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Today the Standard & Poors "credit rating agency" borrowed a slick comedy move from Bart, Cleavon Little's character in Blazing Saddles. Specifically, S&P made a hollow threat to cut the rating of U.S. Treasury securities this morning---in effect, Wall Street holding a cap gun against its own head---which I assume is supposed to scare the President and the Democrats into doing whatever the right-wing deficit peacocks demand, such as abolishing Medicare and Social Security so rich assholes can have more tax cuts.Right on cue, naturally, lame duck Senator Joe Lieberman was on my car radio this afternoon spewing turgid nonsense about the existential threat posed by current US debt levels and why it's important to cap federal spending at some absurdly low percentage of Gross Domestic Product. (I can't find a link to this, so you don't have to listen to his putrid, quavering voice here.) Why do I call it "turgid nonsense"? Because like most talk about federal deficits and debt in the corporate media today (including NPR), the somber generalities preached by deficit peacocks immediately break down to gibberish when real macroeconomists insist that the discussion include valid historic data, meaningful contexts, and other scary evidence-based features.
Nobel macroeconomist Paul Krugman, for example, quickly authenticated this S&P stunt as another episode of Wall Street's tiresome Saturday matinee serial entitled Uncle Sam and the Phantom Bond Vigilantes. It's fair to ask why I might put stock in anything Krugman and other neo-Keynesians say. My reason is simple: because his analysis have been consistently correct (i.e., consistently predictive about what would happen to the economy in the future) since I started following his New York Times blog 5 or 6 years ago, around the time he was was warning readers about the runaway US housing bubble and related phenomena. And he always backs his arguments with verifiable economic data and simple numerical models that every economist and most people with a high school diploma can understand.
I suspect if they don't shot themselves in the foot, someone-else will take down Standard and Poor's.
ReplyDeleteAs I read it corporate America are reporting record increases in profits and dividends (and no doubt compensation). Much of this is due not to their own efforts but low interest rates, reduced wage costs (that is redundancies and zero wage increases - the costs of which the Federal government has to carry - and deregulation.
Also the gap between the richest and poorest sections of society in the US is now wider than for 100 years.
I'm sure the sensible American voters will tell the Republican party can stuff its trunk.
Marginalia: you're correct about everything except maybe your last good thought. Sensible American voters are outnumbered by victims of this stunning propaganda operation that has dominated our mass media since the mid-1980s. It is very easy for media demagogues to goad people into voting against their own interests just so they can stick it to poor people and unemployed workers who "get a free ride" at their expense. The strong and intentional subtext of this propaganda machine is that the "undeserving" poor are generally African Americans and Hispanics. And one other issue is this: although far-right Republicans have been driving the train here since the Reagan administration, they could *not* succeed in their initiatives without the acquiescence of a plurality of Democrats. Why? Because Democrats are bought and sold with the same money that keeps Republicans driving the train. Still, there's the Law Of Unintended Consequences; I do not think it's impossible that regular Americans will develop a much more coherent and vociferous class consciousness over the next decade as they can no longer ignore what's in front of their noses.
ReplyDeletenow I get it about stylized art. Joe Lieberman does have a mandible (and balls) even though we never see them. It's stylish, very stylish
ReplyDeletePerception, if widespread, is reality. An interesting experiment would be to have a flash mob suddenly start running out of a public space. The research question is: what proportion will get a non-plugged in subject to join in? 5%? 75%? Effectively, what do these other people know that I don't - and can it hurt me?
ReplyDeleteFor what it's worth, the U.S. bond market yawned - but of course you have to know enough, at the time, to both see this and interpret it correctly. Longer term, debt is an issue - especially if "reserve currency" status is at risk (though only a currency basket has 1/2 a chance to take the $US place). Inflated donuts to dollars, that (hopefully) gradually persistent inflation will keep U.S. of A. in the global game. Note: investment advice worth the price paid. PRC is probably the ultimate ascendent economy barring civil war or warring states redux.
Ne How--dy Doody!
PS Does anyone even mention the cost of wars? They sure as shootin' t'ain't cheap...
Anon 1: no, no---Lieberman has no mandible or gonads, stylish or otherwise. Life doesn't always imitate art.
ReplyDeleteAnon 2: I'd quibble about the perception = reality formulation for reasons not related to your main point. The flash mob experiment is an intriguing idea, though, but might relate more to conformity issues than perception. The concerning perception issue to me is the success with which propaganda can be used to advance social engineering goals. The news media were supposed to provide our reality test, but now they provide delusional narratives in support of the entrenching American ruling class.