The Democratic Response
Received via e-mail:
Washington, D.C. – This evening, Governor Martin O’Malley, the chair of the Democratic Governors Association, released the following statement on President Obama’s State of the Union address:
“President Obama’s focus tonight on increasing America’s global competitiveness is welcome news in states across our country, and to American businesses and families. Our nation is in a fight for its economic future and it is a fight in which every state has an important role to play to win the future.
“Democratic governors have been singularly focused on creating jobs, managing for results, and making the tough – but fiscally responsible decisions – to improve public education, make college more affordable, and spur innovation to help businesses create jobs.
“Democratic governors support President Obama’s results-oriented approach to reduce the deficit and invest in the right priorities to fuel innovation and move America forward by creating new jobs and new opportunities for America’s families.
“And Democratic governors will continue every day to make the tough choices to ensure that our states – and our nation – are poised for success in the new global economy. We look forward to working with President Obama and Congress to achieve this end.”
Martin O’Malley is the governor of Maryland.
I’m not sure whether this qualifies as “damning with faint praise”, but I’m fairly certain that being from Maryland, O’Malley knows the states are going to get nothing from a Republican controlled House.
CNN notes that Democratic leaders slam Obama veto threat.
The biggest problem was this sentence: “If a bill comes to my desk with earmarks inside, I will veto it.”
House Democratic Whip Steny Hoyer & Senate Majority Leader Harry Reid didn’t like it, and don’t want to cede any Congressional power to the Executive, but they’re Democrats, so Obama doesn’t care what they think.
7 comments
Well, the Republicans want to cut spending on social programs, Social Security, unemployment, and even worker’s compensation and they are claiming that they intend to cut, what is it (?), $100B from the budget this year? I think that Obama has taken on the challenge to cut the budget by trimming the fat and ending subsidy programs such as subsidies to oil companies (he said they are doing just fine, I agree). But look at what is moving to the chopping block, and look who’s squeeling.
http://www.govexec.com/dailyfed/0111/012511nj2.htm
Armed Services leaders warn Gates about halting work on programs
http://www.govexec.com/dailyfed/0111/010611rb2.htm?oref=rellink
Gates takes ax to Defense programs to end ‘culture of endless money’
Republicans aren’t focused on cutting spending so much as they are focused on eliminating or underfunding Democratic programs. I’m hoping that the President is able to cut spending and maintain programs that are important to society as a whole.
Austerity is how Ireland got itself into such a mess, and the UK is about to join them, since the Conservative Chancellor of the Exchequer, Mr. Osbourne, has adopted the Irish model.
We have a demand problem, and until it is addressed the economy and country are in trouble. Cutting the Federal budget at this time will make matters worse by reducing jobs and demand.
The recent tax cuts have just caused a major jump in the deficit forecast for next year, as every sane person knew it would, and Obama still doesn’t understand how much trouble his attempts to appease the Republicans are going to cause.
But… but… don’t you know tax cuts pay for themselves? Just like if I cut my wages to $1 per hour, I could work more hours and make more money than I make now! Of course, I’d have to work around 130,000 hours per year at $1 per hour to make more money than I make now, and there are only, hmm… 365*24 = 8760 hours in a year… but hey, nobody ever said Republicans know basic arithmetic, nevermind complicated stuff like how many days there are in a year and how many hours there are in a year :twisted:.
– Badtux the Snarky Penguin
Mr. Duff, if Ireland had not bailed out the banks but had let the large depositors take a haircut instead when the assets of the failed banks were auctioned off, Ireland would not have had a problem with austerity causing much suffering and social disorder.
Regarding the U.S. debt, as I continually and repeatedly point out, the U.S. debt is denominated in U.S. dollars and the U.S. possesses this marvelous new invention (only 500+ years old!) called the PRINTING PRESS. And it’s a perfectly reasonable thing to have the Federal Reserve buy our Treasuries in exchange for freshly printed dollars if the so-called “bond vigilantes” decide they want to drive up U.S. sovereign debt too. Not that they will, because they know the Fed *would* print sufficient dollars and buy sufficient Treasuries to drive the rate right back down again, causing them to lose money on the high-interest bonds they just bought. The only possible way the U.S. could ever default on its debt would be if the Republicans in Congress took away the Fed’s printing press… but then, that would interfere with their ability to be borrow-and-spend big spenders when they’re in power like in 2002-2006, so not bloody well likely.
Mr. Duff, regarding Ireland, I think you know not what we’re saying. We know perfectly well that austerity did not cause Ireland’s economic problems. What we’re saying is that it is not fixing those problems — indeed, cannot fix those problems but can only make them worse by reducing consumption and thus employment (since businesses hire only if there is demand for their product, regardless of whether labor is cheap or not) — and thus is causing unnecessary pain to the Irish people in order to enrich German bankers who hold the Irish debt. My advice to any other Eurozone nation that finds itself in the same situation as Ireland is that if the Germans try to impose the same conditions upon you that they imposed upon Ireland: Tell them to stuff it. Withdraw from the Eurozone. Re-denominate your debt in your local currency at a fixed exchange rate. Ignore the howling of the bankster grifters, people who produce nothing, create nothing, merely siphon off the money of those of us who *do* produce and *do* create — it is like the howling of coyotes, much bluster of no import. Capitalism requires banks in order to operate efficiently, but not necessarily *these* banks. There is no such thing as “too big to fail” in a true capitalist society, because there will always be the opportunity for new players to enter the market when the old players stumble. Of course, what we have right now is not a capitalist society but, rather, crony socialism, but that’s another issue…
— Badtux the Capitalist Penguin
Mr. Duff, as I said, capitalism needs banks, but capitalism doesn’t need *these* banks. I would break this into smaller words that perhaps you would have more capability to understand, but it is difficult to express complex ideas like “banks good, these banks bad” with words of less than four letters.
Capitalism would, BTW, be a good idea. Because right now we don’t have capitalism — we have crony socialism, where the profits are capitalized and the risks are socialized. Markets cannot work in such an environment where those who take inordinate risks with other people’s money are in no way penalized for such, either via law or via simply going out of business. If Ireland had chosen either the capitalist solution (let the banks go out of business and capitalize new banks to take their place) or the socialist position (nationalize the banks and give a haircut to the big bond holders) they would not be in their current position. By choosing to instead do some sort of crony socialist pseudo-capitalism in order to cling to the Euro, they have wrecked their economy and are well on the way to wrecking their nation.
– Badtux the Capitalist Penguin
Mr. Duff, the Irish government made an incredibly insane decision to guarantee the losses of private banks without knowing or understanding what was actually involved, and then they instituted an austerity program to pay for their stupidity, rather than allowing the banks to clean up their own mess.
Then they agreed to pay outrageous rates on loans from French and German banks to cover the junk bonds that those same banks bought from the private Irish banks. The Irish government is destroying their economy so that French and German banks don’t have to explain their stupidity in buying junk bonds from failed Irish banks.
The failed banks was a private issue, and had nothing to do with the Irish government or the Irish people, but both are being beggared by government officials trying to save private banks from their own greed. The government of Ireland intervened and prevented capitalism from working by wiping out the Irish, French, and German banks who were participating in a Ponzi scheme called the real estate bubble.
The “Celtic Tiger” was made from paper, because their prosperity only existed on paper, and only involved paper transfers. It created nothing but an illusion of prosperity based on numbers that had no real assets behind them. Corporations routed money through Ireland as part of their tax avoidance schemes, but they didn’t build anything in Ireland. The banks took a cut for holding the money in transit, and the government was given a pittance, but the people of Ireland received no long term investments or improvements as a result of the government acting as a marginally better class of Cayman Islands tax haven.
What should have happened to the Irish, French, and German banks was capitalism, but what is happening to the Irish nation and people is caused by their government’s institution of austerity. The banks were guilty of misdeeds, the Irish people are not, but they are the ones paying the price.
Banks are how capitalism pays for future production by using the income generated by that future production, and thereby allows capitalism to respond to consumer need much faster than if businesses had to slowly and painfully accumulate the capital needed via profits to respond to that need. Banks also have the side effect of printing (and unprinting) money via their operations of lending and contraction of lending. So banks are special in a number of ways to a capitalist societies, and as such should be carefully regulated to ensure that they do not behave in ways that would destroy the money supply.
Now, whose money supply, if we’re talking about Ireland? These banks were not dealing in Irish bank notes. They were dealing with Euros. And the money supply that would be collapsed if the banks collapse is the entire European money supply, not just the Irish money supply. As such, it’s a problem that most certainly should devolve to the one European institution responsible for maintaining the integrity of their money supply — the European Central Bank. The ECB, which possesses a printing press capable of printing sufficient Euros to either make people whole or otherwise keep the money supply from collapsing, is the only entity that should have been involved with any bailouts of the Irish banks, because it isn’t an Irish problem — it’s a Eurozone-wide problem.
But of course the ECB is basically the Bundesbank, the former German central bank, and all during this monetary crisis has been taking steps to ensure that Germany comes out on top and everybody else pays the price. But the Irish government doesn’t have to *help* them here. The Irish government *does*, after all, have a card in its pocket — they are still sovereign (at least on paper), and can issue their own currency via their own new central bank, which they can then state will be exchanged on par for Euros in payment of their debts. This would not be a desirable situation for them or for the holders of Euro-denominated debt payable by the Irish government or Irish banks, but it would be a real threat to the Eurozone and the Eurozone would *have* to act or disintegrate as an entity.
But the Irish government didn’t even pull that card out of their pocket before folding and impoverishing the Irish people for the benefit of the Germans. They surrendered without even a whimper. When Germany said “boo!” in their direction, they collapsed faster than France in 1940. And it’s causing no end of suffering for the Irish people, and social instability will inevitably ensue. All for no good reason other than the fact that the Austerians believe the people should pay for the crimes of the banks, and have convinced major governments of that “fact”.