The Other McCain

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BLACK MONDAY? Obama’s Debt-Ceiling Crisis Strategy Could Sink Wall Street

Posted on | July 25, 2011 | 39 Comments

Let’s be clear: President Obama has orchestrated this unnecessary drama for the specific political purpose of causing a crisis that he — with the willing assistance of the liberal media — hopes to blame on Republicans.

Yet while Obama, the Democrats and the media (but I repeat myself) are scripting a kabuki dance, economic reality threatens to intervene:

U.S. stock futures fell, indicating the Standard & Poor’s 500 Index will drop after rallying within 1.4 percent of a three-year high, as President Barack Obama and Congress failed to reach an agreement on raising the federal debt limit, intensifying concern the nation will default.
S&P 500 futures expiring in September declined 1.1 percent to 1,326 at 12:13 p.m. in Tokyo. Dow Jones Industrial Average futures lost 133 points, or 1.1 percent, to 12,488.

The Japanese Nikkei index lost 82 points. The Chinese Hang Seng was down 175 points. Meanwhile, Harry Reid — who has been worse than useless in this phony crisis — now says he has a plan:

The Senate’s top Democrat rolled out a plan Sunday night to raise the nation’s debt limit – in a way he said even Republicans could not refuse.
Senate Democratic boss Harry Reid proposed slashing $2.7 trillion in spending and raising the debt ceiling through 2012 to avoid a market meltdown.
The offer “meets Republicans’ two major criteria: It will include enough spending cuts to meet or exceed the amount of a debt ceiling raise through the end of 2012, and it will not include revenues,” Reid said in a statement.
“We hope [House] Speaker [John] Boehner will abandon his ‘my way or the highway’ approach, and join us in forging a bipartisan compromise along these lines,” Reid said.

The accusation that Boehner is the obstacle to a “bipartisan compromise” is laughable. The GOP leadership very much wants a deal, but Obama and Harry Reid’s Democrat majority in the Senate refuse to play ball.

For two years, Obama, Reid and Nancy Pelosi acted as if they could spend infinite money with no regard whatsoever to the effects of deficit spending. Now — with Obama looking for something he can score a “win” against the GOP — suddenly they’re all about the balanced approach.

Lying bastards.

John Hayward at Human Events rakes Obama over the coals for his dishonest rhetoric.

Meanwhile, John Boehner lays it on the line:

It boils down to this: The president wants his $2.4 trillion debt limit increase all at once, without any guarantees that we’re going to cut more than $2.4 trillion in spending. The administration says they have to have it all upfront so we don’t have to deal with this again until after the next election. You heard the president say that himself on TV the other night.
We’ve seen this coming all year long. But here’s the challenge: To stop him, we need a vehicle that can pass in both houses. . . .
The White House has never gotten serious about tackling the serious issues our nation faces — not without tax hikes — and I don’t think they ever will. . . .

So today, everyone will be watching Wall Street. And if you’ve got your 401(k) or other retirement investments in stocks . . . well, see, what happens to your money is of no interest to the Democrats. All they care about is politics.

Obama Fears Losing Reelection More Than Default. And meanwhile, here’s a kick in the head:

Gold hit a record high above $1,620 an ounce on Monday . . . over fears of a possible U.S. debt default as the debt ceiling talks in Washington stalled.

Yeah. You should have listened to Glenn Beck.

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Comments

  • http://twitter.com/D_E_Hershberger Duane Hershberger

    “what happens to your money is of no interest to the Democrats. All they care about is politics.”

    Not quite, they think it’s _their_ money in the first place.  You are just a 3rd party administrator.

  • http://thecampofthesaints.org Bob Belvedere

    They see it as a loan that they can call in whenever they want for whatever they want.

  • http://thecampofthesaints.org Bob Belvedere

    Hey, Cryin’ John: Harry ‘The School Marm’ Reid is trying to take control of the narrative again — don’t let him, dammit.

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  • Anonymous

    Yep, they invested in your human capital and they demand a reasonable ROI. If you deny them their fair share, that’s embezzlement!  

  • Anonymous

    Now, Duane, in the Copperhead world, slaves aren’t allowed to own property, and the fact some think they still can means they haven’t learned their place.

  • Anonymous

    Democrats/progressives are good at propagating political “narratives,” but very little else.

    Of course, those fools run Hollywood with an iron fist and yet the quality of screenwriting has steadily declined for decades. 

    I blame Industrial Light & Magic and other “special effects” shops. Those gurus of the smoke-and-mirrors can turn a horrible movie like Titanic into a blockbuster and a community organizer like The One into POTUS.

  • JeffS

    We’re not even administrators in their eyes, Duane.  We’re just mindless drones churning out the moolah for their pleasure.

    And they wonder why we balk at their greediness.

  • Anonymous

    Don’t blame horrible movies on SFX. There have been more than a few movies that didn’t bother with plot or narrative and placed their trust in effects alone, and almost without exception they sank without a trace at the box office.

  • Cube

    So, Harry Reid is going to make them an offer they can’t refuse?  And you thought the comparison of the Donks and the Mob was just a rhetorical device.  Doesn’t he know that people go to prison for making “offers” like that?

  • http://pulse.yahoo.com/_VOABDQNPU7TIKDX2C33ZWG4O6U Dobby

    If our politicians were serious about cutting the debt, they’d be voting to lower the debt ceiling, not voting to increase  it.  Neither side is serious about cutting government spending.  It’s just too easy to spend other people’s money.

    The credit ratings on the USA’s debt should have been rated downwards a long time ago.  Eventually, we’re going to default(not pay interest on the loans), it’s just a matter of when.  Those credit rating agencies are not serious either.

    http://www.usdebtclock.org/

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  • Anonymous

    I was partly kidding about blaming SFX. Whether political “narratives” are really as important as some think (which is debatable), they’re connected to issues & dynamics that run much deeper than that.

    As for the movies, though, Hollywood nowadays churns out mostly garbage. You’re right, that is not the fault of SFX, which is just a (neutral) vehicle for telling a story. Here are some awful movies that relied heavily on SFX that grossed lots of money: Avatar, Titanic, the Pirates of the Caribbean series, the new Star Wars series, Independence Day.

    Some others that I sorta enjoyed watching, myself, but that were still pretty lame when the SFX is peeled away: Live Free or Die Hard, Iron Man, the Matrix series, etc. Much of the time now, Hollywood simply recycles old ideas, makes video games and comic books into movies, does another crappy sequel.   

    No, I don’t expect Hollywood to do ”art films,” which are usually rubbish, too. But if you’re aiming to entertain, you still have to do THAT well, and Hollywood can no longer make a decent COMMERCIAL picture. In its heyday, Hollywood produced a lot of awesome commercial pics, including B films that were much better than the “A” films of today. At times, some of the screenwriters were even closet communists, but at least they could write well.

    My underlying question was: How can political “narratives” supposedly take on such importance while the narrative writing out of Hollywood has never been worse?      

  • http://twitter.com/Mutnodjmet Leslie Eastman

    Obama just said”no” to a truly bipartisan debt ceiling plan, which is proof Obama has never been negotiating in good faith. Once this is understood, the remainder of this Kabuki Theater production is easy to follow.

  • Anonymous

    Right on, but how to make that understanding more widespread?

  • http://www.facebook.com/profile.php?id=1802716459 Rebecca Harris

    I wonder what Wall Street thinks of its god-king now?

  • http://thecampofthesaints.org Bob Belvedere

    It reminds me of sharecropping: you get paid, say $20, a week, but THE MAN deducts for your room, board, water, tools, and clothes, so that by the end of the week, you end up owing him — and you never get off the farm.

  • http://thepagantemple.blogspot.com/ ThePaganTemple

    Hey guys stop worrying about the stock market. If we don’t get a budget deal by August 2nd, I have a hot stock tip for you, on a stock that’s going to go through the roof-

    Taco Bell

  • http://theothermccain.com smitty

    “I’m here all week. Try the chalupa.”

  • JM Hanes

    “suddenly they’re all about the balanced approach.  Lying bastards.”

    Not so!  When Dems talk about a “balanced approach” they mean balancing the pretense of future spending cuts against immediate increases in “revenue.”  They’ve been cranking out euphemisms for raising taxes like there’s no tomorrow (the best one EVAH is “cutting tax expenditures”).

    Forget Harry Reid.  The White House is still spin factory HQ.  

    Threatening to cut off granny’s Social Security checks, courtesy of Republicans, didn’t have the desired effect.  The New! Improved! tactic is accusing Republicans who reject Obama’s “long term” package of recklessly fomenting market uncertainties, destroying the U.S. credit rating and wreaking global economic havoc.  None of which would happen if Tea Party extremists weren’t pulling Republican strings!  Driving that wedge into the Republican party’s heart is Obama’s underlying strategy here, and the debt crisis is his win/win.  If he can’t take the issue off the campaign table, he can blame Tea Party Republicans for derailing the putative recovery — and killing off all the jobs he saved or created.  Èt voilá, they own the Obama economy.

  • Tlaloc

    “Let’s be clear: President Obama has orchestrated this unnecessary drama
    for the specific political purpose of causing a crisis that he — with
    the willing assistance of the liberal media — hopes to blame on
    Republicans.”

    Obama asked for the debt ceiling to simply be raised like it’s been done every other time.  Republicans refused.  So how exactly did he manufacture the crisis?  Did he use secret jedi mind tricks to force the right to hold the economy hostage?

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  • http://profiles.yahoo.com/u/EU5DQWQTTHTPO4A4ZYSL3AAV2U Adjoran

    He manufactured the crisis by increasing spending by 40%+, running up huge deficits, and refusing to take the necessary steps to set our fiscal house in order. 

    Please also note it is ONLY Republicans who have offered any specific plans at all.  Obama isn’t smart enough to come up with details, and Senate Democrats can’t put any actual cuts on paper for fear of rebellion among their parasitic constituencies.

  • http://thepagantemple.blogspot.com/ ThePaganTemple

    Tlaloc-Well, well, well, if I didn’t know better I’d swear you got you a cool little Aztec name there. Have no fear, Obama is going to make sure the GOP gets the blame for the debt ceiling talks collapsing, even though he actually is the one that wants them to collapse. Haw Haw Haw see how clever he is? One of the things he can get out of funding then is our border security. Soon you might be joined by tens, maybe hundreds of thousands of your Aztlan brethren yearly. Will you kindly come to Kentucky and build one of those cool temples, the kind that allows the blood to flow from the top all the way down? They are the whip. 

    Oh by the way when you get your Democrat Party approved counterfeit citizenship papers, who are you going to vote for?

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  • http://profiles.yahoo.com/u/EU5DQWQTTHTPO4A4ZYSL3AAV2U Adjoran

    So much for “Black Monday” – the drop in the markets amounts mainly to normal profit-taking and fluctuation than some panicked reaction to the mess in DC.  And that’s the equity markets worldwide – the bond market seems to be yawning over the unbearable lightness of being, etc.

    Treasury can pay everything until at least August 8th, perhaps a couple of days beyond that, so there really is a “drop dead” date coming for a deal.  But despite Obama’s best efforts, he could not tank the markets to pressure Republicans.  Everyone seems to be learning to just ignore him until he goes away.

  • Anonymous

    IRRATIONAL EXUBERANCE!

  • Tlaloc

    Bush ran up a huge deficit during a period of prosperity.  Obama ramped up spending during a recess, exactly like you are supposed to do to end the recession.  Our debt is not really a big deal, people are still happy to buy our treasuries and simply ending the bush tax cuts would bring the debt down to a very manageable level. 

    Our deficit is fueled mostly by a lack of revenue, and yet the GOP is demanding we cut spending in a recession.  It’s insane.

  • Anonymous

    Tlaco wrote, “Obama ramped up spending during a recess, exactly like you are supposed to do to end the recession.” Hmmm, why didn’t the recession end like it was supposed to?

    Actually, you’re contradicting yourself. As VDH pointed out, “The old argument that we simply did not borrow enough (say, $5, $6, $7 billion a day?) is laughable beyond the point of caricature, given that the administration followed the Bush record of record peacetime debt.” If, as you admit, Bush “ran up a huge deficit” and then Obama “ramped up spending” on top of what Bush had been spending, shouldn’t we have expected some good ol’ pump primin’ by now?

    Your excuse for the faulty pump sounds an awful lot like the Marxists’ old excuses for the failure of communism: the pump (or communism) only works if it’s given 110 percent power; anything less and it’s like you never turned the pump on to start with.    

    Talk about insansity: A). you Krugmanites have concluded, in backwards fashion, that the proof we didn’t spend enough is that we’re still in a recession; B). it’s becoming a cliche, but if the boot fits . . . the defintion of insanity is doing the same thing over and over again and expecting different results.

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  • Praetorian

    dude your head is really far up your ass. Democrats do not own the movie industry. The people that own the movie industry are those who are rich and supply the million dollar budget that micheal bay gets to make cars explode.  These people all happen to be rich,  white and do not want to pay their hard earned money to taxes because they smoked so much of satans cock their lips burn. Who don’t want their taxes increased? Republicans…

  • Nospam

    So “rich and white” automatically means “Republican”? Dude, I’d tell you to go check the donor lists for your favorite actors/directors/producers, but I’m pretty sure you’re too stupod to figure out how to do so.
    In fact, I’m pretty sure you have a little reminder card in your pocket reading, “Systolic, THEN Diastolic”…

  • Nospam

    Try, “Winchester”.

  • Nospam

    “Revenue” equals “Spending”? So if I max my credit cards, I get a raise?
    Why don’t you just go try that and tell us how it works.

  • http://profiles.google.com/chazhammond Charles Hammond Jr

    IT seems as if though the Modus Operendi in the white house has changed ever so slightly.  It used to be ‘Never let a good crisis go to waste’.  It has now evolved into ‘Why wait for a crisis when you can create one?’

    He simply threw out a bipartisan agreed upon plan to thunderous applause.

    The republic is dead.  If you need me, I’ll be reloading some 7.62 in the back.

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  • Ggg

    Which plan would that be?

  • Ggg

    Rich + White = 99.9999 % republican.

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