actually be necessary.

[low-tech cyclist]

I think it's best to just view Moody's threats as one more aspect of the Wall Street push to get something done.

Bingo. Even an actual downgrade from Moody's wouldn't have importance in and of itself. The ratings given by bond ratings agencies exist so that investors don't have to make their own determinations of the risk situation of every company whose bonds they consider including in their portfolios. But nobody needs to have someone else make that determination for them with respect to Uncle Sam; Moody's has no better idea than you or I do as to whether the U.S. will actually default.

But it's just one more signal that Wall Street is sending that this ain't no party, this ain't no disco, we ain't got time for that now.

[Morzer]

Even an actual downgrade from Moody's wouldn't have importance in and of itself.

Low-tech cyclist, given how jittery the markets are already because of concerns over the shakier European economies, plus the unresolved debt ceiling situation in the US, a Moody's downgrade might just spark a panic, and if that panic spreads far and fast enough the damage to the economy would be considerable, especially in the current, rather rocky situation. It's perfectly true that a downgrade from the ratings agencies shouldn't be this influential, especially when one considers that the system is obviously rigged to a substantial extent - but I think it would be a mistake to assume that they don't matter.

[kathy a.]

seems to me the threat of default has these investment people skittery, and more so with the threat of a downgrade. isn't the practical effect of a downgrade in credit that more needs to be paid in interest, and investors/lenders are harder to find?

i confess to not understanding the investment world very well, but they seem to panic about all kinds of things. "stocks fell sharply today on news that blah blah blah."

bonds are considered extremely safe investments because they always pay the promised amount. and here we have yahoos who think it is just dandy to say -- proudly, unapologetically -- that promise doesn't matter as much as getting their way politically. would you loan money to a cousin who has a habit of not meeting his obligations?

harry reid says cantor should not be involved in debt talks because he is not proceeding in good faith or acting like a grownup.

[low-tech cyclist]

Morzer - the problem that I have with that logic is that somebody who holds a lot of Treasury bonds, or a lot of somebodies who cumulatively hold a lot of Treasury bonds, would have to panic.

The big boys are going to make their own decisions, and won't give a flying fuck what Moody's has to say. And small investors who try to manage their own portfolios are usually in something a lot more interesting than T-bills. It's just hard for me to see where this Moody's-induced panic would start.

[Morzer]

low-tech cyclist, by its nature, panic isn't something that can be confined to one part of the financial sector, nor is it bound by logic. There's already a good deal of anxiety about the future of the European economies and the potential US default. It wouldn't take much to set the ball rolling - and Moody's downgrading the US might just be the push that makes it happen. Moreover, China has begun issuing expressions of "concern". There's plenty of potential for disaster here. I don't personally have much respect for the ratings' agencies, but I don't think the financial sector is going to be as sanguine as you might hope.

[kathy a.]

someone probably brought this up earlier -- it is a bit dated -- but here is ezra klein on how our debt happened: it's the bush era tax cuts and the wars that put us deep in the mess.

[nancy]

Meet Eric Cantor at our liberal/elite NPR. You'll have to search for the liberal bias.

My favorite part of the story: "In his 2007 column, [Fred] Barnes quoted an aide to former GOP House Whip Roy Blunt of Missouri, who first tapped Cantor for leadership, extolling the young congressman's temperament.

'He's so humble," Mildred Webber told Barnes. 'And he's a very good listener.' "

Story doesn't mention Cantor's tapping away on his blackberry during the President's first SOTU. Of the two accounts now circulating of his meeting on Wednesday, why is it practically impossible not to choke at reading his. (NYT/The Caucus)

[Sir Charles]

Sorry -- been unavailable all day.

I am afraid that Moody's actions cans have consequences. Notwithstanding the fact that both Moody's and S&P have een sown to be bullshit artists of the first order, nonetheless institutional investors continue to rely to some degree on their ratings. So in other words, when I write investment guidelines for a pension plan, I will specifically reference the quality of bonds that can held in the portfolio based on the ratings by the two agencies. Yes, the expectation is that investment managers will also do their own due diligence regarding the bonds -- but they are typically constrained to buy only those bonds deemed investment grade by Moody's and S&P.

Also, as Morzer points out, financial panics don't need to be entirely rational.

But what would be entirely rational is if investors began demanding higher interest payments due to increased risk associated with U.S. bonds, heretofore considered the safest investment in the world. It will cost the taxpayers hundreds of billions of dollars.

Cantor just seems like such a dick.

[Krubozumo Nyankoye]

Well, my comment got zapped by the system. It was sage and insightful of course. It might have stimulated some conversation, but I will not attempt at the moment to reconstruct it from my disk cache. Too much trouble, too much Gran Par, too much labor, too much weariness.

Discussing what might happen seems impotent now.

The gist of my original post was simply, there comes a tipping point, a threshold, past which events take on a will of their own which no one can prevent or mitigate. Perhaps part of the initiation of freshman members of congress should include a lesson in humility.

[kathy a.]

KN -- i'm not sure the word "humility" is in the orientation materials. or part of whatever dumbass pledges they have signed.

there is a certain "lord of the flies" quality to the current unpleasantness, amongst mainly the relative newcomers to governance. [governance is another word not in the lexicon.] but there are various seasoned pundits and others who helped sow and nurture the insanity over a very long time; it is small comfort that some are now recoiling at the present state of things.

[Krubozumo Nyankoye]

Kathy a. -

Well observed. The Lord of the Flies" allusion was particularly apt because it speaks to the strange collusion among fools that appears to be going on.

To me it seems we have a unique combination of extreme demogogary and almost equally extereme apathy.

[oddjob]

The "Lord of the Flies" allusion was particularly apt

Yes, it was!

[oddjob]

LOL!

Go read the whole thing (the anecdotes are all worthy reads). The photo is explained at the end (and reading the other bits first helps set you in the right mood to read that explanation).

:)

[burberry bag]

The photo is explained at the end (and reading the other bits first helps set you in the right mood to read that