Barack, Barney & American Thinker: All on the Same Page?

Perhaps, at least, when it comes to the “Tea Party” and the budget. Let me explain.

As Mike Razar today exclaims at AT:

I am sick of the debt ceiling fiasco and yet I can’t let it go. Post mortems abound identifying winners and losers. Some are pleased that we dodged a bullet while others on both sides bemoan their own lack of backbone. The truth is that nothing was accomplished by either side. The debt ceiling had to be raised. Sorry Tea Party, but it was a tactical error to use it as leverage. The cuts are trivial and unenforceable.

True. But I don’t think that was the purpose of what turned out to be a rather short-lived recalcitrance on their part.

Mr. Razar seems to agree with Mr. Barack, who on Tuesday had a little something to say about those pesky Tea Party-ers as reported by the Washington Times:

Obama: Tea-party GOP blocking U.S. recovery

PEOSTA, Iowa — A day after clashing with a tea party activist, President Obama Tuesday told crowds here that it was “a faction in Congress” that was to blame for blocking economic progress.

At a rural jobs forum, Mr. Obama ticked off a list of pending bills that he said would create jobs.

“The only thing that’s preventing us from passing the bills I just mentioned is the refusal of a faction in Congress to put country ahead of party,” the president said in a thinly veiled reference to House Republicans backed by the tea party. “That has to stop.”

I seriously doubt that the Tea Party has anything whatsoever to do with the notion that “our economy can’t afford it” (applause) when it comes to not, not spending more stimulus dollars.

Once again from Mr. Razar: “S&P are idiots.”

During his August 9th interview on NPR, yours and my favorite legislative financial wizard, Congressman Barney, put it a shade less pointedly though still non-numerically:

Standard & Poor’s, frankly along with Moody’s – although Moody’s was more responsible this time – has an extraordinary record. They have consistently overrated private debt. They have told people – and they were one of the reasons we got into a terrible crisis – that it was safe to buy junk, to buy subprime bonds. The people who read, for instance, Michael Lewis’s “The Big Short” will see how shockingly inadequate they were.

At the same time, they’ve had a history, less well known, of undervaluing the debt of governments. They have these ratings, and if you look at any given rating – double A, double B, whatever – at any given level, municipalities are much, much, much less likely to default than corporate…

Listen to all of Mr. Frank’s dulcet recital here.

This is from the man who once assured that Fannie and Freddie were both just peachy-keen financially. At least he finally managed to change his mind. Finally. But there’s no questioning his judgment, is there?

A smidgen of enlightenment: S&P didn’t pull the downgrading of U.S. debt out of thin air nor their butts. Ratings, of both public and private debt, are based on a very detailed analysis of numerical information. Without knowledge of that information and the methods used by S&P to evaluate the capacity of the United States to service its debt, assigning S&P the rating of “Idiots” seems to be going a bit, shall we say, overboard?

Mr. Razar continues:

How can the quant community take this lying down? Name a safer long term dollar denominated investment than a t-note. It is a good example of bad math and bad statistics spewed out by ignorant self-styled experts. The debt is not about to be paid down tomorrow with freshly minted QE (Quantitative Easing) certificates. It is unnecessary, since the net assets on the US balance sheet, public and private, dwarf the liabilities.

Sure about that? Could I see the balance sheet? And don’t forget Mr. Greenspan’s notion that the U.S. could never default on its debts precisely because it could always print money. I’m sure that was reassuring to the financial markets.

And I didn’t realize that private assets were considered collateral for public debt? Perhaps my notion that we’re selling-off the country and living, for what will probably prove a very short while, on the proceeds, isn’t quite so far-fetched after all. Do remember that Obama really does want to “spread around some of the wealth.” Unfortunately, much of it is going overseas.

In closing, I’ll merely note that Mr. Razar believes:

The powerful economic engine of the United States can support a more frugal government without a sacrifice in the standard of living. 

If that were the case, wouldn’t we all be back on Easy Street by now?

Ciao,
Dennis

 

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3 Responses to Barack, Barney & American Thinker: All on the Same Page?

  1. Mike Razar says:

    Since you were kind enough to read my article, allow me to correct your understanding of what I wrote. I stand by my assertion that the whole episode was a waste of time. No serious cuts were made. Not raising the debt ceiling might have been inconsequential or might have disrupted the world economy. Maybe something in between. Putting that aside, why get into a fight? All the Republicans in the House have to do is to come up with their own budget cuts and enforce them by simply refusing to pass any appropriations for them.

    I have written before on the economic impact of our vast hydrocarbon reserves totalling hundreds of trillions of dollars. That’s one of the things I mean when I refer to the national balance sheet. We are not on easy street because our government, in its zeal to “protect” our environment and otherwise tell us what to do, has blocked development of these resources. That is changing even now, and it leaves me quite bullish. A return to free market constitutional principles is what is needed.

    I think you owe me an apology for linking my views to Obama’s. :)

    • admin says:

      Yes, the whole episode a waste of time. But not because of the “Tea Party”. My comparison of your article’s thrust to the expressed viewpoints/ opinions of Barack and Barney is not merely tangential. Standard & Poor’s is not the primary, secondary, nor even tertiary cause of the world’s financial woes. They may be a lot of things, but they aren’t “idiots.” Whatever the Republicans in the House do or don’t do legislatively, will be undone or done by Obama administratively. The Republicans, by not forcing the issue at this time, merely give Barack another year-and-a-half to screw things up all the more. Your views being “linked” to Obama’s isn’t the issue. The Republicans, by failing to act, have essentially endorsed his spendthrift policies for the next two fiscal years. When you’re in a hole, the first thing you do is stop digging. And that’s what the Tea Party House members were struggling to do.

      I have no problem offering an explanation, but an apology is neither warranted nor given.

      Sincerely,
      Dennis Sevakis

  2. Mike Razar says:

    I must really be a terrible communicator. How you can read my words and not realize that I am with the tea party? It is getting all too common for any disagreement on tactics or issues to be construed as being on the other side.

    If you really believe that Obama can unilaterally appropriate money from the US Treasury, then you either don’t understand the Constitution or you don’t realize how much the American people support it. That would precipitate the greatest constitutional crisis in 150 years. But let me play your game. If you don’t trust Obama and the Democrats to be bound by anything in the Constitution, then how can you trust them to uphold any “deal” made in Congress? My core point was that the whole negotiation was a sham. Why waste whatever leverage there is in the debt ceiling on meaningless deals?
    I’m sorry, but I disagree that the issue could have been “forced”. There were ample constitutional means available to keep the national checkbook open for at least several months. I even discussed that in a previous article in AmericanThinker. American investors are already losing trillions of dollars in savings and investment because of the perception that the US could ever default. Failure to raise the ceiling might well have cost them more trillions. This bogus deal may yet do that too.
    I am pleased, Dennis, that you have joined the Constitutional cause, and that you want to get the budget under control. But some of us have spent half a lifetime on those causes. Do you really think you can come along and just wish solutions into existence? This is the closest we have been. I hope we don’t squander the opportunity to defeat the statists because of impatience on the part of newly converted tea-party advocates.
    I hope I get to vote for Palin, but if necessary I’ll vote for Romney. One step at a time.

    P.S. I can live without your apology, but you can’t win without people like me. Not that I expect you to believe that, And yes, I can’t win without people like you. It seems we are stuck with each other or the Marxists.

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