Last Call

Adam Serwer for the win.

But ultimately, voters don't really care that much about bipartisanship, they care about results. It's been clear to the voters since the beginning that the president has been trying to reach out to Republicans only to be rebuffed by the GOP's strategy of total obstruction. In fact, a Gallup poll way back in April of 2009 found that two thirds thought Obama was willing to work with Republicans, while only 38 percent thought Republicans were willing to work with him. Americans have been convinced of this all along -- but they voted Republicans into power anyway.

Whether the president gets reelected depends on whether the economy recovers and more Americans have jobs, not on the next Congress melting into a campfire chorus of Kumbaya. If unemployment is where it is now, voters will care about "Republican obstruction" about as much as they did in 2010.

All Republicans have to do to win the White House is make sure anything that might help lower the unemployment rate gets killed in the House.  They are counting on you going "I don't care what the Republicans did, Obama is supposed to be the adult, and if he can't get the job done, I'm staying home like I did in 2010 or hell I'm voting for the other guy."

They know the easiest way to win is to let the country fall apart. You will reward the Republicans with another chance.  They know this.

And fall apart we shall.

This Week's Busted Banks

Your Busted Bank Chart, via Barry Ritholtz.



How many banks will fold in 2011? No sign of the number slowing down. Could we break 200 next year? It's entirely possible as the pressure on the commercial real estate market will grow.

Southern Culture Warriors On The Skids

Matt Osborne explores the GOP "50-State Southern Strategy" as a source of short-term victory for the GOP and longer-term potential disaster for America.

There is no more Manichean human activity than war. There are only ever two sides, and the issue is total; so are suspicion and righteousness. Victories are counted in miles of territory or cities or body counts. In the most deceptive turn of all, winning battles can lead a society to think superior willpower or character or piety has been the difference when the reality is quite material. Thus the weight of Republican and right-wing rhetoric has become militant in part because it is such a natural fit for faith-based politics.

And in fact, one can easily argue the Republican Party behaves in a militant fashion. The tea party has succeeded in resurrecting the ardor of conservatives and bringing them en masse under the GOP banner; ‘conservative Democrats’ are a nearly-extinct species. Leadership squabbles among Republicans are short, and Republican legislators have developed lockstep habits in voting. Mitch McConnell runs his Senate minority with an iron hand. John Boehner has indicated he will use earmarks to bring Republicans under control. To be sure, Jim DeMint and Michele Bachmann aim to replace them or at least bring them further to the right (and use the language of war doing so); they want to lead the leaders, but in the end they will follow. Yes, the tea party doesn’t like earmarks — but they’ll be back next election, and behaving worse than ever. Head-stomping will seem quaint in 2012.

And what of the propaganda filling the airwaves and internet? What of Pamela Geller’s midsummer crusade against a mosque-that-wasn’t-a-mosque? What of two New Black Panthers blown up into a marauding army of Obama goons? What of spurious accusations of vote fraud? What of the smearing and defunding of ACORN? What of Darrell Issa’s promises to investigate the White House? They are part and parcel of the strategy of “no” and obstructed appointments: there will be no progress, there will be no advance. WE are the ones under attack.

Conservatives understand these things inherently. At the Huntsville appearance of the Tea Party Express bus tour in April of 2010, the attitude was exemplified by a sign that read: if we lose our FREEDOM here there is no place to escape. This is the last stand on Earth. Those are the stakes: total destruction or victory.

The famed Bushian binary worldview -- us or them, right or wrong, conservative or liberal, red or blue -- has itself become the means to an end.  It's a self-perpetuating super-cynical nightmare scenario, the famed "One Percent Solution" of Dick Cheney writ large.  If there's a chance that compromise with America's changing demographic means giving up power, then it cannot be allowed to happen.

Millions of Americans have become the enemy.  And the war itself is playing out on a daily basis.  Do read the article, Matt lays it out in stark and powerful detail, and the more people who read it, the more people will understand what's really going on out there.

The Certainty That It's Not Uncertainty

Kevin Drum sticks a much-needed fork in the "Obama and the Democrats created regulatory uncertainty and crippled the economy" myth.

Why does the economy continue to suck? The LA Times is hosting a symposium on the topic today, and USC business professor Ayse Imrohoroglu says the answer is uncertainty:

Businesses don't know what will happen to interest rates. They have trouble calculating what new workers will cost in light of potential new healthcare mandates and costs. They don't know what will happen to tax rates, which could rise dramatically. They are uncertain about increasing financial regulation and the possibility of a carbon tax. And as if that isn't enough, the soaring deficits and national debt raise very real questions about the federal government's long-term ability to meet its debt obligations.

That's the setup:  Now Drum's takedown:

• Interest rates will remain very low for a very long time. The Fed has made this as clear as any central bank possibly could.
• PPACA has no impact on small businesses and only a minuscule impact on large businesses. Medium-sized businesses face a modest penalty if their workers use federal subsidies to enroll in private insurance programs via the exchange. In other words, the overall financial impact on the business community is pretty small. What's more, there's really no uncertainty here. The broad impact of PPACA's rules is already clear and they don't take effect until 2014 anyway. This is not having an impact on business investment decisions in 2010.
• There's no excuse for Congress leaving tax policy up in the air for as long as it has. But even with that said, the Bush tax cuts affected personal tax rates, not business rates. And despite demagoguing to the contrary, even if the Bush tax cuts expire completely the effect on small businesses would be close to zero.
• Financial reform was a fairly modest affair, and in any case its effect is almost entirely restricted to the financial sector. Its effect on the rest of the business community is slight.
• There is no possibility in the near future of a carbon tax.
• There is no question about the federal government's long-term ability to meet its debt obligations, and even if there were this would have next to no effect on short-term investment decisions by American businesses.

And all six of those points are true.  The uncertainty meme, as Drum calls it, is complete and utter hogwash.  It always has been.  What the real problem is and has been for years now is demand.  Nobody wants to be the business to spend money to hire to create jobs to power consumption if there's no additional demand for the business's products, but if every business is holding back, the entire market suffers.

There's short-term risk to be the one business that hires.  Your competitors have lower costs.  That leaves the government as the buyer of last resort, but Republicans insist that this is a tax or regulatory problem.  The problem is with lost jobs and cut wages, people can't consume as many goods and services.

We have to spend money to jumpstart the economy.  If we do not, the economy stalls.  Period.  What we spent wasn't enough, and now the GOP is threatening to take all of it away.  This happened in 1937.  The result was the second half of the Great Depression.  Only massive forced government spending, in this case creating the materiel needed in WW II, resolved the problem.

We need an infrastructure project like that again.

The Conflictinator Explained

Here's the full Jon Stewart interview from Thursday on Rachel Maddow, it's better than any Sunday show stuff you'll waste time on today, and it's very, very interesting to see Stewart's take on the left in general.



At one point from about 12-20 minutes into this, Stewart basically asks "How does calling George W. Bush a war criminal, while technically correct, actually accomplish anything?" and goes on to say that Obama is doing much of the same stuff.  Rachel counters that this is a completely false conflation when the Tea Party is literally making things up about Obama, as opposed to the Left using facts.  Stewart then goes after Rachel on the Centrist Dalek "You and your network are ignoring the legitimate anger that created the Tea Party" argument.

Rachel, to her credit, does not dropkick Stewart's face in on this point.

It's a very eye-opening interview.

Top Of The Heap

Frank Rich's latest column is a reality check on GOP talking points for extending the Bush tax cuts for the top two percent.

The G.O.P.’s arguments for extending the Bush tax cuts to this crowd, usually wrapped in laughably hypocritical whining about “class warfare,” are easily batted down. The most constant refrain is that small-business owners who file in this bracket would be hit so hard they could no longer hire new employees. But the Tax Policy Center found in 2008, when checking out similar campaign claims by “Joe the Plumber,” that only 2 percent of all Americans reporting small-business income, regardless of tax bracket, would see tax increases if Obama fulfilled his pledge to let the Bush tax cuts lapse for the top earners. The economist Dean Baker calculated that the yearly tax increase at the lower end of that bracket, for those with earnings between $200,000 and $500,000, would amount to $700 — which “isn’t enough to hire anyone.”

Those in the higher reaches aren’t investing in creating new jobs even now, when the full Bush tax cuts remain in effect, so why would extending them change that equation? American companies seem intent on sitting on trillions in cash until the economy reboots. Meanwhile, the nonpartisan Congressional Budget Office ranks the extension of any Bush tax cuts, let alone those to the wealthiest Americans, as the least effective of 11 possible policy options for increasing employment.

Nor are the superrich helping to further the traditional American business culture that inspires and encourages those with big ideas and drive to believe they can climb to the top. Robert Frank, the writer who chronicled the superrich in the book “Richistan,” recently analyzed the new Forbes list of the 400 richest Americans for The Wall Street Journal and found a “hardening of the plutocracy” and scant mobility. Only 16 of the 400 were newcomers — as opposed to an average of 40 to 50 in recent years — and they tended to be in industries like coal, natural gas, chemicals and casinos rather than forward-looking businesses involving the Green Economy, tech or biotechnology. This is “not exactly the formula for America’s vaunted entrepreneurial wealth machine,” Frank wrote.

As “Winner-Take-All Politics” documents, America has been busy “building a bridge to the 19th century” — that is, to a new Gilded Age. To dislodge the country from this stagnant rut will require all kinds of effort from Americans in and out of politics. That includes some patriotic selflessness from those at the very top who still might emulate Warren Buffett and the few others in the Forbes 400 who dare say publicly that it’s not in America’s best interests to stack the tax and regulatory decks in their favor. 

But let's be honest here:  this is the group of Americans that are our New Brahmins.  They control the whole show.  You're mad if you think there was any way they will ever pay a dime more in taxes.  The Republicans and an increasing number of Democrats are sworn to defend them because they are the most important people in the country.

The rest of us, deadbeats all, are the ones who have to take our medicine and tighten our belts.  It's what serfs are expected to do, after all.