Valley Forge August 17, 2011March 24, 2017 The country’s in a bind – I think we can agree on that much. So what are WE called on to do? (“Ask NOT . . .”) How most effectively to focus our frustration? We’re not called on to spend a shoeless winter at Valley Forge, but we are, I think, called on to do this much: TO BE RIGOROUS IN OUR THINKING AND THEN ACT IN THE BEST INTEREST OF OUR COUNTRY. Don’t hate me for saying this, but I think the 97,488 idealistic Floridians who voted for Nader in 2000 (to take the most glaring example) failed that test. Their intentions could not possibly have been better, but – because they surely knew Nader could not win and Gore came closer to their ideal than Bush – they should have acted rationally and voted for Gore . . . even as they urged friends in NON-swing states to vote for Nader to make their point. Imagine how different the world would be if they had. Today, I have mainly two kinds of friends: (1) Those who feel pride in all the President has accomplished and focus their angst on the opposition that has kept him from accomplishing more. (2) Those who believe that if only he were smarter, or cared more, or worked harder – or were tougher – he COULD have accomplished so much more. I am passionately in the first camp, but for the sake of argument, let’s stipulate that my friends in the second camp are right. What should they do? Yes, they agree a McCain/Palin presidency would have been unthinkably worse. And, yes, they agree even a so-called “moderate” Republican would be all about appeasing the religious right with his judicial appointments – the last straw for a Court already tilted against us – and all about pledging never to raise taxes on anything, ever. Yet my friends in this second camp are just so angry – with good reason but, I think, at the wrong people – that they say they will VOTE for Obama but won’t do more than that. So here’s the rigorous thinking part: You either want a huge turn-out that reelects the President (and holds the Senate, takes back the House, and flips state legislatures back from red to blue) – or you don’t. (Some of you don’t. You think Bush took the country in the right direction; you think historic low taxes on the rich these last 10 years produced tremendous job creation; you don’t “believe in” evolution or man-made climate change; you think women should be submissive and gays denied equal rights; you like the gun show loophole – whatever. You are not alone!) But if you do want a huge turn-out that reelects the President (and holds the Senate, etc.), then it’s nuts to withhold the resources – and enthusiasm – needed to produce that outcome. That only helps the OTHER side and risks an outcome we would regret for the rest of our lives – as many of us will regret Bush v. Gore. I’m not proposing we become mindless cheerleaders or stop voicing our frustration and offering our suggestions — forcefully. But the bottom line, if we really do want to win, is that we need to pump each other up, not demoralize each other. The challenge of 2012 is significant – not least because in 27 states Republicans are doing their damnedest to make it hard to vote. (And they call us unAmerican?) But here’s the good news: ☞ If we ARE rigorous in our thinking we WILL win. ☞ For all the obstacles, this Administration averted a depression, restored America’s standing in the world, launched an educational “race to the top,” doubled auto efficiency standards, killed Bin Laden, appointed two progressive Justices, extended health insurance to 30 million people, preserved the social safety net . . . and on and on and on. It’s a VERY long list. ☞ And for all the frustration, people ARE stepping up – in record numbers – to fund OBAMA VICTORY FUND 2012, and giving at record levels. If that’s you – thanks. If not, I’d ask you to sandwich your disappointment between these two frames – and to do so whenever the subject arises, as it always does. The first frame: We need to win! The world depends on it! The second frame: the REASON we didn’t get the public option or raise taxes on billionaire hedge fund managers or [name your top frustration] is that the Republicans stood in the way. It would be a tragedy to let the other side win as they did in 2000. Success requires resources and a willingness to express enthusiasm. Which isn’t always easy – but neither was Valley Forge. In case you agree, please help spread the word.
Tzedakah August 16, 2011March 24, 2017 WARREN BUFFET’S ANALYSIS Here, in case you missed it in the New York Times. In small part: Stop Coddling the Super-Rich By WARREN E. BUFFETT Published: August 14, 2011 . . . The mega-rich pay income taxes at a rate of 15 percent on most of their earnings but pay practically nothing in payroll taxes. It’s a different story for the middle class: typically, they fall into the 15 percent and 25 percent income tax brackets, and then are hit with heavy payroll taxes to boot. Back in the 1980s and 1990s, tax rates for the rich were far higher, and my percentage rate was in the middle of the pack. According to a theory I sometimes hear, I should have thrown a fit and refused to invest because of the elevated tax rates on capital gains and dividends. I didn’t refuse, nor did others. I have worked with investors for 60 years and I have yet to see anyone — not even when capital gains rates were 39.9 percent in 1976-77 — shy away from a sensible investment because of the tax rate on the potential gain. People invest to make money, and potential taxes have never scared them off. And to those who argue that higher rates hurt job creation, I would note that a net of nearly 40 million jobs were added between 1980 and 2000. You know what’s happened since then: lower tax rates and far lower job creation. . . . MORAL RELATIVISM Yesterday, Dr. K urged us to eschew DNDN (which Guru thinks is going up, but whose drug he believes should not have been approved) – on moral grounds. I suggested that the amount of harm one would do by buying shares would be negligible compared to the good one could do with the profit (should there be one). Ed: “Oh dear! Using the proceeds of a morally corrupt investment to do good deeds in no way ameliorates the stain. Good ends do not justify evil means!” ☞ It’s not clear to me that it’s evil to buy these shares (or even that DNDN management is aware Provenge is useless, though Guru and Dr. K. are quite sure it is). The money you put up to buy the shares doesn’t go to the company, it goes to some seller (who could be planning to use the cash to feed starving children). In theory, of course, your adding – even infinitesimally – to demand for the stock buoys its price, so that if it needed to raise more capital (which I don’t think it does) it might get an infinitesimally better price. But infinitesimal harm strikes me as less consequential than concrete good. And there are loads of concrete good things to do with the profit from this trade, in case we make one. Abe: “As I age and think about things like mitzvahs and tzedakah, I more and more think your good Doctor K may be on to something. I am torn. I own MO (formerly Philip Morris). Bought it right after the court case where they did not have to post bond to continue an appeal. Been very good to me ever since. My basis in the stock and its subsequent spinoffs returns over 11% per year in dividends alone. Still, I don’t know. Making money from tobacco? I have justified it with, ‘Well, the funds provided have served good purpose.’ Question may be, were those purposes good enough?” ☞ I expect they were. Nothing about your ownership helped sell more cigarettes. You didn’t fund the company’s expansion – they are funded from operations. MYLGF Russell T.: “Surely I’m not the only one of your readers who bought that lottery ticket? Should I sell? Hold? Buy more?” ☞ A lottery ticket is exactly how you should regard it – but, I think, quite a good one. No need to buy more if you already have it; no way anyone should buy it except with money he or she can truly afford to lose (it is a lottery ticket!). And because it trades so thinly, if you do put in an order, be sure to place a limit. Guru writes: “They released earnings last week. Expenses have come down, including compensation expenses. They aren’t overpaying the managers at shareholder expense. They estimate they are well financed into 2014 – that will be plenty of time to see if the thesis about their drugs is correct. Lots of breathing room. The biology here is compelling!”
DNDN Again August 15, 2011March 24, 2017 I’m declaring today a holiday, but — for those of you who follow Dendreon — I turn the mike over to two of my esteemed readers, both doctors: Guru: “The reimbursement specialist I talked to (part of an oncology practice) was very bullish on Dendreon, now that they have a Q code. She said a permanent J code – for ultimate ease of reimbursement – should follow soon. She was the one who pointed out that in 2010 in her state, there were only five centers in the whole state who offered Provenge. Now there are pages and pages of them, including the three in Hollywood I mentioned yesterday. Fair or unfair, the doctors who administer this get $5800 for doing so – very profitable for them. Right or not, Medicare has decided Provenge works well and will get broad reimbursement. Right or not, many of the key opinion leaders have also decided it works. The reimbursement specialist herself was very bullish on Provenge – it harnesses your own immune system to treat cancer! She said that the Q code and the permanent J code will make reimbursement almost automatic, relieving the issue that torpedoed DNDN’s earnings in the 2Q and the guidance in 2011. They will make the guidance – and much more – but in 2012. Wall street will figure this out over the next couple of months. That’s why it is a buy now. For the record, DNDN will start another prostate cancer trial this year as well as a bladder cancer trial. No crossover. No other shenanigans with the protocols to make it look like it is working. Survival will be the end point in both trials. Both trials will take five years or longer, I estimate. Both will fail.” Kevin K: “I think there’s a moral decision to consider – when I asked my mentor why Stanford and UCSF were giving Dendreon’s vaccine to their prostate cancer patients and Johns Hopkins wasn’t, he sent a one-word answer: ‘geld.’ At a time when we are ALL concerned about Medicare’s financial solvency, should we really participate in encouraging in ANY way any urologist or oncologist wasting $100,000 of Medicare’s money on a placebo? I would urge your readers to not want to make any money on Dendreon on principle alone. I know people don’t really consider the moral implications of their investments, but I have stayed far away from Dendreon’s stock for these reasons and I hope your enlightened readers would do the same.” ☞ I love Dr. K’s motivation but don’t share his view. The amount of harm one would do by buying 300 shares – or 10,000 shares – of the stock is infinitesimal. The amount of good one could do with a $3,000 profit – or a $100,000 profit – if the stock were to double from here, is considerable.
A Brilliant Plan August 12, 2011March 24, 2017 Down 634, up 429, down 519, up 423 . . . how quickly we get sensitized to the new normal. Fear and greed on steroids. A BRILLIANT PLAN Watch this. Its premise is that we need to create jobs – and that perhaps we can. The credit downgrade and the wildly gyrating stock market may have sufficiently scared Congress into doing something. But what to do? Exhume the Republican requests for stimulus money, wherein many Republican House members argued – in writing – for projects that they claimed would improve life and create jobs in their districts . . . and approve all those requests. It sounds a little dull here, but watch. It’s delicious. SO WHERE IS CONGRESS I’ve gotten emails criticizing the President for not calling Congress back from its vacation. In his remarks at a Michigan battery factory yesterday, he responded: You know, in the aftermath of this whole debt ceiling debacle, and when the market’s going up and down as it is, there’s been a lot of talk in Washington right now that I should call Congress back early. The last thing we need is Congress spending more time arguing in D.C. (Applause.) What I figure is, they need to spend more time out here listening to you and hearing how fed up you are. (Applause.) That’s why I’m here. That’s why I’ll be traveling to a lot of communities like this one over the next week. That’s what Congress should be doing — go back home, listen to people’s frustrations with all the gridlock. Listen to how frustrated folks are with the constant bickering and the unwillingness to compromise and the desire to score points, even if it’s at the expense of our country. And if they’re listening hard enough, maybe they’ll come back to Washington ready to compromise and ready to create jobs and ready to reduce our deficit — ready to do what you sent them there to do. DNDN Remember Guru, who is certain Provenge doesn’t really work? “Actually,” he wrote me last night, “you’re going to be shocked but Dendreon is a screaming buy here. Urologists all over the country are signing up to be Provenge providers now that the Q code is in place. There are three doctors in Hollywood Florida alone who just signed up. I talked to a reimbursement specialist yesterday. There is a theoretical concern about Medicare cutbacks from the deficit panel November 23. But it won’t matter.” He still thinks it won’t work, but that doesn’t mean it won’t sell. HOW FDR WAS ALMOST KILLED BY FRIENDLY FIRE It seems a destroyer accidentally fired a live torpedo at the ship he was on. You can read it easily in Wikipedia, here; or more colorfully, with a little more effort, in Kit Bonner’s USS Iowa At War, using Amazon’s “search inside” function, here. Search on “Willie Dee” – you’ll see the remarkable tale. It begins on page 44. (Thanks, Fred.)
A Good War August 11, 2011March 24, 2017 The sun, as previously suggested, will come out tomorrow. (If not literally tomorrow.) One reminder of that was the yesterday’s news of a possible cancer cure. So, yes, maybe your 401(k) is in the toilet; but maybe you’ll get to enjoy life with your spouse or your folks or your child for an extra 20 years. (So keep contributing all you can to that retirement plan.) We still have a load of problems to work through – including Europe’s banking problems which are interconnected with our own. (In case you hadn’t noticed, the global financial system is by now, like it or not, pretty well one financial system.) Our biggest problem may be an opposition party intent on the President’s failure – which, of necessity, pretty much requires national failure, at least until the next election. If that sounds excessively partisan, remember that this is the crowd that cheered when Chicago lost its bid for the 2016 Olympics; the crowd that killed its own proposal for a bipartisan budget deficit commission once the President agreed it was a good idea (he had to establish the Bowles-Simpson Commission by executive order, instead); the crowd that wanted to let GM and Chrysler go under; the crowd that needlessly brought the nation to the brink of default, dealing a body blow to business confidence and investor confidence – and S&P’s confidence in our ability to solve our problems. Yet I have to think we will begin to solve those problems, sooner rather than later, and surely a year from November when, I hope, the House Tea Party members are thanked for their enthusiasm and good intentions but retired for their intransigence and narrow focus. INFRASTRUCTURE Stephen Gilbert: “Remember when the Mississippi River bridge collapsed in Minnesota? We cared about the infrastructure for a few weeks; there was video. And, by the way, we have been spending a fortune on infrastructure – in Iraq.” Chris Hubbard: “From a twitter post by Paul Myers (@pulmyears), making your point from yesterday: ‘The USA should invade the USA and win the hearts and mind of the population by building roads, bridges, and putting locals to work.’ ” Indeed. WE NEED A WAR Like the one that got us out of the Depression – but a war that builds things rather than blows them up. Namely, a war on our crumbling infrastructure and our dependence on foreign oil. I think the nation could rally around that war.
The Infrastructure Deficit August 10, 2011March 24, 2017 While the Tea Party focuses on the budget deficit, channeling the ghost of Herbert Hoover, the nation’s infrastructure slowly crumbles. The Urban Land Institute says: In contrast with its global competition, the United States is lurching along a problematic course—potentially losing additional ground. After more than 30 years of conspicuously underfunding infrastructure and faced with large budget deficits, increasing numbers of national and local leaders have come to recognize and discuss how to deal with evident problems. But a politically fractured government has mustered little appetite to confront the daunting challenges, which include finding an estimated $2 trillion just to rebuild deteriorating networks. Operating beyond their planned life cycles, these systems include roads, bridges, water lines, sewage treatment plants, and dams serving the nation’s primary economic centers. Brookings calls the infrastructure deficit “more than $2 trillion.” And this article (thanks for these, Jonathan!) says that to build the infrastructure we need would cost $8 trillion or more. With interest rates low and millions of talented people looking for work, wouldn’t it be a good idea to float 30-year bonds to put them to work revitalizing our infrastructure with projects that might last 100 years?
Sign The Petition: Let Fred Debate! August 9, 2011March 24, 2017 But first a word about stocks. The sun will come out tomorrow. (If not literally tomorrow.) Long-term, our little gaggle of mostly biotech speculations will be hurt only if people stop getting sick . . . or stop wanting to get well . . . or the government sharply cuts health care costs. The latter might happen if it decides to negotiate drug prices. And I hope it does. But I doubt it will negotiate so hard as to kill the incentive to develop important new drugs. If you have money you can truly afford to lose, and have not yet dipped your toe in these waters, you’ll be pleased to know these stocks are now on sale. (Stocks like DVAX, CBRX, SIGA, TTNP, YMI, KERX, ALXA, and FCSC – maybe even DCTH – among others.) And there are loads of non-biotechs to consider, too. I don’t think we will stop dredging our ports, so GLDD at $4.25 seems cheap. I own a few shares of ALN, which purports to be in the food business in China selling at 3 times earnings (warning: this one did not come from anyone smart, and I don’t do my homework). And a few shares of ALU (which does come from someone smart), half the price of two weeks ago and thus back to where I bought it. In any event, I would not be selling here, even though the market could certainly fall further. THE S&P IDIOCY – II S&P has now downgraded Fannie and Freddie from AAA to AA+ status, also. As my wise young friend Zac Bissonnette noted yesterday, that meant that for a few days Fannie and Freddie’s debt was rated higher than that of the U.S. government. This, despite the fact that their AAA rating rested entirely on the expectation that the government – though not legally obligated to do so – will not let them fail. Perhaps, just as a nod to logic, S&P should have downgraded Fannie and Freddie a few days before downgrading their hoped-for guarantor? The ironies just keep coming. For example: “In reaction to the downgrade,” a CBS radio newscaster told America yesterday, “a lot of investors are taking their money out of stocks and putting their money into U.S. Treasuries, which some see as safer.” Got that? S&P’s downgrade of Treasuries has stock market investors fleeing into . . . Treasuries for safety. Now that S&P has officially decided they are not completely safe, investors are paying even higher prices to buy them. (Safe though Treasuries are, I would not rush into them myself, as they pay almost no interest. My reluctant hedge has been GLD – the exchange-traded gold fund – suggested most recently here. Unfortunately, it’s done quite well. It would make me very happy if it stopped doing well. But I’m not willing to bet all my assets on the triumph of common sense.) And one more note of irony (not to mention the big one, of course, covered yesterday: that for years S&P rated worthless mortgage-backed securities triple-A and caused the financial meltdown that led to the mess we’re in now), compliments of Janet Tavakoli, whose compelling call to decertify the rating agencies I linked to yesterday. Janet writes: “Thank you for the mention. You may have noticed that among other things, S&P said that it downgraded the US even though the economy is ‘strong’ (you can’t make this stuff up) but they are worried about our fiscal trajectory. If this is how they really felt, then they should have downgraded us in September 2008 post bailouts when we didn’t look as ‘strong’ and people were ready to jump out of windows over our fiscal trajectory.” KRUGMAN Paul Krugman did his usual brilliant job in his New York Times column yesterday – and made a point that was new to me: . . . in those rare cases where rating agencies have downgraded countries that, like America now, still had the confidence of investors, they have consistently been wrong. Consider, in particular, the case of Japan, which S.& P. downgraded back in 2002. Well, nine years later Japan is still able to borrow freely and cheaply. As of Friday, in fact, the interest rate on Japanese 10-year bonds was just 1 percent. So there is no reason to take Friday’s downgrade of America seriously. [S&P] are the last people whose judgment we should trust. ☞ He went on to say: . . . The U.S. government is having no trouble borrowing to cover its current deficit. It’s true that we’re building up debt, on which we’ll eventually have to pay interest. But if you actually do the math, instead of intoning big numbers in your best Dr. Evil voice, you discover that even very large deficits over the next few years will have remarkably little impact on U.S. fiscal sustainability. No, what makes America look unreliable isn’t budget math, it’s politics. And please, let’s not have the usual declarations that both sides are at fault. Our problems are almost entirely one-sided — specifically, they’re caused by the rise of an extremist right that is prepared to create repeated crises rather than give an inch on its demands. The truth is that as far as the straight economics goes, America’s long-run fiscal problems shouldn’t be all that hard to fix. It’s true that an aging population and rising health care costs will, under current policies, push spending up faster than tax receipts. But the United States has far higher health costs than any other advanced country, and very low taxes by international standards. If we could move even part way toward international norms on both these fronts, our budget problems would be solved. So why can’t we do that? Because we have a powerful political movement in this country that screamed “death panels” in the face of modest efforts to use Medicare funds more effectively, and preferred to risk financial catastrophe rather than agree to even a penny in additional revenues. The real question facing America, even in purely fiscal terms, isn’t whether we’ll trim a trillion here or a trillion there from deficits. It is whether the extremists now blocking any kind of responsible policy can be defeated and marginalized. ☞ And, for all its ineptitude, that seems to be what S&P was trying to say. PLEDGE NOT TO VOTE FOR CANDIDATES WHO TAKE PLEDGES Bill Merkel: “I’m with Elliott. Pledges take away the flexibility that our representatives have to compromise and, if necessary, select the lesser of two evils. A special interest group (Norquist’s among them) who gets an elected official to sign a pledge is essentially getting a guarantee that that official will vote the way they would like. That sounds a lot like buying votes to me. The only pledge I’d want my elected representatives to sign would be that they’d NOT sign any pledges, otherwise they could simply be replaced by if/then statements.” LET FRED DEBATE I don’t want him to win the White House, but Fred Karger – the first openly gay candidate for President – met all the requirements to participate in Thursday’s Fox News Iowa Republican Party Presidential debate. He polled higher than Santorum and tied Pawlenty and Gingrich. But Fox changed its criteria to keep him out. Federal Election Law requires news organizations that sponsor Presidential debates to select participants based on “pre-established, objective criteria.” Sign the petition to let him debate? Tomorrow (or soon): Our Infrastructure Deficit
The Good War August 8, 2011March 24, 2017 S&P ARE IDIOTS Seriously – why would anyone take the rating agencies seriously, after they consistently gave junk mortgage securities triple-A ratings? After failing the world so egregiously – which gave us the mortgage derivatives fiasco that caused so much of this mess – they are now going to show how responsible they are by warning the world that U.S. debt obligations are not triple-A? Really? Oh, and by the way, they acknowledge making a $2 trillion error in their calculation, as explained here, but decided to go ahead with the downgrade anyway. The idea of giving special NRSRO (Nationally Recognized Statistical Rating Organization) status to the rating agencies was not for them to opine on stuff the whole world has been watching on the nightly news for six months. That’s not why we need rating agencies. Rather, the idea was for them to analyze the arcane stuff almost no one could bear to pay attention to – like collateralized debt obligations – to make assessments investors could rely on. They failed so miserably that Janet Tavakoli last month made a serious recommendation to strip them of their special status: “Tavakoli Structured Finance Revokes the Credit Rating Agencies’ NRSRO Designation: Issues and Solutions for Restoring Credibility to the Credit Rating Agencies and Rehabilitating the Alternative Banking System.” Of course, Janet has no authority to revoke their NRSRO designation. But after perusing her report, you will wish she did. The U.S. is clearly not going to default on its debt, if only because our debt is denominated in dollars, and we can print dollars. (That makes for inflation risk, but no risk of default.) The whole world seems to agree, or would not be piling into Treasuries at essentially no interest. Does the world really need the wisdom of S&P to form its judgment on this? S&P whose dereliction in rating the mortgage securities led to our financial crisis in the first place? THE SILVER LINING The first stimulus package, which the Republicans required be largely about tax cuts, was way too small. Why do we have so many construction workers idle when there is so much work to be done? Especially when – despite it all – Uncle Sam can borrow to fund these long-term investments at under 4% for 30 years? The bottom line is that we need to raise taxes, especially on the wealthy, to help finance the added debt we need to assume in order to put millions to work revitalizing our infrastructure and achieving energy independence. This is a war we can win, a war that set us back on the path to prosperity, and a war that doesn’t blow things up. And this bottom line is almost the exact opposite of the “unimaginably stupid” Republican priorities: (a) cutting back on government spending at exactly the time it is most needed; (b) keeping tax rates on the wealthy at historic lows at a time when we are running massive deficits. Talking heads please note: Raising taxes in a weak economy does not kill jobs. Bill Clinton did it, and in the ensuing years of his presidency we created 23 million new jobs. Keeping taxes on the wealthy low does not create jobs. Sure the last 10 years have proved that. The tax on dividends and capital gains when Ronald Reagan left office was 28% – and he is the second greatest man who ever lived. So what is so sacred about today’s 15%? The only way to get back on track, it seems, will be to vote the passionately misguided Tea Party folks out of office. What we do in the meantime is harder to know. The silver lining is that last Thursday’s 512-point drop in the Dow and S&P’s downgrade just might put enough pressure on the Republicans to support actions that are not unimaginably stupid. IF YOU SKIP THE ADS Every so often, they’re worth watching. Like these, from Rachel Maddow at the Hoover dam and in a diner. SIGN THE PLEDGE Elliot Raphaelson: “I have written to the White House today, with the following suggestion. Perhaps you can ask your readers if they agree. I recommend the following: As part of the upcoming election campaign, the White House ads should ask the voters to ‘pledge’ not to vote for any politician willing to sign the Norquist pledge, since the only result is to destroy the middle class.” ☞ Leaving aside the unfortunate fact that most voters don’t know who Norquist is – maybe there’s a way this could work? Maybe leave Norquist out of it and just say we pledge not to vote for any candidate who pledges not to raise taxes on the wealthy? “Discuss.”
“Unimaginably Stupid” August 5, 2011March 24, 2017 DNDN Chris McMahon: “Guru was right again, it just took a little longer than anticipated.” ☞ Well, we’ll see what happens. Dendreon dropped 67% yesterday, from $35.84 to $11.69, on news that the company’s treatment is not selling as well as projected. But Guru’s point has been that the treatment does no good. That will take much longer to come clear. THE MARKET Stocks went on sale yesterday – which, for the record, is a better time to buy than to sell. All our little biotechs got hit, though not as badly as Dendreon. THE ECONOMY By focusing on the deficit when we should be running a massive deficit – at wonderfully low interest rates – to put our people to work rebuilding our crumbling infrastructure, we are doing something, in the words of Professor Robert Frank, “unimaginably stupid.” Watch. It’s simple – if only the Republicans would not keep blocking the smart things that need doing. (And could they please not now shut down the FAA?) THE DEBT CEILING DEAL There are a lot of myths about it – dispelled here. The President did not cave; the safety net is secure; revenues from the wealthy will be forthcoming. It’s worth three minutes to become informed, the better to buck up others who, with best of intentions, are easily demoralized and quick to assume the worst. NOT SINCE FDR . . . If you’ve been touched by some of that demoralization, this assessment of the President’s accomplishments may bolster your spirits. A DNC MEMO From: Patrick Gaspard, DNC Executive Director To: The DNC Family and Interested Parties Date: August 4, 2011 Subj: Shocker: Washington Pundits Got the Debt Fight Fallout Wrong _______________________________________________________ The subject line of this memo aside, anyone who has followed Washington in recent years won’t be a bit surprised to find out that it is a town which rushes to judgment, has a pack mentality and makes declarations of winners and losers without regard to the facts. There is no better recent example of this than this past Sunday when supposed details of the debt and deficit deal reached between Congressional Democrats and Republicans and President Obama began to leak from “anonymous” sources. Then one or two supposedly wired journalists tweet their reaction and begin making declarations of which side won and which side lost and which party’s supporters will be pleased and which will be enraged. In this case – certainly, the conventional wisdom was that the Republicans won and the Democrats lost and Republican partisans would be euphoric while Democratic partisans would be in the dumps. Fortunately, we don’t have to depend only on the rush to judgment of a small cadre of Washington-based pundits and activists making their assessments off of one-sided leaks and spin – there is a thing called public opinion that we can look to for a more accurate portrayal. The fact is, since President Obama reached a debt and deficit compromise with Republicans over the weekend, CNN and Gallup polls show that a hefty majority of Democrats and Liberals support the deal while a hefty majority of Republicans, and particularly the all-important Tea Party Republicans, oppose it. If you’re waiting for the rush of stories, columns and blogs with the inside the beltway intelligentsia admitting they missed the mark on this – don’t hold your breath. The very folks who rush to judgment on these things are rarely in a rush to admit they were wrong. So, despite the conventional wisdom on Sunday about how this plan would be perceived, actual public opinion shows a very different story. Gallup: Nearly Two-Thirds Of Republicans And Conservatives Oppose The Deal. “The results are reversed on the other side, with large majorities of Republicans (64 percent) and conservatives (64 percent) expressing disapproval.” [Huffington Post, 8/3/11] Gallup: Majority Of Democrats And Liberals Approve Of The Deal. “According to the Gallup poll, a majority of Democrats (58 percent) and liberals (51 percent) approve of the deal, although significant minorities of both groups express disapproval (28 and 35 percent respectively).” [Huffington Post, 8/3/11] CNN Poll: 58 Percent Of Republicans Disapprove Of The Deal. According to a recent CNN/ORC poll, 58 percent of Republicans disapprove of the deal compared to 35 percent who support it. [CNN, 8/2/11] CNN: 63 Percent Of Democrats Approve Deal. According to a recent CNN/ORC poll, 63 percent of Democrats approve of the deal compared to 32 percent who disapprove it. [CNN, 8/2/11] The numbers show that while Democrats and liberals supported the President’s commitment to reaching a fair compromise, Republicans and Conservatives overwhelmingly opposed compromise. Of course this should be of little surprise. Poll after poll during the course of this discussion showed that Democrats by large margins favored compromise while the vast majority of Republicans opposed any compromise with Democrats whatsoever. Of course, the post agreement reaction to the deal from Democrats isn’t just a function of their willingness to compromise, but is also a function of the agreement itself. The fact is, there is a lot about this agreement for Democrats to like. First, the agreement prevented the nation from defaulting on our debt for the first time in our nation’s history and it guarantees that Republicans cannot hold our economy hostage again over the next 18 months with the threat of a catastrophic default hanging over our heads. Importantly, the agreement also protected important investments in America’s future, including aid for college students, and it guaranteed that Social Security, Medicare benefits, and Medicaid would not be gutted to pay for deficit reduction. Finally, the agreement set out a process by which America can get its fiscal house in order – not by balancing the budget on the backs of the middle class, but by coming to a balanced agreement that includes revenue-increasing tax reforms. But even beyond what the agreement included, Democrats are undoubtedly buoyed by what it didn’t. The agreement moved the needle very far from where this debate started with the House GOP just a few short months ago – ending Medicare and slashing critical programs for education, job creation and the poor. In essence, this agreement was a stinging defeat for the Ryan/House Republican Budget approach and was also a thorough rejection of the GOP’s so called “Cut, Cap and Balance” plan which was simply the Tea Party version of the Ryan plan on steroids. This is not to suggest that this agreement was perfect or that Democrats view it that way. But in a world where GOP Presidential candidates are failing the leadership test by following the extreme wing of the GOP and the Senate Minority Leader Sen. Mitch McConnell says our nation’s debt ceiling is, “a hostage that’s worth ransoming”, a compromise that protected Medicare and Social Security and averted a debt crisis was a win. And according to CNN and Gallup, a majority of Democrats and Liberals agree. RUBBING A SHARK’S NOSE I am not advising this.
So Help August 4, 2011March 24, 2017 Mark P.: “I will continue to contribute to Pres. Obama’s re-election and will vote for him, but only because the alternative would be so much worse – not because I am enthused. He extended Bush tax cuts last December and now agrees to a debt deal with no revenues, only cuts. While I previously liked the fact that he was so reasonable, it now seems to be such a liability.” ☞ Let’s start with last December. The President could have let unemployment benefits expire – they were being held hostage by the Republicans. You would have had the spine and the balls and the cojones to take that chance; he seems to have had too much empathy for the unemployed and what it would have been like for them to miss even a few checks. Smart, strong people like you and the President can disagree on what risks to take, and with whose lives. (Not making the deal to extend the tax cuts would also likely have meant not getting repeal of Don’t Ask/Don’t Tell or renewal of the Nuclear START Treaty; and not getting the payroll tax cut that has helped so many struggling families. Again, you would have ditched all that to see taxes go up, especially for the wealthy. I respect that. He made a different choice.) My frustration is not with him for making this deal, but with the Republicans for their insistence on a deal in the first place – for putting the interests of the wealthy, yet again, above those of everyone else. Likewise, the debt ceiling deal. As I said Tuesday, the debt ceiling deal does NOT slash spending in the next year or two, while the economy is so fragile; PROTECTS the social safety net; and does NOT close the door on increased revenues from the rich (or Exxon). To my friends who are quick to assume the President has unaccountably become a different person (uncaring? slothful? dim-witted?) when we don’t get what we want on our timetable, I’d say, first, that you may not have looked at this deal, and its implications for the future, closely enough. And second, that I totally share your frustration – as I’m quite sure the President does – but direct most of it at the opposition, whose first priority is to see him fail and whose second priority is to protect billionaires from paying anywhere close to the 28% rate on investment income they paid under Ronald Reagan (second greatest man who ever lived). Even so, the long view may be that he is winning the war. Most Americans – albeit not House Republicans – now clearly agree we need to raise revenues, especially from the wealthy. Yes, it would have been better to get that done now. But in the 20-year scheme of things, whether those increased revenues began flowing in 2012 or 2013, as I think they will, it won’t matter much. The broad solution, it seems to me, is to revitalize our economy and infrastructure by investing for the future with funds we raise in taxes rather than borrow from the Chinese. Our job – yours and mine and everyone else’s who agrees with that broad solution – is to cheerfully spread the word as we work to achieve massive turn-out 461 days from now. Massive registration and turn-out are how we’ll hold the White House, take back the House, hold the Senate, and flip state legislative chambers back from red to blue.* It’s a challenge, because the other side are doing all they can to prevent the poor, the young, and the disabled from voting. And because they are masters at misdirection (“death panels,” “death taxes,” “job creators”) and misinformation (Iraq attacked us on 9/11; a Muslim not born in America; “by far the vast majority” of the Bush tax cuts would go to people at “the bottom of the economic ladder”). And because we are so quick to attack our own rather than direct our anger at the Republican senators and representatives whose priorities are so misguided. But with your help, we’ll get there. (So help.**) *Which won’t get us everything we want, anymore than President Clinton was able to get us everything we wanted. (Did he get universal health care? gays in the military? Lily Ledbetter? Did he close the gun show loophole? Kill Bin Laden?) But we’ll continue to move forward, as we did under Clinton, rather than back, as under Bush. **And don’t dismiss all the amazing things he has accomplished, against blistering opposition, in these first 30 months. Volunteer to help him do more! SIGA I bought a bunch yesterday at $6.30 with money I can truly afford to lose. Here’s why.