Sunday, August 7, 2011

Who's to Blame?


When I was a quality control inspector, we'd have regular MRB meetings, sometimes with executive management. MRB stands for Material Review Board and whenever our products got RMA'd (or rejected and returned to us), the MRB's mission was to identify, isolate and eradicate the problem by issuing the best corrective action. The goal of an MRB, although it may have been tempting to senior management at times, was not to point the finger of blame but to arrive at the best possible disposition and compromise that would be mutually beneficial and balance the needs of our company and that of our customers.

So, while it's tempting to assign blame for the largely symbolic minority opinion of Standard & Poor's downgrade of our credit rating, it's largely futile and will get us nowhere. For starters (and this is going out to the Chicken Littles of the GOP presidential sideshow who are squarely placing the blame on the President without being able to reach a consensus on why exactly Mr. Obama is solely to blame), if you stick your head out the window, little jagged blue shards of the sky are not landing on your head. Even before the downgrade, Wall Street, which twitches and flails over any such news or even rumors like a quail on amphetamines, predictably tanked and Asian markets such as the Nikkei continued the domino effect. China said a few nasty things to us, we bowed our heads and took it like incorrigible children and, somehow, perhaps solely due to the universally human aversion to anarchy, the world continued to dysfunctionally churn.

Now, that's not to say we should remain blissfully ignorant of who the real economic vandals and terrorists were: It's all too obvious that the Republican Party shot the engineer and disabled the dead man switch in the caboose until Obama caved yet again on cutting entitlement programs before voting to raise the debt ceiling.

There's more than enough blame to spread around. Obama's partly to blame for this mess for a variety of reasons. And, as is sometimes the case, the Republican Party is saying the right things: Yes, Obama must go. Yes, Geithner must go. But, as always, they're saying them for the wrong reasons.

Obama's, and the Democratic party's biggest mistakes, aside from the Chief Executive's latest appeasement and capitulation to an increasingly fascist GOP, was in allowing the right side of the aisle to hijack and set the terms of the debate by insisting that any balanced budget bill had to be tied in to the raising of the debt ceiling. To my knowledge, this had never happened, not even when the Republicans threatened to shut down the government in 1987 over this when Reagan was President.

Indeed, this was virtually an inversion of the usual sleazy tactic of the GOP to insert a poison pill amendment into a bill for the express purpose of killing or severely compromising a bill that would threaten in the slightest a bottom line for a corporation they held in particularly high esteem.

But since the debate over unemployment benefits last December, when minority Republicans in both chambers, led by nasty, heartless, vicious prick Jim Bunning, hijacked UI benefits until they got their Bush-era tax breaks extended for another two years. It was and will prove to be one of many cases in which the entire country will eventually be held hostage until forced to swallow whatever poison pill the GOP decides to shove down our throats. The poison killed the bill until it had actually achieved the desired effect.

Before, the Republican Party would insert these poison pills into bills whether or not they were germane to the original intent of the bill and it didn't matter to them whether the amendment got inserted into it or not. The idea was to water down or entirely kill the legislation. But as the GOP gets more radicalized and uses the Tea Party as their front organization, it's obvious the poison pills they'll keep inserting into already tepid, watered-down bills will actually supplant the bill in question.

Another failure, this one on the part of the left, is that the Tea Party is to blame for this mess, in getting our credit downgraded to AA status. The Tea Party is an increasingly atrophied, shrinking group of ignorant racists on whom the radical GOP has latched and is pretending to represent. The freshman Republicans who are just as clueless and ineffective as those in Gingrich's 1994 Republican Revolution, cynically latched on to these astroturf and faux populist movements plainly financed by Dick Armey and the Koch brothers. Yet when the Boehner bill passed in the House last month, 23% of the Tea Party caucus, including Michele Bachmann, voted against it.

The Tea Party does not represent the Republican Party and are no more in power than you or me. I think it's obvious that when S&P was holding negotiations and meetings concerning the downgrade, the last thing on their minds was an uncontrolled mini mob screaming non sequitur bumper sticker slogans such as "Keep your government hands off my Medicare!" and holding up misspelled signs.

Two more failures in perception that many across the political spectrum are making are A) that our debt was the cause of our credit downgrade (Rachel Maddow put the kibosh to that this morning on Meet the Press) and B) the real issue was about debt and not high unemployment.

In reality, it is largely about unemployment but when you're talking about a massive and highly abstracted issue such as the national debt, then obviously everything having any impact on our bottom line is of a piece and interconnected. Unemployment and low consumer confidence are mere synecdoches of a larger whole. There are many factors that explain our $1.5 trillion deficit and $14+ trillion debt and war is another cause.

The very most conservative estimates cite a $1 trillion price tag on the three war fronts, the largest slice of that bloody pie being Iraq. When one factors in direct and ancillary costs (often at the municipal and even the family level due to lost income, lost civilian jobs due to endless deployments, etc), many (such as Nobel prize-winning economist Joe Stiglitz) would put the cost at $3 trillion and rising.

Yet for neither the GOP nor the spineless White House, ending the wars immediately was never even under the table much less on it any more than was the slightest rise in taxes for the wealthy. The closest either side could come to that was in vaguely putting defense spending cuts on the table. Yet it's impossible to imagine a hawkish party like the GOP actually agreeing to that either as a whole or as half of that oligarchy known as the Super Congress except inasfar as cutting pay for soldiers and pensions for veterans (a proposal Bush made even as he was sending the first troops into Iraq).

Secondly, S&P plainly overstepped its bounds and decided in their comically amateurish way to become political scientists and to smack Congress (specifically the GOP) on the nose for its dysfunctional intransigence using our tattered AAA credit report. It's not up to a ratings agency, especially one steeped in collusive corruption as Standard & Poor, an entity that gave AAA ratings to subprime mortgages across the board for no apparent reason, to engage in political punditry.

What's equally, if not more, telling is that the other two major credit rating agencies, Moody's and Fitch, refused to pile on and to isolate S&P's downgrade by maintaining our AAA national credit rating. Standard & Poor, by deviating from its historically exclusive financial prognostications, had no right downgrading our bond rating and throwing foreign markets in turmoil as a Dutch Uncle lesson to the GOP. They also had no right on insisting last month that the GOP succeed in getting the insanely unrealistic $4 trillion in spending cuts that they'd also insisted on getting at the beginning of their runaway train showdown with the White House.

So, yes, there's plenty of blame to go around. And just because our MRB meetings weren't motivated solely by pointing the finger of blame didn't mean we turned a blind eye to the kink in the process. That's part of problem-solving. But it is not what should motivate this government, and its people. The question is not, "Who do we lynch for this?" but "How do we pull together and stop ourselves from sliding over the abyss?"

2 Comments:

At August 7, 2011 at 11:02 PM, Anonymous Anonymous said...

Perhaps publishing a list identifying the top 1% individually might encourage them to offer US a hand up.

 
At August 7, 2011 at 11:10 PM, Blogger jurassicpork said...

Gates, William.
Buffett, Warren...

 

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