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